Carbon policies may limit shale gas production growth, expert warns

Policies to restrict carbon emissions potentially could inhibit significant production growth from US shale gas formations, an expert warned.

“Fugitive emissions are the biggest issue, and if they are considered too high, it could reverse the potential gains,” said Alan Krupnik, senior fellow and director of the Center for Energy Economics and Policy at Resources for the Future.

His remarks came during a Nov. 28 RFF seminar, “The Future of Fuel: Toward the Next Decade of US Energy Policy,” as panelists considered possible impacts for nuclear, coal-fired, and renewable power, and energy efficiency in addition to oil and gas.

Krupnik said for natural gas, most of the regulation still occurs at the state level, where it can vary significantly. “Several are playing catch-up, even states like Texas where gas has been produced for a long time,” he said. “They generally rely on command-and-control requirements, such as specifying how far a well has to be from a river or stream. Local governments are also crying foul and challenging states’ authority to site wells.”

Another panelist, Frank A. Verrastro, a senior vice-president specializing in energy and geopolitics at the Center for Strategic & International Studies, said pressure to move more oil and gas regulation to the federal level comes as the US tries to move from an atmosphere of scarce supplies and rising demand to one of ample supplies and falling demand.

“There’s a lot of overlap among the fuel groups. Environmental concerns are large,” he observed. “The real dilemma is how we reconcile this large resource base with those concerns…. Unconventional and ultradeepwater resources are expensive to discover and produce. Regulations should be effective, but not overly burdensome. We should seek a balance.”

Areas of uncertainty

Verrastro said despite the apparent abundance of tight oil and gas onshore with multilayered formations and significant ultradeepwater crude oil resources offshore, the US outlook still is far from certain. “Will these resources be produced more efficiently as they are developed? If not, we could blow through them quickly,” he said. “Will the necessary investments be there? Can the Bakken shale success story be replicated over and over?”

The situation is aggravated by major policy questions, he continued. “Government policymakers’ priorities change,” Verrastro said. “Sometimes climate is at the top, sometimes economics, and sometimes energy. That’s what makes it so hard for them to be consistent.”

Krupnik said just how widespread unconventional oil and gas sweet spots are is another big question. “If you start looking at the data, you see how choppy it is. Even a small movement can change these wells’ productivity,” he said. “There’s also a tension as productive sweet spots are drained and producers move to less productive sweet spots.”

He also cautioned against over-optimism about other countries being able to replicate US unconventional production successes. “We need to temper our optimism about international potential,” Krupnik said. “A typical unconventional well in China now is being drilled for $12 million, compared with $1-3 million in the US.”

Verrastro suggested that concerns likely will not destroy the resources’ potential, however. “We’re finding this resource base, and the productivity of these wells, is incredible,” he said.

Other participants at the seminar included RFF President Philip R. Sharp; Michael Schaal, from the US Energy Information Administration; Douglas Arent, from the National Renewable Energy Laboratories; Richard Meserve, president of the Carnegie Institution for Science; Jeffrey R. Holmstead, a partner in Bracewell & Juliani’s Washington office; and Karen Palmer, a senior fellow and research director at RFF.

Contact Nick Snow at nicks@pennwell.com.

Related Articles

Obama’s proposed fiscal 2016 budget recycles oil tax increases

02/02/2015 US President Barack Obama has proposed his federal budget for fiscal 2016 that he said was designed to help a beleaguered middle class take advanta...

MOL absorbs Eni’s Romanian retail assets

02/02/2015

MOL Group, Budapest, has completed the acquisition of Eni Romania, including 42 service stations to be rebranded under the MOL name.

CNOOC subsidiary inks deal for grassroots refinery

02/02/2015 Hebei Zhongjie Petrochemical Group Co. Ltd., a subsidiary of China National Offshore Oil Corp. (CNOOC), has entered into a $700 million agreement w...

Pessimism mounts over UK offshore industry

02/02/2015

Pessimism about the UK offshore oil and gas industry is gaining momentum.

EnLink agrees to purchase Coronado Midstream for $600 million

02/02/2015 EnLink Midstream has agreed to acquire Coronado Midstream Holdings LLC, which owns natural gas gathering and processing facilities in the Permian b...

Antero trimming, delaying Marcellus drilling

02/02/2015 Antero Resources Corp., Denver, has announced a $1.8 billion budget for 2015, which is down 41% from 2014. The independent said it plans to defer c...

Woodside gets NEB approval for British Columbia LNG exports

02/02/2015 Woodside Energy Holdings Pty. Ltd. has received approval from Canada’s National Energy Board on its application for a 25-year natural gas export li...

Syncrude sees additional $260-400 million in possible budget cuts

02/02/2015 The estimate for capital expenditures has also been reduced to $451 million net to COS, which includes $104 million of remaining expenditures on ma...

Kerry expects to receive other agencies’ Keystone XL reports soon

02/02/2015 US Sec. of State John F. Kerry said he expects to receive other federal agencies and departments’ reports soon on the proposed Keystone XL crude oi...
White Papers

Pipeline Integrity: Best Practices to Prevent, Detect, and Mitigate Commodity Releases

Commodity releases can have catastrophic consequences, so ensuring pipeline integrity is crucial for p...
Sponsored by

AVEVA’s Digital Asset Approach - Defining a new era of collaboration in capital projects and asset operations

There is constant, intensive change in the capital projects and asset life cycle management. New chall...
Sponsored by

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by

Squeezing the Green: How to Cut Petroleum Downstream Costs and Optimize Processing Efficiencies with Enterprise Project Portfolio Management Solutions

As the downstream petroleum industry grapples with change in every sector and at every level, includin...
Sponsored by

7 Steps to Improve Oil & Gas Asset Decommissioning

Global competition and volatile markets are creating a challenging business climate for project based ...
Sponsored by

The impact of aging infrastructure in process manufacturing industries

Process manufacturing companies in the oil and gas, utilities, chemicals and natural resource industri...
Sponsored by

What is System Level Thermo-Fluid Analysis?

This paper will explain some of the fundamentals of System Level Thermo-Fluid Analysis and demonstrate...
Available Webcasts


Cognitive Solutions for Upstream Oil and Gas

When Fri, Jun 12, 2015

The oil & gas sector is under pressure on all sides. Reserves are limited and it’s becoming increasingly expensive to find and extract new resources. Margins are already being squeezed in an industry where one wrong decision can cost millions. Analyzing data used in energy exploration can save millions of dollars as we develop ways to predict where and how to extract the world’s massive energy reserves.

This session with IBM Subject Matter Experts will discuss how IBM Cognitive Solutions contribute to the oil and gas industry using predictive analytics and cognitive computing, as well as real time streaming for exploration and drilling.

register:WEBCAST


The Alternative Fuel Movement: Four Need-to-Know Excise Tax Complexities

When Thu, Jun 4, 2015

Discussion on how to approach, and ultimately embrace, the alternative fuel market by pulling back the veil on excise tax complexities. Taxes may be an aggravating part of daily operations, but their accuracy is crucial in your path towards business success.

register:WEBCAST



On Demand

Prevention, Detection and Mitigation of pipeline leaks in the modern world

Thu, Apr 30, 2015

Preventing, detecting and mitigating leaks or commodity releases from pipelines are a top priority for all pipeline companies. This presentation will look at various aspects related to preventing, detecting and mitigating pipeline commodity releases from a generic and conceptual point of view, while at the same time look at the variety of offerings available from Schneider Electric to meet some of the requirements associated with pipeline integrity management. 

register:WEBCAST


Global LNG: Adjusting to New Realities

Fri, Mar 20, 2015

Oil & Gas Journal’s March 20, 2015, webcast will look at how global LNG trade will be affected over the next 12-24 months by falling crude oil prices and changing patterns and pressures of demand. Will US LNG production play a role in balancing markets? Or will it add to a growing global oversupply of LNG for markets remote from easier natural gas supply? Will new buyers with marginal credit, smaller requirements, or great need for flexibility begin to look attractive to suppliers? How will high-cost, mega-projects in Australia respond to new construction cost trends?

register:WEBCAST


Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected