Government policymakers worldwide will have to scramble to keep pace as oil and gas companies aggressively develop unconventional plays, speakers told the IHS Forum in Washington Nov. 13-14.
“This is a home-grown technology. What we spend here will stay here,” said John W. Larson, global leader for public sector consulting at IHS Global Insight and lead author of a recent report, America’s New Energy Future: The Unconventional Oil and Gas Revolution and the US Economy.
Estimated revenue from unconventional oil and gas activity to federal, state, and local governments of more than $62 billion/year in 2012 could climb to more than $124 billion/year in 2035, indicated the Oct. 25 report.
The anticipated government revenues could result in more than $2.5 trillion cumulative during 2012-35, the report said.
Researchers forecast exploration and production spending for unconventional plays in the Lower 48 could grow from an estimated $87.3 billion this year to nearly $353.1 billion in 2035.
Upstream unconventional employment could grow from more than 1.7 million jobs in 2012 to nearly 3.5 million in 2035, the report said.
“This isn’t a partisan, one-party conclusion,” IHS Vice-Chairman Daniel Yergin noted. “The numbers from it were quoted by [US President Barack Obama] and [former Massachusetts governor Mitt Romney] in their presidential debates.”
Scarcity to abundance
The US oil and gas supply outlook has shifted from one of scarcity to one of abundance, creating unprecedented opportunity, American Petroleum Institute Pres. Jack N. Gerard told the forum. “The question now is what we’ll do with this opportunity,” he said.
Karen A. Harbert, president of the US Chamber of Commerce’s Institute for 21st Century Energy, told the forum that US policies must change to allow more US production. “We’d like to put money to work here instead of making producers wait 6, 7, or 8 months to get permits,” she said.
Noting that states traditional regulate oil and gas activity, Yergin said he believes federalizing the process could cause delays while the responsibility probably would devolve back to the states anyway.
Larry G. Chorn of Halliburton Co.’s unconventional resources division, noted that shales vary greatly, and that formation characteristics can vary within each play. “Anything we can do to reduce uncertainty about the next well will make the industry that much better off,” he said.
David Waterland, Schlumberger Ltd.’s North America vice-president of drilling, said technology improves a producer’s reservoir knowledge, which cuts drilling time. “My opinion is that US shale plays are not mature, but may be ready for the next stage,” he said.
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