CSIS speaker: Community benefits are key to next US gas phase

Communities should be able to continuously share economic benefits from increasing US tight oil and shale gas production, experts said.

Industry’s ability to help communities do more than merely withstand the impacts of unconventional development will be an essential part of realizing a dramatically improved US oil and gas potential, speakers told a Feb. 18 event at the Center for Strategic and International Studies (CSIS).

The sustainable shale growth zones that US President Barack Obama mentioned in his 2014 State of the Union address could be aimed at sharing economic benefits where development impacts are heaviest, said Paula Gant, deputy assistant US energy secretary for oil and gas.

“In Ohio, where many plants shut down over several decades, there’s interest in developing the Utica shale in ways that stimulate industries,” she said.

Noting the concept still is being developed, Gant said, “This is a good time for all of us to ask how we can help these communities.”

Clay Bretches, Anadarko Petroleum Corp. vice-president of exploration and production services and minerals, said he has yet to hear details about local economic-benefit ideas.

“What I hope is we’ll see education opportunities for people to gain skills in new areas,” Bretches said. “I also hope it doesn’t impinge on state regulatory primacy.”

Gant responded that the Obama administration is well aware of states’ regulatory contributions.

“The focus will be on finding ways to help affected communities more,” she said. “The potential to realize this abundance rests at the local level. There’s a tremendous need for the states and oil and gas industry leaders to take the necessary steps to make sure local needs are met.”

Additional steps

It will be essential for the US to recognize how oil and gas markets have changed, and for policy makers to implement policy reforms in response, Gant said.

More investment will be needed in infrastructure, research and development, and manufacturing, she said. Gant also called for US resources and technology to be used effectively to improve energy security.

Frank A. Verrastro, a senior vice-president and holder of the James H. Schlesinger Chair for Energy and Geopolitics at CSIS, moderated the discussion.

He noted oil and gas supply situations keep changing.

“The high resource scenario of yesterday has become the standard resource base,” he said

Adam Sieminski, US Energy Information Administration administrator, noted domestic production of natural gas strictly from gas reservoirs is beginning to diminish.

Much gas production now is associated with oil production.

EIA anticipates the US will become a net gas exporter by the end of this decade while crude oil production from tight shales, which has lagged gas’s growth, could approach 10 million b/d by 2016.

An EnCana Corp. spokesman said industry knew shale gas could be a robust contributor.

“We did not expect its rise to be so meteoric,” said Douglas Tierney, EnCana vice-president for business development. “We’re finding more and more supplies at less and less cost. That’s the takeaway.”

A recent reassessment of 2011 data by IHS Energy found US and Canadian unconventional resources potentially could produce 10 times as much as conventional supplies, Tierney said.

“This winter was a good test,” he said. “The price behaved as it should.”

Demand outlook

In its recent study for the American Gas Foundation, IHS forecast gas demand for power generation will grow 3%/year (compared to EIA’s 0.8%/year) as consumers buy energy-consuming devices, such as big-screen televisions, said Mary Barcella, director of North American natural gas at IHS.

“The transition will not be smooth,” she warned. “Lots more demand is expected, particularly in the 2015-17 period, and it will put more pressure on producers. If they haven’t ramped up, there could be a temporary price spike.”

Andrew J. Slaughter, vice-president of energy research at IHS, said pipeline operators will need to be confident with market fundamentals before investing in additional infrastructure.

Barcella said it’s important not to overestimate the potential for US LNG exports.

“Even if the market doubles in the next 20 years, there are more than enough proposals to supply it,” she said. “The situation could change dramatically if Japan makes methane extraction from hydrates profitable in the next decade.”

Slaughter noted the NPC’s 2011 study estimates it could take 50-70 years to bring North American gas hydrates into production. “Japan could get it earlier because it’s so dependent on LNG imports,” he said.

Contact Nick Snow at nicks@pennwell.com

Related Articles

MARKET WATCH: NYMEX oil price bounces back up somewhat

02/06/2015 Crude oil prices on the New York market bounced up $2/bbl to settle slightly above $50/bbl Feb. 5. The positive momentum continued during early Jan...

Congressional Republicans renew bid to halt sue-and-settle maneuvers

02/05/2015 Calling it an affront to regulatory accountability that results in unchecked compliance burdens, US Sen. Charles E. Grassley (R-Iowa) and US Rep. D...

Oil-price collapse may aggravate producing nations’ other problems

02/05/2015 The recent global crude-oil price plunge could be aggravating underlying problems in Mexico, Colombia, and other Western Hemisphere producing natio...

Goodlatte reintroduces bills to repeal, reform RFS

02/05/2015 Calling it “a true ‘kitchen table’ issue,” US Rep. Bob Goodlatte (R-Va.) reintroduced a pair of bills to address problems in the federal Renewable ...

MARKET WATCH: NYMEX oil drops, ending 4-day rally

02/05/2015 Crude oil prices dropped on the New York market Feb. 4 to settle below $50/bbl and to end a 4-day rally after a weekly government report showed oil...

Alberta’s premier seeks more North American energy integration

02/05/2015 Better policy integration and cooperation will be needed for Canada, Mexico, and the US to fully realize the North American energy renaissance’s po...

Deloitte studies oil supply growth for 2015-16

02/04/2015 A Deloitte MarketPoint analysis suggested large-field projects, each producing more than 25,000 b/d, could bring on 1.835 million b/d in oil supply...

Oil, gas infrastructure investments essential, House panel told

02/04/2015 Investments in oil and gas transportation and storage should move ahead because they are essential in continuing the US economic recovery and North...

Petrobras CEO, five other senior executives resign

02/04/2015 Maria das Gracas Foster, chief executive officer of Petroleo Brasileiro SA (Petrobras) since 2012, has resigned along with five other senior execut...
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


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


US Midstream at a Crossroads

Fri, Mar 6, 2015

Oil & Gas Journal’s Mar. 6, 2015, webcast will focus on US midstream companies at an inflection point in their development in response to more than 6 years shale oil and gas production growth. Major infrastructure—gas plants, gathering systems, and takeaway pipelines—have been built. Major fractionation hubs have expanded. Given the radically changed pricing environment since mid-2014, where do processors go from here? What is the fate of large projects caught in mid-development? How to producers and processors cooperate to ensure a sustainable and profitable future? This event will serve to set the discussion table for the annual GPA Convention in San Antonio, Apr. 13-16, 2015.

This event is sponsored by Leidos Engineering.

register:WEBCAST


Emerson Micro Motion Videos

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