Sam Fletcher
OGJ Online
HOUSTON, June 18 -- Future US natural gas supplies must come primarily from increased imports of liquefied natural gas (LNG) and more exploration and development of deepwater gas resources, said Ronald E. Oligney, co-author of The Color of Oil, a study of the history, economics, and politics of oil and gas development.
However, he said, development of those offshore resources will require a push to develop technology similar to that mounted by the National Aeronautics and Space Administration for the space program.
In a speech Monday at an annual symposium of the Society of Professional Well Log Analysts in Houston, Oligney offered a succinct explanation for California's current energy crisis.
"Gray Davis (California's Democratic governor) is an idiot," he said, to the delight of the upstream service industry representatives.
After years of government policies that prevented construction of new power plants and forced utilities to buy gas supplies on the open market rather than through long-term contracts, Davis and other California politicians are now trying to shift the blame to energy companies and marketers outside that state, Oligney said. "We are the 'bastards in Texas' who get attacked," he said.
"It's frightening how we have politicized the energy debate in this country," said Oligney, an adjunct professor and director of engineering research development at the University of Houston.
The development and marketing of energy "should be a populist issue, but somehow it has been relegated to the conservative side of the Republican Party," he said.
While today's hydrocarbon industry operates more cleanly and more environmentally friendly than at any previous time in its history, that's not good enough for some of its critics who want to kill off the industry, said Oligney, who also cofounded an Australian-based environmental contracting firm.
However, he said, alternative energy sources won't replace oil and gas in the foreseeable future, not when it would take 20,000 windmills to generate the same power as one 2,000-Mw power plant.
Although conservation is again a buzzword among politicians and environmentalists, it won't play a significant role in reducing energy demand because today's energy market has changed since the oil boom of the late 1970s, he said.
"Today, 15%-20% of all US power is consumed by computers and the internet," Oligney said.
Calls by Davis and other politicians for price caps on the electricity market will not resolve the basic fundamentals of supply and demand, and the need for California pipelines, said Oligney.
The recent rush by California politicians to shorten the licensing process for power plants will mean nothing if they don't simultaneously address the problem of developing gas supplies to fuel those plants, he said.
The current ramp-up of conventional drilling in mature US land areas "is not going to have much impact" in providing those future supplies of natural gas. Nor will industry lobbying to open the Arctic National Wildlife Refuge in Alaska to exploration. "That's not going to happen," Oligney said.
US consumers cannot count on Canada or Mexico for sufficient new supplies of natural gas. And by the time the proposed Alaskan natural gas pipeline is built, Oligney said, the US market "will need three or four more" just like it.
Contact Sam Fletcher at [email protected]
