Natural gas utilities often face different issues than producers and pipelines. But keeping domestic supplies abundant and affordable by resisting rash legislative proposals was very much on Chris McGill’s mind as he prepared to visit Houston.
“It’s an interesting contrast,” he told me during a June 2 interview at the American Gas Association, where he’s managing director of policy analysis. “In the short-to-medium term, if we are pushed legislatively in the direction of encouraging alternative and renewable energy sources and dealing with global climate change, natural gas will be very important.”
The US market has clearly grown in the last 3-4 years, McGill said. Technology, discovery rates, and economics all have improved. The US supply picture is very solid, and that’s before including LNG imports.
“It’s an abundance message, but diversity also is important. You have to have policies that support developing these resources. If you start picking off options, whether in the Intermountain West or on the Outer Continental Shelf, this abundant resource could become limited,” McGill warned.
Constant advocates
Gas should be viewed less as what he termed “a carbon fuel impediment” and more as part of the US global climate-change strategy, McGill said. Producers, pipelines, and utilities all need to be constant advocates, he said.
“There’s an untold technology story too. Gas gets short-changed and is not viewed as high-tech. Yet we’ve had progress in burner-tip efficiency and in securing new supplies in the past few years,” he said.
“More important, gas is available right now. What’s more, we have the domestic supplies to meet foreseeable demand,” McGill said.
In a week when a House Natural Resources subcommittee was holding a hearing on hydraulic fracturing and the American Petroleum Institute scheduled a teleconference with reporters on the technology, McGill also acknowledged the controversy surrounding the process for producing gas from shale formations.
An inappropriate link
One problem in the debate is linking hydraulic fracturing to water problems associated with coalbed methane production, which occurs much closer to the surface and is likelier to pose challenges in keeping impurities out of potable aquifers, McGill said.
“A frac job at 7,000 ft below the surface, if it’s properly done, will be separated by thousands of feet from an aquifer. If the well is properly drilled and cased, production should not disturb drinking water supplies,” McGill said.
Shale gas recovery also requires millions of gallons of water, he continued. “These problems need to be addressed locally, but producers, states, and communities already are discussing specific questions,” he said.
Not every producer behaves in exemplary ways, McGill conceded, but most recognize that it’s in their best interests to be candid with landowners and nearby communities.
