Significant advances in technology have unlocked abundant quantities of natural gas and crude oil in North America, but the potential benefits of these resources can only be realized through prudent development. This was one of the many key points in a report released by the National Petroleum Council last month.
Andrew Slaughter, business environment manager, Shell Upstream Americas, provided an overview of the study on Oct. 11 at the Black & Veatch quarterly breakfast forum.
Slaughter said the 18-month study, entitled Prudent Development: Realizing the Potential of North America's Abundant Natural Gas & Oil Resources, involved 400 people making substantive contributions. The experts were from diverse backgrounds and organizations, and many were from outside the oil and gas industry.
Core strategies
Slaughter discussed the five core strategies that NPC proposed in its report:
• Supporting prudent development and regulation of oil and gas resources through councils covering environmental, safety, and health practices.
• Corporate and regulatory commitment to advancing environmental performance.
• Engaging communities.
• Reducing methane emissions.
• Structuring policies to support prudent development of, and access to, these resources.
Another strategy in the report is to reflect environmental impacts in markets and fuel technology choices by recognizing the US will find it difficult to reduce greenhouse gas (GHG) emissions further without a mechanism for putting a price on GHG emissions that is part of a global framework; keeping options open for carbon capture and sequestration; and developing information on environmental footprints and full fuel cycle impacts.
NPC also recommends enhancing the efficient use of energy through policies that support continued progress to adopt cost-effective efficiency standards for buildings and appliances; remove the disincentives for utilities to deploy efficiency measures; and eliminate barriers to combined heat and power as a way to increase the efficiency of electricity production.
Another strategy is to enhance the functioning of energy markets through policies that improve mechanisms for utilities to manage the impacts of price volatility; harmonize market rules and service arrangements between the wholesale natural gas and wholesale electric markets; and increase environmental regulatory certainty affecting investments and fuel choices in the power sector.
It is also important to support the development of a skilled workforce through increased funding for training activities.
Conclusions
North America's potential gas supplies are far more significant than was thought, even just a few years ago. It is now understood that the gas resource base is enormous and that its development—if carried out in acceptable ways—is potentially transformative for the American economy, energy security, and the environment. These resources have the potential to meet even the highest projections of demand reviewed by this study.
The North American oil resource base offers substantial supply for decades ahead and could help the US reduce, but not eliminate, its requirements and costs for oil imported from outside of North America. Realizing the potential of oil, like gas, in the future will depend on putting in place appropriate access regimes that can allow sustained exploration and development activity to take place in resource-rich areas.
Even presuming that the US uses energy much more efficiently, diversifies its energy mix, and transitions to a lower carbon fuel mix, Americans will need gas and oil for much of their energy requirements for the foreseeable future. Moreover, the oil and gas industry is vital to the US economy, generating millions of high-paying jobs and providing tax revenues to federal, state, and local governments.
In order to realize the benefits of these larger gas and oil resources, responsible and environmentally acceptable production and delivery must be ensured in all circumstances. Many oil and gas companies are committed to such goals. The path to sustained and expanded resource development includes commitment of industry and regulators to continuous improvement in practices to eliminate or minimize environmental risk.
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