AGA official's message: Keep US gas abundant with sensible policies

Natural gas utilities often face different issues than producers and pipelines. But keeping domestic supplies abundant was on Chris McGill's mind as he prepared to visit Houston.

Jun 2nd, 2009

Local distribution companies often face different issues than natural gas 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 an 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 domestic market has clearly grown in the last 3-4 years, he continued. Technology, discovery rates and economics all have improved. The US supply picture is very solid, and that's before including liquefied natural gas imports.

"It's an abundance message, but diversity is also important. You have to have policies which 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, he told me. 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," McGill said.

"More important, gas is available right now. What's more, we have the domestic supplies to meet foreseeable demand," he added.

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, he explained.

"A frac job at 7,000 feet 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. For example, do you take water from streams during the summer when they're at their lowest or store water from spring runoff?" 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. "They simply want to recover the gas as economically, and with as little environmental impact, as possible," he said.

Contact Nick Snow at nicks@pennwell.com

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