US Energy Secretary Steven Chu was in the lion’s den, so to speak, when he gave a keynote speech at the IHS CERA energy conference in Houston this week attended by thousands of oil, gas and power generation executives. And several noted that he finally gave them what they have been looking for – a signal that the Obama administration recognises the importance of domestic natural gas to the US’ energy future.
Chu said that he requested in September a study from the National Petroleum Council entitled Prudent Development of North American Natural Gas and Oil Resources. Groundwork, he said, is underway to initiate the study this spring. He noted that while natural gas still produces emissions, it is less than other fossil fuels. And he said that natural gas is a key enabler of renewable energy, by providing a power source when solar and wind are not available.
These are all things the industry has been trying to get Congress and the Obama administration to recognise but have felt their message was falling on deaf ears, given that the US goverment has proposed higher taxes on the natural gas industry, and is tightening resource access.
Indeed, Jim Mulva, chief executive of ConocoPhillips, the third biggest US oil and gas company, told the CERAWEEK conference after Mr Chu was done that the US government has yet to exploit its natural gas potential. New technology and expertise has enabled the industry to extract natural gas from shale rock, which has led to estimates of US onshore supply rise from 30 years’ worth, at current usage rates, to 100 years’ worth, in just the past few years.
Mulva said the US government holds 2.4bn acres of mineral estate – larger than the land area of any of the world’s countries, except Russia and Canada. And yet just 3 per cent of this has been leased for energy development. He said:
The shale gas revolution here occurred on private and state land, not federal land. Think of the economic develoment and job creation potential if more land was opened. And if less red tape tied up the acreage that is leased.
He pointed to China, which supports renewable energy but does not oppose fossil fuels:
They will soon begin assessing their shale gas potential. With assistance, I might add, from the same US government that has ignored the shale potential here. US energy policy brings to mind a famous Winston Churchill quote – A riddle wrapped in a mystery inside an enigma.
Chu’s comments indicated that he, for one, believes natural gas could be a part of the clean energy movement – and a number of people in the audience took heart at that.
Related links:
Natural gas focus of CERA oil conference, pointing to the source of the future (FT Energy Source)
