Posted February 28, 2014
GE Chairman and CEO Jeffrey Immelt:
“A lot is taking place in natural gas. People historically have viewed this as a transition fuel. Now it’s becoming more of a baseload fuel. There’s more supply diversity, it’s viewed incrementally as cleaner and an interim solution to environmental issues. We see that taking place.”
Colorado Gov. John Hickenlooper’s state is at the forefront of shale development, thanks to advanced hydraulic fracturing and horizontal drilling. A trained geologist, Hickenlooper has first-hand knowledge of fracking:
“What this horizontal drilling/hydraulic fracturing, has done – it’s a technological innovation, which means that the recoveries and your ability to predict cost and quantities of energy is much more accurate, much more predictable. That’s a huge part of what we’re trying to get people to recognize. This is something in the history of this country is one of the biggest game-changers we’ve seen, certainly in several generations.”
Kenneth A. Hersh, CEO and managing partner of NGP Energy Capital Management, said shale energy has completely changed America’s energy narrative:
“U.S. natural gas was seen as limited, and as a result the big users of natural gas had to move offshore or somewhere else where they could guarantee a 30-year supply. Because it was always thought that the United States had this eight- to 10-year reserve life and it was very unpredictable and maybe or maybe not it would materialize. Now there is no debate about the size of the supply base of North America. … In terms of supply, now we’ve got confidence that if you want to site a power plant, and you want to use baseload power supplied by natural gas, you can have confidence it’ll be there for 30 years. Same thing with fertilizer plants, petrochemicals, you name it.”
The United States is at the dawn of a new American energy era, one that’s driven by natural gas and oil from shale – an era we can choose to fully embrace with pro-development strategies and policies. ConocoPhillips Chairman and CEO Ryan Lance, speaking in Houston this week, compared the shale revolution to a baseball game (Houston Business Journal coverage):
"We're in the first inning of a nine-inning game on the shale revolution in the United States. … What people are learning is we've only scratched the surface on what technology can do to improve that outlook over the years. This is a layer that is going to last for quite some time."
Let’s go back to something Immelt said. Natural gas from shale has an added benefit: Its increased is improving the environment, helping drop U.S. carbon dioxide emissions to their lowest level since 1994, according to the U.S. Energy Information Administration. This environmental benefit is seen in EPA’s just-released greenhouse gas inventory, which found that total U.S. emissions (measured in CO2 equivalent) decreased 3.3 percent from 2011 to 2012. EPA also found methane emissions have decreased more than 10 percent since 1990. The largest source of methane, EPA says, is enteric fermentation from cattle populations. The report:
From 2011 to 2012, CO2 emissions from fossil fuel combustion decreased by 3.8 percent, with emissions from fossil fuel combustion at their lowest level since 1995. This decrease from 2011 to 2012 is primarily a result of the decrease in the carbon intensity of fuels used to generate electricity due to a slight increase in the price of coal, and a significant decrease in the price of natural gas.
EPA’s chart showing the annual percent change in U.S. greenhouse gas emissions, 1991-2012:
Put the pieces together: The United States has vast reserves of shale energy and exploration and production technologies that are moving the U.S. to global leadership in combined output of oil and natural gas. This week, Citigroup’s commodities research manager said the U.S. would be a net-zero importer of energy 2020. That’s the new energy reality: opportunities born of abundance, economic growth, more energy security and a better environment.
ABOUT THE AUTHOR
Mark Green joined API after a career in newspaper journalism, including 16 years as national editorial writer for The Oklahoman in the paper’s Washington bureau. Mark also was a reporter, copy editor and sports editor. He earned his journalism degree from the University of Oklahoma and master’s in journalism and public affairs from American University. He and his wife Pamela live in Occoquan, Va., where they enjoy their four grandchildren.