Abundant Natural Gas Drives Operators To Liquids Shale Plays

By Rita Tubb, Executive Editor | June 2012, Vol. 67 No. 6

As to future LNG export regulatory hurdles, Moss said he doesn’t view this as insignificant even though a number of companies have filed for LNG export permits and Sabine Pass Liquefaction, a subsidiary of Cheniere Energy Inc., won approval from U.S. regulators to export 2.2 Bcf/d of LNG from a terminal in Sabine Pass, LA. The permit is a second for the Cheniere subsidiary. The company won a permit earlier to export LNG to countries that have a free-trade agreement (FTA) with the U.S., such as Mexico and Canada.

While LNG exports are expected to create jobs and provide markets for domestic natural gas, there is a tremendous amount of political pressure against allowing the export of natural gas. One main concern is that exports could lead to higher natural gas prices in the U.S. That latter point is why Moss said the manufacturing sector is one of the main opponents to the export of natural gas. Manufacturers credit low prices to creating a domestic competitive advantage.

“There is also that core opposition from environmental groups that oppose any extraction of hydrocarbons,” he said.

CO-2
Other highlights of the session included speaker Robert Bryce, energy writer and author of Power Hungry and Gusher of Lies, who discussed the impact of CO2 emissions. Bryce told attendees that over the last decade the five countries with the biggest percentage growth in CO2 emissions were: Viet Nam, 137 percent; China, 123 percent; Qatar, 115 percent; Trinidad 84 percent; and India with 78 percent.

Over the last decade, he said, U.S. CO2 emissions could have gone to zero and global CO2 emissions still would have increased.

J. Mark Robinson, consultant, URS Corporation, who spent 31 years with the Federal Energy Regulatory Commission, gave a lively Washington perspective focusing on energy past and energy future.

Robinson shared the accompanying slide showing the growth of natural gas by sector from 2010-2035 and the 1.5 Tcf of growth in electric power projected over the 25-year period.

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In a questions and answer session, Kelcy C. Warren, chairman and CEO, Energy Transfer Partners, outlined key issues facing midstream operators in today’s fast-moving environment.

A huge challenge, he said, is determining the rules of the game. “The worry is that the government will suddenly say we’re not playing that game anymore and come up with new rules.”

In providing his perspective on mature shale plays, he considered the most profitable, Warren identified the Marcellus, Eagle Ford and the Permian Basin as “extremely profitable.”