Tom S. Price, Jr., Senior Vice President of Corporate Development and Government Relations, Chesapeake Energy Corporation
In a speech at the renowned Massachusetts Institute of Technology in late October, President Obama clearly and cogently said our nation’s economic future is tied to its environmental promise, and described innovation as the key to righting a flagging economy, saving the globe’s natural resources and ensuring our nation’s competitiveness, according to news reports.
There is a fervent discussion about climate change underway around the world. Some believe it is anthropogenic and some do not. The conflicting viewpoints do not diminish the incontestable fact that we have an inherent responsibility to take care of the planet and its natural resources.
For too many decades, economic and environmental interests have taken polarized positions. We have all heard the opaque arguments from both sides of this fierce—and occasionally divisive—discussion. And while we endlessly debate the true costs to wean the American economy off its dependency on carbon, we continue to transfer an estimated $25 billion per month to foreign nations to buy their oil to quench our insatiable thirst—the very same nations that are openly hostile to our democratic way of life and would not hesitate to use this valuable resource to do us economic harm.
Yes, we can all agree it is insane, especially when you consider that we can reverse this insidious situation sooner rather than later—and it would be simple to do, if only our country could muster the political and commercial willpower to make the all-important transition to carbon-light natural gas, which is produced in America by Americans. Natural gas burns 50% cleaner than coal and 30% cleaner than oil, and, most importantly, it is abundant and more affordable. What is not to like about such a resource?
Innovations in the past 10 years have made it possible for the US to begin transitioning its transportation and electric generation systems to natural gas. These are “made in America” innovations resulting from good old-fashioned American ingenuity. If I may use President Obama’s campaign slogan to drive home the point: “yes, we can” strengthen our economy by creating new jobs; “yes, we can” clean our air; and “yes, we can” make our country more secure than it is today. “Yes, we can” build a better, greener and brighter energy future.
I recall a thoughtful editorial by former US Sen. Timothy Wirth in which he made a sound case that natural gas and renewable energy sources can be complementary pillars of a clean energy strategy that can create millions of new jobs, enhance our energy security and protect our global climate. As Senator Wirth wisely stated in his piece, “it is not enough to admire these resources—we must harness them.”
Yes, now we can harness them, especially US-produced natural gas, thanks to incredible technological advances that allow E&P companies like Chesapeake to pinpoint and extract large gas reserves housed deep below the earth trapped in rock formations.
Just three years ago, some policy makers were skeptical that the US had enough natural gas to fuel its economy for years to come, much less decades. Not anymore. Following groundbreaking studies sponsored by the American Clean Skies Foundation in July 2008 and the Potential Gas Committee in June 2009, policy makers have reconstituted their natural gas supply data, taking into account the unprecedented and enormous potential of new domestic gas developments in what we call “unconventional” resource areas, including deep onshore shale gas plays. Today we know of at least 22 major deep shale plays in the US spread over more than 20 states.
When the American Clean Skies Foundation released its North American Natural Gas Supply Assessment, conducted by a team of recognized experts at Navigant Consulting, it was considered a game-changing moment. The Navigant study pegged America’s recoverable gas resource base in the range of 1,680–2,247 Tcf, representing 88–118 years of supply at 2008 production rates. As a result of the Navigant Study and the Potential Gas Committee study, which pegged the resource base at 2,074 Tcf, the US Energy Information Administration increased its estimate to 1,747 Tcf in 2009.
There is no longer any debate about gas supply in the US. We truly have an abundance of natural gas, and it has been brought to the market in a timely and effective manner by America’s natural gas industry. The product surge in natural gas over the last three years has been dramatic—too rapid for most industry analysts to grasp. Why? The answer is innovation, especially in the area of exploration and well completion technologies.
Chesapeake and other independent E&P companies have known about the existence of large quantities of natural gas in shale for many years. These formations were so nonporous and geographically spread out, and gas prices were so consistently low in the early 1990s and early 2000s, that it was not economically feasible to explore them. Several technologically savvy independent producers were able to combine horizontal drilling, hydraulic fracturing and state-of-the-art geosciences and geophysics to crack the code on deep shale gas plays.
In many ways, the leaders in today’s natural gas industry have become more like manufacturers than the wildcatters of old. The shale formations represent a large source of valuable raw materials for the production of natural gas. As with any manufacturing process, it is now possible for the natural gas industry to dial down or dial up production to conform to prevailing market conditions. Additionally, the industry’s ability to more efficiently and immediately respond to fluctuations in supply and demand, thanks to continued innovation, means more stable pricing in the future, which is important to US industrial users.
The US gas industry is poised to resume rapid growth when market demand warrants. We have enough natural gas in America not only to run our transportation system but also to generate the power we need to keep our economy strong and our way of life secure for generations.
With natural gas, the US can regain its rightful place as the leader of the worldwide environmental movement. We can create jobs, clean our air and lessen our dependency on foreign oil. But we are at a turning point. To pursue the full potential of natural gas, we must not relent in our focused efforts, through groups like the American Natural Gas Alliance and the American Clean Skies Foundation, to educate policymakers and the general public on the advantages of natural gas. 
|
THE AUTHOR
|
 |
Thomas S. Price, Jr., is Senior Vice President of Corporate Development and Government Relations of Chesapeake Energy, having been with the company since 1992 and a consultant during the prior three years. He was previously employed by Kerr-McGee Corporation and by Flag-Redfern Oil Company, both in Oklahoma City. Mr. Price earned a BA degree with honors from the University of Central Oklahoma in 1983 and master’s degrees from the University of Oklahoma in 1989 and from Thunderbird, the American Graduate School of International Management, in 1992.
|
| |
| |
|
|
