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Natural Gas: America’s Abundant Resource
- Heating our homes- Generating more electricity
- Reviving U.S. manufacturing - Fueling transportation- Creating American jobs
Natural Gas RoundtableCongressional Briefing – September 18, 2013
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Scott Morrison - APGAGovernment Affairs
Manager [email protected]
Erik Milito – APIDirector,
Upstream and Industry Operations
Randall Luthi - NOIAPresident [email protected]
Don Santa INGAA
President [email protected]
Jeff Schrade - NGSADirector, Government [email protected]
David SweetWADEExecutive [email protected]
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Natural Gas Has Many Uses
Natural gas heats homes - 177 million Americans use it at home - 71 million U.S. homes and businesses use natural gas
Natural gas increasingly used to generate electricity In 2002, natural gas provided 16 percent of U.S. electric generation In 2011, natural gas provided 31 percent
Natural gas is also used in the manufacturing, chemical and fertilizer industries
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Natural Gas: Good news for U.S. Manufacturing
New projects 2012-2019
LNG Exports
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Natural gas becomes liquid when chilled to -260ºF Chilling shrinks it 600 times
– making it easier to transport LNG is…- Cold, clear, and colorless- Non-toxic, non-corrosive and non-explosive
22 export facilities have been proposed to export LNG to non-free trade countries
- 4 LNG export facilities have been approved so far
Natural gas: Good news for the Environment
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“Greater use of natural gas in early 2012 resulted in the lowest U.S. carbon emissions since 1992” U.S. Energy Information Administration, August 1, 2012
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Shale Changed the Game Improvements in
technology brought down production costs
Shale gas production quadrupled between 2006 – 2012 and is poised to comprise more than 40% of U.S. gas production in 2020
Diversity of supply complements strong and growing pipeline system, reduces vulnerability to hurricanes, brings natural gas closer to consumers
Gas Production by Type Through 2040Source: EIA Annual Energy Outlook 2013
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Technology Makes It Possible
Drilling technology improvements and efficiencies in shale have emerged
Longer horizontal laterals
Multiple-stage hydraulic fractures per lateral
Small surface footprint for multiple, extended wells
Ground water separated by thousands of feet and tons of impermeable rock and protected by state and federal regulation
Significant amount of water is recycled
“Micro-seismic” technology evolving and enabling even greater precision in fracturing wells
Source: American Petroleum Institute
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Abundant shale widespread across U.S. U.S. Gas Reserves Increased 22% between 2006 – 2009 Primarily Due to Shale Development
Source: Energy Information Administration based on data from published studiesUpdated: May 2011
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Natural gas production has shifted
Part of the reason
Federal drilling permit 2005 – 154 days
Federal drilling permit 2011 – 307 days
State drilling permit average – 12 to 15 days
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Positive News for the Economy
America’s New Energy Future: The Unconventional Revolution and
the Economy, IHS, October 23, 2012
Total Supported Employment• 2.1 million jobs supported in 2012• 3.9 million jobs supported in 2025
Including 515,000 manufacturing jobs- Jobs tend to high quality and high paying
$35/hr vs. $23/hr in general economyCapital Expenditures• $121 billion in 2012, rising to $240 billion by 2025
- $2.75 trillion cumulative between 2012 and 2025Gross Domestic Product Impact• $284 billion in value added contributions in 2012
- Increases to $533 billion / year in 2025Federal and State Government Revenues• $74 billion in 2012
- Increases to $240 billion in 2025Average Increased Disposable Household Income viaLower Energy Prices$1,200 in 2012, rising to $3,500 in 2025
Natural Gas Industry: Highly Regulated
Regulated by state and federal agencies Clean Water Act – surface water discharge, storm water runoff
Clean Air Act – air emissions throughout production to usage
Safe Drinking Water Act – underground injection disposal/reuse of produced water and flowback fluids
Federal Land Policy and Management Act – permitting for federal onshore resources
Outer Continental Shelf Lands Act – permitting for federal offshore resources
National Environmental Policy Act – permits and environmental impact statements
Occupational Safety and Health Act – requires information about chemicals used at every site
Emergency Planning and Community Right-to-Know Act – annual reporting to emergency responders of chemicals stored and used above certain quantities
Extensive State Oversight – implement federal laws and regulate drilling fluids and produced water management
Detailed state regulatory information available at www.STRONGERInc.org
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Natural gas estimates keep growing
Estimates have grown significantly with improvements in technology
If the 1966 estimate of 600 trillion cubic feet (Tcf) had remained static, the U.S. would have run out of natural gas about 10 years ago
Estimates have been conservative – history shows there is more to be discovered
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Pipeline System Extensive and Expanding at Record Pace
Between 2000 and 2010, FERC approved more than 16,000 miles of new interstate pipeline- Capacity to move an additional 113 bcf per day
Pipeline system connects U.S. with Canada and Mexico
Storage capacity grew 22% from 2006 - 2010
Half of new storage is flexible high-turnover salt domes closer to customers
U.S. Natural Gas Infrastructure: Anticipated Investment Through 2035
Source: INGAA Foundation’s North American Natural Gas Midstream Infrastructure Through 2035
$205B in midstream infrastructure investments
125,000 jobs every year for 20 years
$57B in federal, state & local tax revenue
since 2005, pipeline avg. cap/ex:
$8.8 Billion/yr
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Off Limits Under Federal Law or Moratorium
Available for Energy Exploration but closed to leasing due to current Federal Policy
Available for Production & Exploration
Offshore access is the key
Estimated Offshore ResourcesWe still have a lot out there
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Natural Gas Vehicles
A growing NGV market addresses a number of America’s priorities:
• Foreign oil displacement• Urban pollution reduction • Jobs• Balance of trade
20-25% of transit buses on US roads are natural gas powered, and last year over 50% of
trash trucks purchased were NGVs
The biggest driver is… cost savings 18
Propane – from natural gas processing - is also used to fuel vehicles
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Tax-exempt financing is the
primary method by which
cities and towns
finance infrastructure
Potential Efforts to alter the current
system:
Eliminate Tax-exempt financing
Reduce benefits to wealthy individuals of
purchasing municipal bonds
Tax exempt financing
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To Continue to Make Good things happen… Industry is Committed to Good Stewardship
Listening to and addressing community concerns
Use of stringent industry and government standards on land reclamation,
well construction, water management and pipeline safety
Responsible hydraulic fracturing practices
Minimizing surface effects on land and infrastructure
Offshore safety and spill containment
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… And Government Must Do Its Part As Well
Fair access to onshore and offshore resources
Continued strong and effective state regulation of hydraulic fracturing
Level playing field: avoid picking winners and losers through mandates
Tax policy must be fair, not burdensome, and compatible with resource
development and job creation
Financial regulations must not create “economic drain” on investment
Provide regulatory environment compatible with pipeline infrastructure
investment and safe, reliable operation
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American Petroleum Institute (API)1220 L Street, NWWashington, DC 20005-4070202-682-8000 www.api.org
American Public Gas Association (APGA)201 Massachusetts Avenue, NE, Ste C-4 Washington DC 20002 202-464-2742 www.apga.org
Interstate Natural Gas Association of America (INGAA)20 F Street, NW, Suite 450 Washington, D.C. 20001202-216-5900www.ingaa.org
National Ocean Industries Association (NOIA)
1120 G Street, NW • Suite 900Washington, DC 20005202-347-6900www.noia.org
Natural Gas Supply Association (NGSA)1620 I Street, NW, Suite 700Washington, DC 20006202-326-9300www.ngsa.org
World Alliance for Decentralized Energy(WADE)1513 16th Street, NW Washington, DC, 20036(202) 667 5600www.localpower.org