The “golden era” is approaching for natural gas — but don’t look for it to begin this year, Range Resources Corp. CEO John Pinkerton said last week.

“It took six and a half years for the gas rig count to double, and it has taken just seven months for the rig count to drop in half,” Pinkerton told an audience at the Independent Petroleum Association of America’s 2009 Oil & Gas Investment Symposium.

In the short-term, Pinkerton thinks it will take more than a small gas price increase to get U.S. onshore producers back in the game.

“The rig count will not rebound materially until natural gas prices rise to the marginal cost,” said the CEO. Once gas prices increase and the rig count rebounds, “it will likely take at least a year for production to stop declining.”

The CEO also isn’t optimistic about capital spending by gas explorers this year. In fact, he thinks producers will continue to cut their budgets through 2009 and into 2010 because “most companies’ hedges roll off at year-end 2009.”

What about that “golden era?” That, said Pinkerton, is longer term.

“The industry has found significant amounts of natural gas in shale plays that can be developed at low cost,” he told the audience. “Unlike conventional plays, shale plays are very repeatable and the economics tend to get better over time.”

Even though prices are low, Pinkerton said his company still plans to double its gas output in the Marcellus Shale and to double it again in 2010. Range’s rate of return in the Marcellus play is 34% when the New York Mercantile Exchange price is $4/Mcf.

“While some capital is required, the shale plays are in areas with reasonable pipeline infrastructure already in place,” and they can be developed using technology already available, he said.

Longer term, arguments for oil and coal won’t stand up when compared to natural gas, said Pinkerton. In addition, renewables remain “very expensive and will take many, many years to have a material impact. Nuclear has a very long construction time, high upfront cost and that NIMBY [not in my backyard] factor.”

And Pinkerton also can’t wait for the coming debate on cap-and-trade emissions. The debate, he said, will only “enhance the economics of natural gas versus coal.”

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