A Range Resources Corp. executive said last week he believes the federal government will eventually allow liquefied natural gas (LNG) to be exported but cautioned that the industry shouldn't be complacent and assume it will be so.
"Congress today is very much in favor of capitalism, entrepreneurship and seeing manufacturing and our industry make a lot of money by introducing international markets," Range COO Ray Walker told attendees of Hart Energy's DUG East Conference in Pittsburgh. "I think that's the approach that will win out. Most people, when they just use a little bit of common sense and think about it, will realize that there's no other way to do it. It's not a big deal and we ought to encourage [exports].
"But one thing we as industry cannot do is just sit back and assume it's going to be OK. We have to get out there and address some of those issues. We have got to work with Congress and give them the support they need. We have got to educate the public. Commercials, ad campaigns, all of those sorts of things are really critical. And you're starting to see big industry organizations...beginning to tackle that."
Walker predicted that natural gas production would remain steady and largely unaffected by fluctuations in the nation's rig count.
"The industry is getting a whole lot better every day that goes by," Walker said. "We're becoming more efficient, and we're doing more with less. We drill a lot more footage of lateral today with the same rig, in most cases twice what we did a couple years ago. We frack [hydraulically fracture] a lot more wells per day, and frack crews are a lot more efficient. We also sometimes overlook that our geology groups are all becoming very much aware of reservoir description attributes. You're seeing that we continue to make better and better wells, and in all of these shale plays the decline rates are far less than we thought.
"[But] what this industry really needs to do is create more demand for our product. If we're going to see prices go up, that's where it's going to come from."
Walker also predicted that natural gas production in the Appalachian Basin would surpass Qatar's North Field within a couple years and would have higher reserves "in the not too distant future." The North Field is considered the largest gas field in the world (see NGI, March 25, 2011).
"You'll see numbers like we've seen previously in the Marcellus, 400-500 Tcf," Walker said. "But you have to remember that is only the Marcellus. We're beginning to recognize that the Utica has a lot of potential. There could be some tremendous reserves there. As an industry we're also drilling a lot more wells into the Upper Devonian, so it's essentially a double. So if you take 400-500 Tcf in the Marcellus and add those additional formations and their stacked pay potential, there's no question that the Appalachian Basin could be much larger than the North Field."
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