We're living in a "golden age" for natural gas -- especially in the United States -- and there is more than enough to export as liquefied natural gas (LNG), but an executive from ExxonMobil Corp. warned that the industry still needs to focus on getting essential infrastructure built and continue its commitment to operate safely in the public domain.
John Dashwood, vice president for the Americas at ExxonMobil Gas & Power Marketing Co., said the United States currently has the equivalent of about 100 years of gas supply.
Dashwood says that abundant supply not only is expected to meet domestic demand and revive a number of energy-use sectors, “but it has set the country up to be a global energy player, in particular in the LNG industry," Dashwood told attendees of the LDC Gas Forum Northeast in Boston on Tuesday. "Further, the industry this winter successfully dealt with a significant stress test, with cold weather leading to record-breaking U.S. gas demand for heating requirements.
"And while ultimately gas was delivered as never before, we have to ask ourselves if the industry delivered as much gas as was needed, where it was needed, when it was needed and maintaining its affordability. More important, what are the settings as we go forward that will help us do this even better in the future."
According to Dashwood, ExxonMobil projects that power generation will be the fastest-growing sector, accounting for about 55% of total energy growth through 2040. He said power generation will also become the largest energy sector by 2040, reaching about 40% of demand that year, followed by industrial demand at about 25%. Transportation is forecast to be the second-fastest growing sector, at a little more than 1% per year through 2040.
"Fossil fuels will continue to meet nearly 80% of the world's energy needs through 2040," Dashwood said. "Coupled with its abundance and flexibility, we expect natural gas to be the world's fastest-growing energy source through 2040, with global demand rising close to 65%. We also expect it to overtake coal as the second-largest energy source, behind only oil, by 2025."
Dashwood said that as of January 2012, there was 1,290 Tcf of technically recoverable unconventional resources in the United States. There was also an additional 1,000 Tcf of conventional resources.
"There is far more than enough supply available for domestic needs," Dashwood said. "Reserve numbers will likely continue to grow as technology unlocks new opportunities.
"There is some debate in the public domain regarding whether energy exports are in the national interest. Some have called for a limit on U.S. exports in the interests of the nation, arguing that exports will come at the expense of domestic gas consumption and affordability. Attempts to restrict or limit LNG exports would be inconsistent with long-standing U.S. positions on free trade and open markets that have enhanced global prosperity."
Having enough gas to meet its domestic needs and possible exports puts the United States "in a golden age for natural gas," Dashwood said, adding that the "settings here are very hard to replicate, at least all of them, in other parts of the world. There are likely eight to nine settings that are very specific to the U.S. If you're missing just one of them, it makes a very big difference to how that unconventional resource development program will proceed.
"To get this supply to the markets that need it in a timely and efficient manner we need to get the settings right to encourage the required infrastructure. Planning for peak days, such as the ones experienced this past winter when gas consumption hit record levels, will be important. The robustness of our energy systems will be important if we are to sustain the performance we had this winter with another winter like it."
Dashwood added that the factors that affect infrastructure expansion differ from region to region. He called on all stakeholders involved in natural gas -- producers, marketers, pipelines, utilities, consumers, landowners and local governments -- to work together to overcome problems and develop solutions.
"There is no silver bullet," Dashwood said. "Adhering to free market and free trade options, and utilizing commercial structures that foster competition and economic growth, will be to our best collective advantage." He added that "underpinning all this is something that we must all bear in mind as we participate in this industry: an unwavering commitment to maintaining a license to operate.
"Our operating performance -- in other words doing [our work] safely and in an environmentally responsible manner -- is precious and it will shape the public's perception of our business. We need to earn our social license through being transparent, communicative and engaged with stakeholders about natural gas. And we need to achieve all of these things while being competitive globally, within our respective energy sectors, and with other fuels and our customers choices. Our competitiveness will ensure only the most efficient projects are developed, and that we collectively are able to make the most of this wonderful resource we have for the benefit of all."