Outgoing FERC Chairman Patrick Wood on Wednesday said that he feels "very comfortable that we will get the amount of gas we need in...North America," an amount that a 2003 National Petroleum Council (NPC) report to the U.S. Secretary of Energy "said we've got to have" (see Daily GPI, Sept. 26, 2003).
Wood, who is leaving the federal agency at the end of this month, made his comments at a media briefing sponsored by the Energy Daily.
"They said we need LNG and we need Alaska gas -- or Arctic gas -- let me include the Canadian gas from Mackenzie Delta in there as well," Wood said. "Those two sources of gas should allow us to entertain a much more stable price feature for this very important fuel that a lot of people value because of its environmental benefits."
He said that along with nuclear and coal-fired power, "we've got to have gas be reasonably priced." Wood thinks that "we'll see a downward pressure from both the Arctic gas and from the LNG hitting the continent. I don't see it happening before '07. So I do think this year and the next will be relatively high prices. The futures markets from Nymex -- (the strips from yesterday [June 21] -- certainly reflect that same expectation -- that it will be high for awhile and then possibly go back down."
The FERC chairman said that "we're going to get two" LNG facilities in eastern Canada. "One in Quebec and one in the Maritimes, for sure, and maybe even a third -- I think that may be a little bit of puffery." He noted that in two of the projects, they are beyond permitting "and are moving forward pretty well."
Commenting on pending comprehensive energy legislation in Congress, Wood said that "there are some good provisions...that help the permitting and development of natural gas in the Rockies area, which I think will be our biggest production area for natural gas" domestically in the coming decade.
"We've got to make it more sane to go through a permitting process out there," he added. "There are a lot of environmental concerns that are raised during every one of these permitting processes, and sometimes the environmental opponents are successful in court."
Wood doesn't think "you have to dilute environmental protections at all to develop natural gas resources because Lord knows it's probably the most environmentally benign fuel we could use."
The permitting processes outlined in the legislation "have got a lot more teeth" to them "and a lot more direction from Congress and that's the kind of stuff that when a court looks at it, they go, 'Yep, the BLM did just what Congress told them to -- check. No lawsuit. Move on.' That kind of certainty is what developers need."
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