The future of American’s shale industry is bright and the darkest shadows on the horizon are nothing more than black swans — potential problems that involve high impact risks but a low probability of occurring — according to Natural Gas Supply Association of America (NGSA) CEO R. Skip Horvath.

Customers are most worried that infrastructure won’t be able to keep up with shale development, water scarcity might hamper shale development and liquefied natural gas (LNG) exports could drive up domestic gas prices, Horvath said at the United States Energy Association’s (USEA) State of the Energy Industry Forum in Washington, DC, Wednesday.

But Horvath downplayed all three concerns.

“The infrastructure is coming, it’s already coming and it will continue to come. There’s nothing to say it will not,” and natural gas production “uses less water than any other fuel except solar and wind,” with shale extraction adding only marginally to the total, Horvath said. “It’s small when you look at the bigger picture.”

It is unlikely that all of the applications that have been filed for LNG export facilities will be approved or that U.S. exports will take over a significant portion of the global LNG market, according to Horvath. “Think of the competition. Qatar gas is 50 cents; we’re at $2.50…you can transport natural gas from Australia to Asia for $1.00-1.50 and from Qatar for $1.00-1.50, and for $3 from the United States…so for the growth market, we’re not the cheapest gas, nor are we [the] cheapest transportation rate.”

The Energy Information Administration, on the other hand, believes that if the Lower 48 states were to export LNG to markets such as Asia and Europe — most likely from the Gulf Coast region — it would mean higher gas prices for U.S. consumers, more domestic gas production along with reduced domestic consumption and an increase in pipeline gas imports from Canada (see related story).

NGSA remains “very bullish about exporting, but what I’m trying to do is at the same time explain that this is a difficult environment to be in for exporting natural gas through LNG. So in our view it is unlikely that it would put upward pressure on prices, at least nothing significant,” Horvath said.

“We just don’t see a black swan in our future. We think all these issues are manageable.” Systemic risks, including recent concerns about the relationship between hydraulic fracturing (fracking) and seismic activity, sound like they “could take down the industry,” but “we are convinced that when the science comes out our claims will be upheld,” he said.

As for the anti-fracking Gasland film and the protesters it has inspired — including a group of about 10 people who were escorted out of the room Wednesday after they attempted to disrupt the USEA forum — Horvath said the battle to influence public opinion is the industry’s to win.

“It will take a lot of time,” he said. “And a lot of money.”

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