Shell Oil Co. expects to produce more natural gas than oil in 2012, company President Marvin E. Odum told a major gathering of energy executives and policymakers last Tuesday.

“It’s [worth] procuring and it will be a preferred fuel,” he said at the Energy Information Administration’s annual conference in Washington, DC. “Just a few years ago North America’s natural gas production was believed to be in decline,” but that was before the discovery of prolific shale gas plays.

It’s now estimated that more than 22,000 Tcf of natural gas is available worldwide, of which more than 2,500 Tcf is in North America, according to Odum. At current production levels there’s enough supply to meet the world’s demand for 250 years. “We have enough just in the U.S. for 100 years,” he said.

In the last decade the Royal Dutch Shell plc U.S. unit has invested more than $17 billion in natural gas exploration and development, Odum said. He further noted that the Houston-based producer is active in six tight gas plays in North America, representing about 3.4 million net acres and 40 Tcf of natural gas.

“We’re still waking up to the fact that we have this enormous energy resource [shale gas] in our backyard,” Odum said. And he believes that shale gas can be developed through hydraulic fracturing without posing risks to public health or the environment. “Make no mistake; it can be done without harming the environment. Anything less is unacceptable,” he told the audience (see related story).

An increase in supply is a certain way to build a “stable energy picture,” Odum said, “but our political climate doesn’t always make that easy.” Energy decisions in Washington are often made based on “rhetoric and hyperbole rather than on facts.” Politicians often pick the winners and losers among the energy sources and “relegate compromise to the back road,” he said. This is “one of the reasons people are so disappointed in their leaders right now.”

Asked if he believed an Alaska pipeline to the Lower 48 states would ever be constructed, Odum indicated that the discovery of abundant shale resources has dampened interest in the long-line system (see NGI, April 25). “You need a strong commercial driver that connects that gas resource with the Lower 48. With the number of resources [shale gas] discovered recently in North America, you can see why that presents quite a challenge to the commercial driver.”

Shell has been blocked at every turn to develop the resources off the coast of Alaska. The producer has abandoned plans to drill in Alaska’s offshore this year but hopes to restart the long-delayed project in 2012 (see NGI, Feb. 7). It’s estimated that offshore Alaska contains 120 Tcf of gas.

In early January Alaska Native and conservation groups successfully challenged the air permits that the Environmental Protection Agency had issued to Shell’s exploration unit to drill and operate in the Chukchi and Beaufort seas (see NGI, Jan. 10). Shell, the leading acreage holder offshore Alaska, has been working for several years to secure federal and various state approvals to drill three exploratory wells in the Arctic seas.

As for the Gulf of Mexico, Odum said he believes “hands down things are better than they were before” the Macondo well blowout, which led to the explosion and sinking of the Deepwater Horizon rig last April (see related story). He said the construction of a containment system was a “significant” step toward a more safe environment in the deepwater. However, he says more attention needs to be paid to blown out capping a well.

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