Transcript Slide 1
Natural Gas:
America’s Abundant Resource
- Heating our homes
- Generating more electricity
- Reviving U.S. manufacturing
- Fueling transportation
- Creating American jobs
Natural Gas Roundtable
Congressional Briefing – September 18, 2013
Randall Luthi NOIA
[email protected]
Erik Milito – API
Upstream and
Industry Operations
Don Santa
[email protected]
David Sweet
Executive Director
[email protected]
[email protected]
Scott Morrison - APGA
Government Affairs
[email protected]
Jeff Schrade - NGSA
Government Affairs
[email protected]
Natural Gas Has Many Uses
Natural gas heats homes
- 177 million Americans use it at home
- 71 million U.S. homes and
businesses use natural gas
Natural gas increasingly used
to generate electricity
 In 2002, natural gas provided 16
percent of U.S. electric generation
 In 2011, natural gas provided 31
Natural gas is also used in the
manufacturing, chemical and
fertilizer industries
Natural Gas: Good news for U.S. Manufacturing
New projects 2012-2019
LNG Exports
 Natural gas becomes
liquid when chilled to
 Chilling shrinks it 600 times
– making it easier to transport
 LNG is…
-Cold, clear, and colorless
-Non-toxic, non-corrosive and non-explosive
22 export facilities have been proposed to export
LNG to non-free trade countries
- 4 LNG export facilities have been approved so far
Natural gas: Good news for the Environment
“Greater use of natural gas in early 2012 resulted in the
lowest U.S. carbon emissions since 1992”
U.S. Energy Information Administration, August 1, 2012
Shale Changed the Game
 Improvements in
technology brought down
production costs
 Shale gas production
quadrupled between 2006 –
2012 and is poised to
comprise more than 40% of
U.S. gas production in 2020
 Diversity of supply
complements strong and
growing pipeline system,
reduces vulnerability to
hurricanes, brings natural
gas closer to consumers
Gas Production by Type Through 2040
Source: EIA Annual Energy Outlook 2013
Technology Makes It Possible
 Drilling technology improvements
and efficiencies in shale have
 Longer horizontal laterals
 Multiple-stage hydraulic fractures
per lateral
 Small surface footprint for multiple,
extended wells
 Ground water separated by
thousands of feet and tons of
impermeable rock and protected by
state and federal regulation
 Significant amount of water is
 “Micro-seismic” technology
evolving and enabling even greater
precision in fracturing wells
Source: American Petroleum Institute
Abundant shale widespread across U.S.
U.S. Gas Reserves Increased 22% between 2006 – 2009 Primarily Due to Shale Development
Source: Energy Information Administration based on data from published studies
Updated: May 2011
Natural gas production has shifted
Part of the
Federal drilling
permit 2005
– 154 days
Federal drilling
permit 2011
– 307 days
State drilling
permit average – 12 to 15 days
Positive News for the Economy
Total Supported Employment
• 2.1 million jobs supported in 2012
• 3.9 million jobs supported in 2025
Including 515,000 manufacturing jobs
- Jobs tend to high quality and high paying
$35/hr vs. $23/hr in general economy
Capital Expenditures
• $121 billion in 2012, rising to $240 billion by 2025
- $2.75 trillion cumulative between 2012 and 2025
Gross Domestic Product Impact
• $284 billion in value added contributions in 2012
- Increases to $533 billion / year in 2025
Federal and State Government Revenues
• $74 billion in 2012
- Increases to $240 billion in 2025
Average Increased Disposable Household Income via
Lower Energy Prices
$1,200 in 2012, rising to $3,500 in 2025
America’s New Energy Future:
The Unconventional Revolution and
the Economy,
IHS, October 23, 2012
Natural Gas Industry: Highly Regulated
Regulated by state and federal agencies
 Clean Water Act – surface water discharge, storm water runoff
 Clean Air Act – air emissions throughout production to usage
 Safe Drinking Water Act – underground injection disposal/reuse of produced water and
flowback fluids
 Federal Land Policy and Management Act – permitting for federal onshore resources
 Outer Continental Shelf Lands Act – permitting for federal offshore resources
 National Environmental Policy Act – permits and environmental impact statements
 Occupational Safety and Health Act – requires information about chemicals used at
every site
 Emergency Planning and Community Right-to-Know Act – annual reporting to
emergency responders of chemicals stored and used above certain quantities
 Extensive State Oversight – implement federal laws and regulate drilling fluids and
produced water management
 Detailed state regulatory information available at
Natural gas estimates keep growing
 Estimates have grown
significantly with
improvements in technology
If the 1966 estimate of 600
trillion cubic feet (Tcf) had
remained static, the U.S. would
have run out of natural gas
about 10 years ago
 Estimates have been
conservative – history shows
there is more to be discovered
Pipeline System Extensive and Expanding at Record Pace
 Between 2000 and
2010, FERC
approved more than
16,000 miles of new
interstate pipeline
- Capacity to move an
additional 113 bcf per
 Pipeline system
connects U.S. with
Canada and Mexico
 Storage capacity
grew 22% from 2006
- 2010
 Half of new storage is
flexible high-turnover
salt domes closer to
U.S. Natural Gas Infrastructure:
Anticipated Investment Through 2035
$205B in midstream
125,000 jobs
every year
for 20 years
$57B in federal, state
& local tax revenue
since 2005, pipeline avg. cap/ex:
$8.8 Billion/yr
Source: INGAA Foundation’s North American Natural Gas Midstream Infrastructure Through 2035
Offshore access is the key
Off Limits Under Federal Law or Moratorium
Available for Energy Exploration but closed to
leasing due to current Federal Policy
Available for Production & Exploration
Estimated Offshore Resources
We still have a lot out there
Natural Gas Vehicles
A growing NGV market
addresses a number of
America’s priorities:
Foreign oil displacement
Urban pollution reduction
Balance of trade
Propane – from natural gas processing -
is also used to fuel vehicles
 20-25% of transit buses on US roads are
natural gas powered, and last year over 50% of
trash trucks purchased were NGVs
 The biggest driver is… cost savings
Tax exempt financing
Tax-exempt financing is the
primary method by which cities
and towns finance infrastructure
Potential Efforts to alter the current system:
Eliminate Tax-exempt financing
Reduce benefits to wealthy individuals of purchasing
municipal bonds
To Continue to Make Good things happen…
Industry is Committed to Good Stewardship
 Listening to and addressing community concerns
 Use of stringent industry and government standards on land reclamation,
well construction, water management and pipeline safety
 Responsible hydraulic fracturing practices
 Minimizing surface effects on land and infrastructure
 Offshore safety and spill containment
… And Government Must Do Its Part As Well
 Fair access to onshore and offshore resources
 Continued strong and effective state regulation of hydraulic fracturing
 Level playing field: avoid picking winners and losers through mandates
 Tax policy must be fair, not burdensome, and compatible with resource
development and job creation
 Financial regulations must not create “economic drain” on investment
 Provide regulatory environment compatible with pipeline infrastructure
investment and safe, reliable operation
American Petroleum Institute (API)
1220 L Street, NW
Washington, DC 20005-4070
National Ocean Industries Association (NOIA)
1120 G Street, NW • Suite 900
Washington, DC 20005
American Public Gas Association (APGA)
201 Massachusetts Avenue, NE, Ste C-4
Washington DC 20002
Natural Gas Supply Association (NGSA)
1620 I Street, NW, Suite 700
Washington, DC 20006
Interstate Natural Gas Association of America
20 F Street, NW, Suite 450
Washington, D.C. 20001
World Alliance for Decentralized Energy
1513 16th Street, NW
Washington, DC, 20036
(202) 667 5600