Observer-Reporter | Richardson: Shale industry needs to adapt world view

PITTSBURGH – As the former governor of a large energy-producing state with oil and natural gas assets, Bill Richardson could be expected to be in full support of the shale gas boom occurring in the Marcellus Shale strata and elsewhere throughout the United States.

During a half-hour keynote address Thursday during the second day of Shale Insight 2014, the former two-term governor of New Mexico and former U.S. energy secretary in the Clinton administration, praised the industry’s rapid progress, but also suggested that it consider aligning itself with some unlikely partners.

“You’re hot right now, you’re good, you’re strong, you’re moving forward,” Richardson told an audience of several hundred industry representatives gathered at the David L. Lawrence Convention Center for the annual event sponsored by Marcellus Shale Coalition.

Richardson credited the industry’s work and its use of hydraulic fracturing technology in the Appalachian Basin for driving the production of natural gas and natural gas liquids and making the United States the top oil and gas producer in the world.

“You guys are on a roll,” he said.

While acknowledging that those in the industry are most at home associating with their peers, Richardson suggested that they take a broader, more worldly view moving forward.

“It’s important that you look at where you want to be nationally and internationally, where you want to be for this country,” he said.

Richardson, who said he attended the recent climate summit at the United Nations, noted President Obama and others “talked about how natural gas (usage) has reduced carbon pollution. With that kind of recognition, you’re doing pretty good.”

But at the same summit, Richardson noted that the majority of the United Nation’s member countries indicated that they expect renewables to handle the majority of their energy needs in the future.

At the same time, countries like Poland and the Ukraine are looking to import liquefied natural gas as an alternative to purchasing gas supplies from Russia, he said.

For that to happen, the U.S. will need to lift its restriction on exporting oil and gas, Richardson said.

He told the group that it needs to form a coalition to address those issues.

“Always think of yourselves not just regionally but nationally,” he said.

“It’s also very important that you find ways to work on a bipartisan basis,” he said, adding that he believes it’s also in the best interests of the industry to work with state regulators.

“If they want you to disclose your chemicals, do it,” he said.

Perhaps the most surprising suggestion made by Richardson was that the oil and gas industry should consider reaching out to environmental groups.

He noted that when he was governor of New Mexico, he suggested that the nuclear industry form similar ties with environmentalists, but his suggestion was rejected.

“Now they’re kind of frozen out,” he said.

He also said that those in the industry who confuse the idea of America becoming energy independent because of the shale as a way to reject OPEC or Middle Eastern countries like Saudi Arabia are misguided.

“You can’t become isolationist,” he said.

Richardson said the industry can achieve political and policy goals because it creates jobs and produces a clean fuel.

While Richardson promoted a world view for the industry to take, EQT President and Chief Executive Officer David Porges told the group earlier Thursday that the industry must continue to go above and beyond compliance with state and federal regulations if it hopes to make communities comfortable with the drilling process.

“If all we do is maintain a compliance mindset, that can be a recipe for failure,” he said.

Porges described his company’s goal of obtaining “a social license to operate” by ensuring that communities understand the work being done starting with the planning stages through to production.

“We never forget just how important our local communities are to us,” he said.

The need to “get it right” was also a theme of Frank Semple, chairman, president and CEO of midstream operator MarkWest Energy Partners.

Semple, whose company provides fractionation of the various marketable components of the natural gas coming from the shale, said the Marcellus region is a game-changer in terms of its production potential.

“If the Marcellus were a country, it would be among the top 10 gas producers in the world,” he said, noting that the U.S. Energy Information Administration has estimated that the shale strata has 370 trillion cubic feet in remaining resources.

With the neighboring Utica Shale strata still in the early stages of development, Semple said the Appalachian Basin is poised for more growth.

While stressing the need to build additional midstream infrastructure to enable natural gas and its components to markets as diverse as Gulf of Mexico refineries to shipping liquefied natural gas for export, Semple underscored the necessity for the industry to pay close attention to its work.

“This is an opportunity we simply have to get right,” he said. “We must be good stewards of our environment and be responsive to communities.”

via Observer-Reporter | Richardson: Shale industry needs to adapt world view.