By ADRIENNE BLUME
DALLAS -- Dr. Steven Chu, former US Secretary of Energy, addressed attendees Monday at the Gas Processors Association (GPA) general session and offered his thoughts on the rapidly-changing landscape of natural gas in the US.
Dr. Chu said notable changes include developments in gas production due to hydraulic fracturing and horizontal drilling, environmental and safety issues, LNG terminal regulatory approvals, growing infrastructure requirements, the heavy-duty trucking sector and environmental and climate changes.
The shale gas advantage. Dr. Chu shared a forecast for US gas production from 2008 onward, at which time it was expected that gas production would plunge; however, the shale gas boom has caused US gas output to rise dramatically and opened the door for LNG and pipeline exports. Potential shale gas reservoirs can change the energy landscape of the Americas, Asia and Europe, Dr. Chu said.
Presently, there are 862 Tcf of shale gas reserves estimated in the US, and 1,275 Tcf estimated in China. China is desperately seeking to develop its gas reserves to mitigate its extreme pollution problems, although the country is unwilling to allow multi-national corporations to drill for shale gas, which complicates shale gas resource development in this country, Dr. Chu noted.
Advances in fracing. Water treatment for hydraulic fracturing operations is another major issue being tackled by the industry. Dr. Chu also said that detection methods have improved with the use of inexpensive diode lasers for the detection of leaking pipes, fugitive methane emissions from poorly capped wells, fractures to the surface and other issues. "These lasers are a very important technology," he noted.
Regulatory policies and infrastructure requirements. The former Secretary of Energy also spoke about the regulatory holdups for LNG projects in the US, which he noted require continuous monitoring. Unlike Newton's first law of motion, which says that "a body in motion will tend to stay in motion unless acted on by an outside force," LNG project regulatory approvals "will only stay in motion if continually pushed," Dr. Chu quipped, soliciting a round of laughter from the audience.
The US gas transmission system is also in need of new investment, Dr. Chu said. Growing power outages due to the US' aging electrical and pipeline system make investment in this sector particularly critical. Natural gas refueling for heavy-duty trucks will also need to be developed, and more heavy-duty trucks will need to be introduced by trucking companies, to build the use of natural gas as trucking fuel.
Climate concerns. Dr. Chu also spoke about measured temperature increases and observed climate changes over the past several years, noting that these effects are not uniform and are still in the process of being understood. "We know something weird is happening. But we can't predict these climate models [accurately]," he said. The speaker quoted the proverb, "If we don't change direction soon, we'll end up where we are headed," as an analogy for the need for greater emissions controls from the hydrocarbon processing industry.
Scientists are unsure of the time delay for temperature increases as a result of climate change, Dr. Chu noted, but several research scenarios show that increases in greenhouse gas emissions will eventually cause global temperatures to rise. "It's a risk scenario," he said, calling on the US industry to work together to mitigate that risk.
Dr. Chu then posited, "Is it possible to use oil and natural gas in a highly carbon-constrained world?" Yes, he said, with the use of carbon capture, utilization (i.e., reinjection methods) and sequestration. "Again, this is where technology will help. Because of the new carbon monitoring technologies available, if [the carbon] stays underground for 100 years, it will qualify as carbon sequestration ... So, the ability to measure carbon dioxide and methane is a big deal."
Dr. Chu closed his remarks by saying, "I hope the gas and oil industry will move in the direction of reducing [climate] risk," he said. "These are real risks20% to 30% risks of significant temperature increaseswhich would be like adjusting to a new ice age," he cautioned.
MORE NEWS FROM GPA
GPA welcomes attendees to Texas. Before Chus address, GPA Committee Chair Paul Brewer took the podium to kick off the 93rd GPA Annual Convention and introduce Texas Speaker of the House, the Honorable Joe Straus. Mr. Straus welcomed attendees to Texas and spoke briefly of the need to cut through "red tape" to ensure regulatory certainty for gas processing projects.
Mr. Brewer then brought GPA Chairman Joel Moxley to the podium. Mr. Moxley noted that this year's GPA Annual Convention attracted more than 2,400 registrants from 22 countries and 620 companies. The GPA monitors activities in 11 key states, including Arkansas, Colorado, Kansas, Louisiana, New Mexico, North Dakota, Ohio (new in 2014), Oklahoma, Pennsylvania, Texas and Wyoming.
He then gave a brief review of GPA's history, from its research roots in the 1920s to the six divisions and responsibilities of the present-day technical committee. Mr. Moxley also shared previews of ongoing and upcoming GPA programs, such as the School of Gas Chromatography and the GPA Young Professionals organization.
Awards recognize individual, company contributions. An awards ceremony followed Mr. Moxley's speech, wherein the 2014 GPA Hanlon Awardthe midstream's highest honorwas given to Kelcy Warren of Energy Transfer Partners, for his significant contributions to mergers and acquisitions in the US midstream industry. Mr. Warren praised the Texas oil and gas industry for its performance and opportunities, which he noted was not just "normal," but, in fact, "great."
The Donald L. Katz Award, which recognizes excellence in technical research, was given to Dr. William R. Parrish for his research contributions to the industry, particularly in the LNG and gas processing sectors, and to the GPA. Dr. Parrish spoke to the openness and camaraderie of the greater gas processing community, which he said was extremely helpful during his early involvement with the gas processing sector.
Lastly, a number of GPA Environmental Excellence Award and Safety Awards were given to companies that have demonstrated noteworthy achievements in environmental and safety performance.