Sep 15: A major new report by the National Petroleum Council (NPC), a Federal advisory committee to the Secretary of Energy, indicates that, significant technology advances have unlocked abundant natural gas and oil resources, but the potential benefits "can only be realized if developed prudently." The report entitled, Prudent Development: Realizing the Potential of North America's Abundant Natural Gas and Oil Resources, was approved at the 121st meeting of the NPC held in Washington, DC, on September 15. The sole purpose of the Council is to advise, inform, and make recommendations to the Secretary of Energy, at his request, on matters relating to natural gas and oil or to the natural gas and oil gas industries.
Jim Hackett, Chairman and CEO of Anadarko Petroleum Corporation and Chair of the NPC's Resource Development Committee, which conducted the study at the request of Department of Energy (DOE), "This landmark study represents a comprehensive and candid view of our nation's energy future that we hope will serve as an important tool in creating an informed energy policy for America. Prudent development of our domestic energy resources, particularly natural gas and oil, drives economic development, creates jobs, and enhances our nation's energy security, and this report recognizes those opportunities, as well as candidly addresses the challenges and potential solutions. It also suggests that natural gas is a good near-term answer for reducing America's carbon footprint."
The 18-month study of North American natural gas and oil resources involved more than 400 experts from diverse backgrounds and organizations, the majority of them from outside the oil and gas industry. DOE Secretary Steven Chu, who asked the NPC to conduct the study, expressed his appreciation for the broad diversity of participants and extensive outreach efforts in its development.
The study came to four major conclusions. First, the potential supply of North American natural gas is far bigger than was thought even a few years ago; Second – and perhaps surprising to many – America's oil resources are also proving to
be much larger than previously thought; Third, we need these natural gas and oil resources even as efficiency reduces energy demand and alternatives become more economically available on a large scale; and Fourth, realizing the benefits of natural gas and oil depends on environmentally responsible development.
The report indicates that, "The critical path to sustained and expanded resource development in North America includes effective regulation and a commitment of industry and regulators to continuous improvement in practices to eliminate or minimize environmental risk. These steps are necessary for public trust. Recognizing that access to available resources can be undermined by safety and environmental incidents, all industry participants must continually improve their environmental, safety, and health practices, preserving the benefits of greater access for the industry, consumers, and all other stakeholders."
Philip Sharp, Resources for the Future President and NPC study Vice Chair said, "this report affirms the importance to the country of developing our resources in a prudent way, and builds on the proactive efforts of industry to mitigate environmental, health, and safety concerns." The NPC proposed five core strategies:
- Support prudent development and regulation of natural gas and oil resources through such measures as councils of excellence covering environmental, safety, and health practices; corporate and regulatory commitment to advancing environmental performance; engaging affected communities; reducing methane emissions; and structuring policies to support prudent development of and access to resources.
- Better reflect environmental impacts in markets and fuel/technology choices by recognizing that the United States will find it difficult to reduce greenhouse gas emissions further without a mechanism for putting a price on greenhouse gas emissions that is economy-wide, market-based, predictable, transparent, and part of a global framework; keeping options open for carbon capture and sequestration; and developing information and methodologies on environmental footprints and full fuel cycle impacts.
- Enhance the efficient use of energy through policies that support continued progress to adopt cost-effective efficiency standards for buildings and appliances; remove the disincentives for utilities to deploy efficiency measures; and eliminate barriers to combined heat and power as a way to increase the efficiency of electricity production.
- Enhance the functioning of energy markets through policies and regulations that improve mechanisms for utilities to manage the impacts of price volatility; harmonize market rules and service arrangements between the wholesale natural gas and wholesale electric markets; and increase environmental regulatory certainty affecting investments and fuel choices in the power sector.
- Support the development of a skilled workforce through increased public and private financial support for educational and training activities.
Erik Milito, director of the American Petroleum Institute's (API) upstream group, said the NPC report adds significant weight to API's belief in the enormous potential for oil and natural gas in North America. He said, "This report supports what our industry has been saying for some time -- including last week in a letter to the president -- that with policies that encourage responsible development of new and existing oil and natural gas resources, we could create 1.1 million additional jobs by 2020. It is our hope that the nation's leaders read this report and understand that the United States can greatly enhance its energy security, create jobs and provide more government revenue through effective policy that allows environmentally safe access to domestic resources. Our industry is committed to ensuring safe and environmentally responsible development of these domestic resources to help meet our nation's economic and energy needs."
The American Chemistry Council (ACC) President and CEO Cal Dooley issued a statement on the report indicating it, ". . . provides yet another verification that new domestic supplies of natural gas, particularly shale gas, have the potential to kick-start economic growth, revitalize our nation's manufacturing sector and create hundreds of thousands of new jobs. Shale gas is proving to be a game-changer for America's chemistry industry, giving domestic chemical manufacturers a significant competitive edge for the first time in years -- new investments and new plants have already be[en] planned and announced by several U.S. chemical companies. . . The full potential from shale gas will only be realized with sound state regulatory policies that allow for aggressive production in an environmentally responsible way. We support efforts to continually improve production processes, including the use of best practices. Chemistry makes many of these advanced production technologies possible."
Access a release from NPC release (click here). Access the complete report including Transmittal Letter, Preface, Executive Summary and , description of the NPC, NPC membership and study roster (click here). Access the NPC website for more information including a slide show and additional information (click here). Access a release from API (click here). Access a release from ACC (click here). [#Energy/Oil, #Energy/NatGas]
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