DOE council says US oil, gas supplies much larger than thought

15 September 2011 19:41  [Source: ICIS news]

WASHINGTON (ICIS)--US reserves of oil and natural gas are potentially far larger than previously thought and if prudently developed, could be a “transformative” resource vital to the nation’s economy, jobs growth and government revenues, the National Petroleum Council (NPC) said on Thursday.

The NPC study and developmental policy recommendations were quickly hailed by US energy and chemical industry officials who urged federal government leaders to recognise the potential for oil and gas production to revitalize the US economy.

The council, a congressionally chartered private-sector advisory group to the Department of Energy (DOE), issued its first comprehensive analysis of US energy resources since 2007.

In a letter to Energy Department Secretary Steven Chu, the council noted that “extraordinary events have affected energy markets in the years since the [2007] NPC report”.  Chu requested the new study in 2009.

A 60-page draft excerpt of the analysis said that the some 400 specialists who conducted the study – drawn from inside and outside the energy sector – reached four main conclusions.

“First, the potential supply of North American natural gas is far bigger than previously thought,” the report said. 

“It is now understood that the natural gas resources base is enormous and that its development, if carried out in acceptable ways, is potentially transformative for the American economy, energy security and the environment, including reduction of carbon and other emissions,” the study said.

“Second – and surprising to many – North America’s oil resources also are much larger than previously thought,” the council said.  “These oil resources offer substantial supply for decades and could help the US reduce, though not eliminate, its reliance on imported oil.”

Third, the council said its analysis shows that natural gas and oil will be essential to the US economy “even as energy efficiency reduces demand and lower-carbon alternatives become more economically available on a large scale”.

“Moreover, the natural gas and oil industry is vital to the US economy, generating millions of jobs, widely stimulating economic activity, and providing significant revenues to government,” the report added.

In its final finding, the council advised: “The nation can realize the benefits of these larger resources by ensuring they are developed and delivered in a safe, responsible and environmentally acceptable manner.”

Cal Dooley, president of the American Chemistry Council (ACC), said: “Today’s report from the NPC provides yet another verification that new domestic supplies of natural gas, particularly shale gas, have the potential to kick-start economic growth, revitalise our nation’s manufacturing sector and create hundreds of thousands of new jobs.”

He said that the full potential of the newly expanded energy resources “will only be realised with sound state regulatory policies that allow for aggressive production in an environmentally responsible way”.

US petrochemical producers and downstream chemical makers are heavily dependent on natgas as both a feedstock and energy fuel, and a broad spectrum of other US manufacturing relies on gas for production power.

The American Petroleum Institute (API) also hailed the NPC study. 

“This report supports what our industry has been saying for some time – including in a letter last week to President Obama – that with policies that encourage responsible development of new and existing oil and natural gas resources, would create 1.1m additional jobs by 2020,” said Erik Milito, director of API’s upstream group.

The American Natural Gas Alliance (ANGA), which represents natgas exploration and development firms, said that the NPC study “makes a compelling case about the pronounced role that natural gas can and should play in our country’s energy future”.

“The benefits natural gas brings in terms of improved air quality, economic growth and jobs creation, and energy security are unmistakable takeaways from this report,” said ANGA president Regina Hopper.

The NPC study also was hailed by the Natural Gas Supply Association (NGSA), the American Gas Association (AGA) and the Interstate Natural Gas Association of America (INGAA).

By: Joe Kamalick
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