Mulva (right) with other key speakers at the congress
Natural gas provides short- and long-term solutions to concerns about energy security, economic opportunity and sustainability, said James J Mulva, ConocoPhillips chairman and chief executive.
Addressing “Natural Gas, as part of the energy solution” at the plenary session of the 20th World Petroleum Congress (WPC) here yesterday, he said that “natural gas can and must be part of the world energy solution, for both the short and long terms”.
Citing Qatar as one of the world’s most vital energy-producing countries, the ConocoPhillips boss said: “Qatar’s production of natural gas and LNG (liquefied natural gas) has truly benefitted its people, realising economic growth, job creation and sustainable industrial and social development.”
He spoke about the impact of the North American shale gas revolution on the region and the world’s energy security describing it as a “mature industry reborn through technology”.
“By using horizontal drilling and hydraulic fracturing, production is now possible from source rock.
“As a result, the US gas reserves are up 65% since the mid-1990s, and still rising. We now estimate more than a 100-year supply in North America,” explained Mulva.
Praising the “borderless” technology, Mulva asserted that what the industry learnt in North American was being applied in dozens of countries exploring their potential for shale gas as well as unconventional gas from tight sands and coal seams.
“Consider the implications,” he said, “the world uses about 110tn cubic feet of gas a year. Recoverable conventional resources of 14,000tn cubic feet represent at least a 120-year supply.
“Adding the recoverable unconventional gas doubles that, to nearly 250 years; and even this could rise with new technology.”
“Further, thanks to growing LNG transportation, neither supplies nor users remain stranded any longer. Natural gas found almost anywhere can find markets, and consuming countries can gain access to the gas they need,” he added.
Beyond that, there are massive methane hydrate resources under the ocean floor and in the Arctic.
“This is gas trapped in a matrix that resembles ice and while hydrates have never been produced commercially, they could potentially add more centuries of supply,” Mulva said.
“Even without them, shale gas and other unconventional resources are transforming the energy market, leading us to conclude that natural gas can certainly ease today’s energy security concerns and hydrates may one day contribute as well,” he argued.
He discussed the economic opportunity represented by natural gas, citing Qatar as a model for economic growth based on LNG industrial development.
“Qatar’s experience demonstrates the economic benefits of encouraging natural gas production. It has helped give Qatar the world’s highest gross domestic product per capita. As well as a 19.4% economic growth rate last year – the world’s highest.”
In the same context, Mulva provided some pertinent statistics on the benefits of natural gas production growth in the US, Canada and Australia.
“Last year, the US production was 22.6tn cubic feet, or one-fifth of the world’s total. Its wellhead value was nearly $100bn – a substantial economic contribution by any definition.
“Had this production occurred in Europe or Asia, its value would have been even higher. But this is only part of the total benefit.
“It is estimated that natural gas helps sustain 2.8mn jobs in the US, including more than 600,000 direct jobs in field operations, drilling, distribution, pipeline construction, equipment manufacturing, site preparation and others.
“Then there are about 700,000 indirect jobs, people who work for companies that supply products to service industries.
“And another 1.5mn more jobs are induced, when the direct and indirect employees spend their income on goods and services.
“Add it up and the annual value-added benefit of these jobs approach $390bn,” Mulva said. – Pratap John
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