THE SOURCE - Summer 2016 - (Page 14)
Q&A: Barry Russell
PGA discusses fracking
and other industry
issues with Barry
Russell, the president and CEO
of the Independent Petroleum
Association of America (IPAA),
the leading, national upstream
trade association representing
oil and natural gas producers
that drill 90 percent of the
nation's oil and natural gas
wells. These companies
account for 54 percent of
America's oil production, 85
percent of its natural gas
production, and support more
than 2.1 million American
jobs. Learn more about IPAA
by visiting www.ipaa.org
and following @IPAAaccess
APGA: How would you describe
the current state of natural gas
production in the U.S.?
Barry Russell: For years, coal and natural
gas were in a dead-heat to be the leading
fuel source for u.s. electricity generation.
For decades, coal has been the leader.
But, in February, the energy Information
Administration (eIA) announced that
natural gas had overtaken coal. Of
course, while low prices of both products
will create the tug-of-war we've been
witnessing over the past few years, it is
impressive that natural gas is the fastest
growing fossil fuel.
The latest data from eIA also shows oil
and natural gas together supply around
65 percent of total u.s. energy demand. If
you add coal, you get around 81 percent,
although, as I mentioned, coal's share
continues to fall. meanwhile, renewable
shares constitute around 9.9 percent.
so for those activists who call to keep
fossil fuels "in the ground," they aren't
looking at a realistic scenario.
Thanks to new efficiencies and
technologies, like hydraulic fracturing
and horizontal drilling, u.s. shale gas
production has dominated the increase
in worldwide natural gas supply.
New markets here at home for power
generation or the manufacturing sector
will create demand, and our producers of
American natural gas have proven that
we have plenty of reliable supply to meet
and surpass that demand, while also
supplying world markets.
APGA: What do you expect production
levels to look like this year and over
the next three to five years?
Barry Russell: According to BP's most
recent, annual energy Outlook, u.s.
shale gas is expected to grow around 4
percent annually, causing "u.s. shale gas
to account for around three-quarters
of total u.s. gas production in 2035 and
almost 20 percent of global output."
some other forecasts have that closer to
2 percent annual growth.
The consulting firm IHs energy
recently concluded a February study
on North American natural gas reserves
and production and found these results:
"Approximately 1,400 Tcf of natural
gas in the u.s. Lower 48 and Canada
is recoverable at a current break-even
Henry Hub price of $4/mmBtu or less (in
real terms). This is a 66 percent increase
over 2010 estimates. more than half
of that (800 Tcf) can be produced at a
current break-even price of $3/mmBtu
or less. These quantities point to longterm low-cost energy supplies capable of
meeting demand projections for at least
the next 30 to 40 years."
This is an opportunity, and a healthy
market scenario for American natural gas
production. Of course, there are some
challenges that need to be considered-
not just low commodity prices, but also
APGA: Regulatory changes always
seem to be looming for the production
industry. Are there particular
regulations that concern the industry?
If so, what are they and what is your
take on them?
14 THE SOURCE | THE vOICE and CHOICE Of pUblIC gaS
Barry Russell: During the Obama
Administration's seven years in office,
there has not been cooperation between
Congress and the White House. so, the
Administration has increasingly used
regulations and executive action that
don't require congressional approval. In
our industry, as many, the President has
overreached his authority and in this final
year, proven that politics is the priority,
not common sense.
right now, IPAA is tracking more
than 45 federal regulatory proposals
at various agencies. This is something
unseen before. Literally this is about 20
years of new regulations condensed
into one year. With so much under
consideration, it is very difficult for
natural gas producers to plan into the
unknown regulatory future. many of
our projects must be planned for years.
It's the uncertainty that concerns us the
most outside of commodity prices.
some of the most sweeping
regulatory proposals include new
methane emission and ozone
restrictions, offshore bonding
requirements, higher royalty rates, rules
for hydraulic fracturing on federal lands,
endangered species and critical habitat
Table of Contents for the Digital Edition of THE SOURCE - Summer 2016
Expanding Your Network Through the Virtual Pipeline
Q&A: Barry Russell
The Very Different Field of Commercial Foodservice Research and Development
Can Natural Gas Stay Cheap Forever This Time?
Home Fueling for Natural Gas Vehicles
Advertisers’ Index/ Advertiser.com
THE SOURCE - Summer 2016