MARKET VIEW: Shale Gas Revolution Producing ‘Win-Win’ Situation for All Sides (Energyintel.com)

The debate over exporting LNG is swirling from energy conferences around the US to the halls of Capitol Hill.

On one side, producers saying it will monetize a growing and ample supply of natural gas. On the other, refiners and petrochemical interests who say it endangers an industrial renaissance based on that same bounty of shale gas.

In between is the simple truth: “This country is experiencing something amazing and that is natural gas development,” said Breitling Energy Chief Executive Chris Faulkner. “It really is a win-win situation for everyone involved and it will continue to be so for some time.”

Faulkner recently took time out during a recent visit to Houston to visit with Natural Gas Week about the prospects for US natural gas exports.

“I think the energy industry will be exporting LNG. It is not really up for debate,” he said. “It will happen.”

Dallas-based Breitling Energy has production interests in North Dakota, Oklahoma and Kansas.

Faulkner said natural gas resources are brimming from the Marcellus and Utica Shales to the Haynesville, as well from burgeoning associated gas output from the oilier Bakken and Eagle Ford plays and a host of others.

“And those developments are continuing to grow,” Faulkner said, adding that the Marcellus Shale has rapidly become the king of gas production in the US.

According to Pennsylvania state officials, natural gas production in the Marcellus hit 3 trillion cubic feet in 2013, or roughly double 2012 production.

Simply put, the supply is there. And even though storage has been hit hard by this year’s successive waves of winter storms, prices will remain fairly stable in the $4 to $5 per thousand cubic foot range, Faulkner said.

Taking the side of the producers, Faulkner said there is one question that needs to be asked: “What would happen if you told manufacturers they could not export what they are making?”

“In essence, that is what they are telling oil and natural gas producers,” Faulkner said.

Inevitably, some, but not all of the LNG export terminals now being planned along the Gulf Coast will go into operation, making the US a net LNG exporter.

“That said, I would tell manufacturers that they really don’t have anything to worry about,” Faulkner said. “At the end of the day, they want cheap gas and that’s what they can expect. It works out for everyone.”

Because of the cold weather and supply constraints, natural gas rose well over the $5.50/Mcf mark temporarily. But Faulkner said he expects prices to again settle into a $4 to $5 range.

Another key industry for natural gas is power generation, he said, however, “one area I don’t see natural gas really making big inroads is for personal vehicles.

“That is a different story for fleet vehicles, where there is a growing market and where operators are looking for fuel savings and natural gas offers them that advantage,” he said.

The infrastructure of fueling stations — now mainly tied to interstate corridors — would have to improve a great deal for the public to begin feeling comfortable about buying natural gas powered cars.

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