Incoming Chair of the American Gas Association Ronald W Jibson talks to Stephen Dineen during a recent visit to Ireland about the future for natural gas, the shift in energy priorities and the fracking debate.
Ronald W Jibson has every reason to be optimistic. From forecasts in the 1970s that the US had approximately nine years of natural gas left, the sky now seems the limit. Due to shale gas finds, the US is now predicted to have a 95-year supply of gas. While oil prices have fluctuated and risen over the past five years, gas has remained relatively steady.
“I’ve been in the industry over 30 years now,” Questar Corporation’s President and CEO tells eolas. “I’ve never seen a time where all the arrows seem to point to natural gas.”
“Now we still have that stigma of natural gas as a fossil fuel,” he concedes, with environmental groups in the US “having a hard time wanting to embrace natural gas as a fuel of the future because it’s a fossil fuel, albeit that it’s so much cleaner than other fossil fuels.”
Jibson contends: “We certainly support development of renewable energy, but it needs a back-up fuel because the wind doesn’t always blow and the sun doesn’t always shine.” Natural gas is “the natural back-up plan to renewable because it can come on very quickly, coal-fired power generation is too slow.”
The shale gas discoveries in the US, responsible for its increased gas reserves, have been found in large part through fracking. “Fracking is kind of the new topic, it’s not a new technology. Fracking has been used for years and years,” says Jibson.
In the US, the technique is getting “a lot of attention with the Marcella shale because a lot of that development is right in the heart of a lot of population areas.” People are concerned over frack fluid getting into groundwater. “When you consider that these wells are two miles vertical, a mile horizontal,” he says, “there’s no way that fracking in those zones is ever going to get into the groundwater.” It would take “an actual rupture in the casing itself at the levels of approximately 100 feet or less for that fluid to ever enter the ground water.”
For Jibson, “the real resolve on fracking is that producers need to be willing to show what their frack method is.” He states: “If there are harmful products there, they may need to change that. So I think that the producers need to work with the environmentalists and then we can resolve that.”
For Jibson, who will become Chair of the American Gas Association in January 2013, energy security will be the main issue in the next decade. “We talk about being dependent on foreign imports and oil especially,” he reflects, “and the aspect of jobs and money going to countries, many of which don’t think a lot of us, you know, they don’t like us.” However, “we’re all focused on lessening our dependence on others.” He predicts that countries will become “more energy secure.”
As well as contributing to energy security, natural gas will help reduce carbon levels, Jibson believes. “I’m not going to debate global warming,” he states, “but obviously we’re seeing climate change.” “Natural gas is your answer,” as there is “abundant enough supply and a reliable enough use of energy that it’ll meet the energy demands at the same time reducing carbon.”
Though other countries have been increasing carbon dioxide emissions, Jibson points out that the US has been doing the opposite. Energy-related carbon emissions fell by 2.1 per cent between 2001-2010. While there have been “a lot of conservation measures, efficiency measures,” and “everyone is getting more and more conscious of carbon and cleaner generation,” he believes that natural gas has been a key driver. “We have no new energy policies, we had no mandatory restraints on carbon, but what’s happened, especially the last few years, is that natural gas, because of the price, has replaced coal in power generation.”
New gas abundance has brought new opportunities globally. “Certainly end use is still going to always be the major use: home heating, water heating, manufacturing, industrial type uses,” but “probably power generation first, transportation second, would be the new markets,” he predicts.
Natural gas vehicles (NGVs) is a market that Jibson’s company has targeted. NGVs have been hailed as the future of transport with over 13 million vehicles worldwide, and 11.6 per cent growth in 2010 alone. Such vehicles typically have 20-30 per cent less CO₂ emissions than petrol or diesel vehicles. Converting one heavy-duty truck from diesel to natural gas, for example, has the pollution reduction equivalent of removing 325 petrol cars off the road.
Take-up in the US has been slow, however. In North America there are 127,000 NGVs, compared to 1.3 million in Europe. “I think they were somewhat spoilt to the larger vehicles,” he says of fellow Americans when NGVs emerged from 1996 onwards. “I don’t think they saw the need for fuel efficiency at that time. Petrol prices were low and people just didn’t see that it was a big deal to pay that much for petrol.”
Yet, “as petrol prices went up to $4 per gallon, all of a sudden that mindset started to change.” People were also becoming “more conservation-minded.” He adds: “There’ll be a certain market drive for those who want to do the right thing as far as cleaning the air and being more efficient, more conservative, but what will really move the needle is the wallet.” In mid-2008, when petrol cost $4 a gallon in the US, the equivalent price of natural gas was $0.67.
In 2009, Questar Gas partnered with the State of Utah in creating a corridor of NGV filling stations from the north to the south of the state. It is now selling over 400,000 equivalent gallons of natural gas per month for NGVs, simply to meet demand. Questar, which distributes retail gas in Utah, Wyoming and Idaho, now has 27 NGV fuelling stations within its service area. A company’s conversion of 600 large trucks from diesel to natural gas, for example, is the equivalent for Questar of 24,852 extra homes to supply gas to for a year.
Two and a half years ago only a few other companies in the American Gas Association were interested in NGV development. “Pretty soon everyone wanted to get involved because they could see a model that actually worked.”
Tags: Natural Gas
Date posted: Monday, May 28th, 2012 at 7:36 pm