The surge in shale gas production has the potential to transform geopolitical energy relationships for the United States and the world
With other countries still at an early stage in exploring their own potential for shale gas, the implications for greater balance in the global natural gas market are very positive. The abundance of natural gas has reduced the need for the U.S. to import liquefied natural gas (LNG) for the foreseeable future. This has, in turn, made more LNG available to those nations that lack their own energy resources, with obvious benefits for the world economy.
Ample and Affordable Supplies
The U.S. is not nearly as dependent on foreign producers for natural gas supplies as for crude oil. According to the U.S. Energy Information Administration (EIA), in 2010, 90 percent of the natural gas consumed in the U.S. was produced domestically, with nearly all the imports coming from Canada. The emergence of plentiful and affordable natural gas supplies has allowed energy-dependent industries in the U.S. to gain a competitive advantage against their counterparts in other countries with higher energy costs.
The EIA estimates that recoverable reserves amount to 190 trillion cubic feet, or nearly 200 times the current annual worldwide consumption of natural gas. Additionally, the nine LNG import terminals in the U.S. currently have capacity to supply about 20 percent of U.S. demand and could easily be utilized to increase imports in the event of an unanticipated tightening of the market.
Energy Security and Climate Change
Most Americans agree that the U.S. needs more domestic energy production, but they also want to ensure that our actions protect the environment. As an energy company with a global presence, ConocoPhillips operates in many countries that already have greenhouse gas regulations in place or in development. We have operations in the Arctic that are affected by warming temperatures. And as we go about providing the energy that powers modern life, we consume energy ourselves.
We believe our industry must be involved in the effort to find solutions to both challenges. We believe we can do so by:
- Developing new conventional and unconventional energy resources.
- Utilizing our expertise to develop carbon capture and storage technologies.
- Leveraging our international business and trading experience in the emerging global greenhouse gas emissions industry.
In 2007, ConocoPhillips became the first U.S.-based integrated energy company to publicly support a mandatory national framework to address greenhouse gas emissions in the U.S., and we continue to advocate for policy solutions that are practical, equitable and cost effective.
The abundance of natural gas in the U.S. can further increase the nation's energy security by providing reliable, affordable supplies. At the same time, industry and government must work together to find effective climate change solutions without raising energy prices too far, or too fast.