Energy boss: America at its most independent in decades
PITTSBURGH – Thanks to the development of vast natural gas reserves, American energy independence is no longer a pipe dream, according to Federal Energy Regulatory Commissioner Tony Clark – but the nation must focus on developing its infrastructure to make it happen.
“Right now, this country is absolutely the envy of the world. … Our nation’s been given a gift, and it’s up to us to make sure we use it and develop it the right way,” Clark, appointed by President Barack Obama in 2012 to one of five seats on the commission, said Wednesday during the DUG East Conference and Exhibition in Pittsburgh.
Clark’s agency is responsible for overseeing the interstate transmission of natural gas, oil and electricity and regulating hydropower projects.
For many years, Clark said, it was assumed that America would always be a net importer of natural gas. But of the 25 trillion cubic feet of natural gas the U.S. consumed last year, only 3 trillion was imported, most of that from a friendly neighbor in Canada.
About 60 percent of U.S. daily crude oil consumption was produced here, Clark said, and 75 percent came from somewhere in North America.
“Our dependence on foreign oil has decreased steadily since 2005. … What you get is a picture of a nation that is more energy-secure than it has been in decades.”
A growing market for American natural gas is another aspect of what Clark believes is an historic shift in the nation’s energy production. The idea of large-scale exports of liquid natural gas from America was “virtually unthinkable” not so long ago, he said.
But today, an export facility is under construction at Sabine, La., with at least 13 more in various stages of the siting process in places such as Texas, Louisiana, Georgia, Oregon and Maryland – and Clark believes more are on the way.
Whatever the future holds for the industry, be it large-scale exports or more domestic consumption, Clark said there must be a way to get the gas to market.
There are 3,427 miles of shale gas pipeline in service or in some stage of the FERC permitting process, Clark said. Nationwide, companies invested $90 billion in crude oil and natural gas infrastructure – a $30 billion increase in just four years.
But much more is needed, Clark said. He called the propane shortages of this past winter, one of the coldest in recent memory, a shocking reminder of the need to develop gas pipelines in America. At times, the price of the fuel soared to several times the national average in places like New England.
“It’s not that far from the Marcellus (Shale) to New England, but it goes to show you what happens when you have inadequate infrastructure,” Clark said.
As a federal agency, FERC has little to do with many aspects of the oil and gas industry, as state and local governments most often take the lead in regulating exploration and development. It’s an arrangement that works well, Clark said, but pipeline projects – many of which cross state lines – often fall under his agency’s jurisdiction.
He said the goal is always to strike a balance, ensuring responsible development without delaying needed projects unnecessarily. He acknowledged things take time, but said cutting corners in the permitting process provides easy justification for opponents to challenge a decision in court.
“If you act in a few days of haste … it can mean years of delay on the back end,” Clark said.