Chris Hogan AGA Chairman Skains Comments to World Gas Conference

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At the 24th World Gas Conference today, Thomas Skains, AGA chairman, and chairman, president and CEO of Piedmont Natural Gas Company told attendees that the expanded use of abundant U.S. domestic and global natural gas supplies can address many economic recovery, climate change and energy security goals.

The conference, being held in Buenos Aires, Argentina, is the global natural gas industry’s leading event.

Skains also addressed the outlook for the U.S. domestic natural gas industry and its role in a global energy economy. Specifically, he discussed some of the strategies America’s natural gas industry is pursuing and the unique market and regulatory conditions under which it operates.

“Perhaps never in its history has the U.S. domestic natural gas industry experienced more changes than it is right now, and this is just the beginning,” noted Skains.  “The largest change affecting the U.S. market is an increasingly home-grown supply portfolio, led by unconventional onshore shale gas.  The abundance of American natural gas resources is a fundamental change – a paradigm shift – in conventional wisdom.   Natural gas prices have changed as well; gas purchased by utilities in June of this year cost on average 68 percent less than in June of 2008.”

Skains also spoke to broader topics including natural gas supply and demand, conservation and energy efficiency, natural gas supply diversity and energy legislation.

As these highlighted slides from Skains’ presentation show, natural gas is both an abundant and environmentally friendly natural resource.

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This slide highlights the considerable increase in domestic natural gas resources now available through shale gas. Coupled with known gas reserves reported by the Energy Information Agency (EIA) the total U.S. resource base is now estimated to exceed 2,000 Tcf – that’s about one hundred years of gas supply at current U.S. demand levels and with current technology.

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In the long-term demand picture, an eventual global economic recovery will increase demand at some point. But a number of mitigating factors have led to lower long-term demand projections to a 25 Tcf market by 2030. Leading this shift is increased conservation and energy efficiency.  American consumers are using less natural gas per household, but they are also using natural gas in more energy efficient appliances, homes and businesses.

A second reason analysts are lowering their gas demand projections is that by 2030 there will be more alternative energy sources, such as renewables, that become a more significant part of the overall energy mix.  Demand for natural gas, according to Skains however, will continue to increase in the power generation market, even after accounting for the contribution of alternative energy sources.

Notably, from now until 2030, EIA forecasts a 25 Tcf U.S. natural gas market, with 23 Tcf of that demand met by domestic production.   That is an extraordinary change for our industry.

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Direct use of natural gas is still the most efficient and carbon-friendly option for residential applications like water heaters. Skains made it clear that AGA believes direct use of natural gas in America’s homes and business will allow it to play a significant role in addressing the challenges of global warming, economic recovery and energy efficiency.

“Natural gas is a clean, efficient and abundant U.S. and global energy resource.  The wide-scale use of natural gas in residential, commercial, industrial, power generation, and transportation applications is good for the global economy, the global environment and for the global energy consumer,” Skains concluded.

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