Leading The Way From Coal To Gas

on September 08, 2011 at 6:00 AM


A Colorado program to convert coal-fired power plants to natural gas could lead the way in increasing the use of the abundant, cleaner-burning fossil fuel for generation in the US, a top shale-gas executive said on Wednesday.

“Colorado is the best model for converting coal-fired plants to natural gas,” chief executive of Range Resources John Pinkerton told reporters after a speech to Shale Gas Insight, an industry conference organized by the Marcellus Shale Coalition. The coalition is an industry group representing energy companies active in the major Northeast US shale play.

Pinkerton, whose company was the first to drill in the Marcellus, said the field is already the third-largest in the US and is likely to become the biggest in “just a few years.”

He predicted the Marcellus, together with associated shales such as the Utica, will produce 20 billion cubic feet of natural gas a day in coming years, up from the current rate of about 3 bcf.

“[The supply] will last for hundreds of years,” he said.

Because of the abundance of shale gas from the Marcellus and other shales, market prices are likely to remain stable for years, Pinkerton predicted. He said Range agrees with futures prices indicating a $4.50-$5 per mmbtu range over the next five years.

“I don’t think we are going to see big spikes in natural gas prices for many, many years,” he told reporters.

Asked whether Range would be open to acquisition offer from majors like Exxon Mobil, Pinkerton said any offer would be considered.

“We are a public company. If someone makes us an offer, we will take it to the board and consider it,” he said.

Gassing Up For Energy Independence

In comments to the opening session of the conference, former US Homeland Security Secretary Tom Ridge called for a national energy policy that would reduce dependence on foreign oil from overseas suppliers whose policies may conflict with the country’s interests.

Ridge said vast reserves of natural gas in the Marcellus Shale and other US reserves have the potential to cut US oil imports but that the gas deposits need to be developed as part of a national strategy.

“The dependency is a vulnerability to which, unlike terrorism, we have not responded,” Ridge said.

Ridge noted that roughly half of the 10 million barrels of oil imported by the US every day comes from OPEC members such as Algeria and Venezuela.

“Many of these relationships are toxic for this country,” said Ridge, a former governor of Pennsylvania who now runs a firm that lobbies for the shale gas industry.

Addressing Safety Concerns

Marcellus Shale Coalition chairman Ray Walker, opening the conference, said the industry needs to do more to convince the public that shale gas extraction is safe, in light of continuing claims by opponents that hydraulic fracturing is contaminating drinking water.

“We understand that the public in communities where we work have concerns and those are valid,” Walker said.

Photo Caption: A shale gas drilling operation.