Natural gas: looking ahead to year 2000
The natural gas industry foresees gas supplying 25 percent to 30 percent of US energy demand in the year 2000.Skip to next paragraph
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This relatively stable projection for gas, which currently meets 27 percent of US energy needs, stands in sharp contrast to perceptions in 1977. At that time, natural gas supplies were considered so critically short that industrial use was restricted, and the government encouraged gas users to switch to other fuels.
But in order to keep gas a major contributor to America's energy mix, there must be ''strong federal support'' for the ''unprecedented high levels of capital investment'' needed, says American Petroleum Institute (API) director W. J. Bowen.
Mr. Bowen - also chairman of the Houston-based Transco Companies Inc., a major producer, supplier, and transporter of gas, oil, and coal - bases his forecast on a soon-to-be-released American Gas Association (AGA) report: ''The Gas Energy Supply Outlook: 1980-2000.'' Bowen headed the AGA Gas Supply Committee that drew up the report.
The report projects total US energy consumption increasing from 1981's 75 quadrillion British thermal units (quads) to 100 quads in the year 2000. Currently natural gas provides 20 quads a year - meeting 27 percent of US energy demand.
Industry and US Department of Energy figures show that more than 90 percent of the present US gas supply is from conventional wells in the lower 48 states. In an early peek at report findings last week, AGA president George H. Lawrence said a major switch in the source of gas supplies must take place over the next 20 years.
The AGA report lists four possible ''gas supply scenarios'' to choose between. These range from total reliance on US supplies backed by import restrictions, to various degrees of reliance on Mexican and Canadian gas, or finally to unrestricted imports of gas from overseas.
At present, 8 percent of US supplies come from ''supplemental souces'' such as Alaskan, Canadian, and Mexican gas; gas from unconventional underground formations; liquefied natural gas (LNG) imports; renewable urban-waste methane production; and coal gasification. Mr. Lawrence said that with government support, these sources could account for 50 percent of supplies in 2000.
Bowen cited figures showing that US gas needs can be met with any one of the AGA's four options. But in each case, he explained, policy decisions must be made quickly so that the massive capital investment needed will be made in the right direction.
Gas producers and suppliers, he indicated, are waiting for Washington policymakers to signal whether the new investment should go into developing synthetic gas production facilities at home, into opening known gas fields in Alaska, Canada, and Mexico, or back into the mothballed tankers and terminals designed to handle LNG from Libya, Algeria, and the Middle East.
According to Bowen, past federal energy policies have drained conventional reserves while failing to encourage development of potential sources. To correct the imbalance and prepare to meet future energy needs, Bowen calls for the Reagan administration to:
* Strengthen rather than dismantle the Department of Energy.
* Encourage producers, suppliers, and utilities to agree on new pricing arrangements under the 1978 Natural Gas Policy Act rather than decontrol natural gas prices.
* Introduce a ''fast-track process'' to give priority treatment to new energy projects such as coal slurry pipelines, coal gasification plants, and deepwater offshore drilling.
Bowen says that vital energy development remains stalled because ''we build an obstacle course in this country for getting new energy projects under way. . . . One person can stop a project, if not in the regulatory process, then in the courthouse.''
Bowen called on all API members to support ''what is probably the most essential piece of legislation before the Congress this year.'' This energy mobilization legislation, he said, would create a special White House council to select ''priority energy projects'' and speed them toward completion.
Bowen opposes administration plans to dismantle the Department of Energy. With continuing energy shortages ahead, he says, the US needs a secretary of energy who can present energy issues ''with one voice'' to the President and Cabinet.
The alternative, Bowen suggests, is to ignore long-term energy policy and instead focus on the temporary oil surplus and on political wrangling over whether to deregulate natural gas prices in 1983 or 1985.
Assuring ''environmentally acceptable and economically attractive'' energy supplies for 2000, Bowen says, requires making choices now.