"America's Energy Starts Here" is Consol Energy's motto. Chesapeake Energy calls itself "America's Champion of Natural Gas." Range Resource's "My Range Resources" campaign features wholesomely weathered rural Americans. Does the natural-gas industry have a thought besides keeping our nation's furnaces lit, and its power plants and petrochemical factories running?
Even President Obama chimes in. In his State of the Union address, he touted record natural-gas production in terms of lower energy bills for Americans, "cleaner power and greater energy independence."
It's true: Gas prices are the lowest in a decade. The controversial, water-intensive process known as hydrofracturing has let drillers access gas in deep shale formations like the Marcellus, creating a glut.
But increasingly, fracking's risks — air pollution, contaminated water, fractured habitats — won't be associated just with gas produced for U.S. users. Industry bets much of that gas is bound elsewhere.
Here's why. Gas production in the U.S. is up some 25 percent since 2005. But domestic demand has grown slowly, while demand in developing countries explodes. About 7 percent of gas production is now exported — a fivefold increase since 2000. Though the U.S. currently imports more gas than it uses, the U.S. Energy Information Administration forecasts that by 2020 it will be a net exporter. EIA's Michael Schaal says gas exports will "nearly quadruple" by 2040.
By then, estimates the EIA, we'll be exporting an estimated 17 percent of gas production. But more exports mean more wells and more pipelines in places like Pennsylvania, and the problems that come with them. And they mean downsizing expectations on how long this nonrenewable resource — this ticket to "energy independence" — might last after all.
Schaal spoke Jan. 30 at the 2013 Marcellus-Utica Midstream Conference and Exhibition, at the David L. Lawrence Convention Center. The conference, which was attended by industries operating between drillers and end-users, was studded with references to gas for export.
One key here is liquid natural gas (LNG). Liquefying gas — by chilling it to minus-260 degrees Fahrenheit — is the only way to ship it overseas, where most demand is. (Most exports currently go to Canada, by pipeline.) Prices in Asia are up to four times higher for LNG than for conventional gas here.
Exporting LNG is controversial: Studies suggest that more exports would spur economic activity, but also raise the price of gas here. As the New York Times reported in October, LNG is lucrative enough that international energy companies from places like Qatar and Great Britain are signing long-term deals to export natural gas — sometimes from facilities whose construction are still awaiting federal approval.
Exporting LNG is an uncertain business; much depends on future exports from other countries, like Russia. But there are other ways to exploit shale gas.
At the Midstream conference, Steve Jacobs, of Harvest Pipeline Company, discussed plans for a new pipeline to head west from West Hickory, Pa. The Unity Pipeline, a joint venture with Marathon Petroleum Corp., would transport a gas byproduct called diluent. Unity Pipeline diluent would be ultimately bound for Alberta. What's in Alberta? Canada's tar sands, a.k.a. bitumen, a fossil fuel so viscous it can't be drilled for, but must be strip-mined or liquefied by steam — another reason Canada buys U.S. gas. Dirty enough when burned, the crude-oil end product is so energy-intensive merely to produce that it's worse for the climate than conventional petroleum. And industry levels vast swaths of pristine forest to reach it.
Diluent thins steam-treated bitumen so it can be shipped in pipelines like the proposed Keystone XL. Environmentalists consider the tar sands a climate disaster. But this oil reserve — the world's second-largest — is huge, and diluent means good money to companies like Harvest. Demand for diluent, said Jacobs, is expected to triple by 2024. Thus Marcellus Shale operations in Pennsylvania — already environmentally fraught — could help bring to market the dirtiest oil available.
Currently, exports are low enough that individual energy companies might not be in that market. But gas and its byproducts will go where they're most profitable.
"Our strategy is simple," says Range Resources president and CEO Jeff Ventura on the company's homepage. "We work to drive up production and reserves at low costs in order to build shareholder value." That's whose gas it really is.