Three events in the past two weeks, while not making headlines in the international news cycle, presented a new era on an entirely global basis. “Making History” was the theme the Rocky Mountain Energy Summit, and while such a title is frequently an exaggeration, this particular time it was not. With the shale revolution bringing the United States into the promised land of energy independence, indeed the past year combined with projected production from upcoming years are most certainly of historical significance for US national security, foreign policy, manufacturing might, and, closer to home, strong economic prospects for the Rocky Mountain region.
The agenda was curiously rife with non-industry types, including professional environmentalists and academics, but one by one, these speakers broke from the stereotype and conveyed messages of innovation and collaboration. MIT President Emerita Susan Hockfield pointed out that affordable natural gas availability is driving the US manufacturing boom, while the Smithsonian’s Kirk Johnston joked that “fossil fuels are fossils too, so you’re my people”. All agreed that innovation in energy will make for a better, safer future for not just the United States but the entire planet. Congressman Mike Coffman opened the event with a keynote talk noting that the US can now pivot away from the Middle East toward Asia only because of the energy independence brought about by oil and gas innovation.
Echoing the efficiency theme, Ken Golden of Exxon Mobil’s XTO unit discussed the company’s energy outlook through the year 2040 at the Denver Metro Chamber, noting that thanks to energy-saving practices and technologies, OECD demand should stay flat even as economic output increases by 80% in these countries (including the US, Canada and Europe). Concerning energy sources, oil is set to remain the leading global fuel, though natural gas will surpass coal for second place. Beyond becoming energy independent for its own needs, North America is projected to become a net exporter of oil by the year 2030. This dramatically changed landscape will bring more choices to consumers, more high-paying jobs and greater prosperity than the United States has seen perhaps in its history.
Beth Bowman of Shell Energy, speaking at the EnerCom conference last week, mentioned the fact that the US and Canada are home to the majority of unconventional gas resources (primarily shale gas) in the world. Citing three A’s – Abundant, Acceptable, Affordable – Bowman reiterated the importance of this growing energy resource for electricity production in the US, in that gas plants are more energy efficient than coal plants (55-60% vs 34-42%) and have significantly lower capital costs per megawatt installed, with 50% of coal costs, 20% of nuclear costs and 15% of wind power costs. Environmentally speaking, the news is even better in that gas plants produce 50% fewer carbon emissions of modern coal plants and 70% fewer than older coal plants. Furthermore, Shell does not expect the North American shale boom to be replicated elsewhere in the world due to the deep and liquid capital markets of this continent, to European and African opposition to hydraulic fracturing, to a lack of infrastructure for production and transport in other regions, and to the more accessible geology of gas-producing regions in the US and Canada.
Going well beyond the significance of energy innovation in the coming decades, the Smithsonian’s Johnson stated “Your industry is the engine of civilization and how you respond to the next century is critical for the future of civilization.”