Interview with Gregg Kantor (Second Vice Chairman, American Gas Association)
 

   The CWC Group, which has organized the World Shale Oil & Gas on September 18-21, 2012 at the George R. Brown Convention Center (Houston – USA), exclusively interviewed the Second Vice Chairman of the American Gas Association (AGA), Gregg Kantor, who answered about the summit and the impact of the shale revolution in the energy industry.

 

What do you see as the key growth areas for natural gas demand over the next 5 years?

 

   In the next 5 years, there will be two big areas for demand. The first is power generation. This year, we saw more and more coal generation moving towards natural gas, and I believe that this will continue in the future if natural gas prices remain low. In the Northwest region of the US, we’re seeing a number of coal plants being shut down and replaced with natural gas and with wind that will be backed up by gas generation. 

   The second area is industrial loads. Every gas distribution utility in the US right now is seeing more people walk through their doors to talk to them about new industrial plants or about expanding the use of natural gas in existing facilities. 

   There is no question in my mind that industrial demand for natural gas will remain strong and grow over the next 5 years. 

   If you want to look beyond 5 years, I think you’ll also see a growing demand for natural gas in the transportation sector. Perhaps not anything that approaches the demand in electric generation, but every part of the country is working on NGVs, including here in the Northwest.

 

Speaking of the transportation sector, we’ve been hearing a lot about natural gas

vehicles in the US—what impact has the shale gas revolution had on the transportation sector up until now? 

 

   Up until this point, there has been a lot of discussion about transportation driven by the low price of natural gas. There are two main issues driving this: one is the emissions from transportation—in Oregon for example 40% of CO2 emissions are caused by transportation—and the other is around national security. Both candidates in the Presidential Election are talking about weaning the US off of foreign oil, and low prices have helped create a policy dialogue around how to better support natural gas in transportation.  In particular, over the next 3-5 years, I expect to see rapid growth in LNG fuelled trucks—18-wheelers—and ships.  We’ll also see growth in CNG, though perhaps at a slower rate. 

   We are also beginning to see investment in infrastructure, both private investment and investment from the utilities. At the moment, those investors are trying to deal with the chicken and the egg question: How do you get the natural gas vehicles without the infrastructure, but how do you get the infrastructure without the vehicles? This is something that is being discussed a great deal. 

 

You mentioned emissions as another hot button issue in the US right now.  Could you tell us how shale gas is helping the US meet its climate change goals? 

 

   In the Northwest, we’re living at ground zero when it comes to the discussion of how natural gas meshes with climate change goals. We have a coal plant due to be shut down in 2020, to be replaced by wind and natural gas-fired generation, and then another, larger coal plant in Washington which will go through its first phase of shutting down in 2020 and second phase in 2025, also to be replaced by natural gas and wind generation. We’ll see this debate play out across the country as stricter emissions controls come into force, and utilities have to make the tough decisions on whether or not to invest in emission-control technologies for coal or replace it with natural gas. 

   The less visible impact of shale gas and the revolution we’re seeing in supply is around renewables. Here in the Northwest, we have thousands of megawatts coming from wind, which now exceeds the ability of the hydro-system to back it up. If you want to build wind, which does not blow all the time, you need to be able to follow it with generation. The way to do this is with gas-fired peaking generation. As more renewables are being developed around the country, we will see these being paired with natural gas-fired generation in order to ensure the system is stable and reliable.  

 

Of course the economy is another huge issue in the political debates.  How has the

shale gas revolution impacted the US economy?

 

   It certainly has been a revolution for our economy.  There is no doubt about it. When you look at the jobs that have been created by shale gas production in states like Pennsylvania, Ohio, Texas, and elsewhere—it has been truly amazing. 

   On top of job creation, if you look at the reduced energy costs and factor that through the economy as a whole, the overall benefits have been phenomenal and will continue to be so. In the political debates, we have seen the candidates discuss strategies for how best to take advantage of this domestic energy supply, and we will see policies and investment focused on making the most out of this resource. 

   Shale gas has delivered a major positive jolt to the US economy. 

 

Finally, are there any participants or discussions that you are most looking forward to hearing at the World Shale event next week?

 

   What’s great about World Shale is that you’re going to hear about a wide range of issues from all parts of the shale industry—that is what’s unique about this conference. There is a lot of diversity, and it’s a great way to hear about a variety of issues that are important right now and to the future of a successful shale gas industry, not just in the US, but around the globe.

Interview conducted by Hannah Lawrence, Producer, World Shale Oil & Gas, The CWC Group.