Boone Pickens says falling natgas rig count will hurt U.S. output
HOUSTON, June 16
HOUSTON, June 16 (Reuters) - Energy investor T. Boone Pickens questioned on Monday whether U.S. natural gas production can continue its robust growth with just 300 drilling rigs working to find gas.
Last week, the number of rigs drilling for gas fell by 10 to 310, while rigs drilling for oil rose by 6 to 1,542, according to data from oil services firm Baker Hughes.
While gas-directed rigs have fallen from 353 a year ago, the U.S. Energy Information Administration keeps raising its estimate for gas production this year and next.
In its June Short-Term Energy Outlook, the EIA said it expects daily gas production to reach 73 billion cubic feet per day in 2014 and 74 bcf/d in 2015, the fourth and fifth straight annual records due primarily to growth from the Marcellus shale play, EIA said.
However, Pickens said the pace of gas production is on the decline.
"You can't add (to production) with 300 rigs," he added.
Pickens expects utilities to rebuild gas in storage to between 3.4 trillion and 3.5 trillion cubic feet by the beginning of winter, well-below the five-year industry average of 3.8 tcf after the coldest winter in decades.
Pickens, founder of BP Capital, was in Houston on Monday to talk about natural gas as a transportation fuel, and to recognize Waste Management Inc for its growing use of natural gas to fuel its fleet of trash-hauling vehicles.
Pickens also founded Clean Energy Fuels Corp builds and operates compressed natural gas (CNG) and liquefied natural gas (LNG) fueling stations and other equipment.
Waste Management, a leading trash collection, disposal and recycling company, has more than 3,200 trucks that run on CNG, or about 18 percent of its fleet, said David Steiner, chief executive.
Waste Management began using gas to fuel some trash trucks in California in the mid-1990s, working with a previous Pickens company, but the effort stalled when truck engines had operational problems.
The push to rely on the alternative fuel gained momentum in 2007 when U.S. gas production from unconventional shale plays blossomed and gas prices fell, Steiner said.
Waste Management is now spending about 90 percent of its fleet budget to replace diesel trucks with CNG trucks. While more costly to purchase, Steiner said each CNG truck reduces diesel use by an average of 8,000 gallons a year and eliminates 22 metric tons of greenhouse gas emissions. (Reporting by Eileen O'Grady in Houston. Editing by Andre Grenon)