By Joe Silha
NEW YORK (Reuters) - Environmental concerns about the impact of increased North American shale gas production could slow development of some projects, but technology should help solve some of those worries, the head of the Canadian Association of Petroleum Producers said Tuesday.
"It (environmental concern) is likely to attract more focus, and that has the potential to slow things down in terms of the pace of development. But I would not suggest that it's going to impact significantly the overall scope of development over the longer term," CAPP president David Collyer told the Reuters Global Energy Summit in Calgary.
Shale gas, or gas trapped in sedimentary beds, has become a big factor in growing North American gas supplies this decade just as conventional plays seemed set to begin a long decline.
But concerns that water quality may be adversely affected by the chemicals used to help fracture the gas-bearing rock now threaten to slow development of these promising new supplies.
It wasn't long ago natural gas producers were struggling to find enough gas to keep up with growing demand, as rapidly depleting conventional wells stirred fears of supply shortages.
"The change (over the last few years) in the supply outlook for natural gas is a dramatic illustration of how technology can be used to unlock a significant resource ... in a short period of time," Collyer said.
Producers knew for years about the vast reserves of shale gas across North America, but much of that supply was thought to be uneconomical until recent advances in horizontal drilling and rock fracturing techniques made shale production viable.
Collyer said he expected industry to apply the same kind of technological innovation to lessen pollution concerns.
As the United States looks to reduce its dependence on foreign oil and limit carbon emissions, natural gas, the cleanest burning fossil fuel, could play an important role.
The United States alone is thought to have between 1,700 trillion and 2,200 trillion cubic feet of technically recoverable natural gas reserves, or enough gas at current production rates to supply the country for more than 90 years, according to industry estimates.
Shale reserves make up about 28 percent of that total, but estimates of total supply are likely to grow in coming years as big new plays such as Marcellus in Appalachia or Horn River in Canada are more fully defined.
Collyer said a lot of the outlook for gas depends on the impact of climate change policies on coal-fired generation.
Coal produces about half the electricity used in the United States but has come under close scrutiny because it emits about twice as much carbon dioxide than natural gas.
"There is clearly an opportunity for increased natural gas penetration in electricity generation," he said.
Conventional gas basins will still contribute to overall supplies, but the main engine for supply growth looking forward will come from unconventional sources such as shale, Collyer said. Continued...
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