Industry head wants policy to follow natural gas promise

Posted April 4, 2011

By Michael Bradwell
Observer-Reporter

CANONSBURG - The head of the Marcellus Shale Coalition said Thursday she is pleased to see President Obama include natural gas as part of a national energy strategy.

But Kathryn Klaber, executive director of the 2-year-old industry group that represents about 180 companies working in the shale strata said policies regarding the use of the fuel must be consistent going forward.

Klaber addressed more than 350 members of the Washington County Chamber of Commerce during the group's "Executive Series" dinner at the Hilton Garden Inn, Southpointe.

"It's good to see that natural gas is on Obama's list," Klaber said, "but policies need to be consistent."

On Wednesday, Obama called for a one-third reduction in U.S oil imports by 2025, but offered little in the way of new initiatives for an energy policy, instead providing a list of energy proposals he's already called for, including increasing domestic oil production, increasing the use of biofuels and natural gas and making vehicles more energy efficient.

Klaber, noted that because of the use of hydraulic fracturing and the production of natural gas from several large shale fields around the country, including the Marcellus, the U.S. now has an abundance of natural gas supplies that continue to grow by the month.

After stagnating at 3 trillion to 24 trillion cubic feet between 1970 and 2006, U.S production numbers have pushed to new record levels, reaching 26.85 TCF from 2009 to 2010. Last year, the industry set new records in every month except January, February and July.

At the same time, natural gas prices have declined from $8 to $10 per thousand feet in the middle of the last decade to just over $4 per mcf now.

"The big reason we're seeing lower prices is supply," Klaber said.

Closer to home, Klaber said the coalition, which is headquartered in Southpointe, is focused on making the gas industry's work transparent to Pennsylvanians.

"This is an industry that's clearly focused on doing this right," she said, adding that drillers and regulators are dealing with an "incredibly complex set of issues" to put natural gas squarely in the middle of the national energy landscape.

According to Klaber, the industry has made safety its top focus, and she disputed claims that the shale gas industry isn't adequately regulated in Pennsylvania.

"There's not a single (area) of the well process that is not covered by a regulation," Klaber said, showing a slide from the state Department of Environmental Protection website that showed 12 separate regulations for construction of a well site, 18 each for drilling and hydraulic fracturing; 10 for site reclamation; and 11 rules for midstream (processing) operations.

While acknowledging that much of the industry's current focus is on drilling, the coalition has a longer-term goal of promoting "not just home heating and electric generation from natural gas" but finding markets for the hydrocarbons like propane, ethane and butane that accompany methane extracted from the shale, to helping to grow the use of natural gas vehicles.

Klaber said Washington County stands to benefit from those developments, by virtue of its role as the epicenter of the Marcellus Shale development, now seen as the world's second-largest gas field.

"We are really sitting in a place that makes it strategic from a headquarters place," she said, noting that many companies located here are involved with developing the shale across the state.

On the environmental front, she said that the industry is also making strides in recycling the millions of gallons of water required to hydraulically fracture the shale to free the natural gas from the highly compacted rocks a mile or more beneath the earth's surface.

"We're driving water use down and it's making a real difference in this part of the country," she said.

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