Panelists Discuss Equation of Natural Gas Supply, Demand

Article excerpt

There was no dispute about the quality of natural gas among panelists of an energy and environmental debate Thursday in Norman.

Panelists - ranging from an environmentalist to producers, a pipeline, local distribution company and regulators, plus a Canadian - agreed that natural gas is a clean fuel.

Discussion focused more on the natural gas supply and demand equation and the forces that drive the cycle such as price and deliverability.

The debate - the second in the "Man, Energy and Environment" series planned through June 1991 by the OU Energy Center and Jefferson Energy Foundation - was hosted by the University of Oklahoma and was televised nationally.

Although panelists agreed that natural gas is among the cleanest fuels available, no one offered it as a panacea for the air quality woes of the United States.

"We're all natural gas fans here," said George L. Mazanec, group vice president of Panhandle Eastern Corp. of Houston.

However, he noted there are concerns about pipeline infrastructure constraints and supplies at a preferred price.

Two fronts in which natural gas is becoming more viable are motor fuels and electric generation. Environmental concerns have been the imputus bringing natural gas to the forefront of such debates, but the playing field for the industry has also changed from a strictly regulated one to a freer marketplace.

Realistically, the vehicle fleet of the United States is too vast for natural gas to ever become the fuel of choice, said Paul J. Hoenmans, executive vice president of exploration and production for Mobil Oil Corp.

Federal policymakers have shifted discussions toward targeting large fleets such as mass transit, corporate fleets and the like that will diversify the resource base devoted to vehicles, said Charles A. Trabandt, a Federal Energy Regulatory Commissioner.

California and Texas legislatures have passed forms of mandates for vehicles to be converted and Oklahoma has followed suit with a less stringent law.

"Natural gas should be a significant fuel option," said Richard B. Hillary, general manager of the Independent Petroleum Association of Canada. "That's really what we're talking about here."

Those measures would increase demand for natural gas, which plummeted in the 1970s as reserves were perceived to be periously low and President Carter curtailed the use of natural gas to generate electricity. Since then, those restrictions have been lifted and the natural gas industry has done an about-face. Pipelines are common carriers and wellhead prices have been totally decontrolled.

With that, the debate shifted to the current supply portion of the equation.

Usage is currently at about 18.5 trillion cubic feet annually with production at about 17 trillion cubic feet and the remainder exported from Canada. Demand forecasts from the U.S. Energy Department and industry experts range from 22 to 25 trillion cubic feet by 2000.

Meanwhile, replacements of reserves are estimated between 60 and 100 percent.

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