Here Comes Natural Gas

Article excerpt


DON FELSINGER, new chief executive officer of Sempra Energy, the $12 billion a year San Diego-based energy company, says Americans will likely accept more energy infrastructure projects to help contain prices. Here are excerpts from an interview, originally conducted for The New York Times:

Q: Is it a problem that the U.S. is so dependent on other countries for energy?

We've become more and more of an importer of energy over time. There is nothing on the horizon that is going to lessen that.

Q: More specifically, is it a concern that we're dependent on certain countries for petroleum that don't seem very stable?

Yes, it was recognized by the president in his State of the Union address that we need to lessen our appetite for foreign oil.

Q: Is natural gas part of the solution?

Natural gas is going to follow in the ways of oil. In North America, we have been able to satisfy our own demands for natural gas from internal production. What we haven't been able to produce in the United States, we've imported from Canada.

But we're at a point of time in our history that it's becoming apparent that we are consuming more gas. That's why prices have gone from $2 to $3 per million BTUs over 20 years and now are in the range of $7 to $15.

We saw that coming about five years ago. Were building natural gas-fired combined cycle power plants. The only power generation this country has built in the past 10 to 20 years has been this type of plant.

Q: How can you keep prices from shooting up further?

We came to the conclusion that there was plenty of gas around the world. That imported natural gas could be priced to compete against domestic supply.

Q: Is natural gas in the same countries that have oil?

It's some of the same countries, but also different countries. You see a lot of the South American countries like Bolivia that have gas. We have stranded natural gas up in Alaska. We have natural gas in Australia. It's all over the world. It's in more places than oil is.

Q: Of America's total energy consumption, what percentage does natural gas account for?

The latest figures show that it's about one-quarter of the total.

Q: If we import more liquefied natural gas (LNG), would that ease our dependence on oil?

It would lessen it somewhat because oil and natural gas get substituted for each other. But it's naïve of us as a country to think we're going to become energy independent. If we were to launch a program like that, it would take many, many years. I'm not sure it would be achievable.

Q: Are there other forces at work that could ease U.S. dependence on imported energy?

We have been struggling as a country for a number of years to have a defined energy policy that would set certain goals to achieve by certain dates. I think the country would benefit by having a more focused energy policy that set goals and objectives we're trying to achieve. But I'm not concerned that we have oil or natural gas coming in from other parts of the world. As global economy develops and as countries become more dependent on the revenue from selling natural resources, the world becomes a more civilized place.

Q: You're bringing more LNG into the New Orleans area. What is the significance of that? …