There are many reasons to be bullish on intermediate and long-
term demand for natural gas, said an executive with Oklahoma City-
based Chesapeake Energy Corp.
"The natural gas landscape is changing," said Domenic Dell'Osso
Jr., executive vice president and chief financial officer of
Dell'Osso was the luncheon speaker at the fifth-annual Oklahoma
State University Energy Conference at the Tulsa Renaissance Hotel
and Convention Center.
Among the speakers during the daylong conference was Dana Murphy,
chair of the Oklahoma Corporation Commission. Murphy offered an
Oklahoma perspective to the national energy outlook and addressed
domestic energy and shale. Meanwhile, Don Humphreys, senior vice
president and treasurer of ExxonMobil, offered a long-range energy
outlook view to 2030.
There is a quickening momentum for compressed natural gas
vehicles, Dell'Osso said.
Chesapeake, which this year announced it was converting its
entire fleet to CNG as a motor fuel, has opened several CNG stations
across the Oklahoma City metro, he said.
"U.S. companies are looking for options, and with $4 gasoline and
just as high diesel prices, that forces the markets to force policy
changes," Dell'Osso said.
The demand for natural gas is also fueled by a growing industrial
demand, he said.
"U.S. natural gas prices are the lowest in the industrialized
world," Dell'Osso said. "This is accelerating the shift from coal to
natural gas for U.S. electrical generation."
The U.S. does not import natural gas and exports small amounts,
"The U.S. suffers from the fact that we are a gas island," he
said. "We do not import natural gas, while we export relatively
It's possible that over the next decade, the U.S. could see a
conversion of U.S. liquefaction import facilities to liquefied
natural gas export facilities, Dell'Osso said.
"That could be a game changer," he said. "Since we are not
connected to world gas prices, once we begin exporting gas, it would
close the price differential between the U.S. and the gas prices
around the globe."
Other factors pushing CNG as an alternative fuel include cheaper
costs to fill a CNG tank compared to gasoline and versatility of CNG
- it can be used in everything from drilling rigs to off-road
vehicles or as a marine fuel, Dell'Osso said.
The cost for 1,000 cubic feet of CNG is listed near $1.40, while
a gallon of gasoline is about $3.66 and diesel is close to $4 a
The amount of natural gas produced from shale formations is
contributing to a substantial cost benefit for industry and a broad
range of consumers, Dell'Osso said. …