North America is already energy independent in terms of natural gas thanks to the shale gas revolution, and increased domestic oil production could slash oil imports by half in 2025, ConocoPhillips Chairman and CEO James Mulva told attendees at the Greater Houston Partnership luncheon in Houston on April 26.
"Very few companies can match the natural gas base of the United States," Mulva commented, adding that the U.S. shale revolution is a modern day industry story. "Natural gas is more than a short-term fuel, but a real part of the U.S. energy solution."
Record low natural gas prices have created a renaissance in the petrochemical and manufacturing industries in the United States., Mulva noted. Mulva also supports exports of liquefied natural gas from the United States., believing it would have a small impact on consumers and businesses in the United States.
"In the long-term, natural gas supply will provide energy security and economic stimulation in terms of jobs and tax revenues," Mulva said, adding that gas hydrates found offshore could add centuries of supply to the United States.
While natural gas is in amply supply in the United States, the full potential of shale liquids is not yet known, Mulva commented. ConocoPhillips and other companies have ramped up their liquids drilling activity as higher oil prices and record low U.S. natural gas prices provide incentive to switch to liquids drilling from gas.
ConocoPhillips will spend $2 billion and drill 160 wells in the Eagle Ford shale play in South Texas, and will spend $600 million and drill 300 wells in West Texas' Permian Basin. The company will also drill 25 to 30 wells in the mature North Barnett Basin.
Mulva said ConocoPhillips is also focusing on liquids-rich areas such as the Bakken, and will continue to add liquids-rich assets in Colorado, New Mexico and other locations.
The revival of the oil and gas industry has benefited not only the U.S. economy, but the economies of both Texas and more specifically Houston. The state not only produces 30 percent of U.S. gas supply, but consumes significant amounts of natural gas for power generation.
The image of the oil and gas also has changed as more companies focus on developing North American energy resources.
"We're no longer viewed as old school and low tech," Mulva said.