On February 14, 2015 9:44 pm
By Mikaila Adams
The future is positive for North American natural gas, and demand is increasing, said Williams president and CEO Alan Armstrong in a presentation to the NAPE Business Conference in Houston on Wednesday.
“I’ve marveled at what the E&P space has brought to us,” he said. “The E&P space has created tremendous opportunity downstream and is bringing manufacturing back home to the US,” he said, pointing to growing confidence in the demand for natural gas.
“It takes time to build out large-scale capital intensive infrastructure,” he explained, but the fundamentals look solid, he said. North American industrial demand for natural gas is expected to increase about 30% from now until 2030, he said, and new shale-driven chemical capacity will supply significant new demand and job growth. “There is a tremendous opportunity to drive new manufacturing in the Northeast and across the Midwest,” Armstrong said.
The current price environment is a challenge, he said, noting that money that thought oil would bottom at $70 is gone and completing projects will now require a lot more creativity. However, he said, it is important to note that confidence in the demand side is what is different today from the previous downturn.
Today’s challenges include taking the long-view in a short-term market and sharing the responsibility of keeping the industry safe and viable, he continued.
One stumbling block Armstrong mentioned—the current regulatory environment—echoed concerns expressed by Continental Resources executive Jack Stark at the same conference. Regulatory delays are the industry’s Achilles’ heel, Armstrong said, noting the delays impact both businesses and consumers, and hinder the opportunity for a manufacturing resurgence in the US.
“The delays make investment and business planning difficult,” he said, pointing to the 2.6 years it took for the company’s recent Transco pipeline project to complete the FERC pre-filing process after business negotiations, open seasons, and financing had already taken place. These types of delays hinder manufacturing job growth, keep consumers paying higher rates, delay the deployment of new emission reduction technologies, and prolong the use of higher-carbon fuels, he said.
You can read more about Armstrong’s concern about regulatory contraints on the industry in his November 2013 interviewwith OGFJ.