Thousands Join Shale Drilling Conference
Pittsburgh Post-Gazette
4 November 2010
By Elwin Green,
Interest in the Marcellus Shale continues to grow, if attendance at an
annual conference on natural gas development is any proof.
The Developing Unconventional Gas East conference opened Wednesday at
the David L. Lawrence Convention Center with 2,500-plus attendees --
compared to 1,450 last year -- and hundreds of drilling opponents
assembled outside to protest. The conference was organized by Hart
Energy Publishing of Houston, Texas.
In the keynote speech, David L. Porges, president and CEO of EQT Corp.,
highlighted four lessons his Downtown-based energy company has learned
since venturing into the Marcellus: that improved technologies increase
productivity and reduce costs, that preserving the environment is good
business, that natural gas is the new kid on the block, and that "to
thrive we MUST create demand."
Mr. Porges said exploration of the natural gas reserves that underlie
much of Pennsylvania has both relied on and spurred innovation, but
producers "need to remember the need to keep going" and to develop a
culture of innovation, something that he admitted was not always in
place at EQT, formerly Equitable Resources.
He also urged attendees, who represent all aspects of the industry from
drilling to marketing to engineering, make sure their companies work to
prevent environmental damage and, if it happens, to mitigate it and
remediate it. They also need to hold each other accountable.
"The industry earns much more credibility if we embrace the notion of
punishment for bad actors," he said.
In support of his third point, he noted most residents who live atop
the Marcellus are unfamiliar with natural gas drilling. The new
phenomenon, for them, raises multiple concerns that the industry must
recognize as valid.
"We do cause inconveniences for the places in which we operate," he
acknowledged.
While answers to concerns about pollution or about jobs being created
for outsiders may be obvious to producers, they aren't obvious to
residents and need to be communicated.
On the point about creating demand, he asserted, "We have solved, as an
industry, the supply problem" regarding natural gas. It is now possible
to recover so much of the substance that the challenge is finding uses
for it all.
The place to do that, he suggested, is in the transportation sector,
which now uses less than 1 percent of the nation's natural gas
production.
While 225 million U.S. vehicles run on gasoline, only 120,000 run on
natural gas. Using natural gas instead of gasoline in transportation
would save the nation $256 billion, he said, while reducing imports 68
percent.
Increased attendance at the three-day conference, which organizers
dubbed DUG East, was more than matched in percentage terms by the
increase in exhibitors.
Some 250 companies have booths, compared to 50 last year.
One new exhibitor was Champion Technologies. Headquartered in Houston,
Texas, the company has been active locally for about 2 1/2 years, said
Jamie Roush, whose business card reads, "Sales Engineer." It's a title
that makes sense in an industry and at a gathering where a lot of what
is being bought and sold is, in fact, engineering.
Brochures at Champion's booth touted "sustainable water treatment
solutions." Mr. Roush needed little prompting to launch into a
mini-dissertation on how untreated water can calcify and plug drilling
equipment, or how bacteria in untreated water will produce hydrogen
sulfide.
Champion provides oil and gas producers with chemical solutions to
combat those problems by treating the water used in hydraulic
fracturing.
Martin V. Fleming was returning to the DUG East, having attended the
first conference last year.
Mr. Fleming is senior vice president of Noble Royalties Inc. of Dallas,
a privately-owned firm that buys royalties.
If a landowner has a deal with a producer to receive royalties from
natural gas but would rather have a lump-sum payment, Noble is ready to
make that deal.
That is, if it's large enough -- Noble typically deals in
multi-million-dollar placements.
Having attended last year's conference, Mr. Fleming had a larger
contingent of Noble representatives with him this year to capture what
he sees as a still-growing opportunity.
"We have completed a transaction in the Marcellus Shale that was fairly
significant," he said. "It has given us interest in doing a lot more."
Elwin Green: egreen@post-gazette.com or 412-263-1969.