Oil and gas exports take center stage at EIA conference

At a recent conference, stakeholders discussed the prospect of expanding U.S. exports of natural gas.

The U.S. Energy Information Administration (EIA) recently concluded its sixth annual Energy Conference in Washington, D.C. The agency reported that the event drew a record number of attendees, with more than 900 industry stakeholders, government officials and academic researchers turning up to discuss the many challenges that exist in the energy sector.

While a wide range of issues were up for discussion during the event, one topic seemed to jump straight to the top of the agenda. Specifically, many attendees were eager to discuss the prospect of the federal government allowing more companies to export liquefied natural gas (LNG) to countries with which the United States does not have a free trade agreement (non-FTA countries).

Key policy maker: 'Deciding to export gas should be easy'

Senator Lisa Murkowski of Alaska, the ranking Republican on the Senate Energy and Natural Resources Committee, urged all stakeholders to acknowledge the importance of handling the issue appropriately.

"Deciding to export gas should be easy," Murkowski said. "But if we don't handle LNG exports right, there's little chance we'll be able to effectively tackle a hot-button issue like crude oil exports."

The Senator spoke at length about the importance that federal energy policy has for residents and companies in her state, which depends on the oil and gas industry for tax revenues, employment opportunities and other benefits. She explained that Alaskan producers have been looking for a way to increase their exports of natural gas for decades, but have been stymied by regulatory obstacles.

"The only thing we know at this juncture is that we don't know how all this will turn out," Murkowski said. "That is why it's imperative that the U.S. government not turn its back on crude oil and natural gas exports into the world's markets."

Stakeholders debate impact of increased exports

The Oil and Gas Journal noted that against the backdrop of the EIA conference, the Energy and Power Subcommittee of the U.S. House of Representatives Energy and Commerce Committee hosted two panel discussions on the subject of oil and gas exports. During one of these hearings, Christopher Smith, acting assistant secretary for fossil energy, explained that the Department of Energy (DOE) has received a growing number of LNG export applications as rising demand for gas has driven up the price of the commodity in overseas markets.

Smith noted that as of June 7 the department had approved 24 long-term applications to export almost 30 billion cubic feet per day (bcfd) of LNG to FTA countries, with another three applications pending. However, the situation was flipped for non-FTA countries, with only two applications authorizing 3.6 bcfd having been approved and 21 applications covering more than 25 bcfd still pending.

Although the DOE is responsible for reviewing applications to export oil and gas to non-free trade agreement countries, it is a separate body—the Federal Energy Regulatory Commission (FERC)—that is responsible for regulating the siting, construction and operation of LNG import and export facilities.

On the first day of the EIA conference, U.S. Secretary of Energy Ernest Moniz indicated that his department would act "expeditiously" to grant export licenses in cases where the overseas sale of gas was in the national interest. However, there continues to be debate over the exact costs and benefits of such activity, with some saying that exports could cut into the advantages that growing domestic production has provided to U.S. businesses.

Such concerns are "misplaced" according to Lucian Pugliaresi, president of the Energy Policy Research Foundation. Testifying before the subcommittee, Pugliaresi argued that the domestic market would remain stable in the face of increased exports.

"Even the most ambitious plans to use gas for the entire range of domestic applications are highly unlikely to limit the availability of US gas supplies for export markets," Pugliaresi said, adding that FERC's process for authorizing and regulating the operation of new natural gas liquefaction facilities already limits the pace at which LNG can be exported.

Technology key to delivering benefits associated with gas exports

While shipping LNG overseas promises to strengthen the domestic energy industry by opening new revenue streams, companies will need to continue pushing forward with initiatives to enhance the productivity of their oil and gas wells in order to keep the U.S. market supplied. One piece of equipment that can provide an aid in this area is the hydraulic jet pump.

Jet pumps are highly valued by producers due to their versatility. Their streamlined design allows them to be deployed in straight, horizontal or deviated wells and with no downhole moving parts, the units require minimal maintenance. This solution can even be effective in improving production performance at sites where problems with the completion of well casing would make other artificial lift equipment less useful.