State Dept. Takes Lead in Promoting Global Shale Gas Development

Hosts two-day Global Shale Gas Initiative Conference in Washington this week

We’re familiar with names like Barnett, Bakken and Marcellus – but what about Silurian or Changbei? Read up on them, because not too long from now, it’s a good bet we’ll be hearing a lot more about these here in the US. Thanks to the good work of the folks over at the State Department, shale gas went global this week – and below, we recap the event in case you weren’t able to attend. Following are select excerpts of a press conference held earlier this week where David L. Goldwyn, Coordinator for International Energy Affairs at the State Department, runs through what went down:

On the Global Shale Gas Initiative Conference and Countries that Participated:

We’re up to 20 countries and 10 federal entities, as well as state and local regulators. The reason we’re doing this is it’s part of the State Department’s effort to promote global energy security and climate security around the world. The U.S. shale gas phenomenon has transformed global energy markets. Because we have discovered and we have the technology to develop efficiently large quantities of gas from shale, global prices of liquefied natural gas have decreased. Gas has become cheaper. Gas is now competitive with coal on a BTU basis, which means that countries that might use coal can now not make an economic choice, but on a competitive basis choose gas for their next level of power generation.

On Shale’s Role in Providing Energy Security and Affordability Around the Globe:

[T]his has been a terrific boon for ourselves and for global energy security, and other countries want to replicate this process. And we wish them the best in doing this, but there are a lot of things that governments need to know in order to develop shale gas safely and efficiently. And that’s why we organized a regulatory conference where we could teach them what they need to know. Now, their motivation and our motivation as the State Department to engage on this issue should be clear for foreign policy and energy security reasons. Countries around the world need diversity of energy supply. There are countries with millions of people – in fact, tens and some hundreds of millions of people – without access to electricity services. They need a feedstock and they need it for base load energy.

State and Federal Regulations, Safety, Environment:

[W]e have, in our country, an umbrella of laws and regulations that makes sure this is done safely and efficiently. We have federal regulation of air and water. We have state regulation of land use and water. We have the capacity to monitor and to regulate. And even then, there’s the need for enforcement… We’ve also had a representative from the Groundwater Protection Council, and this is an association of state regulators, because in our country, it’s really the states that are on the front lines of safe drinking water regulation. In 33 states, the state leads or co-partners with the Environmental Protection Agency. So we’ve spent a lot of time talking about water, because water is scarce in a lot of these countries.

On Groundwater Protection, Hydraulic Fracturing:

[S]afe water and safe regulation plays a huge part in our discussions. It’s really one of the main reasons that we held the conference in the first place. And while hundreds of thousands of wells have been drilled successfully in the United States so far, the lesson that we want all these countries to understand is that you have to have technically competent people operating and you have to have laws and regulations in place first. We have safe – we have safe – Clean Air Act. We have safe drinking acts. We have rules about where you can drill. We have rules about what sort of casings you have to have. And so, if done responsibly, it can be done safely, but these countries need to know you need laws and regulations in place first. I wouldn’t paint the development with a broad brush.

On the Overall Success of the first Global Shale Gas Initiative Conference:

The bottom line is that we’ve had a really successful conference, because these countries have a lot of questions. People are enthusiastic, but they’re careful. There’s a lot that they need to know and there’s a lot they need to stand up in terms of regulatory capacity before they’re ready to engage in this. And so from our point of view, this has been a big success. We want people to have rational expectations about what they have. We want them to understand that it takes not just good commercial terms but really good government and good governance in order to make sure this is done safely. So it’s another of the examples of our using smart power or creative diplomacy to try and improve energy security, but to help countries learn what they need to know.

NOTE: Click HERE for a full transcript and video of Mr. Goldwyn’s press conference from earlier this week.

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