Engaging with local communities ahead of issues is key – Southwestern executive
Mark Boling, president of V+ Development Solutions, an initiative within US-based gas producer Southwestern, spoke with ICIS ahead of the North American Gas Forum, which will be held October 4-6 in Washington, DC, regarding his views of upcoming policy and environmental issues for gas producers.
The US natural gas production industry still faces major hurdles in engaging with local communities and pushing for updated policies that reflect demand-driven initiatives.
Southwestern’s V+ is focused on developing natural gas resources with the least amount of impact to the environment and local communities, while also researching on utilizing methane for the company’s downstream business.
The US energy industry – and natural gas producers specifically – must come to terms with addressing three crucial topics: protecting underground water resources, addressing seismic activity and methane emissions, Boling said.
One of the initiatives launched through V+ is ECH20, a water conservation project to maintain and refresh local watersheds in the areas where Southwestern produces. The company is focused on being “freshwater neutral,” and plans watershed restoration projects in the immediate areas of Southwestern’s production sites, not just in other states or even countries.
Energy companies tend to take a defensive position, which is a disadvantage for US gas producers when debate on topics such as hydraulic fracturing turn emotional, Boling said.
He said handling communication is a key strategy in diffusing that emotion. Companies instead should allow individuals to come to understanding the issues, such as the risks associated with hydraulic fracturing, on their own. Gas producers should not hesitate in engaging in open dialogue and more transparency around these issues in order to incorporate the views of local communities in energy production projects, Boling said.
US gas producers should also come to terms in understanding that natural gas should not be viewed as a competitor to renewables, he added.
Natural gas can instead be an enabler to renewable sources, given the intermittence of power produced by renewables can be offset by natural gas as a bridging fuel.
“I think we need to be looking for more ways of having natural gas work with renewables, as opposed to fighting over market share,” he said.
With the upcoming NAGF dialogue coming up, policy-makers and industry representatives will have the opportunity to mull over potential changes ahead for natural gas producers.
The US natural gas market is expected to brace for further drops in commodity pricing and belt-tightening this year and next. With many positions in the natural gas market largely unhedged for 2016, the upcoming months will be pivotal for supply with producers making adjustments.
According to Boiling, availability of capital will also factor into producers’ borrowing costs and affect production and supply.
Federal and state level policies have been successful so far at addressing supply, he added, but little exists for what he called “use-driven” policies. Boling would like to see more incentives in place that specify how natural gas can be used in combined heating and power applications, or natural gas fuel cells, or downstream methane applications. These would be useful to spur domestic manufacturing in the US, should the right policies be in place, Boling said.
“We need to focus on the types of policies that are going to make use of our product,” he said.