Dominion's top executive believes shale gas has already changed the U.S. economy and will have a global geopolitical impact, making America the arsenal of energy.
View full sizeUtica and Marcellus shale formations contains 52 trillion cubic feet of shale gas, making the region from Ohio and West Virginia east to New York and north to Canada one of the richest energy fields in the world, Thomas Farrell, CEO of Dominion, said Friday. CLEVELAND, Ohio -- The shale gas locked under Ohio and nearby states has the potential to change the course of history, a top utility executive said Friday.
In defense of shale development before a packed audience at the City Club of Cleveland, Thomas Farrell II, CEO of Dominion Resources, dismissed environmentalists, called wind and solar "niche players," and gave a full-throated argument that shale gas will not only make the nation energy independent but transform America into an "arsenal of energy."
Judging from the questions following the speech, the audience was more concerned about the environmental and health impact of hydraulic fracturing than whether the gas industry drills the nation into "energy independence."
Time permitted just five questions, four of which were concerned with the safety of hydraulic fracturing. Farrell, who is also a writer and movie producer, called all of the queries "good questions" and treated his inquisitors with a great deal of respect.
City Club member Dorothy Faller was first in line, asking Farrell how long it would take for the nation's utilities to switch to 100 percent renewable energy. Farrell responded that unless Ms. Faller included nuclear power, such a switch would be impossible at this point because wind and solar are intermittent and power storage technologies are not adequately developed.
As he fielded other questions, Farrell stayed on point -- that shale gas is an extraordinary development that will end two generations of energy scarcity, that technologies will be developed -- both for gas production and to integrate renewable power into existing utility grids.
"Of course we'll figure it out. We're Americans. We always figure it out," he said.
In his remarks, Farrell worked hard to describe just how much shale gas has changed electric utilities and the U.S. economy -- and how it potentially will alter the nation's geopolitical position.
"For a very long time, our country has been an energy importer. Since the 1970s, in particular, when U.S. oil production peaked and OPEC's embargo sent shock waves through the economy, the American public and our policymakers have viewed energy as an albatross, even a strategic liability," Farrell said.
Shale gas development has changed everything, he said, and within only a decade.
"I am talking about hydraulic fracturing - more commonly referred to as 'fracking,'" said Farrell. "We are now talking about the United States as 'the new Middle East' and 'Saudi America.'
"If the Marcellus were a country, it would rank 8th in the world in terms of natural gas production -ahead of Saudi Arabia.
"The Marcellus and the Utica shales together hold proven reserves of 52 trillion cubic feet of natural gas and 188 million barrels of oil," he said.
"Experts are now predicting that between the Marcellus and Utica formations, the two deposits could yield 20 billion cubic feet of gas per day by 2020," he added, about 67 percent more than current production levels.
And all of this will be good for Dominion's bottom line for years to come.
Dominion - and its subsidiary Dominion East Ohio -- is at the heart of the Utica and Marcellus shale development, he said, building pipelines, processing plants and maintaining significant underground gas storage.
And Dominion is seeking federal approval to liquefy and export natural gas from a facility at Cove Point, Md., on the Chesapeake Bay. The project is a $3.8 billion development. The company already has negotiated 20-year contracts to supply gas to companies in Japan and India.
Environmental groups are opposing the projects.
"Environmental activists have sought to make Cove Point - like Keystone XL (pipeline) - a poster child for a dirty and dangerous fossil fuel project benefiting no one but the 'richest gas tycoons,' in the words of one of their leaders," Farrell complained.
Quoting Cambridge Energy Research, a U.S.-based global energy-consulting firm, Farrell said shale development will by 2035 directly support 735,000 new jobs and millions more indirectly.
Pointing to eastern Ohio gas and oil development, he said the wells there have already transformed the local economies.
"A place like Youngstown - long lamented as a symbol of industrial decline - now has some wind in its sails," he said.