Michael Smith, chairman, CEO and founder of Freeport LNG, does not mince words when it comes to the importance of natural gas to the global marketplace.
"Natural gas is the fastest-growing, cleanest- burning fuel that we could provide to our planet," he said.
Al Monaco, president and CEO of Enbridge, agreed, calling Smith's assessment "an undeniable fact" while adding yet another undeniable consideration that "gas is growing."
But for all the superlatives executives in the petrochemical industry may heap upon liquefied natural gas, all parts of the chain -- upstream, midstream and downstream -- will suffer if infrastructure cannot be built to move gas to the markets that demand it.
Regarding the industry's level of success in confronting opposition to infrastructure development, Monaco doesn't believe the situation will improve any time soon.
"On the other hand, we have been successful to some extent. We've put $12 billion [worth of capital] in the ground in the last year," Monaco said, speaking on a panel discussing North America's gas future at CERAWeek by IHS Markit, held recently in Houston. "The issue is that it's a lot harder, it takes a lot more time and you have to be really good at it."
Monaco specified that much of what makes the prospect harder is "working on the ground" with communities, including First Nations and Native American tribes.
"It means being world-class on safety and reliability," Monaco continued. "It means taking input from people and actually listening and addressing their concerns."
In addition to the complexities of this level of communication with these communities, project delays result in higher costs.
"But it's such a competitive advantage that we have on this continent that we can't not let it happen," Monaco said.
The softer side
From a business market perspective, Monaco said "situating the project development and design way ahead of when we used to" is key to success as the market evolves.
He also cited the importance of "making sure that we're really tightly connected with the community before we start designing the project so that we know how to facilitate the concerns."
Though Enbridge knows well how to build pipelines "in any kind of conditions," Monaco said, he considers the community- based, "softer side of the equation" to be the biggest challenge.
"Connecting with communities, connecting with governments and building coalitions of support allows you to move through the process with confidence without putting hundreds of millions of dollars in capital at risk," he said, "with certainty in that investment."
Smith noted while the industry "suffered through the Obama administration, things have only gotten better regulatory-wise under Trump."
"In the Gulf Coast, there's no impediment," Smith said. "It's all about the economics with the customers who have to be willing to sign long-term contracts for a price that is high enough for someone to be able to pay the banks and make a return."
Regarding how the industry might be successful in a market that seems to experience chronically low gas prices, Torgrim Reitan, executive vice president of development and production USA for Statoil, believes "a broader perspective on how to market gas" should be considered.
"I think we need to take a bigger role in taking the gas to the market to see that the gas gets to the highest-priced customers," he continued. "That's the mindset that we have taken with us from European business: to take a full-advantage approach to the business."
"That is key," Reitan concluded. "We would like to work closely with infrastructure companies to develop these systems and markets."
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