Path Home Shows 2010 Show Archive May 2010 Show 1020 Oklahoma Energy

Oklahoma Energy

Oklahoma is home to 2 of the 3 largest natural gas producers in the country. Based in OKC, Chesapeake and Devon Energy are industry leaders in developing this abundant energy source that drives our country's energy future while transforming our state's economy.
Oklahoma Energy

Energy source

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Chesapeake Energy Corporation
Devon Energy Corporation

Show Dates

Show 1020: Oklahoma Energy

Air date: May 16, 2010

 

Transcript

Rob:  When it comes to the United States’ energy future, natural gas has been a game changer.

New drilling technology is allowing the industry to tap into natural gas reservoirs that have given us a 100-year supply of a cleaner burning domestic fuel.

And, Oklahoma is home to two of the three largest natural gas producers in the country.

Based in Oklahoma City, Chesapeake and Devon Energy are industry leaders in developing this abundant energy source that’s driving our country’s energy future while also transforming our state’s economy.

Rob:  Oklahoma City is under construction.

Work is underway on the Devon Energy Tower, a 50-story skyscraper that CEO Larry Nichols says is concrete proof of the potential of natural gas.

Larry Nichols:  Because of the new technology in natural gas, the potential a gas supply committee recently estimated that we’ve increased in the last few years, our gas supply, by 40%.  That’s a major increase in natural gas that’s right here in the United States that we can use.

Rob:  What Nichols is talking about is horizontal fracturing, an energy extraction process opening new natural gas fields around the country.

Larry:  It’s a game changer; it’s really the combination of two different technologies.  Hydraulic fracturing which is a way to crack open rock that is very dense; we started it 1949 here in Oklahoma and has been used in well over a million wells since with no problems at all.  Horizontal drilling was also a technology where you take your well down vertically and then drill a bend to the well horizontally into the formation, has been around a while too.  Devon combined those first two, those two technologies for the first time in 2002, down into the Barnett Shield in Texas that completed the first well in 2002 that ever used both of those technologies in the same well.

Rob:  Which has increased significantly in just a few years; 98% of all natural gas comes from North America, with production now in 32 of the 50 states.

Chesapeake CEO, Aubrey McClendon.

Aubrey McClendon:  Just in the last few years we’ve found more clean-burning natural gas in American than all the oil that there is in Saudi Arabia.

Rob:  In fact, with the new discoveries America has a 100-year supply of natural gas.

The challenge now, is how to use it.  Currently less than 25% of power plants use natural gas, and less than 1% of the cars on the road run on the cleaner burning fuel.

Is it going to take another energy crisis for us to literally get off our duffs here in American and find a sensible energy policy?

Aubrey:  In some ways I think we’re in an energy crisis already; we already export a billion dollars a day of our national wells to places around the world, some of which leaks out to terrorist organizations and then we have to go spend more money to fight that terror.  So, in a way, we’re in kind of a rolling crisis; it’s not characterized as that because for most people $2.50 gasoline is affordable.  But, if you get to a point where gasoline prices go to $3.50, $4, $4.50, $5, I think we have serious problems again; and we will have missed a real opportunity to embrace cheaper, American, domestic, natural gas rather than imported oil.

Rob:  McClendon says while gas prices have fallen from their record highs, the true cost of imported oil is still astronomical.

Aubrey:  Right now you can look in the paper and its $85 a barrel, but we think the true cost is probably about three times that when you factor in the environmental costs.  But more importantly, the national security costs, the military costs of having to defend parts of the world so that we can freely import their oil.

Rob:  A national security problem Nichols and McClendon believe they can solve with natural gas.

Larry:  If you think of energy security, we’re never going to be energy independent, but we’re not independent on anything; I mean, we import a huge number of goods, raw goods as well as manufactured goods.  The whole world is completely interdependent.  What we could do though is to increase our diversity.

Rob:  A diversity that includes wind generation, as well as, solar.

According to a report by the World Watch Institute, natural gas will be key in any low-carbon economy.

Noting that greater use of this clean, Made-in-America energy source could reduce US coal dependence and greenhouse gas emissions significantly within the next 10 years.

Larry:  Because any thoughtful scientific study that really studies where we get our energy from, every study shows the same thing that our reliance on oil and natural gas and coal and nuclear are not going to change very much at all.  You know, we do not have any alternate fuels that replace our transportation; wind and solar do not, will never fuel a car.

Aubrey:  And we don’t brand our product like other people do, so it’s always been difficult to associate a brand name with natural gas, but we’re making progress there.  There’s a natural gas marketing campaign out there today that, to bring home to people the, all the great things that this fuel does.

Male Voice:  America’s new natural gas, cleaner, smarter energy.

Aubrey:  Right now we’re not a well-understood industry; we’re doing a better job of telling that story.

Rob:  As an Oklahoman what do people need to understand about this industry?

Aubrey:  Oh that it’s, it’s absolutely been the foundation of why our state has not endured the ravages of the recession the way that other states have.  And, not only did we not go down as far, we’re going to bounce back more quickly and we’re going to take this state to a different level in the years ahead.  So, very exciting, a cleaner, brighter energy future for America and brought to you by Oklahoman’s.

Rob:  Well natural gas is an economic engine in Oklahoma; roughly, one in ten jobs can be tied back to the industry with a total value-added economic output last year of 24 billion dollars.