Noting “the potential for natural gas is enormous,” President Obama put aside his feud with the oil and gas industry for a moment Wednesday, and for the first time promoted the use of natural gas, particularly gas-fueled vehicles, as part of his energy policy, according to Natural Gas Intelligence (NGI). As he spoke the Environmental Protection Agency (EPA) issued a rule easing the conversion of after-market cars and trucks to compressed natural gas (CNG) and other alternative fuels.
“we’ve got to make sure that we’re extracting natural gas safely without polluting our water supply. That’s why I’ve asked [Energy Secretary Steven] Chu to work with other agencies, the natural gas industry, states and environmental experts to improve the safety”
“In terms of [developing] new sources of energy, we have a few different options. The first is natural gas,” Obama said during a speech at Georgetown University on Wednesday. “Recent innovations have given us the opportunity to tap large reserves, perhaps a century’s worth of reserves…in the shale under our feet,” the president said, surprising those who had come to expect natural gas to be buried among the also-rans of an energy policy devoted to efficiency and renewable fuels.
Natural gas for transportation “is an area where there’s actually been some broad bipartisan agreement” in Washington. The president noted that last year more than 150 members of Congress from both sides of the aisle offered legislation to provide incentives for natural gas vehicles.
Oil and gas billionaire T. Boone Pickens, an avid supporter of CNG vehicles, was “encouraged” by Obama’s speech, predicting Wednesday that the New Alternative Transportation to Give Americans Solutions Act -known as the NAT GAS Act – would pass Congress with strong bipartisan support and be signed by Obama by the end of the year. Pickens said opposition by some environmental groups to hydraulic fracturing used to unlock shale gas resources would not be a roadblock.
The Pickens Plan, which encourages more heavy duty fleet vehicles to run on domestic resources, is included in the NAT GAS Act, which is being prepared for introduction next week in the U.S. House of Representatives by Congressmen John Sullivan (R-OK), Dan Boren (D-OK), John Larson (D-CT) and Kevin Brady (R-TX).
The president also directed federal agencies to, by 2015, buy only alternative-fuel vehicles, as part of a goal to cut oil imports by one-third by 2025.
The final rule released by the EPA Wednesday eases regulatory roadblocks to convert older vehicles to alternative fuels. In the case of natural gas this would make it easier for automobile owners and auto shops to legally convert vehicles to CNG as long as they comply with emissions standards.
The stock market took note of the breakthrough in the administration’s revamped policy on Wednesday. Stocks of natural gas-weighted production companies jumped, mostly on the order of 1-3%, but some pure plays such as Range Resources Inc., Cabot Oil & Gas Corp. and Petrohawk Energy Corp. saw their stocks gain 4-5%.
The president cautioned, however, “we’ve got to make sure that we’re extracting natural gas safely without polluting our water supply. That’s why I’ve asked [Energy Secretary Steven] Chu to work with other agencies, the natural gas industry, states and environmental experts to improve the safety” of hydraulic fracturing.
However, President Obama continued his battle with the industry during the speech Wednesday, defending the nearly year-long moratorium on drilling in the Gulf of Mexico following last April’s rig explosion and oil spill, threatening new “use it or lose it” requirements for federal leases and higher royalty charges. The president noted the Interior Department’s issuance last month, as the Middle East exploded in turmoil, of the first new permits to drill both shallow and deep water wells in the Gulf of Mexico.
