Natural Gas: A Pillar in the AI Revolution and U.S. Energy Security

Natural Gas and U.S. Energy Security

Natural gas plays a crucial role in U.S. energy security by meeting high domestic demand, increasing production, and reducing reliance on external sources. Enhanced technologies and operational excellence further bolster this security, highlighting the importance of maintaining robust natural gas supplies amidst global geopolitical tensions.

"Let's say natural gas demand in the U. S. Right now is 103 or 104 depending on what the rest of this year holds and the power demand over the summer." --- (EOG, conference, 2024/05/29)

"He was instrumental in making the case that restrictions on the export of U.S. oil should be eased – which flipped the U.S. from being a net importer to a net exporter of oil and was key to reducing U.S. reliance on external sources for energy, further strengthening our country's energy independence and national security, along with increasing competition for global supplies of oil and natural gas." --- (PXD, press release, 2024/05/02)

"The deal strengthens American's energy security by bringing the best technologies, operational excellence and financial capability to an important source of domestic supply." --- (XOM, event transcript, 2024/05/29)

"Natural gas deliveries for the first quarter of 2024 increased 219 MMcfd, or 13%, compared to the same period of 2023 due primarily to increased production of associated natural gas from the Permian Basin and higher natural gas deliveries in Trinidad, the Dorado gas play and the Rocky Mountain area." --- (EOG, sec filing, 2024/Q1)

"Energy security is critical. We've seen what happens when it is threatened in Europe and other places where geopolitical tensions have risen." --- (XOM, event transcript, 2024/05/29)

Infrastructure Supporting Natural Gas

Natural gas infrastructure is expanding significantly, with companies like Kinder Morgan and Williams Companies enhancing pipeline networks, storage capabilities, and LNG export facilities. These developments are crucial for meeting growing energy demands, supporting intermittent renewables, and ensuring energy security both domestically and internationally.

"Looking forward, we continue to see significant incremental project opportunities across our natural gas pipeline network to expand our transportation capacity and storage capabilities in support of growing natural gas markets between now, 2030 and beyond." --- (KMI, earning call, 2024/Q2)

"And on the Gulf Coast, we acquired a premier natural gas storage portfolio that positions us to capitalize on LNG exports and intermittent power backup needs, both of which are expected to double over the next decade. Without question, natural gas and the infrastructure that moves it are necessary to meet growing energy demand both in the U. S. And abroad, backstop intermittent renewables and support the build out of electrification." --- (WMB, event transcript, 2024/04/30)

"Furthermore, through our large and growing support to the liquified natural gas (LNG) sector, including our own export facility at Elba Island, we are also playing a key role in providing energy security to countries around the world," Kinder concluded." --- (KMI, press release, 2024/07/17)

"Our diverse and growing customer base depends on our natural gas network to reliably serve growing demand for electricity generation, heating and industrial uses here in the U. S. Our expanding interstate pipeline and storage footprint will further support the reliability of the U.S. Power sector as it faces growing regional demand, driven in part by the emergence of new large scale data centers that are accelerating throughout our key markets." --- (WMB, event transcript, 2024/04/30)

"We own an interest in or operate approximately 79,000 miles of pipelines, 139 terminals, 702 billion cubic feet of working natural gas storage capacity and have renewable natural gas generation capacity of approximately 6.1 Bcf per year with an additional 0.8 Bcf in development." --- (KMI, press release, 2024/07/10)

Economic and Environmental Implications

Natural gas remains crucial for economic growth and environmental goals. Despite policies favoring lower-carbon investments, demand persists. Heavy industries require carbon capture, as wind and solar are insufficient. Natural gas supports economic contributions and aims for net-zero emissions, influenced by government policies on renewable fuels and hydrogen.

"It's an economy that is large and demand continues to go up. That said, the policy environment has been one that is geared towards reducing investment in traditional energy, encouraging investments in these lower-carbon energies." --- (CVX, earning call, 2024/Q1)

"The harder to carbonize sectors of the economy account for 80% of the world's energy related emissions.And while wind and solar have an important role to play, they are simply not sufficient. Heavy industries need carbon capture and storage." --- (XOM, event transcript, 2024/05/29)

"The environment is very important to the people and the state as well. And I think their goal has been to be a leader in responsible development and to recognize the important economic contribution that our industry makes to the states." --- (CVX, earning call, 2024/Q1)

"Environmental Impact ExxonMobil has industry-leading plans to achieve net-zero Scope 1 and Scope 2 greenhouse gas emissions from its Permian unconventional operations by 2030." --- (XOM, press release, 2024/05/03)

"And so we're pleased with both of these. There are markets, maybe to your point about economics that are in some ways heavily influenced by government policy, be it the renewable fuel standard and the Low Carbon Fuel Standard, which affect renewable fuels or some of the things in the investment or the inflation reduction act that affect hydrogen." --- (CVX, earning call, 2024/Q1)

Technological Advancements in Natural Gas

Technological advancements in natural gas are driving its evolution in the energy mix, with significant investments in infrastructure and innovative technologies like SLB's EcoShield™ and PowerDrive Orbit™ systems reducing emissions. Digitalization efforts are enhancing operational efficiency and sustainability, underscoring natural gas's critical role in the global economy.

"And so we're strong proponents of natural gas and really see it as a growth opportunity going forward as well as then continuing to evolve in the energy mix with the energy transition." --- (BKR, conference, 2024/06/18)

"Oil and natural gas continues to demonstrate its critical role in the global economy in meeting this long term demand, and necessitates sustained capital investment in existing and new sources of production." --- (HAL, sec filing, 2024/Q1)

"Highlights include the following: In the Midland Basin, SLB received an award from Pioneer Natural Resources recognizing its work in reducing greenhouse gas emissions through use of the EcoShield™ geopolymer cement-free system and PowerDrive Orbit™ rotary steerable system." --- (SLB, press release, 2024/04/19)

"Following the recent announcement to not pursue an increase to its maximum sustainable capacity, the country's shifting focus towards natural gas where production is now expected to increase by more than 60% through 2030, will require significant investment in gas infrastructure." --- (BKR, earning call, 2024/Q1)

"The initiative represents a significant advancement in digitalizing the drilling operations of Pakistan's energy sector to enhance operational efficiency, reduce costs, and promote sustainable oil and gas exploration in the country. Digital Enablement" --- (SLB, press release, 2024/04/19)

Future Role of Natural Gas

Natural gas is poised to play a crucial role in the future energy landscape. Major players like ExxonMobil and Chevron emphasize its importance in meeting global energy needs, transitioning from coal, and developing renewable natural gas projects. Despite fluctuating prices, the demand for natural gas remains integral to energy security and sustainability.

"Under any future scenario, we're convinced that our company is uniquely positioned to play a leading role, meeting the world's essential needs for energy and high value products. Thanks for the question." --- (XOM, event transcript, 2024/05/29)

"Continued development in renewable natural gas projects creates new, lower carbon-intensity solutions for transportation, industry, and customers. After years of preparation for this moment, my family and I are thrilled that the Eloy RNG project will officially be up and running, said Craig Caballero, owner of Caballero Dairy." --- (CVX, press release, 2024/04/10)

"Jim Chapman: All right, next question. We saw a number of comments on the fact that the U. S. And the world will continue to need fossil fuel based energy for the foreseeable future. Can you share what ExxonMobil is doing to meet demand?" --- (XOM, event transcript, 2024/05/29)

"There has been an ongoing global trend of switching from coal to natural gas." --- (CVX, Twitter, 2024/05/17)

"Natural gas prices decreased, moving back toward the middle of the 10-year range, on high inventory levels and lower demand." --- (XOM, sec filing, 2024/Q1)