Friday, July 13, 2012 at 4:49 PM
The leader of the nation's second largest producer of oil and gas was in Cleveland Friday as part of the City Club of Cleveland's Business Leaders Series. Ideastream's Michelle Kanu reports, BP CEO Bob Dudley sees the natural gas exploration in Ohio as a big part of the nation's future development of energy resources.
BP estimates the world’s demand for energy will increase by 40 percent in just 18 years, and CEO Bob Dudley says with the Utica and Pt. Pleasant Shale formations lying beneath eastern Ohio, the state is positioned to be a key player in supplying natural gas to the global market.
Dudley says the concept of energy independence is outmoded and won’t make the United States “energy secure”. Citing the nuclear power plant explosion in Japan as an example, he says independence could be a dangerous recipe during an energy crisis.
Dudley: “I think we have learned that true energy security doesn’t come from barricading yourself from the rest of the world and hoping you strike oil or gas.”
Dudley says the best path to energy sufficiency, security and sustainability is access to a variety of domestic AND imported energy sources that includes both traditional fossil fuels and alternatives.
BP WILL be drilling for oil and natural gas in Ohio. It plans to lease 84,000 acres of land in Trumbull County, and Dudley says the company is optimistic about what they’ll yield.
Dudley: “We are in the very early stages of evaluating the prospects, but the Ohio Department of Natural Resources estimates a recoverable shale potential of as much as 5.5 billion barrels of oil and 15.7 trillion cubic feet of natural gas.”
With natural gas prices at historic lows, Dudley says the Utica Shale is even more enticing for oil and gas companies because it contains both a mix of dry gas and oil. Dudley says that makes it more economical to explore over the long term.
In Dudley’s opinion the process of fracking - using water, sand, and chemicals to fracture the rock to release the natural gas – is largely misunderstood by the public, and gets undue attention. He says he gets that it’s difficult for people to visualize what’s taking place so far below ground, but it’s nothing new to the oil and gas industry.
Dudley: “This is fascinating for me because the oil and gas industry has been doing this, and it’s not a great word—a bit barbaric—but has been fracking wells for over 60 years. And so there are many parts of the country where fracking wells has just been part of the industry going back to the forties, fifties and sixties.”
Dudley adds that he supports the regulations Ohio passed recently that require companies to disclose the chemicals used in the process and he says that will give the public greater insight into the process.
BP knows all too well what it’s like to be under intense public scrutiny. The company is still rebuilding its image after the massive oil spill in the Gulf of Mexico two years ago. Dudley says when he took the helm shortly after the debacle, he implemented a new safety organization and the company has made several efforts to restore the Gulf coast economy and environment.
Dudley: “We’ve shut down platforms and operations to ensure we’re operating at the highest possible standards now around the world, and we’ve rejected rigs from contractors that failed to meet those.”
Rounding out the last rung of the energy portfolio—alternative energy sources—Dudley says BP has 13 wind farms across the US and may consider investing in Ohio’s wind industry in the future.
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