GasPro ’14: Energy Transfer sees shale as ‘stimulus package’ for US economy

By Ben DuBose
Online Editor

HOUSTON -- The ongoing US shale revolution is directly responsible for the nation avoiding further recessionary conditions, an executive with Energy Transfer said.

Richard Cargile, president of Energy Transfer’s midstream business, credited the shale wave as the main driver of US job growth since the 2008 economic downturn.

“The shale revolution really was the ‘stimulus package’,” said Cargile, who delivered Tuesday's keynote address at the inaugural GasPro North America conference.

“Without the shale revolution, we would have gone through a second-dip recession, if not an outright depression,” he added. “There’s no question.”

Cargile cited statistics showing US oil and gas job growth improving by over 26% in recent years, while total non-farm growth slipped by over 2% over the same period. Additionally, for every job created in the oil and gas industry, Cargile says three indirect jobs are also formed, alluding to the trickle-down effect that leads to increased jobs in construction and other related areas.

“It really has spurred on the economy as a whole,” Cargile said. “We have an abundance of natural gas, it’s affordable and it’s clean burning. That’s going to lead to growth in exports, as well as other industry sectors like petrochemical plants.”

Cargile pointed to relatively inexpensive NGL feedstocks such as ethane, which he believes puts US petrochemical producers in a better position to compete with oil-based feedstocks, such as naphtha, from producers overseas.

Nonetheless, there are some challenges. In particular, feedstock access in North America is not always readily available, presenting a challenge to the midstream industry to build new pipeline networks and unlock the bottlenecks that Cargile believes are “choking the industry’s growth rate”, at times.

Cargile says his company, Energy Transfer, is uniquely positioned to capitalize on that US growth, pointing to its status as the fastest-growing company in the Eagle Ford Shale region.

With new projects set to alleviate many of the bottlenecks, the current wave of proposed LNG-export projects is likely to begin operations by 2018, Cargile expects. That would put the US in a position to fully capitalize on its newfound supply and make the nation “firmly in the export business”, he said.

Meanwhile, on the demand side, the unique properties of natural gas make it preferable for consumers in electricity generation, relative to other energy feedstocks.

“Natural gas is overall the cheapest to build and also the most efficient,” Cargile said.

As a result, as rosy as the outlook appears today for US gas industry professionals, it could improve even more in the months and years ahead, with both supply and demand factors pointing to additional job growth.

“This is where the jobs are being created,” said Cargile. “It really is an incredible transformation. The shale revolution is the key to reinventing growth and is saving our economy.”

The inaugural GasPro North America conference continues through Wednesday at the Hyatt Regency in downtown Houston.

 

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