WHITE SULPHUR SPRINGS, WV — Natural gas’ growing role in electric generation was a recurrent theme at PJM’s annual meeting last week, with author Michael Levi warning that overconfidence could threaten the fracking boom and gas executive Steven L. Mueller calling for increased efficiency to protect the “national treasure” in U.S. gas

“If we don’t set our standards high enough we could have more than a few high profile accidents … that could put a lot of land off limits” to drilling, said Levi, director of the Council on Foreign Relations’ Program on Energy Security and Climate Change, and author of the forthcoming book “The Power Surge: Energy, Opportunity, and the Battle for America’s Future.” “There’s a bit too much certainty in a lot of the messages we hear and not enough humility,” Levi said. “And people don’t buy that.” In his own speech, Mueller, president and CEO of Southwestern Energy Co., conceded: “I can’t tell you [U.S. producers will] never have a problem drilling 12,000 wells a year.” But he said his company, one of the largest North American natural gas producers, is “doing to everything we can not to screw it up.”

“Unsustainable” Practices

Mueller said that the fracking boom will be “unsustainable” unless drillers find ways of decreasing their water use. He noted that drillers currently require 900 truck trips per well, including deliveries of equipment and supplies. About 400 of the trips are deliveries of water. “The constraint becomes the roads you have,” he said. Mueller said drillers also will increase their productivity, predicting that unconventional wells — which now collect about 30% of the gas present — will increase their yield to 70% to 80% within three decades. “Today if you can’t get 80-90% from a conventional well you’re not doing it right.”

Another challenge, Mueller said, is finding enough pipeline and storage capacity to ensure adequate supplies of gas to meet both heating and electric loads. “We need to continue building our pipeline infrastructure out. We’re about two-thirds of the way there. We need to build overcapacity; if we have overcapacity, we’ll have that storage.” Levi said he did not expect the federal government to limit natural gas exports because exports won’t cause a significant price rise for most energy and chemical companies. “The place that really gets hurts by exports is fertilizer” companies, he said.

Solar to Challenge Utility Model

Turning to the electric industry, Levi predicted distributed solar generation will grow and present “some tough challenges for the traditional utility model.” What’s the next big thing in energy? Batteries, said Levi. “If you wanted a sort of killer app in the energy world that cuts across all areas like fracking — it’s storage,” he said. “There’s some real breakthrough chemistry that can still happen.”