The American energy renaissance hasn’t stalled, says Greg Harper – it’s just been forced to tap the brakes.
Mr. Harper, the president of Enbridge’s Gas Pipelines and Processing division, recently delivered a keynote address at the University of Houston Global Energy Management Institute’s 2015 conference.
Global factors have seen oil pricing fall from US$100 per barrel last summer to less than US$50 a barrel today, and U.S. production numbers have slid as a result. However, the need for energy infrastructure in North America – created by technological advancements that unlocked vast amounts of new oil and natural gas from U.S. shale plays – has not abated, said Mr. Harper.
“Even in a low-price environment, the continued demand for new pipelines is still expected to take place, because natural gas, crude oil and NGL (natural gas liquids) production is occurring in places that lack fully developed infrastructure,” Mr. Harper told his Houston audience of 200 senior executives from across the energy value chain.
“So it’s not just about the standard supply and demand equation at play here – but also geography. For Enbridge, and for other businesses in pipelines and processing, the environment still means opportunity,” he added. “I grew up as a kid in the pipeline industry, and spent my entire career in the industry . . . and I have never seen a time with such vast opportunities and access to the value chain.”
In spite of the current oil pricing environment, Enbridge is fully engaged in a $44-billion growth program, the largest in company history, in support of North America’s energy renaissance. Our market access strategy aims to establish 1.7-million barrels per day of increased North American market access for continental crude by 2017.
Mr. Harper pointed to February’s announcement by Enbridge affiliate Midcoast Energy Partners – that it was entering the emerging Eaglebine shale play in East Texas – as an example of infrastructure opportunities that still exist in the current environment. The US$160-million transaction was based on two key elements – a capital expansion project for construction of a new natural-gas pipeline gathering header, and the acquisition of premier midstream assets.
“For us, it was the right deal at the right time,” he said. “This may be the formula for doing business in the current economic environment.”
During his address to the GEMI conference, Mr. Harper also spoke about:
As for the energy industry’s prospects for the near term, Mr. Harper told his audience: “As one energy industry analyst put it, ‘Nothing cures low prices faster than low prices.’ ”