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James C. Clad

Energy adviser: Production shift has big implications for New Mexico

Staci Matlock for The Santa Fe New Mexican

In half a dozen years, North America has gone from importing natural gas to exporting it, thanks to technology that allows companies to drill shale.

The shift has major implications for Unites States communities, energy and global politics, according to James C. Clad, an energy adviser to the Center for Naval Analysis and Cambridge Energy Research Associates who will speak in Albuquerque this week about the changing global energy landscape and implications for the U.S. and New Mexico, an oil- and gas-rich state.

Clad’s talk at the next meeting of the Albuquerque Committee on Foreign Relations will take place at 6 p.m. Tuesday at Tanoan Country Club, 10801 Academy Blvd. NE.

Clad has written three books about energy, capitalism and Southeast Asia.

In 2007, he said, the U.S. was expected to remain one of the largest importers of liquid natural gas in the world, and companies built gas processing terminals for importing. But new hydraulic fracturing and horizontal drilling techniques used to break open rock and tap trapped hydrocarbons have since proved an economically viable method for reaching once marginal gas and oil supplies in shale. Those same companies are rushing now to re-engineer their terminals to export the natural gas, Clad said.

The new technology was a game changer. Setting aside the potential environmental harm to communities and water from a boom in drilling and fracking, increased production has put North America in the driver’s seat for energy. Producing more domestic supplies of oil and gas makes the United States less vulnerable to price swings and politics in other countries.

Related: No end in sight for NM’s oil boom

“It’s one of those things that is changing before our eyes,” Clad said.

Northeast Asia, China, Japan and South Korea are eyeing North America’s natural gas supplies. Meanwhile, the United States also is ramping up its domestic market for natural gas to supply electricity and take the place of coal-fired power plants headed for retirement, according to the U.S. Energy Information Administration.

By 2016, the U.S. will retire more than 120 coal-fired plants. Closing the plants is good news to people who see emissions from coal-fired plants as a primary cause of climate change and haze in some regions of the country. But the power has to be replaced.

Natural gas offers a steady bridge fuel for producing electricity while the country shifts to renewable energy. But the industry will have to fix methane leaks from the pipelines and facilities, a problem the federal government is working on currently with industry. Methane is considered a more powerful greenhouse gas linked to climate change than the carbon dioxide from coal plants.

Clad said that shale oil and gas now are big topics among energy companies, even in Saudi Arabia. Some experts estimate that the known reserves could keep producing into the next century.

“Already Texas is producing more oil and gas than Iran,” he said. “It seems inevitable that we will become a larger oil producer than Saudi Arabia.”

Find out more about the latest in energy production by country and type at www.eia.gov.

Contact Staci Matlock at 986-3055 or smatlock@sfnewmexican.com. Follow her on Twitter @stacimatlock.

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