Shale production has put energy independence a step closer for North America and revolutionized the continent’s global position in fossil-fuel production, ConocoPhillips CEO James Mulva said Thursday in his final public speech as head of the corporation.
Mulva, who plans to retire following the split of ConocoPhillips into two distinct energy companies on May 1, touted the importance of domestic natural gas in boosting the U.S. economy.
“The speed and depth by which this has all developed has surprised everyone,” Mulva said during a speech hosted by the Greater Houston Partnership at the Omni Houston Hotel. “More and more companies are joining ConocoPhillips in our intense focus on North America.”
Mulva said the company this year plans to drill 160 wells in the Eagle Ford shale in South Texas, 300 wells in the Permian Basin in West Texas and up to 30 wells in North Texas’ Barnett shale.
“Everyone is going to have to cast aside the old thoughts and the old assumptions of domestic fossil fuels being in short supply,” he said. “That’s simply not the case anymore.”
Technological developments have allowed producers to access oil and natural gas trapped in deep, dense shale rock across the country, from South Texas to Pennsylvania. The shale rush has glutted the U.S. natural gas market, lowering production costs for manufacturing and other industries.
Mulva noted that Chevron Phillips Chemical Co., ConocoPhillips’ joint venture with Chevron, plans to build a $5 billion processing plant in Texas to capitalize on natural gas liquids from the Eagle Ford shale. Dow Chemical has announced $4 billion in expansions, including an ethylene cracker, at its Freeport facilities.
“In the past, these plants and new facilities would have been built in the Middle East to gain access to low-cost feedstock natural gas,” he said. “But now, these investments and opportunities are staying at home.”
The domestic price of natural gas has dropped so low that Conoco- Phillips and other producers have shut wells and pulled rigs out of gas fields.
When Mulva’s company splits May 1, the new ConocoPhillips will focus solely on oil and natural gas exploration and production. The spinoff company, Phillips 66, will absorb the corporation’s refineries, gasoline stations and pipelines.
Both companies will be headquartered in Houston.
Mulva on Thursday supported the efforts of some companies to build export facilities that would ship liquefied natural gas from the United States abroad. Exports would help reignite investment in U.S. natural gas fields and create jobs, he said.
“This is a gift, really. A blessing,” Mulva said. “You can really continue to grow the economy and the standard of living. And it’s a helpful investment in putting people back to work.”