The chairman of Devon Energy Corp. said he expects a "revolution" in the growing use of natural gas as a power source for electricity-generating facilities across the country.
Speaking to a group of freshman state lawmakers Tuesday, Devon Energy co-founder and Chairman Larry Nichols said new technologies have dramatically increased the amount of natural gas available in the U.S., providing a more reliable source of energy for electric plants.
Those technologies include horizontal drilling and hydraulic fracturing, which uses pressurized fluid and sand to break open oil-bearing rock.
"We're in the midst of going through a revolution," Nichols said.
"That's going to change things dramatically in terms of power generation in this country."
Coal remains by far the largest source of electricity generation in the U.S., accounting for more than 1.7 billion megawatt hours of electricity in 2009, according to the U.S. Energy Information Administration. But natural gas surpassed nuclear as the second-most used source of electric power in 2006, and has steadily increased since 2008. Natural gas accounted for 920 million megawatt hours of electricity in 2009.
"If the fuels are allowed to compete, then natural gas will inevitably capture a larger percentage of power generation because it's the cleanest burning fuel we have, it's readily abundant and it's here in the United States, including Oklahoma," Nichols said.
Nichols downplayed concerns by some environmental groups that hydraulic fracturing, also known as fracking, poses a danger of gas leaking into ground water near the surface. He said the only potential risk of polluting water supplies is if producers use substandard well casing in the first few hundred feet of a well, a problem he said should easily be detected by state regulators.
"Any reputable driller would welcome that (oversight)," he said.
But coal also remains an abundant, inexpensive, domestic energy source, said Jason Hayes, a spokesman for the American Coal Council. He said new technologies are allowing coal to burn cleaner, and he expects it will remain a major source of electricity for decades to come.
"Coal is not going anywhere anytime soon," he said.
Nichols said he doubts there will be much of an increase this year in the price of natural gas, which rose 8.7 cents on Tuesday to $4.476 per 1,000 cubic feet.
"There's too much supply and not enough demand," he said. "Industrial demand for natural gas, because of the recession, is somewhat depressed. That won't change until the recession ends, and you can figure out when that is better than I can."
Nichols also briefed lawmakers on the progress of the new 50-story skyscraper that Devon Energy is building in downtown Oklahoma City.
He said workers are adding one floor each week to the tower, which will be the tallest building in the state when it's finished. He said he expects employees to begin moving into the new headquarters in early 2012.
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