LA JOLLA – Commissioner Edgar Rangel of Mexico’s National Hydrocarbon Commission (CNH) declared that we have entered a new energy era.
“The era of boring oil is over,” Rangel, one of five commissioners appointed after the energy reform of 2008 in Mexico said in a presentation at the Institute of the Americas’ XXI annual La Jolla Energy Conference.
Unconventional resources including mature fields, deep water and shale gas, are ushering in a new chapter for Mexico’s oil and gas sector, he said. Rangel added that despite the end of the “boring oil era,” fossil fuels will endure for the next one hundred years as the dominant global energy source. But, he went on, access to technology is fundamental.
How fossil fuels are explored for, discovered, produced and used has drastically changed as a succession of speakers underscored at this year’s La Jolla Conference.
[inset side=right] “The era of boring oil is over,” Rangel, one of five commissioners appointed after the energy reform of 2008 in Mexico said in a presentation at the Institute of the Americas” [/inset]
The unconventional resource revolution has reshaped regional energy markets and policies from Canada to Brazil to Argentina. Indeed, the narrative presented by Commissioner Rangel is quite apt for natural gas developments beyond Mexico.
Take the United States. Long starved for natural gas, shale gas developments have catapulted production in the United States past major international players such as Russia. More importantly, as George Liparidis, president of Sempra International argued, it has positioned the U.S. as a potential exporter of Liquefied Natural Gas (LNG). Sempra has signed contracts and received permits to convert its Gulf Coast LNG import terminal into an export facility.
The unconventional revolution has also altered the context of regional energy integration. Booming natural gas production in North America coupled with LNG projects dotting the region creates entirely new trends and outlooks for balancing supply and demand across markets in the hemisphere.
LNG has shifted energy integration from a regional market context to that of a global market place according to Manuel Colcombet, Senior Vice President for Strategy at International Power GDF Suez.
The Dominican Republic, Rolando Gonzalez Bunster, president of Basic Energy, argued can now fully seize the financial and other upsides for developing natural gas-based projects.
All of these threads woven together present a unique energy outlook for the entire Western Hemisphere. Indeed, according to Jorge Piñón of the University of Texas, David Mares of UCSD and the Baker Institute at Rice University, and former Peruvian minister of energy Pedro Sanchez, our hemisphere has the resource potential to greatly change the geopolitical landscape and diminish the level of domination by Middle Eastern producers.
But, Piñón, Sanchez and Mares cautioned that the region’s potential will only be fully realized with the right mixture of investment incentives, stakeholder management, and balancing of domestic politics.
Andrew Vesey, Executive Vice President of AES Corporation, commented that from the vantage point of the electric sector, these regional energy trends highlight the desire for innovative technologies and the broad distribution of benefits.
María Victoria Riaño, president of Equion Energía and Sebastian Castañeda of Ecopetrol, among other conference speakers, touted the boom in Colombia’s energy production as evidence of that country’s accomplishments and what it takes to strike the right balance for a successful national energy policy.
Argentina and Venezuela, meanwhile, offer examples of massive potential that has been severely underdeveloped due to incoherent energy policies, political interference and lack of long-term horizons.