Lubbock Avalanche-Journal: Regent says increased gas supply is fueling manufacturing resurgence
New drilling and other energy development methods have put the United States "in the middle of a transformation nobody knows about," said John Walker, Texas Tech system's newest regent and head of one of the nation's largest oil and gas companies.
Thanks to advances in drilling method, the natural gas supply in the ground in this country has gone from an 11-year projection in 2003 to a likely 100-year supply today, Walker told attendees Wednesday at the Rawls College of Business Chief Executives Roundtable luncheon.
In fact, he said, there's such a surplus of natural gas available today, production may need to be curtailed and wells shut down because it can't all be stored until needed.
And that's an issue because in addition to causing production to slow down, the price of natural gas is falling, making it a financially less attractive business.
But, Walker said, the access to inexpensive energy supplies could start bringing businesses back.
"Our manufacturing base was built on cheap fuel," he said, noting businesses started looking for new production locations when the cost of oil and natural gas began to rise.
One of the first signs of a resurgence, he said, is fertilizer and petrochemical plants are reopening and getting back into production -- including facilities expected to stay closed for good.
EnerVest, which Walker founded in 1992, has more than 20,000 gas and oil leases in 12 states, and more than 4 million acres under lease.
"We do a reasonable amount of drilling," said Walker, noting the company has a capital budget of $574 million.
One of the secrets of EnerVest's success, he said, is to "buy right."
"Most of the mistakes businesses make involve what they buy," he said. "They see something, fall in love with it, and pay too much."
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