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Natural gas industry tries to find uses for abundance of product from shale drilling

| Wednesday, Oct. 15, 2014, 12:01 a.m.

As Marcellus shale yields more natural gas each month, overrunning the market with record supplies, industry leaders are trying to find the best ways to use it.

Production figures released Tuesday by the Energy Information Administration show that Marcellus wells are expected to produce 7.95 million cubic feet of gas per day in November, up about 0.5 percent from October, continuing a steady increase since 2007.

“(There is) a tremendous amount of steady growth in the wet gas area. Infrastructure is building out, (but) we currently don't have enough capacity to take all of the gas out of the basin,” said Joe Frantz, vice president of engineering technology for Range Resources Inc., at the Penn State Natural Gas Utilization Conference in Washington County, attended by hundreds of company and industry leaders.

Frantz and other experts highlighted the challenge of building pipelines needed to deliver gas as quickly as it's extracted from the ground, the benefits of exports and how gas can be used to power trucks and barges on the region's roads and rivers.

Despite challenges, the drilling process is becoming more efficient, said Charles Riedl, director of transportation and equipment for American's Natural Gas Alliance, an industry advocacy group.

The Port of Pittsburgh Commission is working to retrofit engines on tugboats to reduce pollution by using diesel fuel instead of gasoline, Executive Director Stephen Martinko said. It is studying technology, costs and benefits of converting tugboats to run on liquefied natural gas, he said.

“As the cost of diesel increases, the transportation sector across all modes is seeking alternative and cleaner fuels to move things and provide services,” Martinko said. The region's abundant natural gas combined with its waterways make it a good place to explore liquefied natural gas as a marine fuel, he said.

“We're uniquely positioned to ... see what comes of it and see if we can move this opportunity forward or not.”

The Port of Pittsburgh is the second largest inland port in the nation, with 35 million tons of cargo passing through every year. About 4,000 tugboats operate on inland waterways nationwide, according to The American Waterways Operators.

Industry experts said exporting liquefied natural gas overseas would improve the nation's economy and its allies' geopolitical and economic position.

Exporting gas could benefit allies in Eastern Europe such as Ukraine, said Peter Doran, director of research at the Center for European Policy Analysis in Washington.

Ukraine has been beholden to Russia's state-run gas supply lines, which are often used as a political tool for manipulation and conflict, he said.

“Russia right now is winning in that conflict. ... We can tip the scales in this conflict in our favor. Right now, they're tipped against us,” Doran said. “Central Europe is going to need natural gas, and it's not going to be able to produce it from its own soil.”

This month, federal regulators approved Dominion Resources Inc.'s request to refit a natural gas import facility at Cove Point, Md., to export liquefied gas. It is scheduled to open in 2017, and the Richmond, Va.-based company has contracts with companies in India and Japan, said Bruce McKay, its managing director of federal affairs.

In addition, Cheniere Energy of Houston, Texas, has signed a 20-year gas export agreement with Centrica of the United Kingdom.

Katelyn Ferral is a staff writer for Trib Total Media. She can be reached at 412-380-5627 or kferral@tribweb.com.

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