Consol Energy exec Dugan optimistic about natural gas drilling
Consol Energy enters 2015 having for a year honed its natural gas operations and strategy.
The company began drilling at the Pittsburgh International Airport in July, corralled its natural gas pipeline operations in a spin-off partnership with Noble Energy in September and has plans to start a second one focused on its coal business.
Timothy C. Dugan is approaching his one-year anniversary as chief operating officer of gas with the company, helping to guide its emphasis on shale production. With a broad background in gas operations and management at Chesapeake Energy, Cabot Oil & Gas and EQT, the University of Pittsburgh alumnus returned to the area after working in Texas.
He spoke to the Trib about the company's transformation. Here are edited excerpts.
Trib: Why did you come to Consol and how does your background influence the direction you're taking?
Dugan: I saw that as a great opportunity. At the same time it gave my wife and I an opportunity to move back home.
We're thrilled to be back in Pittsburgh, and I think I filled a need for Consol as they were making that transition. I bring to the table diversified exploration and production background. My background I think I was a great fit for this company because of where they are in the life cycle of being an exploration and production company. They're going through a transformation. I bring a level of experience that has benefitted me and the company has benefitted from my experience. I think it's been a good fit.
Trib: Where can Consol find efficiencies to get more gas out of wells but spend less money drilling?
Dugan: We are improving on that every day. We are seeing improving results on our wells; we're seeing efficiencies from a productivity standpoint; we are drilling out wells, completing our wells in a much more efficient manner in less time the drilling time, (reducing) intervals in between drilling completion and production as much as possible.
Trib: Consol has made a concerted effort to pivot attention to gas, but with coal remaining a key part of its business. How will the new EPA rules to reduce carbon emissions from power plants affect Consol and the reliability of the grid?
Dugan: The regulatory environment continues to change, and that's something we change with. We don't really see that being a roadblock in the future.
Because of our legacy coal position, a lot of our land and acreage we drill on is owned by Consol. We're able to go out and drill our best acreage and drill it in a very methodical way. We're able to thrive a little more so than our peers in a low-cost environment and living within the regulatory controls is just part of it.
The fact that we're involved in both coal and natural gas puts us at a very unique position. The people we've (been) selling coal to for 150 years are the same customers we're selling our gas to. (It) gives us an advantage. Those legacy relationships have really benefitted us.
Trib: There was so much attention around drilling at the airport, but now that it's started, we haven't heard much. How's it going?
Dugan: For us, it's very exciting. It's going very well. I think the fact that you don't hear anything about it says a lot about the pre-work that was done prior to starting our activities out there. Our government relations, our public relations group, our engineering and geology team did a great job of educating the local politicians and helping them understand what our development program would look like (and) what to expect.
I think we did a great job up-front as a company, and that says a lot about why we were chosen for that project. It's really no different than any of our other activities on a day-to-day basis. It's great opportunity for us to put ourselves on display and show what we can do and how we do it.
Katelyn Ferral is a staff writer for Trib Total Media. She can be reached at 412-380-5627 or firstname.lastname@example.org.