Natural Gas as a Bridge to the Future

(See link below for audio podcast of the April 9 event)

For over forty years, Robert A. Hefner III has been at the vanguard of the natural gas industry. Trained as a geologist and petroleum engineer, Hefner has pioneered many of the deep-well technologies used by the  U.S. natural gas industry today.

Hefner, founder and owner of the GHK Companies and a member of the International Council of Harvard Kennedy School’s Belfer Center for Science and International Affairs, has been called the “father of deep natural gas” for his work in the field. In 2010, Hefner was inducted into the Oklahoma Hall of Fame.

On Monday April 9, the Belfer Center’s Environment and Natural Resources Program (ENRP) hosted a screening and discussion of Hefner’s latest project, a documentary titled “The Grand Energy Transition: Natural Gas – The Bridge To Our Sustainable Future.” Excerpts from the film were shown at the Kennedy School to an audience including Belfer Center Director Graham Allison and Harvard University Distinguished Service Professor Joseph S. Nye.

Based on Hefner’s 2009 book “The Grand Energy Transition: The Rise of Energy Gases, Sustainable Life and Growth and the Next Great Economic Expansion”, the documentary makes the case that natural gas is the bridge to what Hefner has termed ‘the age of energy gases.’ Hefner says the world has moved from early reliance on solid fuels such as wood and coal to liquid fuels, such as whale oil and petroleum, , and finally toward a healthier reliance on gaseous energy – based on natural gas but also including solar, wind and ultimately hydrogen. Hefner says the realization of the potential of natural gas will yield enormous economic and environmental benefits for the United States for generations to come.

Not only is natural gas abundant, “we’re drowning in it,” Hefner said in remarks after the screening, “and the U.S. now needs to use it as it is a better, cleaner and more flexible fuel.”

Hefner engaged in a lively discussion with two Kennedy School colleagues: Leonardo Maugeri, a research fellow with the Belfer Center’s Geopolitics of Energy Project and vice-president of strategic operations for ENI, an Italian oil company; and Rasmus Myklebust, a graduate student from Norway in the Kennedy School’s Master of Public Administration program.

While Maugeri said he shares Hefner’s belief that in the next 100 years natural gas will replace coal and oil as the world’s primary source of energy, he said he expected oil to continue to play a significant role in the energy market in part because of the costs of developing the infrastructure needed to extract and transport natural gas.

While Hefner acknowledged that oil will remain a major energy source for some time, due in part to advances in shale-oil extraction, he believes that once oil peaks, natural gas will ensure an abundant supply of cheap energy for years to come.

Hefner answered  Maugeri’s point about infrastructure by noting that  “2.5 million miles of natural gas pipelines [exist] in America and they c onnect 65 million American homes.”

Myklebust discussed the enabling factors behind the natural gas boom in the United States, and questioned whether they could be replicated in other countries. Myklebust pointed to American advantages including extensive knowledge about the resource base, insider know-how and innovative capacity of the natural gas industry, and favorable licensing and incentives to support the domestic market.  Hefner agreed that the United States has some unique conditions that have encouraged the natural gas boom. Especially, he said, the U.S. legal principle in which property owners also own the mineral rights below their land has driven the huge market growth here.

In the United States, “we’re all entrepreneurs and we’re all innovators, and that’s what makes America different, particularly in this industry, than any other place in the world. That’s what brought the shale gas revolution around... It was all of us that were in the independent sector innovating every day to try and make a buck,” Hefner said.

The event was moderated by ENRP director and Kennedy School senior lecturer Henry Lee and organized by ENRP assistant director Amanda Sardonis. A full podcast of the movie and discussion can be found here.