Today's natural gas producer faces a marketplace that bears little resemblance to the one in place a few years ago. The traditional natural gas industry allowed little flexibility and innovation. Today, the natural gas producer has a cornucopia of new economic and marketing challenges before him. Awareness of the new marketing opportunities in the industry allows the gas producer to convert these challenges into opportunities. The potential of the gas industry has never potential of the gas industry has never been better. Natural gas is increasing its value as one of the nation's main energy sources. Energy consumption in the U. S. in 1988 was higher than ever before and will continue to rise as the world economy continues to expand. (FIGURE I - U.S. ENERGY CONSUMPTION)

The importance of natural gas in supplying the country's energy needs will continue to grow also. The gas industry, a $30 billion a year business at the wellhead, and nearly $70 billion at the burner tip in 1988 will continue to increase in size and diversity. FIGURE II - TOTAL VALUE OF U.S. GAS INDUSTRY shows the value of natural gas operations in recent years at both the wellhead and burner tip. The natural gas industry will become more flexible in response to the evolving regulatory environment, and as gas garners an increasingly favorable image as the preferred fuel source. Natural gas' preferred fuel source. Natural gas' appeal in comparison to other fuels, lies in its domestic abundance, its efficiency as a fuel, and its good environmental record - an issue that will likely increase in importance during the 1990s. The Bush Administration's latest proposal, designed to increase the use of natural gas, is but one example of the planned importance of natural gas.

The natural gas producer must understand the full gamut of political, economic, marketing, and regulatory changes and their impact on the structure of the natural gas industry to take advantage of the opportunities. The gas industry is going through major changes. The present direction and impact of which can only be speculated. Yet nobody in the industry can afford to be complacent. Everyone, whether producer, pipeline, or consumer, must understand the structural changes to survive in the changing environment of the industry. The changes are potentially sweeping enough to completely restructure the industry of old and transform it into a new, highly integrated and competitive domestic energy supplier.

This presentation will go into the various factors of the marketplace important to the producer in selecting new sites for natural gas exploration, drilling, and development. Since so much of the market is still in a state of flux, a brief background of the events leading up to the present market conditions is also present market conditions is also provided. The structure of the natural provided. The structure of the natural gas industry is changing because of the evolving market conditions for energy products including natural gas. Staying products including natural gas. Staying on top of these changes and taking advantage of all the opportunities they provide is crucial to the producers' provide is crucial to the producers' success as a resource developer.

P. 337

This content is only available via PDF.
You can access this article if you purchase or spend a download.