U.S. Government in the Way to Develop Natural Gas

By Anna Driver
HOUSTON, March 9 (Reuters) - The U.S. has vast supplies of natural gas locked tight in shale that could offer a long-term energy solution, but the government is ignoring the resource's potential, Jim Mulva, the chief executive officer of ConocoPhillips (COP.N), said on Tuesday.
Shale formations across North America are said to hold enough gas to meet domestic demand for a hundred years. Historically, those resources have been out of reach, but technology like horizontal drilling now allows energy companies to tap natural gas trapped in rock.
U.S. policies and proposals are an impediment and are overly favorable to development of renewable sources of energy, Mulva said..
"Unfortunately, (the U.S. government) also proposes higher taxes on the natural gas industry, and is tightening resource access, Mulva said in the text of a speech to be delivered at the IHS CERAWEEK conference. "Perhaps it has not yet learned that if you tax something, you get less of it."
While shale drilling techniques were pioneered in the United States, the country will fall behind others like China unless more is done to produce shale acreage, Mulva said.
"The shale gas revolution here occurred on private and state land, not federal land," the CEO of the third largest U.S. oil company said. "Think of the economic development and job creation potential if more land was opened and if less red tape tied up the acreage that is leased."
Last month, Conoco and BP Plc (BP.L) said they would drop out of a group lobbying for the U.S. Climate bill because proposed legislation would hurt the motor fuels and natural gas industries.
The U.S. Climate Action Partnership, was a coalition of companies and moderate environmental groups that created a blueprint for legislation aimed at cutting greenhouse gas emissions.
At the time, Mulva said the organization's plan did not do enough to recognize the role natural gas could play in reducing emissions.