U.S. independent oil and gas producers must kick off a "Shale New Deal" in order to counteract negative public opinion surrounding the industry, Parsley Energy Inc. CEO Matt Gallagher said Feb. 5.
Speaking at the NAPE Global Business Conference in Houston, Gallagher said oil and gas producers will remain vital for decades to come, as renewable energy sources will not be able to pick up the weight of supply.
"We are necessary for the future," the CEO said, noting critics of the industry have overstated the ability of renewable energy sources to pick up the slack from oil and gas when, in reality, the demand for hydrocarbons will continue to increase.
"In the most aggressive case for electric vehicles [in BP PLC's 2019 Global Energy Outlook] … it shows that we need 40 million barrels per day of new production by 2040. If you look at the other demand scenarios, unless the cost of these vehicles comes down dramatically, you could see something closer to 80 million barrels per day of new production," Gallagher said.
That reality, however, has been overshadowed by environmental groups that oppose the industry and have been vocal about the dangers of oil and gas production. Gallagher said the nation is firmly divided on the issue, with neither side willing to budge.
"Our country is in two bubbles. In our bubble, gas is good; it keeps the lights on. American oil reduces our dependence on foreign oil, foreign investments, foreign dictators. But in their bubble, we're literally harming the planet," he said.
Gallagher said the industry has been losing the public relations battle for decades and the negative perception of oil and gas has started to take its toll at a time when it needs a new generation of employees.
"We have a massive perception problem. A whole generation looks at us, our industry, and they see the past. There's a big disconnect here," the CEO said. "They're turning their backs on our industry at a time when they'll be needed more than ever."
A "Shale New Deal," Gallagher said, would have to show all sides that U.S. oil and gas producers are not only interested in making money, but are being responsible with how and where they produce. Increasing overall production while reducing emissions and being good members of the communities where they are active are points independents should be mentioning in response to industry critics, he said.
"American independents are uniquely positioned to tell our story about domestically produced oil and gas. We have the most stringent environmental laws on the planet. We should tout our benefits to the communities we're involved in and our contribution to national security," Gallagher said. "We need to lead. We need a shale new deal. We need to highlight the benefits of America producing oil and gas and we're doing it with as little impact as possible."