Enough conventional gas resources still exist in North America to meet demand, but the industry is paying today for chronic underperformance of the past, says James Hackett, president and chief executive officer of Anadarko Petroleum Corp. "Our industry has underperformed for decades until 2003," he said at the recent Cambridge Energy Research Associates conference in Houston. "The independents have been especially poor. This has limited equity investment and strained the sector's balance sheets until the past few years." Since the mid-1980s, returns on energy-related investments were poor, relative to the rest of the economy, Hackett noted. Risk-aversion was a driver for two decades of underinvestment combined with demand growth that has strained the industry's ability to provide supply. "Remote gas is necessary, but insufficient to meet the challenge," he said. "North America is still resource-rich. The challenge is in finding new resources. Over the past two decades, companies have focused on the purchase and redevelopment of assets. U.S. production has been sustained through successful exploitation of previously encountered gas. "When does the Barnett Shale mature to the point of turning over? What do we do when known resources reach this stage? Shifting ownership of assets does not bring new resources to consumers."

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