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Now this once-sleepy chunk of north-central Pennsylvania is a star on the map of an emerging national energy rush. Six hotels are new or being built, and about 100 companies have moved to town, sometimes so fast that the head of the local Chamber of Commerce has told executives wanting guided tours to wait.

“I’ve said, ‘Look sir, get in line,’ ” says Vince Matteo, chief executive of the Williamsport/Lycoming chamber. “Now I know people in their 20s with high school (diplomas) making $120,000 a year.”

Much of Wall Street and Washington is seized by the hope that the U.S.‘s energy future will be as bright as Williamsport’s. As Americans heave a sigh of relief at gasoline prices falling back from near $4 a gallon, big new discoveries of domestic oil and natural gas hold the promise of more substantial benefits for the U.S. economy for decades to come — even the possibility of energy independence.

Every president since Richard Nixon has called for the U.S. to wean itself from needing oil from unstable or unsavory countries. The nation’s new-found energy riches are likely to bring that ambition closer to reality in the next two decades, according to many forecasters.

It’s no pipe dream. The U.S. is already the world’s fastest-growing oil and natural gas producer. Counting the output from Canada and Mexico, North America is “the new Middle East,” Citigroup analysts declare in a recent report.

The U.S. Energy Information Agency says U.S. oil imports will drop 20% by 2025. Oil giant BP projects the U.S. will get 94% of its energy domestically by 2030, up from 77% now, as oil imports fall by half. Energy billionaire T. Boone Pickens, a major investor in oil and natural-gas companies, said the U.S. can at least end oil imports from Organization of Petroleum Exporting Countries, about half its total, through new drilling and by shifting diesel-swilling trucks to natural gas. Any other oil needs should be from politically stable allies such as Canada, Pickens said.

Most enticing, a team of analysts and economists at Citigroup argues that the U.S., or at least North America, can achieve energy independence by 2020, as more domestic production and doubling down on conservation produce a virtuous cycle. The U.S. can make itself a net exporter of crude oil, refined products and natural gas — says Citigroup energy strategist Seth Kleinman.

“The notion of the U.S. getting to zero net imports of oil is obviously a sexy notion, but it’s not necessary for it to mean the world will change,” he says. “We are seeing a dramatic collapse in U.S. net imports of oil as we speak, to the tune of almost 1 million barrels a day each year over the last four years.”

If anything like that happens, an improbable-sounding litany of good things can result.

In practical terms, more energy independence could mean 3.6 million new jobs, enough to cut unemployment by two percentage points, Citigroup argues. It could help manufacturers and chemical businesses that use lots of energy or make products from natural gas. It might give the U.S. a structural advantage on trade partners in energy costs, helping to offset the edge that cheaper labor gives nations such as China, Kleinman says. Already, U.S. natural gas prices are a seventh of what they are in Beijing, Pickens says.

“The potential is clearly there for a genuine revitalization and reindustrialization of the economy,” Kleinman says. “In industries where energy is a major element of costs, the U.S. is moving into a uniquely advantaged position.”

After years of gripes that the U.S. imports too much oil, the energy industry is pumping a gusher of good-news numbers:

•The U.S. price of natural gas has plummeted more than 80% since 2008, including nearly 45% in the last year, thanks to new supplies. The falling cost of natural gas alone will save U.S. households $926 a year between now and 2015, consulting firm IHS Global Insight says.

•The USA’s 15% gain in crude-oil production since 2008 is by far the world’s biggest, with new fields just beginning to be developed. The U.S. has overtaken Russia as the world’s largest refined-petroleum exporter, according to Citigroup.

•Utilities’ switchover to cheap natural gas from coal is lowering power bills. One utility switching to more gas plants, Georgia Power, has filed to cut Atlanta-area electricity rates 6%, citing a 19% drop in fuel costs.

Drill and conserve

A dozen years after Texas wildcatter George Mitchell commercialized a new gas-drilling technology called hydraulic fracking, the new energy boom is taking off. It began with gas, as fields such as the Marcellus Shale in the Northeast and the Barnett Shale in Texas began producing gas that hadn’t been recoverable until Mitchell combined fracking — which uses chemicals, water and sand to force gas out of rock — with horizontal drilling, which yielded much more than simply drilling straight down.

More recently, the same technologies have been adapted to drill for oil. Oil fields are being developed from Pennsylvania to Alaska — a half-dozen or more major sites, each including many smaller ones.

The rush to oil from gas is now so fast that Devon Energy, the No. 3 independent oil-and-gas-driller, isn’t drilling a single new gas well this year, CEO John Richels says.

Because of fracking, Citi says U.S. oil production might climb more than a third by 2015, driven by “tight oil” from shale and tar sands that until recently was too costly to extract. Government estimates say domestic production will rise 22% by 2020 to 6.7 million barrels per day. At the same time, the 19 million barrels that Americans burn daily may fall by 2 million, by Citi’s numbers. One reason: The EIA says the U.S. will be 42% more energy-efficient by 2035, continuing an enduring trend.

One reason for all that new efficiency is regulation.

Automakers face federal corporate-average fuel economy standards doubling, to up to 54.5 miles per gallon by 2025. A 2007 law requires oil companies to quadruple production of renewable auto fuels by 2022. States such as California are making utilities buy up to 60% more renewable-sourced electricity by 2020, says Stuart Hemphill, vice president for power supplies at Southern California Edison. “In California, only two kinds of (energy-producing) facilities are getting built — natural gas and solar,” Hemphill says.

Why $2 gasoline is unlikely

For consumers, America’s new energy supplies help contain costs — but they’re not a magic path back to $2 gasoline.

The good news: Natural-gas heating costs have dropped nearly 40% since 2008, undoing half their 160% climb after 1999. Electricity costs have remained flat, too.

The bad news: Gasoline prices have flirted with all-time highs this year, and even the fast-emerging new supplies are unlikely to offer major relief soon.

To understand why, it helps to master some numbers.

First is the number two — the U.S. has two main energy markets, one each for electricity and transportation. They’re very different. Electric utilities use mostly coal, natural gas and nuclear power, or renewables, almost all from the U.S. and Canada. Cars use oil, about 45% of it imported.

The second big number is 86 — the 86 million barrels of crude produced worldwide daily. About 19 million are burned in the U.S., three-fourths of them for transportation, the government says. About 8.9 million are imported, 4.2 million from OPEC. Bringing crude-oil imports down will be about changing how Americans fill gas tanks — or whatever advanced electric-car battery replaces gas tanks.

Domestic natural-gas gluts will do little for real energy independence until more cars use electricity or natural gas, says Hemphill. That’s one reason Pickens is campaigning to subsidize converting business truck fleets to natural gas — legislation the Senate defeated in March.

“I’m for anything American,” Pickens said. “I want at least to get off the 5 million barrels a day we get from OPEC.”

The most important number may be $70 — the estimated cost to produce a barrel of oil from shale or tar sands, the heart of the new U.S. supplies. While natural-gas prices have sunk, oil prices might not, since they typically follow the cost of producing the most expensive barrel on the market.

Today’s world oil prices of about $111 a barrel are boosted by tensions from Iran’s nuclear program, as well as emerging-market oil demand that will exceed that of developed nations for the first time this year, according to the International Energy Agency. At about $95 a barrel, U.S. oil prices have risen, too, even though the U.S. doesn’t import Iranian crude.

Using the rule of thumb from research firm IHS CERA, that a $10 move in crude changes U.S. gasoline prices by 24 cents a gallon, dropping crude to $70 would lower pump prices about $1, leaving gasoline near $3.

Broad economic impact

Even so, all this new energy is creating jobs across the country. North Dakota, now the nation’s fourth-largest oil producing state, boasts a 3% unemployment rate, the nation’s lowest. In Williamsport, the local economy grew 7.8% in 2010, making it one of the nation’s fastest-growing metro areas.

Projections for energy-related jobs vary, but are all pretty large. More than two-thirds of Citi’s estimated 3.6 million new jobs will come from multiplier effects, as the 550,000 new workers in fossil fuel-related jobs spend their incomes, or as other Americans spend the money they save from cheaper energy, Citi says. IHS Global Insight says the natural-gas boom alone has created 600,000 jobs and will rise to 1.6 million by 2025.

The money saved on energy will pay dividends throughout the economy. Lowering the $400 billion the U.S. sends abroad annually for oil would function like a huge tax cut, says Chris Lafakis, energy economist at Moody’s Analytics.

“A third to 40% would be my guess” at how much the U.S. can cut imports by the next decade, Lafakis says. “At 40%, that’s $160 billion a year, and that’s massive. It’s like the temporary payroll tax cut we have now, plus a third, and it lasts forever.”

A less statistical way to reckon all this is to look at Williamsport.

“It put people to work who hadn’t worked in a long time,” Pennsylvania Gov. Tom Corbett says. “It was a natural-gas rush that put demand on housing, on stores, on restaurants.”

Watching for exaggerations

Yet many hopes — and fears — about the U.S. energy boom will likely prove exaggerated.

Citi’s thesis that gas and oil will stay cheaper in the U.S. than abroad, for example, assumes most exports of U.S. crude remain illegal and natural-gas exports stay rare, says Mark Zandi, chief economist at Moody’s Analytics. Instead, U.S. crude is likely to be refined into exportable products such as gasoline, while infrastructure to export liquefied natural gas improves. Both will pull U.S. prices toward higher world levels, he says.

“Markets have a wonderful way of finding their way around restrictions when there’s money to be made,” Zandi says.

Williamsport exemplifies the likeliest impact of all. With natural-gas prices so low, drilling has all but halted. But gas companies are using the lull to build pipelines, as drilling action moves to oil patches in Western Pennsylvania.

In the meantime, some spinoff industries are coming into focus. Shell has announced plans to build a cracking plant, which will make chemicals from natural gas, outside Pittsburgh. The expected payoff includes 10,000 construction jobs, Corbett says. All this is part of turning the short-term energy boom into a long-term economic plan, he says.

While short-term booms wax and wane, hope persists that the new oil and gas means a better future for Williamsport, and for America.

“They tell us not to worry,” the Chamber’s Matteo says. “The gas isn’t going anywhere and neither are they.”

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The recovery of offshore oil and gas production and increased natural gas production should keep the local economy humming for the next couple of years, according to an imminent Louisiana economist.

Loren Scott, professor emeritus at LSU’s E.J. Ourso College of Business, laid out his forecast for the oil and gas industry in the state at Tuesday’s South Central Industrial Association meeting in Houma.

“The energy sector is going to be the driver of the Louisiana economy and much of the U.S. economy as a matter of fact for the next couple of years,” Scott said.

While deep water petroleum production has waned the past two years since the BP oil spill, signs are pointing to a complete recovery by the middle of next year.

Scott noted that 169 drill permits were approved in 2009, with 33 deep water rigs operational. Through the first quarter of this year, 44 permits had been approved. There are currently 24 rigs online with nine drill ship and semi-submersibles coming soon.

“They’ll be in place by the middle 2013. By that time, we’ll be on your way and doing really well,” Scott said.

“We are ecstatic because the industry is building back up,” said Jane Arnett, executive director of SCIA. “That’s one thing about the people from this area. We are very resilient, and when things don’t go right we find a way to make it right.”

Although natural gas and oil prices continue to drop from record highs in recent years, local producers and shipbuilders will stay busy.

Scott listed several reasons for this positive development including the closing of oil refineries in New England, plans to retrofit liquefied natural gas terminals in the Gulf from import to export use by 2016 and emerging technology such as floating production, storage and offloading units.

Another factor is the Western Gap Treaty, signed by the U.S. and Mexico but which still needs ratification, to open up 1.5 million acres of the U.S. Outer Continental Shelf to exploration of oil and natural gas reservoirs.

“You need barges, you need ships. All of those are built here in this particular part of the state,” Scott said. “Edison Chouset, Bollinger, Gulf Island Fabrications, McDermott, all of these guys that make all these things will benefit. The more they come back to the Gulf of Mexico, this is the place that is going to see growth.”

One matter that was hard to explain is the recent drop in gasoline prices, which had declined 28 straight days as of Monday, according to AAA.

Scott noted it was a rare phenomenon on the verge of summer driving season, but he didn’t expect that to last throughout the season.

“The price of gas goes down three to five cents for every dollar the price of oil drops,” he said. “I know I have a lower end estimate (in this forecast) at $70, but I would be very surprised if it goes below $90.”

Scott projected the price of natural gas to stay between $1.50 and $2.30 mm/Btu, and oil prices in the range of $70 to $110 a barrel through 2013.

If he is correct, that should keep the local petroleum industry happy and employment rates high.

“The Houma area economy is the most energy intensive economy in the state, and one of the most energy intensive in the country with the exception of North Dakota,” he said. “So any time there is a fluctuation in the price of oil or natural gas, it shows up immediately in y’all’s employment numbers.”

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At least a dozen new oil pipeline projects are slated to move forward in the United States over the next few years, bringing controversial sources of new crude to market despite the holdup of a portion of the Keystone pipeline expansion.

Some of the projects reverse the flow of existing pipelines.

As early as next week the Seaway pipeline, which currently carries oil imported into the Texas Gulf Coast up to storage facilities in Cushing, Okla., will reverse its flow.

That will help alleviate the glut of crude in Cushing — a glut that’s been caused by a boom in oil production from shale oil formations in the United States and oil sands production from Canada’s Alberta province.

Other pipelines will add additional capacity, such as the southern portion of the Keystone expansion that will run from Cushing to the Gulf Coast.

There are additional pipeline projects planned for West Texas. Six are set for North Dakota’s prolific Bakken Shale, along with 10 new rail terminals to ship the oil out via train, according to Jeff Dietert, an oil analyst at Simmons & Company, an energy-focused investment bank.

All told, the new projects will have the capacity to bring at least an extra 2 million barrels a day of oil to the U.S. Gulf Coast by 2015. Where that oil goes from there, its effect on gas prices, and its environmental impact are up for debate.

Good for the nation: The industry and most oil analysts think the additional oil will be used by U.S. refineries, offsetting the need of some oil imports and potentially lowering gasoline prices.

The oil will likely be cheaper than where the refineries currently get most their imported crude stock — Mexico and Venezuela — due to fewer shipping costs.

Plus, production from Mexico and Venezuela has been declining for years due to lack of investment in those oil fields.

“The future supply of heavy crude from some of those places is uncertain,” said Jackie Forrest, an oil analyst at the consultancy IHS CERA.

Price wise, analysts say adding an additional 2 million barrels to world markets should bring down prices, if only marginally.

Two million barrels is just a fraction of the 89 million barrels a day the world consumes, and there are dozens of other things that impact oil prices — from violence in Nigeria to OPEC production decisions.

But an additional 2 million barrels is still an increase in supply.

“Ultimately, this will result in lower gasoline and diesel prices,” said Dietert. “Without the growth in U.S. supplies, prices would be materially higher.”

Pipeline advocates also point to the thousands of jobs the projects would likely support, both in pipeline construction and oil field development.

Bad for the environment: But this new production may carry a heavy environmental cost.

The new U.S. oil is mostly from shale formations, which must be hydraulically fractured to flow.

Known as fracking for short, the practice is controversial, with critics saying it can contaminate the ground water and lead to earthquakes.

The Canadian crude comes mostly from the oil sands, which requires massive amounts of heat and water to extract and can leave vast swaths of forest looking like a moonscape.

Most major oil companies now operate in the oil sands, including Exxon Mobil (XOM, Fortune 500), Royal Dutch Shell (RDSA) and BP (BP).

The industry has long maintained that both sources are safe, but environmentalists don’t buy it.

“It’s literally an environmental Armageddon happening in Alberta,” said Kate Colarulli, associate director of the Sierra Club’s Beyond Oil campaign. The Sierra Club is against all production from the oil sands.

When it comes to fracking, the organization isn’t necessarily against the process or transporting that oil by pipeline, but thinks that current regulations aren’t sufficient to protect the public.

On the issue of prices and exports, Colarulli said much of the gasoline made from the new oil will be exported and won’t necessarily insulate U.S. consumers from high prices.

The Sierra Club is working to block the pipeline expansions. It argues that the country would be better off reducing its oil consumption by 2 million barrels a day through higher efficiency standards and the adoption of alternative technologies like electric cars.

But it will be an uphill battle in fighting the pipelines.

The reversals require little in the way of permitting. And Obama has directed his administration to fast track the southern part of the Keystone project.

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Excelerate Energy will build the first US floating LNG facility at Port Lavaca, Texas. Excelerate chose the site because of direct access to the highly liquid south Texas natural gas market, access to the Atlantic through the Gulf of Mexico, and potential access to the Pacific via widening of the Panama Canal.

Excelerate Energy said Tuesday that it will build the first floating liquefaction facility in the US at Port Lavaca, located between Galveston and Corpus Christi on the Texas Gulf coast.

The Lavaca Bay LNG project is the latest in a string of planned US export plants as domestic gas production soars. First exports from the facility are expected in 2017, the company said.

Excelerate will use its floating liquefaction storage offloading vessel (FLSO) technology on the plant, the US-based company said.

Excelerate’s FLSO comprises 3 million tpy of production capacity, 250,000 cubic meters (m3) of LNG storage, and a fully integrated gas processing plant.

With that gas processing capability, the FLSO can accommodate a wide range of gas compositions at its inlet, making it well suited for applications near shore or offshore, Excelerate said.

For situations where gas processing is not required due to presence of existing processing facilities or where pipeline quality gas is used as the feedstock, the processing equipment can be removed and liquefaction capacity increased to 4 million tpy.

The FLSO will measure 338 meters in length, with a breadth of 62 meters.

Front-end engineering and design (FEED) is in an advanced phase, and Excelerate has entered into discussions with potential off takers and natural gas suppliers as well as investors and potential sources of finance to take the project forward, it said.

Excelerate Energy expects FEED to last until the end of 2012. Following its completion and successful permitting, project delivery will take approximately 44 months from final investment decision (FID).

In its initial phase, the Lavaca Bay LNG project will consist of one permanently moored FLSO with multiple connections to the onshore natural gas grid in South Texas.

The project will be designed with the potential for expansion and the addition of a second FLSO over time for a total production capacity of up to 8 million tpy.

Excelerate Energy said it expects to begin the export authorization and Federal Energy Regulatory Commission (FERC) permitting process immediately.

“Excelerate Energy applies the same philosophy to its liquefaction vessel design as it does to its regasification vessel fleet – essentially using proven technology in an innovative way to provide more efficient and timely solutions to the LNG industry,” said Rob Bryngelson, Excelerate Energy CEO.

“Port Lavaca provides us with the unique opportunity to further capitalize on our position as a market leader in floating LNG solutions.”

Excelerate said it selected Port Lavaca for the site of the facility because of its direct access to the highly liquid south Texas natural gas market, access to the Atlantic Basin through the Gulf of Mexico, and potential access to the Pacific basin with the widening of the Panama Canal.

The facility will interconnect to the region’s existing pipeline system in order to obtain natural gas and liquefy it onboard the vessel.

The Port Lavaca location being developed by Excelerate has previously received FERC approval as an LNG import facility, which should facilitate the permitting process, according to the company.

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While prices at the pump have gone down temporarily, experts say the cheaper gas might not last long.

Ragan Dickens with the Louisiana Oil and Gas Association says typically the price of gasoline goes up in the summer months, around Memorial Day.

According to AAA the national average for a gallon of regular unleaded is $3.72. That average is $0.18 lower than a last month. The Louisiana average for a gallon of gas is $3.54. That number is down $0.26 from last month.

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As the U.S. financial picture edges upward, the European economy is creeping lower. Commodity prices are caught in that maze. But is the recent gyration in oil prices a function of supply and demand or is it a sudden rush in or out of commodity index funds? And how do all those dynamics figure into natural gas prices?

Now that this country is winding its way out of the dark tunnel from which it has been, it will require more oil to fuel everything from cars to industry. If supplies are constant, the increased demand will cause those oil prices to rise. But such simple economics can be distorted, namely by increased “speculation” by those who funnel large sums into and out of investments.

“Speculators are attracted to crude oil because it moves accordingly with the economy and with the value of the U.S. dollar,” says Valerie Wood, president of the Madison, Wis.-based consultancy Energy Solutions, in a conversation with this writer. In other words, “If they view an economic pullback, the investors will pull out of crude oil and put their money into safer investments. If they view a global economic expansion, they will put money back in.”

Traditional thought has held that commodity prices all correlate with oil. In fact, the Federal Reserve Bank of Dallas authored a study in 2007 that said the prices of oil and gas tend to move in tandem by a factor of 10 to 1, or $100 a barrel would mean $10 per million Btus. Now, with the advent of the shale gas boom — unconventional natural gas — those commodity prices have been decoupled.

The price of a barrel of oil is now about $94. A week-and-half ago, it was $10 more. The drop can be attributed to political and economic uncertainty in Europe, which causes investors to flee that commodity.

Natural gas is now cheap relative to oil. The most conspicuous explanation is that oil is a global commodity that is affected not just by international economics but also by geopolitical skirmishes, which can cause supplies to tighten up and prices to rise. Natural gas, by comparison, is a regional commodity that is left unscathed by such forces.

Meantime, shale gas is emerging as the king of utility power markets. Newfound drilling technologies mean that abundant shale supplies are now accessible. And with regulators making things increasingly tougher on coal, shale is expected to step in and fill the void. The vast supplies of shale pushed natural gas prices to 10-year lows in April at $2 per million Btus. But now those prices are now crawling back up to about $2.50.

“I think we are seeing a little bit more speculation in the natural gas market,” says Energy Solutions’ Wood. “I think prices have reached an interim low and therefore some of the speculators are willing to come back into natural gas and are being more aggressive now that the market data is turning up a bit.”

Traditional economics teach us that the price of goods — including oil and natural gas — is tied to supply and demand. If times are good and people drive more, then gasoline prices will jump. Ditto for power companies that have to meet the demands of their commercial and industrial customers, all of which would be exacerbated by the increased global demand for either oil or natural gas.

Pragmatics would then suggest that increasing production would help ease pricing issues. That, of course, is the central argument that the oil and natural gas producers are making and one that — in many ways — is conflicting with the views held by the Obama administration.

The White House says that speculators are distorting those market fundamentals by buying up oil and creating the false perception that shortages exist. Prices then rise and the traders sell those “futures contracts” for quick profits. That’s a view generally supported by the Industrial Energy Consumers of America.

Quick fixes, however, don’t exist. But putting more “cops on the beat” to ensure that markets are transparent in one answer. And so is giving producers more drilling access assuming that they have met their regulatory obligations. In fact, President Obama says that during his tenure, the country has quadrupled the number of operating rigs. The problem is that this nation uses 20 percent of the world’s oil but that it has only 2 percent of the world’s proven oil reserves.

“We will need to work extra hard to protect consumers from factors that should not affect the price of a barrel of oil,” President Obama said recently in a Rose Garden speech. By that, the president means that the “irresponsible few” are “illegally manipulating” or “rigging the energy markets for their own gain.”

This country is pursuing an “all-of-the-above” fuels strategy to propel future economic growth, meaning regulators will work to keep supply and demand in balance. But the government must also ensure that markets here operate free from manipulation that benefits the few at the expense of the many.

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BHP Billiton is accelerating the recovery of 1.5 billion barrels of liquid hydrocarbons from the Eagle Ford and Permian fields in the US as it attempts to avoid a multibillion-dollar write-down of its US shale assets.

BHP petroleum chief Mike Yeager yesterday said the recovery target had been increased by half a billion barrels in the past six to eight months and he extolled the company’s $US20 billion acquisitions of Fayetteville and Petrohawk, which had given it a premium position on the ”unique” Haynesville shale play, the largest gasfield in the US.

Mr Yeager said liquids at Eagle Ford would make up half of production volume – and more than 80 per cent of revenue – with BHP targeting 300,000 barrels of oil equivalent a day within five or six years.

”We’re going to bring it forward in a big way,” he said.

Another 100,000 barrels of oil equivalent a day would flow from the Permian field, which was 80 per cent liquids. Combined, the two fields would produce 250,000 barrels of liquids a day and ”$US100 barrels are going to flow through to our company”.

The forecast revenue would more than offset the slump in US gas prices after the fourth-warmest winter in US history, and would feed into a valuation of the business when BHP ruled off its accounts on June 30.

Analysts at investment banks including Citi and Credit Suisse have said there may be a US shale write-down of $US2 billion or more, but yesterday Mr Yeager said BHP would factor in its proprietary view on future gas and oil prices and ”let the accounting fall where it may”.

Mr Yeager said US gas prices had already risen by more than 30 per cent from their bottom. Gas prices had previously fallen below the cash cost of production and operators were pulling out of shale extraction. But he said that longer term, gas was the ”premium, preferred fuel of the future and it will rebound and it will be strong”.

While the Haynesville shale was an unconventional resource, he said it was ”big, fat, juicy unconventional”.

The advent of unconventional gas was a ”revolution” that would last 50 years and was bigger than the shift from 2D to 3D seismic surveys, or from shallow to deepwater drilling. ”It’s the biggest thing in my 33 years in this industry,” he said.

Mr Yeager was confident that the US would allow exports of LNG to Asia, potentially competing with Australian projects including BHP’s Scarborough field.

Mr Yeager said Western Australia was ”very, very expensive” and a floating LNG facility was an option at a smaller field such as Scarborough as it would save on the cost of pipelines, storage tanks and a jetty.

Mr Yeager said BHP had brought in some of its best shale experts from Petrohawk to study the potential for shale gas development in Australia.

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Former investment banker Al Walker on Tuesday takes the helm of Anadarko, one of the world’s largest independent oil and gas producers, succeeding a chief executive credited with building one of the industry’s most attractive exploration portfolios.

James Hackett, who took over as CEO in 2003 and reversed Anadarko’s falling stock price, has handed the reins to Walker. Hackett remains with The Woodlands-based company, serving as executive chairman. He plans to retire in June 2013.

The company is in strong shape and well positioned to capitalize on the boom of domestic oil and natural gas production, with major deep-water exploration projects around the world, analysts say.

One of Walker’s biggest challenges coming in might be filling the shoes of his predecessor, said Andrew Coleman, managing director of exploration and production research for Raymond James and Associates.

“Jim Hackett cast a big shadow,” Coleman said. “Anytime you go from having an oil and gas veteran guy stepping down to a CFO type from the investment banking world, people will naturally expect a change in style.”

Walker, in an interview, said he plans to stay the course set under Hackett’s leadership, maintaining a portfolio focused largely on unconventional oil and natural gas development in the United States and investing in deep-water projects in Africa and Gulf of Mexico.

More than half of the company’s nearly $7 billion capital budget will funnel into exploration and production of oil and natural gas on U.S. land. Another 10 percent is slated for the Gulf of Mexico.

Last week, Anadarko’s Greater Natural Buttes expansion project received the go-ahead from the Interior Department to drill up to 3,675 new natural gas wells in eastern Utah.

“The good news is nothing really is likely to change in the near future,” Walker said. “I don’t believe there is a need to do anything really different, other than to continue the momentum.”

Meeting shareholders

Walker will meet with shareholders Tuesday at its annual gathering.

Anadarko, with a market capitalization of $33 billion, has a number of major projects under way worldwide. The company is developing a major facility for liquefying natural gas in Mozambique, where it estimates there are 17 trillion to 30 trillion cubic feet of recoverable natural gas.

Targeting projects with potential for massive natural gas production to feed the world’s growing power needs will be a focus of Walker’s leadership, he said.

“We made one of the largest gas discoveries in the world there,” Walker said of Mozambique. “Countries that historically leaned toward nuclear power are moving back toward natural gas, and it’s unlikely that that’s going to change.”

Following through

Walker’s challenge will be to take the exploration projects launched under Hackett to production, Coleman said.

“Can they follow up all of that exploration success with actually making sure they hit the targets of getting those big, multiyear projects on production, on time and on budget?” Coleman said. “They have an exploration portfolio that a lot of big companies want to buy.”

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