Week in Oil & Gas: Discovery Hot Spots, Nat Gas' $80M Advocacy Campaign and One Big LNG Project

It wouldn't be a worthwhile week in the oil and gas industry without a few discoveries. And my, there were some goodies.

The hot spots this week were in the ultra deep waters offshore Brazil, Sierra Leone, Venezuela and Uganda. And Spanish energy company Repsol YPF found itself in the midst of nearly every oil and gas find.

And all this just a week after tests conducted by Brazil's state-owned Petrobras, and its partners Repsol and BG Group found an estimated 1.1 billion to 2 billion barrels of light oil and natural gas in its Guara well.

The discoveries have analysts chiming in on what this all means. Will these discoveries put a dent into our global supply or do these amount to merely a drop in the expanding bucket of consumption? Turns out it depends on who you ask and how big these initial discoveries turn out to be.

Meanwhile, the natural gas industry ramped up its fight to get a little respect, namely within the pages of climate change legislation being drafted in the Senate.

America's Natural Gas Alliance, an ad hoc group of energy companies, has stepped up its lobbying efforts and will launch an $80 million advocacy campaign to make sure their industry is not overlooked this time around.

UPDATE: A representative from ANGA has clarified the $80 million effort is not simply an advertising campaign, as reported in some publications. The $80 million will include lobbying, advertising, communications and various other outreach efforts. ANGA ads have already appeared in newspapers "inside the beltway" including the Wall Street Journal and New York Times. Targeted television ads will begin over the weekend, the representative said.

Perceptions of natural gas, long regarded as a volatile industry plagued by limited supply and price fluctuations, have changed a bit in recent years as new technology has allowed companies to reach hard-to-reach shale gas. Numerous unconventional shale gas deposits have been discovered in the U.S., which has pushed supply up considerably.

Natural gas has all the right ingredients to make it a worthy clean substitute to dirtier electricity-generating fuels like coal. There's an abundant domestic supply, half the greenhouse gas emissions of coal and prices have remained low for some time.

Problem is, no one told the folks inside the beltway. And the House's version of climate change legislation reflects the natural gas industry's lack of lobbying, the alliance has said.

Perhaps the biggest -- and most anticipated -- oil and gas news of the week was Chevron's decision to develop the Gorgon natural gas project offshore Western Australia. Gorgon's projected natural gas resources are equivalent to 6.7 billion barrels of oil and Chevron has estimated it will export gas for 40 years.

But what makes Gorgon so important is its potential impact on future projects all over the world that involve carbon capture and storage.

Chevron and its partners ExxonMobil and Royal Dutch Shell made the final investment decision on the $37 billion liquefied natural gas project only after Australia's state and national governments assumed any long-term liability for potential damagesincurred from carbon storage, Bloomberg reports.

This means the Australian government will accept any liability if carbon dioxide captured from the project and injected more than 2 kilometers underground, escapes storage hundreds of years from now.

Chevron and its partners are on the liability hook during construction, the operation of Gorgon and up to 15 years after it closes. Their liability would end around 2069.

And this raises the ultimate question of who is liable when it comes to carbon capture and storage? It's a question that promises to come up more frequently as the push to reduce greenhouse gas emissions forces companies to turn to carbon capture and storage.

Here's some of BNET's relevant coverage from this week: