It is well known that hydrocarbon-bearing shale is found pretty much everywhere, from coast to coast in North America, and from ocean to ocean across the globe. But just because it exists, we shouldn't expect it will be developed, according to Ron McClain, president of products and pipelines at Kinder Morgan.

“There's just not the sentiment to develop certain levels of shale,” McClain said, contrasting the booms of the Bakken and the Eagle Ford with tepid oil development of the Monterey shale in California. The state has some of the most rigid environmental and permitting policies in the country.

“It remains to be seen if the state of California has the will to develop that,” he said. “Not being critical of California, it's just more a case of people make choices, and it won't be produced everywhere.”

In addition, a global shortage of talent and a surplus of political instability mean that shale won't develop at the same pace it has developed in North America.

“Stability in the US and the people that go with it have really made the shales grow and outpace anyone in the world,” he said.

McClain spoke to an early-morning crowd at Summer NAPE in August, using his time to talk about how the shale gale has created a ripple effect across the industry, crossing into midstream on its way into a full-fledged tsunami.

“There's so much change in where supply might be, to have a shipper commit to 10 or 15 or 20 years of long-term commitment, and they pay for that transportation even if that market changes, is very difficult,” he said.

“And that's just the only way that we and most pipeline companies will accept the risk of hundreds of millions and even billions of dollars in construction. Someone's got to commit to using it. But with the changing nature of shale drivers, it's more difficult for people to make 20-year commitments. If you look back five years, who would have thought the supply picture would be what it is? Looking forward five years, it could change that much more,” he said.

Kinder Morgan has adapted to the changes by divesting and acquiring assets, but also by reversing, repurposing and adding on to existing pipeline infrastructure. In the Eagle Ford, a 200,000-barrelper-day commitment for 10 or 20 years would have been a no-go on a newbuild, he said. But by repurposing an existing pipeline, the costs were low enough that the company was able to complete the project on a 50,000-barrel-perday commitment.

McClain noted the economic benefits of shale development, from high-paying jobs to increased revenue for local governments. And there's more to come.

“We're still out in the deep water, it probably hasn't crested into the big wave yet,” he said.

—Caroline Evans