Jim Umpleby Delivers Caterpillar Natural Gas Strategy

Jim Umpleby, Caterpillar Group President for Energy & Power Systems, delivered Caterpillar’s perspective on the natural gas opportunity at the Utica Summit 2014 on October 23 at Canton, Ohio.

The event, presented by the Canton Regional Chamber of Commerce, was attended by more than 200 business leaders, government officials and educators to discuss what is possible, now and in the future, because of the technology that permits horizontal drilling of the shale plays in the United States.

Key messages from Umpleby’s remarks included:

  • New technology such as horizontal drilling and hydraulic fracturing has allowed shale gas, which was previously uneconomical to produce, to be brought to the market. The rapid increase in supply has resulted in very low natural gas prices in the U.S. Due to the availability of natural gas in the United States and the existing infrastructure of pipelines, compressor stations and other equipment, the vast majority of new power generation capacity installed in the U.S. during the next 25 years is expected to come from natural gas.
  • Caterpillar participates across the entire natural gas value chain.
    • For drilling and pressure pumping, Caterpillar has been a long-time supplier of reciprocating engines and transmissions.
    • For gas production, compression and gas transmission, we manufacture Solar gas turbines and compressors, and Cat reciprocating engines. There are thousands of Caterpillar reciprocating engine generator sets and Solar gas turbine generator sets converting natural gas into electricity around the world.
    • While Caterpillar has been a supplier of natural gas fired reciprocating engines since 1947, we are now investing in new technologies to allow our customers to take advantage of low gas prices.
  • We are developing dual fuel products for mining, marine and rail applications. This summer Caterpillar released the M 46 DF, the first Cat® marine dual fuel engine which allows an engine to switch fuels to meet various emissions regulations. In the markets of Oil & Gas, Rail, Mining and Marine, the performance of the gas engine is paramount to success. In short, it must match the reliability, torque response, and power density of the diesel engine while delivering the fuel cost savings and emissions cleanliness of natural gas. The technology to deliver this is dual fuel – engines which burn both diesel and natural gas simultaneously. With deep expertise in both gas and diesel engines, Caterpillar is well-positioned to deliver reliable dual fuel engines to the market. This allows customers to achieve significant fuel savings based on the price differential between natural gas and diesel and contribute to more sustainable engine operations.
  • In 2010, Caterpillar committed in our strategic imperatives to aggressively grow our Energy & Power Systems businesses, which during the last three years has contributed more than one-third of Caterpillar’s revenues and profitability. In alignment with that strategy and to support our customers, we have invested in these businesses. Three of our most recent acquisitions have been in the rail, power and marine segments (EMD, MWM and Berg), so we are placing investment where the long-term opportunities exist in what many are calling the golden age of gas.

Following the event, Ohio Cat, the Cat dealer in the region, hosted a reception for Umpleby and the dealer team to meet customers who are involved in site preparation, drilling and pipeline construction projects at the Utica shale.