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 all over the world. But just because it exists, we shouldn’t expect it will be developed, says 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 and the legislature is considering even stricter hydraulic fracturing laws.

“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 U.S. and the people that go with it have really made the shale grow and outpace anyone in the world,” he said.

McClain spoke to an early-morning crowd at Summer NAPE on the topic of “Dynamic Supply and Demand, Kinder Morgan’s Perspective,” and used 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 drives, 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.”

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 barrel (bbl.) per-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 bbl. perday commitment.

McClain noted the economic benefits of shale development, from high-paying jobs to increased revenue for local governments. But 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.