Soaring natural gas production has already cut the share of oil consumption met by imports to 47% last year from 60% in 2005.
Can America escape the energy trap? Must our lives and security be forever held hostage to the vagaries of political power in the Middle East oil states? The answers to these questions are yes, and no. Thanks to American technology and enterprise, we can achieve a degree of energy security that once seemed hopeless—but only if we can sort out our priorities.
The good news is that the United States is at the center of a global energy revolution. Our development of innovative shale-gas technology offers the prospect of a huge bonanza of natural gas (and some oil as well). It’s the most positive event in the country’s energy outlook in 50 years. Let’s celebrate the achievement before looking at what needs to be done to bring it to fruition.
Our geologists have long been aware that gas (and oil) lies hidden in the country’s shale beds and under the ocean, but we had no chance to extract it until American entrepreneurial energy inspired companies to gamble on new technologies. In a phrase, technology has trumped geology. Advances in computer-processing power yielded seismic mapping and three-dimensional imaging, enabling geologists to “see” through the thick layers of rock and salt obscuring the reservoirs thousands of feet below the surface. And new drilling technologies allow us to penetrate thousands of feet of rock, turn a corner, and continue drilling horizontally for several thousand more feet to reach millions of cubic feet of gas.
It’s trapped in the shale, but it can be released by the process known as hydraulic fracturing, or “fracking.” Millions of gallons of water, sand and chemicals are blasted in at high pressure. Fissures open up, and gas and oil seeps out.
The process of finding and producing hydrocarbons from this shale has taken off with such velocity that it has already significantly altered government and corporate energy expectations. The production costs of shale gas are about one-half to one-third the costs associated with new conventional gas wells in North America. The result is a glut of new supply and plummeting prices.
This kind of seismic shift in the energy landscape is rare. It could bring us back to the time when the U.S. and its neighbors in the hemisphere were self-sufficient and even a major world source of energy. Energy companies have become exporters, as the U.S. has surpassed Russia as the world’s leading gas producer.
So what’s the snag—and how serious is it? Continue reading