A Quiet Energy Revolution

[star2city]

A sea change has been occurring, and the main-stream media has not perceived the seismic shift.

The American

WSJ: America's Natural Gas Revolution

For years, the US has dreamed of energy independence.

Imagine: secure domestic energy for generations, no more huge financial transfers to OPEC, the Middle East losing it's source of power

All could become reality within five years.

Two monumental shifts in the world of energy are underway right now: one technological, the other financial. ...

By marrying and perfecting the two processes into a technology called horizontal fracking, engineering has virtually created, from nothing, new natural gas resources, previously regarded as inaccessibly locked in useless shale deposits. Suddenly, the mammoth shale formations in Texas, Pennsylvania, Ohio, New York, North Dakota, and elsewhere have the potential to produce abundant amounts of gas for decades to come.

How significant are these developments? Exxon Mobil announced in December that it will pay $41 billion

[Goon]

My prediction is that the enviornmentalist movement will shut it down before it can become a reality.

[nodakvindy]

There was actually a documentary at the Sundance Film Festival called GASLAND, talking about some of these issues. I didn't see the film, but it had a fair amount of buzz.

I don't think there is any magical formula to solve our energy problems. There are never easy answers and if something is too good to be true, it usually is. Natural gas can certainly take on a greater role, but the acquisition of it will have to be balanced against risks fracking poses to our water supplies. Other alternatives, like renewable sources and nuclear will have to be part of our energy future. And hopefully we will continue to develop more efficient techologies that will require less energy to begin with.

[star2city]

My prediction is that the environmentalist movement will shut it down before it can become a reality.

Osama bin Laden is concerned, too.

[star2city]

I don't think there is any magical formula to solve our energy problems. There are never easy answers and if something is too good to be true, it usually is.

Agree that has been the conventional wisdom for decades, but the conventional wisdom is always wrong at some junction in history. Will be interesting what the next five years bring.

The Barnett Shale near Fort Worth, and the Haynesville Shale around Shreveport are major game changers and have almost insignificant groundwater contamination issues because the shales are deep.

ExxonMobil paid $41 billion for a new wave natural gas company (XTO Energy) largely because they can not afford to be left behind with limited US natural gas assets.

Seeking Alpha

Over the past 10 years proven US natural gas reserves have risen by nearly 50% and are now the highest in a generation, at about 250 Tcf (estimated as of mid 2009). The highest level reached was 293Tcf in 1967. This level is likely to be exceeded within 12 months, given the most recent pace of reserve additions. The US is embarked on multi-year period when annual net reserve additions could, on a sustained basis, be the greatest ever attained in the history of the US natural gas industry

The idea that the US could double is Proven Reserves of natural gas, from all sources, within 7 years and more than triple them within 15 years is no longer a romantic fantasy to a small but growing set of industry professionals and executives.

The US natural gas industry has the potential to double production within 10 years. The resource base is enormous and growing, management and engineering capabilities exist or can be enhanced, the risk capital can be forthcoming, the business models are correct, the logistical infrastructure to serve domestic and export markets can be deployed in time and the fuel is attractive to users.

Should the industry be allowed to accomplish this quite astonishing feat, it will add hundreds of billions of dollars annually in real value to the American economy, create hundreds of thousands of new, good, jobs, dramatically enhance the energy security of the Nation while significantly improving the trade balance and profoundly change the geo-politics of global energy. However, at present, public policy is acutely hostile, capital markets unfriendly (except to the very largest oil and gas companies), most Americans uninformed about or uninterested in this transforming domestic resource (except in Texas and Louisiana) and of course, natural gas prices are very low in real terms.