Sometimes connecting the dots is child’s play; our political leaders, however, can often lose the thread. The government’s Energy Information Administration this week confirmed what all of us knew: We are blessed with almost unlimited natural gas reserves in this country. Specifically, the EIA more than doubled its estimate of recoverable shale gas, from 353,000bn cubic feet to 827,000bn cubic feet. This amount of newly available reserves would provide for U.S. natural gas demand for the next 36 years. Again: 36 years.
No, we have not discovered a brand new state of Louisiana, or annexed Mexico. This gigantic windfall has come from technical breakthroughs by oilfield companies to penetrate natural gas deposits formerly trapped in rock formations. Previously unavailable gas resources can now be captured through hydraulic fracturing or ‘fracking’ of shale formations, using water and chemicals under pressure to break up rock layers and free up deposits. Progressive improvements in the fracking process have led to a substantial – giant, really – reevaluation of the potential role that can be played by natural gas in our country’s energy portfolio going forward.
Consider the significance. While the recession caused a temporary reprieve in what had been an inexorable climb in our nation’s current account deficit, that measure of our excess of imports over exports has recently resumed its ominous uptrend. The trade gap increased to $127.2 billion in the third quarter, or 3.5 percent of GDP, up from $123.2 billion and 3.4 percent of GDP in the prior three months. It was the fifth consecutive increase in the measure, and a sharp turnaround from the total in the second quarter of 2009, which came in at 2.4 percent of GDP.
Needless to say, one of the largest ongoing contributors to our trade deficit is our reliance on imported oil. The gap between our imports and exports of goods and services this year will be roughly $560 billion. Of that, the Bureau of Economic Analysis expects imported petroleum and products to total $345 billion. Were we to significantly rein in our oil imports, we would be well on the way to solving our persistent import imbalance and consequent indebtedness to foreign nations.
Though converting our oil-fueled vehicle fleet to natural gas would take a huge investment in infrastructure, a gradual shift is not impossible. It is certainly a more realistic (and economic) venture than relying on windmills or solar panels to provide energy for our transportation sector. A resulting downturn or leveling of demand for gasoline in the U.S. would help keep oil prices from rising, having an add-on positive impact on our balance of payments.
Unfortunately, environmentalists have successfully shut down some of the more promising areas of shale oil production, including the Marcellus formation in New York State. Concerns about chemicals leeching into water supplies have been prompted by some preliminary reports of contamination in other parts of the country. The embargo is meant to allow time for further research into possible ill effects from fracking. In the meantime, the industry is addressing anxieties by promoting new products that are chemical free and less likely to pollute water systems. Halliburton, for instance, is promoting CleanStim, a fluid made with ingredients used in food production. (They have cautioned, though, that the product is not edible – a reminder of the protections needed by companies exposed to our out-of-control tort lawyers.)
For the good of beleaguered New York State and our indebted country, these issues must be resolved quickly. Fracking is not new; it has been around for more than 60 years. Today some 20 percent of our nation’s gas supply is coming from shale gas, which has helped keep the nation’s energy costs low. Legislators need to oversee this review, and get us back to drilling for natural gas – a relatively clean energy source – as soon as possible. They must also fend off those who would damp production of natural gas to make way for renewable energy sources likely to drive up, not down, our country’s fuel costs. Most important, they must not allow shale gas to go the way of nuclear power – shunted off track for decades by the environmental lobby.
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