A MAJOR DEVELOPMENT FOR AMERICAN ENERGY PROSPECTS?

A MAJOR DEVELOPMENT FOR AMERICAN ENERGY PROSPECTS? I want to call attention to what could be an enormously important change in America’s energy prospects. Improvements in technology hold out the promise that American natural gas reserves will soon be sufficient to cover American demand for natural gas for the next 100 years at current levels of demand. John Dizard had an article in the Financial Times on November 2 which spoke of an increase of 40% in American natural gas reserves. In my lifetime, the narrative has been that America is running out of energy. That narrative still applies to crude oil, but it looks like the story will be different for natural gas. This article in the Wall Street Journal by Daniel Yergin and Robert Ineson describes the technology improvements which have enabled the commercial extraction of natural gas from shale rock. There are still potential problems, including possible environmental issues with water. And Dizard suggests that the decline rates for shale gas wells may be underrated. If these problems are overcome, there is lots and lots of shale that has not been touched by natural gas drillers—including in places like Pennsylvania and New York. There is also lots of shale in Europe and Asia.