What if I told you a domestic fuel exists that emits only half the greenhouse gases of coal and can be found in abundant supply to last the United States at least 45 years? Many of you already know what it is: natural gas. Technological advances are unlocking natural gas reserves in deep shale rock strata around the world. The more people search for new reserves, the more they find.
The United States has enough shale gas that prices can range in a comfortable zone for the next few decades. Enough exists to make planning for future electricity generation easier for utilities. Five years ago, the U.S. government believed 140 trillion cubic feet of natural gas existed in North America. This year, a private industry estimate pegs the supply at more than 1,000 trillion cubic feet. As oil continues to spill out of the Gulf of Mexico seabed, the United States slowly is waking up to a new energy future. Renewable fuels are still part of the future, but natural gas can add decades to the time needed for wind, solar and other renewables to increase in efficiency and come down in price.
Enough natural gas can be found domestically that the United States has little need now for liquefied natural gas terminals to receive foreign natural gas. LNG supplies will go to other markets, such as China. The world has enough shale gas that natural gas cartels are unlikely to form. Even Europe has enough shale gas to wean itself off Russian supplies. This perspective comes from a recent Wall Street Journal article by Amy Myers Jaffe of the James A. Baker III Institute for Public Policy at Rice University.
“We have a lot of gas to (drill),” Jaffe said recently in San Antonio during a symposium on shale gas held by South Texas Money Management Ltd. Other symposium speakers detailed how the shale gas revolution is bringing gobs of income to South Texas landowners. One of the best new shale gas plays, called Eagle Ford, stretches from the Texas-Mexico border to the Gulf Coast. La Salle and McMullen counties reportedly are among the hot spots for shale gas exploration and drilling. Landowners, who may have paid, say, $200 per acre, receive thousands of dollars per acre for leases, plus royalties.
Natural gas prices now fluctuate above $4 per thousand cubic feet. The Baker Institute projects natural gas prices will stay below $7 through 2040, although some spikes could occur briefly. It wasn't long ago that natural gas prices soared above $14.
Author: David Hendricks
