In my book, Terrestrial Energy, I talk about historian David Potter's 1956 book, People of Plenty, which redefined Frederick Jackson Turner's "Frontier Thesis." Whereas Turner said that an abundance of landhad been the defining experience in the American character, Potter argued it was actually an abundance of natural resources.
Following this line of thought, I argued that since our domestic oil production went into decline in 1970 we had entered a new era of American history where we became a "people of scarcity." It was a pretty good argument at the time, but I think now I'm going to have to revise it for the next edition. Once again we have become a People of Plenty -- this time in natural gas.
In a front-page story last week, the Wall Street Journal summed up what has been floating around for more than a year (it's amazing how long it takes these things to reach the public consciousness) -- gas industry roustabouts, wildcatters and innovators in Texas and Louisiana have done it again. They have cracked into gas deposits previously locked up in shale formations and opened Saudi-Arabian-sized reserves. As the Journal summarized, "One industry-backed study estimates the U.S. has more than 2,200 trillion cubic feet of gas waiting to be pumped, enough to satisfy nearly 100 years of current U.S. natural gas demand."
Here's how it happened:
In the 1980s, Texas oilman George Mitchell began trying to produce gas from a formation near Fort Worth, Texas, known as the Barnett Shale. He pumped millions of gallons of water at high pressure down the well, cracking open the rock and allowing gas to flow to the surface.
Oklahoma City-based Devon Energy Corp. bought Mr. Mitchell's company in 2002. It combined his methods with a technique for drilling straight down to gas-bearing rock, then turning horizontally to stay within the formation. Devon's first horizontal wells produced about three times as much gas as traditional vertical wells.
The development of the Barnett Shale almost single-handedly reversed the decline in U.S. natural-gas production. Last year, the Barnett produced four billion cubic feet of gas a day, making it the largest field in the U.S.
Geologists had long suspected there were similar formations around the country, so the new technology sent them scurrying into the field. Before long they uncovered the Haynesville formation in northern Louisiana and the Fayetteville in Arkansas, both as big as the Barnett. Now they've identified the Marcellus on the back of the Appalachian Range, stretching from Kentucky to upstate New York and covering most of Pennsylvania and Ohio and all of West Virginia. Another gigantic formation underlies nearly all of Illinois.
So it's hats off to the oil-and-gas men with their 3-D computerized formation maps, their rented drilling rigs and their dirty hands. Once again, they have provided us with more energy than all the foundation studies, energy blogs, feed-in tariffs, production tax credits and renewable portfolios will ever generate. Only two years ago it appeared the Lower 48 was pretty well played out for natural gas, just as oil has been for three decades. Now it appears we have enough gas to get us through the 21st century.
So what does this do for our current energy debates? Basically, it means the whole renewables-versus-nuclear controversy has lost its edge. Less than a month ago I sincerely believed we were headed for a national disaster by throwing money into renewable boondoggles while neglecting nuclear power. Now we've created a huge margin of error. Whatever mistakes we make, natural gas will pick up the slack. Granted burning natural gas for electricity is a bit of a waste. It's much better reserved for home heating and as a feedstock for the chemical and fertilizer industries. But what the heck, we're Americans, right? As long as we've got plenty of something, we'll probably waste some of it. Right now natural gas is the course of least resistance as far as electricity is concerned and that's probably where we're headed.
What this means is that every state, municipality and major corporation in the country will soon become the next BP, touting their wind and solar projects in magazine ads and annual reports while quietly meeting their needs with natural gas. At least we'll avoid the experience of California. The Golden State stopped building power plants altogether in 1980 on the theory that they could provide everything with conservation-and-renewables. That led to the California Electrical Shortage. The state quickly changed course, tossing environmental impact statements to the wind and throwing up 13,000 MW of natural gas generators in the next three years. It hasn't had problems since. While the nation as a whole gets 20 percent of its electricity from natural gas, California gets 40 percent. Along with siting coal and nuclear plants out-of-state, this allows the Golden State to be "clean and green" and claiming to be leading the nation into a Environmental Utopia. (See Max Schulz, "California's Potemkin Environmentalism.")
Within twenty years, we'll probably be where California is, at 40 percent natural gas. Meanwhile the Golden State will move ahead to 50-to-60 percent. The key factor is this -- environmentalists don't object to burning natural gas. Drillingfor it is something else entirely, but burning it they'll accept. They'll even label it a "bridge fuel" to the world of renewable energy, just as coal was the bridge to the solar utopia in the 1980s. Fortunately, all the new gas fields have been discovered in the flyover states where environmental objections won't have much impact. (In New York, on the other hand, Riverkeeper, the major opponent to nuclear power, has already announced that upstate New York is "inappropriate" for natural gas drilling, so maybe New York will miss out on the bonanza.)
As usual, Texas, Louisiana, and Oklahoma will remain the workhorses of the nation, shouldering the energy burden while getting rich in the process. Meanwhile, New York and California will continue to explore the possibilities of tapping mid-ocean currents for their energy needs. All this will mean a hefty transfer of wealth from the East and West Coasts to the Heartland, but maybe the Obama Administration can devise a progressive tax policy to redistribute income back again, so Boston and San Francisco don't suffer unnecessarily for their environmental awareness.
Now what happens with nuclear? Despite the extreme skepticism of the Obama Administration, I suspect someone over the next eight years will manage to erect a nuclear reactor somewhere in the United States. By that time Venezuela, Vietnam, and Sri Lanka will have their own nuclear programs so no one will notice much. At that point, the Nuclear Regulatory Commission may decide it doesn't need five years to approve reactor designs that are already operating all over the world and the pace may accelerate a bit. Then around 2025 somebody will say, "You know, natural gas supplies aren't going to last forever." Renewable energy will have proved a bust and by that time we may finally get serious about nuclear.
Whoops, I almost forgot -- global warming. What will happen there? Well, much as I liked to think their alarm over global warming would force environmentalists to rethink nuclear power, it probably won't happen. Instead they'll opt for natural gas. The Obama Administration will pass some kind of carbon cap but it will prove so Byzantine and riddled with exceptions that nothing will be accomplished -- except maybe flattening the economy. All those brave "80-percent-reductions-by-2050" that the politicians are making will go by the wayside, but let's face it -- all these worst-case scenarios for climate change are exaggerated anyway.
So as the British say, we will muddle through. T. Boone Pickens wants to use some of this new natural gas to run our transport sector and that will probably happen. We'll still import more than half our oil, but we won't be headed for the 70 percent currently projected. With a phase-in of electric cars, we may get even lower. We'll still be spending $2 billion a day for foreign oil, but we'll get used to it.
All this is not ideal, but it's probably the best we can expect. Without nuclear, we're never going to get away from fossil fuels or reduce the cost of electricity to the point where it becomes feasible to run a fleet of electric cars. But at least burning natural gas will spare us the spectacle of a modern industrial nation trying to power itself on windmills and sunshine.
So Nature has been good to us once more. It's hard to argue that we deserve it, but the Lord works in mysterious ways. We now have enough natural gas to take the edge off most of our energy problems. Once again, we are a People of Plenty.
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