March 30th, 2012
11:17 AM ET

Zakaria: Natural gas, fueling an economic revolution

By Fareed Zakaria

In my column in today's Washington Post, I argue that the rise of shale gas is shaping up to be the biggest shift in energy in generations. And its consequences - economic and political - are profoundly beneficial to the United States. Here's an excerpt:

No one could have predicted that oil prices would rise to today’s levels. Saudi Arabia’s oil minister, Ali al-Naimi, says that they are irrationally high, pointing out that world demand is lower than the available supply and that Saudi oil inventories around the world are largely untapped. The “irrational” cause, of course, is fear of a war with Iran. But it would also have been unpredictable that a 47 percent hike in oil prices since November 2010 would not cause a major slowdown in the U.S. economy. One reason it hasn’t might well be the rise of shale gas.

By now, the basic facts are well known. It was only a few years ago that most experts were warning of an imminent shortage of natural gas in the United States. But thanks to the efforts of a small private company, Mitchell Energy, combined with a horizontal drilling procedure called hydraulic fracking, it has become possible to extract vast quantities of natural gas from shale, which this country has in abundance.

As with so many stories of American ingenuity, Mitchell Energy had a little help. In the 1970s, the federal government initiated the Eastern Gas Shales Project and funded dozens of hydro-fracking demonstration projects. The Energy Department pioneered a technique known as massive hydraulic fracturing, a key step along the way. It subsidized Mitchell Energy’s first successful horizontal drilling in the North Texas Barnett Shale region in 1991. Between 1978 and 1992, the federal government spent $137 million to develop these technologies.

Whoever gets the credit, the effects are widespread. The United States now has, at current consumption rates, at least 75 years’ worth of recoverable natural gas. More important, the United States has become the world’s low-cost producer of natural gas. That fact is already changing the future of U.S. manufacturing. Companies such as Dow Chemical and Westlake Chemical are finding that low U.S. energy costs can mitigate the lower cost of labor in Asia - making it economical to keep and even build manufacturing facilities in the United States.

Read on full article here.

 

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Topics: Economy • Energy • From Fareed • Oil • United States

soundoff (22 Responses)
  1. jal

    Riddle: What country is best at kicking the can down the road? Ans: Italy (country is shaped like a boot).

    March 30, 2012 at 11:21 am | Reply
    • habibi

      You are a formidable example of your country's in·tel·li·gent·si·a.

      March 31, 2012 at 11:12 am | Reply
  2. paofpa

    How about 1-2 Billion to develop the Liquid Fluoride Thorium Reactor to make the gas obsolete? The will not happen, the gas being obsolete. Maybe to power transport?

    March 30, 2012 at 12:35 pm | Reply
    • habibi

      What did you pull those ahem, facts, out of?

      March 30, 2012 at 10:17 pm | Reply
  3. jean alexander steffen careaga

    should invest in the ultimate energy source: nuclear fusion!

    March 30, 2012 at 2:31 pm | Reply
  4. Benedict

    Utilize these human/physical resources and America will rise again!

    March 31, 2012 at 9:15 am | Reply
  5. j. von hettlingen

    Much of the water used in fracking is collected from the well and processed. There are concerns that chemicals could sometimes escape and find their way into drinking water sources.

    March 31, 2012 at 12:25 pm | Reply
    • j. von hettlingen

      There's a risk that gas leaking into their drinking supply could cause tap water to ignite or the fracking process might lead to small earth tremors.

      March 31, 2012 at 12:26 pm | Reply
    • habibi

      Everywhere I go, there you are, screaming "the sky is falling, the sky is falling".
      Too funny, too too funny.
      Your job, as we understand it is to spew enough islamic poison to try and upset Americans.

      March 31, 2012 at 12:56 pm | Reply
  6. SYRIA SENDING CHEMICAL WEAPONS TO HIZBOALLAH

    50 TRUCKS A DAY CROSSING FROM SYRIA TO HIZBOALLAH ECEVRY DAY SINCE MARCH 1 , ALL THE WEAPONS . CASH COME FROM IRAN AND SHIIA IRAQI GOVERNEMENT, AND THE HEAVY WEAPONS FROM RUSSIA SALE TO SYRIA , SYRIAN SENDING THE WEAPONS TO HIZBOALLAH AS A BACK UP PLAN TO BASHAR AL ASAD RUN, WHERE IS USA , UN AND NATO FROM THIS, THOSE WAR CRIMINALS KILLED MORE THAN 14,000 CIVILIANS TO DATE, WHY IS THE SILENT ....SYRIANS ARE STILL KILLING CIVILIANS DAILY, WHY THEY SEND WEAPONS TO HIZBOALLAH ALONG WITH CHEMICAL WEPAONS WE SEE IT ON THE GROUND EYES WITNESS SEE THAT THE TRUCKS GO AL BEQAA VALY AND SOUTH LEBANON , AND ANY BODY STOP THOSE TRUCKS WILL BE SHOT DEAD....SOME OF THE WEAPONS INCLUDE KATIOSHA ROCKETS, K47, HEAVY GUNS. ANTIAIRCRAFT WEAPONS, ANTI TANKS, MINES, LAND MINES , POISON GAS, AND SMALL UNMAN AIRCRAFTS. SCUDS ETC.....SYRIA MUST BE STOPED AND HIZBOALLAH MUST BE DEALT WITH , IRAN PREPARING THEM JUST INCASE THEY GET ATTACKED.

    March 31, 2012 at 12:58 pm | Reply
  7. Carolyn Pritchett

    Here is my response to the energy crisis. America already has roads that connect all cities. We need to limit the number of vehicles on the roads. I believe that increasing public transport in every city and privatising it will provide immediate help. This will generate jobs immediately, drivers, bus makers...maybe even conductors...it is a simple logic.

    April 2, 2012 at 2:34 pm | Reply
  8. completions engineer

    LOL drillers dont frack!! this is a prime example of how little people know about our industry....

    May 21, 2013 at 9:56 am | Reply

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