On "Fareed Zakaria GPS" this Sunday at 10 a.m. and 1 p.m. ET – debating the natural gas boom.
By Peggy Williams, Special to CNN
Editor’s note: Peggy Williams is editorial director of Hart Energy, an energy publisher that advises natural gas companies. The views expressed are her own.
As nations seek alternative fuel sources in an effort to reduce petroleum use, the world is paying increasing attention to natural gas as an efficient option. Multi-stage fracturing and horizontal drilling have allowed natural gas supply to grow in North America, and if these techniques continue to be implemented, the door will be open for a number of countries to start producing potentially vast amounts of energy.
Consider Russia, which has the largest amount of recoverable natural gas in the world – more than 4,500,000 billion cubic feet of natural gas, not including potential undiscovered resources in the region. Between Russia and Siberia, there’s a mean of 1,385,046 billion cubic feet of undiscovered natural gas, offering impressive potential for expansion.
The United States, while not comparable in size to Russia, still has much to gain from a potential domestic energy increase. The U.S. places after Russia as having the second-highest amount of recoverable natural gas available. Shale gas, which is natural gas trapped in fine-grain sedimentary rocks, makes up about a quarter of these resources.
It’s true that there has been controversy over shale, with some critics pointing to what they claim are the adverse side effects of the so-called fracking drilling process used to tap natural gas, such as the release of methane.
However, supporters point to the huge potential –the Eagle Ford Shale in Texas, for example, was responsible for nearly 327.5 billion cubic feet of natural gas production in 2011. From January to July 2012 alone, over 182 billion cubic feet were produced.
But this general need for energy – total consumption of natural gas in May of this year, for example, was1,850,000 million cubic feet – is entwined with a need to keep prices down, something that is likely to propel the continued pursuit of shale gas resources. Indeed, an MIT study found that under one scenario without shale gas, gas prices could increase five-fold compared with the current price by 2050. This compares with a rough doubling of gas prices over the same period if shale gas is in the picture.
The debate over extraction techniques aside, one thing is clear – an increased natural gas supply could help lessen the country's dependence on foreign energy sources, especially considering that 94 percent of the 2011 natural gas consumed in the U.S. was produced domestically. Could the levels of shale gas available in the United States result in a situation where the U.S. consumes less natural gas than it is able to produce?
As the most common type of recoverable, unconventional gas, shale gas is found across the globe. Such resources could help fuel the Chinese economy, reduce energy imports into Europe, and allow the U.S. to play more of a role in gas exportation. The potential for natural gas to change the world therefore seems stunning. The question is whether the United States (and other countries) will do what is necessary to reap the rewards of economy it promises.