Toronto's Globe & Mail quotes a UN report that includes this observation: “Within a decade or so, North America will almost certainly emerge as the world’s biggest supplier – and exporter – of reasonably cheap energy.”
How can that be? As The New York Times reported last month, it's because the U.S. is incredibly rich with natural gas and oil shale deposits that can be reached affordably using hydraulic fracturing, the injection of liquids into rock formations thousands of feet below the drinking water table.
The injections force the gas or oil into recoverable areas, thus opening up millions of new barrels of oil and trillions of feet of natural gas for production here in America.
These new resources are having a profound impact on the U.S. energy situation and it's happening right now, not off in some projected future, as is the case with the arrival of alternative energy resources like solar, wind, and biomass.
Intrigued? Here's more detail from the Globe & Mail:
“With rising production from shale fields, the U.S. surpassed Russia last year to become the world’s largest supplier of natural gas.
“Shale now accounts for 10 per cent of the country’s natural gas production – up from 2 per cent in 1990. Chesapeake’s production from its next Texas project, expected by the end of 2012, will by itself supply the energy equivalent of 500,000 barrels of oil a day.
“For new oil, the U.S. has the huge Green River play that overlaps Colorado and Utah, one of the largest shale oil fields in the world. The EIA reports that the country’s proven reserves of crude rose last year by 9 per cent to 22.3 billion barrels.
“For natural gas, the U.S. has the four largest fields in the world: the Haynesville field in Louisiana (with production up by 77 per cent in 2009); the Fayetteville field in Arkansas and the Marcellus field in Pennsylvania (both with production up by 50 per cent); and the Barnett field in Texas and Oklahoma (with production up by double-digit increases).
“The EIA reports that proven U.S. reserves of natural gas increased last year by 11 per cent to 284 trillion cubic feet – the highest level since 1971.”
Meanwhile in Washington, that tax cut and unemployment benefits extension deal being hammered out by President Obama and congressional Republicans includes continuation of $22 billion of subsidies for ethanol, an alternative fuel that has received billions of tax dollars in subsidies for the past three decades, and which the federal government requires to be blended with regular gasoline across the nation.
Without government subsidies and mandated use, experts say there would be little or no market for ethanol. The same applies to other alternative sources, but the federal government is embarked on a massive campaign of subsidies and mandated use – think Renewable Energy Standards – in an effort to force the economy to abandon use of fossil fuels like oil and natural gas.
Makes no sense, unless you believe fossil fuels are causing global warming. If you do, then you want to substitute government force for market efficiency – aka customer choice – in the energy market.
The result will be, according to President Obama, that energy costs, “will necessarily skyrocket.”
Just when the U.S. is on the verge of achieving what could be a century of abundant, cheap energy, the production of which could create millions of new jobs and fuel an explosion of economic growth and prosperity.
Which would you prefer?
Go here for more from the Globe & Mail.