NCPA - National Center for Policy Analysis


February 19, 2010

The 20th century was the century of oil.  Wars were fought over it, and the outcomes of the century's biggest conflicts hinged on the stuff.  Two monumental shifts in the world of energy are underway right now: one technological, the other financial.  They will change the way we power our lives (especially our cars), provide a real measure of energy security, and help curb greenhouse gas emissions, says the American. 

The first shift was made possible by a little-noticed technological breakthrough called horizontal fracking, says the American:  

  • Horizontal fracking combines two technologies -- horizontal drilling, which permits wells to move laterally beneath the surface instead of going straight down, and hydraulic fracking, used to extract gas trapped in porous shale rock.
  • By marrying the two processes into a the single technology called horizontal fracking, engineering has virtually created, from nothing, new natural gas resources, previously regarded as inaccessibly locked in useless shale deposits.
  • Suddenly, the mammoth shale formations in Texas, Pennsylvania, Ohio, New York, North Dakota and elsewhere have the potential to produce abundant amounts of gas for decades to come. 

The second shift is the formation of a global market for natural gas, much the same as the global petroleum market, says the American: 

  • The reason is liquefied natural gas (LNG); innovations in liquefaction and re-gasification technologies allow gas to be condensed to 1/600th its size, which then can be shipped by sea.
  • Major infrastructure investments by energy companies and governments, along with the development of specially designed double-hulled tankers to transport LNG, are creating a robust, integrated market for natural gas.
  • The new mobility of LNG will bring a sorely needed measure of market stability after the past five years of unpredictability in price and supply. 

Source: Max Schulz, "The Quiet Energy Revolution," The American, February 4, 2010. 

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