Natural Gas to the rescue of new energy legislation
April 30, 2009

PrintEmail to a FriendAnalysis by: Hans Linhardt
Analysis of: U.S. Gas Fields Go From Bust to Boom
Published at: online.wsj.com
Implications
The shale gas developments in Texas (Barnett), Oklahoma (Fayetteville), Louisiana (Haynesville) and Pennsylvania (Marcellus) are providing now a surplus of about 8% over demand. While the present state of renewable power from wind and solar plants can only cover a small percentage of the national energy demand, natural gas from the shale fields cam displace coal fired plants with fifty percent reduction of carbon footprint. Natural Gas (NG) is also promoted by T. Boone Pickens for transportation fuel. While Haynesville with an estimated 200 trillion cubic feet of NG is the largest play, industry studies estimate the U.S. has more than 2,200 trillion cubic feet of NG reserves to be tapped, promising to displace 360 billion barrels of oil.

Analysis
President Obama ("Obama") is pushing hard for climate energy legislation, promising energy security and reduced green house gas emissions. Of course Obama wants us to depend more on renewable energy such as wind and solar power, but those technologies can presently only provide a fraction of our energy demands. As luck will have it - even being against drilling - , NG comes to his rescue:



• coal is being displaced by NG due to 50% lower emissions and lower prices


• the next 370 power plants will be NG fired


• the NG developments do not need government subsidies but just fair access to dependable and realistic financing and a fair tax credit for new infrastructure projects with large labor content


• NG provides a realistic and immediate energy security solution and satisfies the environmentalists like the Sierra Club


• NG - and also global surplus LNG - provide a much larger window as previously anticipated for decisions on electric transportation and/or large gas powered truck and fleet transportation


In summary, the NG developments tend to help Obama to push through his ambitious energy and climate legislation.

Buck