The Coming Age of Natural Gas part 1

Through the smoke of near financial ruin, we now see dimly and will soon see clearly the revival and structural shift of America. A revival not arising from the machinations of politicians, financial stimulus, funny money or any other artifact of de-stabilizing financial creativity but rather in large part through the coming natural gas revolution. A revolution propelled by ingenuity, technological genius, persistence and creativity that has unlocked the tightly held mother-lode beneath us. While we busily worried about financial ruin, debated how we would survive the end of abundant energy, stressed over how we could transition to renewable energy sources, history changed course and quickly unfolded before us in surprising, mysterious and miraculous ways.

Heretofore unimagined technologies have now thrust themselves upon human history that will permit the safe extraction of this relatively clean domestic energy resource from the tight grip of the earth. The sheer abundance will also provide long-term downward price pressure on energy making the structural shift even more compelling. Miraculously America sits atop much of those resources and the fruits of that extraction will once again help propel America to energy prosperity and security. Dominant global competitive advantage, jobs, tax revenue and prosperity may result for many generations to come. Dire predictions of the collapse of the American Empire and a shift of power to the “East” permeate our news stories. Nonsense! We stand at the cross road of an historical shift of power: but it is not to the East, it is a gathering force rising up from within us.

OPEC and BRIC countries already shudder. Natural gas and petroleum companies themselves only now begin to understand and whisper among themselves about the natural gas energy tidal wave to come. Tony Hayward, CEO of British Petroleum only recently dared to say in Davos Switzerland (January 2010) that “new technologies to extract gas from shale rock have altered the U.S. energy outlook for the next 100 yearsit's a complete game-changer in the U.S.” Peter Voser, chief executive of Royal Dutch Shell echoes similar sentiments and James Mulva of ConocoPhillips is already looking beyond shale gas to future development of methane hydrate, an offshore frozen form of gas with potential of more than 100 times that of the vast shale gas resources. Though America is not the only nation with shale gas, we do have the largest reserves and we are far ahead of the world in its development thus ensuring competitive energy advantage

Buck