The Real Energy Revolution: Natural Gas

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Energy

The Real Energy Revolution: Natural Gas Mark P. Mills, Senior Fellow Manhattan Institute & Faculty Fellow, Northwestern University McCormick School of Engineering, 2016 Energy Writer of the Year

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ver since the 1973 Arab oil embargo that shocked America, the oil side of the “oil & gas” industry has dominated media coverage and energy policy anxieties—not natural gas. That’s understandable, considering the context of those times. In the two decades leading up to 1973, American had seen oil imports increase eight-fold. And, at that time, transportation was the biggest energy-consuming sector of the economy, using 10 percent more energy than electricity generation, which was the second biggest energy-consuming sector. But times change. Today, it is the electric sector that is the biggest energy-consumer, using 50 percent more energy than transportation, which is now in second place. The same electrification transformation is underway globally. Meanwhile, not only are U.S. oil imports collapsing, but America today produces 50 percent more natural gas than petroleum (in energy-equivalent terms) and is a major exporter of natural gas—the latter a complete surprise to nearly every forecaster.

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The ascendancy of natural gas, and of the U.S. as a global supplier, has far-reaching implications. Many pundits and “new energy economy” enthusiasts believe that the future is now centered on a hoped-for revolution in supply, coming from wind and solar technologies. But the real revolution—not based on hope— centers on natural gas. Following decades of massive global subsidies and enthusiastic policies, wind and solar power combined now provide less than 2 percent of world energy. In contrast, natural gas now supplies 23 percent of world energy and is on track to displace oil as the number-one source of global energy supply. As with oil, it has been the dramatic impact of the shale revolution in the U. S. that has powered a real energy revolution. American shale technology was responsible for nearly one-third of all the world’s increased production of natural gas over the past decade. The Middle East was slightly ahead, accounting for 40 percent of the new supply. And, over that period, American growth in shale gas added 400 percent more to the U.S. energy supply than did the combined growth of wind and solar, even though these had the advantage of policy preferences, as well as at least $150 billion in cumulative subsidies.

Sand and data are the greatest drivers of oilfield innovation and value in the 21st century. Without sand, or more generally proppant as displayed in the bottles above, there is no hydraulic fracturing, and without hydraulic fracturing there is no opening of tight oil and gas plays like the Bakken region in North Dakota. With modern well logging techniques drillers can mine massive amounts of data faster and in more detail to find statistical correlations among huge datasets in the blink of anshale eye. well A Bakken near Watford City, North Dakota, producing oil and natural gas. The state produces more than 2 billion cubic feet of natural gas per day.

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The Real Energy Revolution: Natural Gas by University of Mary - Issuu