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Washington Examiner

 

Obama Needs To Step On The Natural Gas Pedal

January 11, 2011

By Robert Bryce

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Back on November 3, fresh from a mid-term shellacking that added 63 new Republicans to the House of Representatives, President Obama uttered two words that have been missing from nearly every energy-related discussion he’s had since he began running for president: “natural gas.”

His specific words--“we’ve got terrific natural gas resources in this country”--should not be noteworthy. But throughout his years as an elected official, Obama has been almost completely silent about natural gas’s critical role in the U.S. energy mix.

He has frequently promoted ethanol, solar, and wind power, and has even said nice things about coal. Heck, he’s even said nuclear power is necessary--a rare stance among Democrats. But when it comes to natural gas, Obama has been nearly mute.

It’s time for the president to speak up. Over the past four years or so, the drilling industry has perfected the technologies needed to unlock galaxies of methane from shale beds.

The result: lower prices for consumers as U.S. natural-gas production has reached its highest level since the early 1970s. This revolution in natural-gas production has fundamentally changed the U.S. energy picture.

The latest estimates indicate that America may be sitting atop the natural-gas equivalent of more than 350 billion barrels of oil--roughly as much as the proved oil reserves of Saudi Arabia and Venezuela combined.

Obama should be welcoming low natural-gas prices, particularly given the ongoing recession. Between 2005 and 2008, the consensus in the U.S. energy business was that America would need to import increasing amounts of natural gas, and that prices were surely headed higher.

During that same four-year period, U.S. natural-gas prices averaged nearly $7 per million Btu. But the shale gas revolution has changed all that.

Thanks to surging production, natural-gas prices during the first ten months of 2010 averaged about $4.25 per million Btu.

That price reduction of about $3 per million Btu is now saving U.S. consumers about $65 billion per year or about $180 million per day. Those energy savings are likely to continue for several years.

In November, the International Energy Agency’s chief economist, Fatih Birol, said that the world is oversupplied with gas and that “the gas glut will be with us 10 more years.” And the futures market is predicting that natural gas will stay below $6 until 2017.

Low gas prices are also helping avert unneeded investment in wind energy, a subsidy-dependent boondoggle that offers few, if any, environmental benefits. In December, Dallas billionaire T. Boone Pickens, one of America’s staunchest backers of wind energy, announced that he was no longer planning to build wind projects in the U.S.

The former corporate raider, who in 2008 ordered $2 billion worth of wind turbines from General Electric, explained that growth in the domestic wind energy industry “just isn’t gonna happen” if natural-gas prices remain depressed.

With nearly a quarter of U.S. electricity generated from natural gas, the reduction in gas prices also means lower-cost electricity for many Americans. Yet despite the many benefits of abundant natural gas, a recent poll found that just 6 percent of Americans thought that the president should fund research to help increase the production and consumption of natural gas, while some 32 percent favored more funding for solar energy and 22 percent favored increased spending on wind energy.

Obama should use the presidential bully pulpit--especially in his upcoming State of the Union address--to promote energy sources that are cheap, clean, abundant and reliable. Few sources can deliver on all of those fronts more effectively than natural gas.

Original Source: http://washingtonexaminer.com/opinion/columnists/2011/01/obama-needs-step-natural-gas-pedal

 

 
 
 

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