Students of the (Shale Gas) Revolution

Mark Green
Posted September 30, 2011

In the Wall Street Journal, Lucian Pugliaresi asks [subscription required] a good question about the National Petroleum Council's point that U.S. oil production could double by 2035 to 20 million barrels per day: Where's all that oil going to come from? His answer includes a critical lesson as we think about America's energy future.

The enormous potential, Pugliaresi writes, is in the revolution in oil and natural gas production from shale formations through hydraulic fracturing. The critical lesson:

"The shale gas revolution started in Texas, migrated quickly to Arkansas, Oklahoma, Virginia, West Virginia and Pennsylvania and then leaped to North Dakota--where the technology for producing shale gas was applied to oil development. Even New York Gov. Andrew Cuomo, no longer wishing to miss out on the economic opportunity for his state, has pulled back from his state's comprehensive ban on hydraulic fracturing and horizontal drilling for shale gas.

"What do these states all have in common besides interesting geology? Their federal land holdings are extremely small and mineral rights are in private hands. Thus landowners were not prohibited from coming to terms with oil and gas companies, providing immediate opportunities to test new drilling technologies. Knowledge gained in one region could move quickly to another. Regulatory and environmental reviews were largely the responsibilities of state and local governments, and disagreements could often be resolved at the local level.

"Contrast the shale gas revolution to oil and gas development on the vast lands owned by the federal government. There access to reserves is burdened by endless federal environmental reviews, congressional oversight, permitting delays and bureaucrats who insist that oil and gas resources do not exist in areas of interest to oil and gas companies."

America's energy potential is vast and growing thanks to new recovery techniques - especially in shale country. Yet, it appears the major obstacle to reasonable development is unreasonable regulation, bureaucratic delay and policy agendas that consider American oil and natural gas a liability instead of a great asset.

Clearing these obstacles is vital to an energy strategy that could produce, dare we say, revolutionary benefits in terms of jobs, economic growth, revenue to governments. And energy.