Energy independence. Two riveting words have gone from political rhetoric to reality in a very short time thanks to new drilling technologies that are freeing huge amounts of oil and natural gas in the United States. It has been postulated that because of increased production, net petroleum imports as a share of total U.S. liquid fuels consumed will drop to 36 percent in 2035 compared to 49 percent in 2010. Enhancing the stronger energy independent U.S. position will be the increase in the use of biofuels, renewable energy resources (wind, solar) and proposed fuel economy standards for vehicles from 2017 through 2025.
In the U.S., the Marcellus shale formation (potential to supply U.S. natural gas needs for 20 years) and the Bakken oil fields (potential of 1.2 million barrels of oil per day) will provide much of the impetus behind energy independence. Canada’s abundant oil sands and Mexico’s recent discovery of three huge deep-water oil deposits in the Gulf of Mexico will push North America closer to energy independence over the next two decades.
Production from shale and other new resources have made natural gas an abundant resource; so much so that U.S. exports of Liquefied Natural Gas (LNG) could bring in annual revenues ranging from $2.6 billion to $32.9 billion and cause the gross domestic product to increase by $4.4 billion to $47 billion in 2020 according to a Department of Energy report.
But natural gas can be a major component in energy independence beyond exports. LNG also can be made into transportation fuels (compressed natural gas, LNG, methanol or gasoline) that can help the U.S. reduce its need for imported oil. The American Gas Association says there is the potential to increase domestic natural gas production during the next 10 years by 11 percent to 34 percent.
The problem is that the U.S. government controls the market. While private industry in the U.S. has the technology, the people and the financial wherewithal to produce large reserves, the government has to step up and provide the permission for drilling in new fields currently restricted by government policy.
In their recently released report “The Promise of Natural Gas,” the AGA states “Our nation’s bullish natural gas supply outlook offers an incredible opportunity to deliver energy value to American homes and businesses, fuel a renaissance in U.S. manufacturing, and provide a cleaner, less expensive option for vehicles, thus reducing our dependence on foreign oil.”
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