Don’t Count on Cheap, Fracked Gas Part 2
April 9, 2013
You thought that America’s home grown energy was yours? You thought “drill baby drill” would lower energy prices?
As more and more export facilities are readied for shipping natural gas to energy hungry countries in Asia and elsewhere, that 200 years of cheap natural gas looks more and more like a Mirage.
India’s Ambassador writes in the Wall Street Journal that they are ready to take that gas off our hands.
Despite the global economic slowdown, India’s economy has grown at a relatively brisk pace over the past five years and India is now the world’s fifth-largest energy consumer. It imports 75% of its energy (especially oil and petroleum products) today and expects to import 90% over the next decade. As a result, India is working hard to diversify its energy supplies. Still, the demand for energy keeps growing at a rate of 5%-6% annually. My country needs to secure more supplies to foster the socio-economic development of millions of our people who are still living in poverty.
Happily, the U.S. has experienced a boom in the production of natural gas. The ability to tap large formations by advanced technologies has yielded a large amount of this energy resource that achieves significant savings compared with diesel, especially when used in high-mileage heavy-duty vehicles.
Liquefied natural gas is transported more easily than other forms of energy. Significant investments, including some from India, have been made in technologies designed to harness LNG safely and efficiently and to build new facilities and ports to distribute it globally.
The prospect of increased Indian investment in the U.S. natural-gas market will usher in a new era for a strong and mutually rewarding India-U.S. energy partnership. Through it, we will further consolidate our strategic ties and deepen cooperation for the benefit of millions of people in both countries.
Exporting natural gas would provide a tremendous benefit for the American economy, as it would expand market opportunities. Given the disparity in prices between domestic and foreign markets (Asia, Europe, and Latin America, for instance) those opportunities should prove to be plentiful even with the costs of transport tankers and liquefaction plants.
Message to consumers: Whether its tar sands or fracking, the environmental impacts locally are your problem. Shut about about price – the global market will set that.
Message to utilities: You won’t get a predictable price 10 years out on natural gas for that new generation station you are building. However, I can offer you wind power at a guaranteed rate for 25 years.
It would be a pretty one-sided affair if renewable energy technologies were not exploding as they are, and continuing to drop in price. One possible corollary: if you are a three dimensional chess playing President, you keep smiling and saying “All of the above” while the energy revolution gathers explosive steam….