“The most important energy innovation so far of the 21st century”

At a hearing earlier today on Capitol Hill, Pulitzer Prize-winning historian Daniel Yergin briefed members of Congress on the extraordinary nature of the recent increase in domestic oil and natural gas produced from unconventional sources like shale.

Many readers know Yergin for The Prize, his monumental history of the global petroleum industry, and his follow-up work, The Quest. In his day job he heads IHS Consulting, an energy and economic research firm that (among many other things) has documented the ways in which the nation’s unconventional oil and natural gas bonanza is transforming our economy.

That work forms the basis of Yergin’s prepared testimony, which I invite you to read for yourself. But I also wanted to highlight a few of the points he made to explain why the dramatic increase in production of shale gas and tight oil amounts to “the most important energy innovation so far of the 21st century.”

I’ll let Yergin’s own words tell the story:

    • The unconventional revolution has unfolded pretty fast … Just half a decade ago, during the turmoil of 2008 … it was widely assumed that a permanent era of energy shortage was at hand.
    • Shale gas has risen from two percent of domestic production a decade ago to 37 percent of supply [today].
    • U.S. oil output, instead of continuing its long decline, has increased dramatically – by about 38 percent since 2008 … [which is] equivalent to the entire output of Nigeria, the seventh-largest producing country in OPEC.
    • So far, this unconventional revolution is supporting 1.7 million jobs – direct, indirect, and induced … [and] the total revenues flowing to governments from unconventional amounted to $62 billion last year.
    • Job impacts are being felt across the United States, including in states with no shale gas or tight oil activity. For instance, New York State, with a ban presently in effect on shale gas development, nevertheless has benefited with 44,000 jobs. Illinois, debating how to go forward, already registers 39,000 jobs.
    • The most notable impact is in terms of CO2 emissions. U.S. carbon dioxide emissions from energy consumption are down 13 percent since 2007. The economic downturn is part of the story. But the most significant part is the result of natural gas supplanting coal in electric generation at a rapid rate. 

Yergin also offered smart insights about potential natural gas exports, noting that the U.S. has long made the free flow of energy supplies one of the cornerstones of foreign policy.

Every one of the points or statistics Yergin mentioned in today’s testimony is a significant story in itself. Taken together they add up to an extraordinary narrative that could well define the economic and environmental story of our times.


8 Comments

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  1. Bruce Fouraker says:

    Ken, where do we stand on using either microwaves or radio waves to heat the shale or tar sands and release the oil? I understand thia method is much less energy intensive than using steam to fracture the shale and heat the oil or processing the tar sands using hot water?

  2. Roland Leaute says:

    Ken, given the much higher energy price differential equivalence between gas and oil in North America likely caused by the recent unconventional gas revolution, could there also be a more strongly sustained incentive in manufacturing in the US higher value GTL very clean transportation fuel products to reduce the need for crude imports even faster than just with the production of shale oil?

  3. Deborah Rhein says:

    How long do you think it will take the industry to produce reports about how the greatest innovations to energy production will be comprised of the various solar and wind sources? ExxonMobil may be taking steps in the direction of alternative energy sources but there seems to be some reluctance to “take greater strides.” What will be the long term (500 + years) environmental price to pay? At this point, not looking at the long term changes to the eco-systems affected will make it more difficult to determine the reality of what our actions will have cost.

  4. Bill Jones says:

    Deborah,

    90% of our entire modern world products are made of plastic just like the keyboard you’re typing on and the monitor you’re reading this from and the carpet your feet are on and the clothes you wear and the medicines you are taking.

    You can’t make plastic out of of solar and wind. Period.

    • Deborah Rhein says:

      Bill, my point is, we need to conserve the oil reserves left, whatever that turns out to be. We need to be be smarter with the alternative sources in order to continue to be able to produce the medicines and other critical products that sustain a certain way of living. If we double the mileage per gallon with vehicles that use less fuel and go farther, we reduce the need to maintain the level of production we have right now. We could, instead of drilling for more oil, put that money to use by creating and building a new infrastructure that will create as many, or more, jobs in many industries. Change is hard to move toward because we humans, by our nature, resist change. We have reached some critical tipping points in natural systems needed to sustain life on earth, and I am not talking about wolves or polar pears, trees or oceans. That would be human beings, Bill, that I am speaking of. Scientists have determined through DNA studies that our species was at one time down to approximately 2000 individuals. These are the things I think of on a daily basis… That is why I would like to see changes in the old system.

      • Bill Jones says:

        Good luck with Detroit and mileage. They’re making bigger gas guzzlers than any time in history because it’s what the people want. Don’t leave out airline fuel usage either…we fly more than ever. Also, don’t leave out the huge growing demand in China for fossil fuels. We need even more for plastics and a huge growing world population with 8 billion planned in the next few years, and they’re not going to be living on a little organic farm either. Please don’t hold back sharing with us when you have more sugar and lollipops dreams and rainbows this coming week.

  5. Ray Phoenix says:

    When we stop attacking people, and start discussing their ideas, we can have a really productive exchange of information. Having one idea does not automatically imply the existence of a whole set of associated ideas that can be easily characterized as “rainbow” or “oil-ugly”! The *idea* that we should use oil wisely is just that, an idea. Please avoid ad hominem attacks. As an idea, it’s a bad one.

  6. Bruce Fouraker says:

    Ken, where do we stand on using either microwaves or radio waves to heat the shale or tar sands and release the oil? I understand thia method is much less energy intensive than using steam to fracture the shale and heat the oil or processing the tar sands using hot water?

  7. Roland Leaute says:

    Ken, given the much higher energy price differential equivalence between gas and oil in North America likely caused by the recent unconventional gas revolution, could there also be a more strongly sustained incentive in manufacturing in the US higher value GTL very clean transportation fuel products to reduce the need for crude imports even faster than just with the production of shale oil?

  8. Deborah Rhein says:

    How long do you think it will take the industry to produce reports about how the greatest innovations to energy production will be comprised of the various solar and wind sources? ExxonMobil may be taking steps in the direction of alternative energy sources but there seems to be some reluctance to “take greater strides.” What will be the long term (500 + years) environmental price to pay? At this point, not looking at the long term changes to the eco-systems affected will make it more difficult to determine the reality of what our actions will have cost.