“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.