What a difference a decade makes.
That’s the thought crossing my mind this week as thousands of delegates meet in Houston for the 17th International Conference and Exhibition on Liquefied Natural Gas, better known as LNG 17. The conference is the world’s premier LNG event, bringing together industry leaders, government figures, academics and others to discuss the various issues and opportunities before the global LNG industry in an age of natural gas abundance.
As the industry gathers this week, it’s worth recalling that a very different mood prevailed 10 years ago. That was when Federal Reserve Chairman Alan Greenspan and Energy Secretary Spencer Abraham issued warnings of looming price squeezes brought on by shortages of domestically produced natural gas.
A decade ago, Americans wondered whether we could build LNG import terminals fast enough to stave off economic crisis. Today, policymakers don’t talk about natural gas imports. In fact, our energy debates focus on why the United States should expand LNG exports.
That we are even considering such a possibility owes to the tremendous transformation in America’s energy situation brought about by recent innovations in drilling and completion technology. The energy revolution made possible by combining hydraulic fracturing and directional drilling has unlocked stores of natural gas from shale that, 10 years ago, were considered practically inaccessible.
Energy expert Dan Yergin recently put this transformation into perspective, noting that “shale gas has risen from two percent of domestic production a decade ago to 37 percent of supply [today].” More than that, he pointed out, the unconventional revolution supports 1.7 million direct, indirect and induced jobs and was responsible for $62 billion in taxes in 2012. Meanwhile, America’s greenhouse gas emissions have fallen to levels not seen in two decades, thanks to power plants burning natural gas in place of coal.
And there’s reason to think the years ahead will prove more fruitful. Last week the Potential Gas Committee, which gauges technically recoverable reserves of oil and natural gas, revised its natural gas resource assessment upward. It increased estimates of potential natural gas resources by 26 percent over the 2010 assessment, reaching a record high in the committee’s 48-year history and demonstrating the extraordinary nature of the country’s new natural gas abundance.
Abundant U.S. natural gas supplies and LNG exports – that’s a story that nobody a decade ago could imagine we’d be telling today.