Will Natural Gas become a Geo-Political Tool or a Modern Weapon?
The crisis in Ukraine has prompted a polarized world power response with little precedent to offer guidance. Hanging in the balance is Syria and Venezuela. What transpires in the weeks to come is anyone's guess. A recent energy conference at MIT offered some valuable clues.
Cleaner to burn but messy to legislate, natural gas from shale holds great promise for the US and the world. This relatively clean energy source has miraculously become the ideal bridge-fuel that society desperately needs to wean itself off its addiction to dirty coal and oil. Already there are positive signs that society is moving in the right direction. For example, utility companies no longer build new coal-fired power plants to produce electricity. Also, transcontinental transportation fleets are converting their trucks to natural gas. These and many more initiatives to replace conventional fuels have helped to reduce greenhouse gas emissions in the US to levels not seen since 1995.
The rapid expansion of wells drilled since 2006 has given engineers plenty of valuable field data to improve upon yields and safety standards. From these field trials, amazing, breakthrough technologies have emerged. However, none of these achievements could have happened without the perfect storm scenario that came together in the last few years; ...where favorable property rights laws in the US made it easier to select drilling sights, ...where the availability of exceptional talent in the oil industry globally was ready and able and ...where the consistently high market prices for oil (above $100) was sufficient to ‘fuel’ the funding needed to keep the engines of this perfect storm humming along.
Now into its eighth year, the US natural gas bonanza is no longer a nascent business for wild cat investors. Its unprecedented success has placed it front and center on the global stage. Presently at the helm, is the US who practically overnight, has gone from being a net importer that was often subjected to the whims of OPEC, to a net exporter. For a long time, Americans have always been taught to loathe their dependence on oil-rich countries. They often accused these oligarchs of using US oil payments to wage war against the same US freedom-fighting armies that protect their regions. With this recent change of the guards, however, Americans and their leaders are finding themselves in uncharted territory. The improved situation favors the US significantly but also leaves its leaders facing a tough dilemma.
To Prohibit or To Allow Exports - a tough dilemma
While the US can boast having the cheapest natural gas on the planet and the best technology to extract it, elected leaders in Congress must deal with two opposing issues: either to prohibit the export of US natural gas so US manufacturers can create more American jobs or to allow exports to threatened US allies whose economies are constantly challenged by volatile energy prices. Already, the US’s offer to export natural gas to the Ukraine in response to Putin’s invasion of Crimea has prompted a strong reaction between both sides. Seen in this manner, one might contemplate the following question:
Could natural gas become the US enabler for global sustainable economic growth and world peace? ...and if so, should it be implemented as a tool or a weapon?
There are three key benefits the US could gain from exporting its natural gas... (see more)