Natural gas is the key to our energy independence. The United States is awash in the resource and it will soon be profitable to extract. As recently as 2008, the full extent of America's natural-gas reserves was not understood. Since then, the Energy Information Agency has reported that given the efficacy of the new technologies of horizontal directional drilling and pressurized fracturing, drilling American shale gas is now cost effective. With the shale reserves now proved or provable, the United States has two quadrillion cubic feet of natural gas. This mineral wealth is located mostly in four easily accessible, on-shore areas: the Barnett Shale in Texas, the Haynesville Shale in northwest Louisiana and eastern Texas, the Marcellus Shale, running along the Appalachian chain in West Virginia, Ohio and Pennsylvania, and the Fayetteville Shale in Arkansas.
How much is two quadrillion cubic feet of natural gas? Enough to satisfy 80 years' worth of America's current transportation needs now provided by imported petroleum.
Here are the numbers: Each day the United States uses just under one-quarter of the world's daily 86 million-barrel output of petroleum. That is 21 million barrels of oil, nearly all of which is refined into transportation fuels, powering planes, trains and automobiles, as well as buses, trucks and ships. Of that 21 million barrels, 12 million are imported.
So how much natural gas is required to replace those 12 million imported barrels of oil? The energy content of each 42-gallon barrel is equivalent to the energy content of 6,000 cubic feet of natural gas. That means that 12 million barrels of imported oil could be replaced with 72 billion cubic feet of natural gas. In a year, 26 trillion cubic feet of natural gas would be required to replace all of the oil the United States imports. If all two quadrillion cubic feet of natural gas were used for transportation fuels, there would be enough natural gas for 80 years-and this includes some incremental growth in fuel requirements (i.e., a somewhat larger national fleet of automobiles, but one that employs better technology over time to increase miles per "gasoline gallon-equivalent").
If you want evidence that natural gas can power cars and trucks, simply look out your window. You will see natural-gas buses and taxis running all over town. Natural gas also can power trucks and trains and airplanes, because it can be refined into ultra-clean diesel and jet fuel. In fact, refineries that synthesize diesel from natural gas are already being constructed.
And, the United States already uses 23 trillion cubic feet of natural gas annually to power 22 percent of the U.S. electricity grid, to heat homes and businesses, and for a myriad of industrial and agricultural endeavors. So, adding the 23 trillion already consumed and the 26 trillion needed to replace imported oil, we arrive at nearly 50 trillion cubic feet. Dividing the 2 quadrillion cubic feet of natural gas reserves by 50 trillion, we arrive at a 40 year supply.
That 40 years is sufficient time to serve as a bridge to a non-fossil-fuel-based transportation system. For example, the rate of technological advancement in connection with carbon-neutral, algae-based liquid fuels should easily meet the forty year time horizon.
The economic basis for using natural gas as a replacement for petroleum is solid too. With the price of oil hovering around $85 per barrel, the United States is sending more than $1 billion every day-or nearly $400 billion a year-to foreign oil suppliers. Over 40 years, that is $16 trillion sent overseas. That sum is more than the official, outstanding national debt, when the portion of the recently federalized Freddie Mac and Fannie Mae guarantees that cannot be repaid are included. Significantly, that $16 trillion figure does not take into account the high probability that oil prices will rise, as supplies grow scarcer.
Remember, there are two giant and rapidly growing economies that used relatively little oil as recently as 10 years ago-India and China. With a combined population of over 2 billion, Beijing and New Delhi are increasing their oil consumption at annual rates in excess of 5 percent. At that rate, Indian and Chinese oil consumption will double in just 14 years.
America's vast on-shore natural-gas reserves allow us to avoid competing with India and China for that oil. We will not be forced to pay ever higher prices for the precious resource.
Indeed, the $16 trillion that otherwise would have been sent to foreign oil suppliers will stay at home. It will circulate in the United States, creating millions of high-paying industrial jobs in drilling, engineering, pipeline construction and refining.
Those jobs will create enough earning power to enable employees to improve their standard of living, increasing their purchases of goods and services, like houses and cars, furniture and appliances, electronics, health care and education, and every other item in the vast American economy. The economic benefits of that $16 trillion would multiply and multiply as the economic pie grows.
This would be a real stimulus package. Not some government program to take from one unpopular group to give to a more favored constituency. Unemployment and welfare payments will be reduced. Tax revenues will increase. Deficit reduction will be possible. The Dollar can be saved. The stock market will rise, as corporate profits increase in a sustainable way. Retirement plans will be refurbished. The standard of living will rise. Societal rifts will diminish. America's strength will be rebuilt.