What I don't understand is the resistance to shale gas by largely liberals. Certainly there are risks- which are minor compared to the benefits and the alternatives with much higher costs. Either way, it's a fascinating story to keep watching given some states are far more hospitable to shale gas development than others.


The natural gas boom in the U.S. has weakened Russia's influence on European energy supplies and could keep Iran's influence in check for years to come, according to a new study from the Baker Institute for Public Policy at Rice University.

The study, "Shale Gas and U.S. National Security," says the surge of drilling in shale formations will have an impact on global supply for years to come and limit the need for the U.S. to import liquefied natural gas, or LNG, for at least 20 to 30 years.

That means more LNG shipments from the Middle East will be available for Europe, which has been beholden to Russia for a large portion of its gas, supplied by pipelines.

The study, funded by the U.S. Department of Energy, predicts that Russia's share of the natural-gas market in Western Europe will drop to as little as 13 percent by 2040, down from 27 percent in 2009.

"By increasing alternative supplies to Europe in the form of liquefied natural gas (LNG) displaced from the U.S. market, the petro-power of Russia, Venezuela and Iran is faltering on the back of plentiful American natural gas supply," writes Amy Myers Jaffe, a fellow at the Baker Institute and one of the authors of the study.

The study challenges the notion that the U.S. natural gas shale is a short-lived phenomenon. It concludes domestic production will more than quadruple by 2040, from 2010 levels, and account for more than half of all U.S. gas production by the 2030s.

'Game changing'

"The idea that shale gas is a flash-in-the-pan is simply incorrect," writes Kenneth Medlock III, another Baker Institute fellow and study co-author. "The geologic data on the shale resource is hard science and the innovations that have occurred in the field to make this resource accessible are nothing short of game changing."

A decade ago, U.S. companies were making massive investments to build LNG-import terminals based on the assumption that domestic natural-gas production would continue to decline and the country would need to draw on supplies from Africa, Russia, the Middle East and Australia.
But U.S. supplies did a U-turn over the past five years as companies perfected the combination of horizontal drilling and hydraulic fracturing — a process of injection millions of gallons of water, sand and chemicals into the ground to crack open shale formations - to economically access more gas reserves.

LNG terminals

U.S. gas production from shale has risen from virtually nothing in 2000 to more than 20 percent of domestic production today. That's left the handful of new LNG import terminals - such as the Freeport LNG terminal southwest of Houston and Cheniere Energy's Sabine Pass terminal in Louisiana - seeking permits and funding to build the capacity to export U.S. natural gas.

And then there's this - http://online.wsj.com/article/SB10001424052702303678704576442053700739990.html

A Tale of Two Shale States
Pennsylvania's gain vs. New York's missed opportunity.

Politicians wringing their hands over how to create more jobs might study the shale boom along the New York and Pennsylvania border. It's a case study in one state embracing economic opportunity, while the other has let environmental politics trump development.

The Marcellus shale formation—65 million acres running through Ohio, West Virginia, western Pennsylvania and southern New York—offers one of the biggest natural gas opportunities. Former Pennsylvania Governor Ed Rendell, a Democrat, recognized that potential and set up a regulatory framework to encourage and monitor natural gas drilling, a strategy continued by Republican Tom Corbett.

More than 2,000 wells have been drilled in the Keystone State since 2008, and gas production surged to 81 billion cubic feet in 2009 from five billion in 2007. A new Manhattan Institute report by University of Wyoming professor Timothy Considine estimates that a typical Marcellus well generates some $2.8 million in direct economic benefits from natural gas company purchases; $1.2 million in indirect benefits from companies engaged along the supply chain; another $1.5 million from workers spending their wages, or landowners spending their royalty payments; plus $2 million in federal, state and local taxes. Oh, and 62 jobs.

Statistics from Pennsylvania bear this out. The state Department of Labor and Industry reports that Marcellus drilling has created 72,000 jobs between the fourth quarter of 2009 and the first quarter of 2011. The average wage for jobs in core Marcellus shale industries is about $73,000, or some $27,000 more than the average for all industries.

The Pennsylvania Department of Revenue says drillers have paid more than $1 billion in state taxes since 2006—and the numbers are swelling. In 2011's first quarter, 857 oil and gas companies and affiliates paid $238 million in capital stock and foreign franchise taxes, corporate income taxes, sales taxes and employer withholding. This exceeds by some $20 million the total payments in 2010.