Shale gas: The new, cheap, abundant energy form?

By Money Matters Editors

You know the business press and general public have finally recognized a trend when they give it a label.

Case in point: unconventional natural gas – previously hard-to-access natural gas that now can be captured by new technologies. Some are calling it the natural gas revolution, with the downward price pressure a ‘shale shock.’

Money Matters first wrote about it on September 23.  Estimated U.S. natural gas reserves have increased 35 percent, mostly on the ability to access these new sources, with estimated reserves totaling 2,074 trillion cubic feet in 2008, up from 1,532 trillion cubic feet in 2006, according to the Potential Gas Committee, The New York Times reported. Natural gas closed Friday down 19 cents to $4.77 per million BTUs (MMBtu).

New technology, including hydraulic fracturing and drilling horizontally, has opened hundreds of previously cost-prohibitive natural gas sites. U.S. drilling has been going on in earnest for more than three years, but global drilling has only just begun.

How significant is unconventional natural gas in the nation’s and world’s energy policy? Oil/energy analyst Daniel Yergin, co-founder of Cambridge Energy Research Associates (CERA), has called unconventional natural gas “the biggest energy innovation of the past decade.”