Monday, June 20, 2005

The Missing Natural Gas
Last Wednesday the New York Times carried a lengthy article on the need for imported liquefied natural gas (LNG) to fill the growing gap between US domestic natural gas production and steadily growing demand. While the Times painted a clear enough picture of the dilemmas posed by LNG--in terms of safety and security of supply--their analogy between the need for LNG imports and the historical growth of our oil imports fails in one important respect: we have chosen to restrict our domestic natural gas supply for reasons having little to do with energy policy.

The US natural gas situation is quite different from the greatly depleted state of our oil reserves, from which we've already pumped out 80-90% of the original oil that we can extract with current technology. In contrast, the DOE reports proved natural gas reserves of 189 trillion cubic feet, some 13% larger than they were in 1992. In fact, they are the second largest outside the Middle East.

As is usually the case for natural gas, though, the problem arises not so much from the underlying resource as from infrastructure and investment, complicated by restrictions on access. The US gas industry has been starved of investment dollars for the infrastructure needed to bring more gas to market, and of the ability to drill in places where we know there is more gas. Consider the bans on offshore oil and gas drilling imposed in areas such as California and Florida. Although targeted mainly at preventing oil spills, such as the one that blighted Santa Barbara's beaches in 1969, they make no distinction between drilling for oil and drilling for gas, which incurs little or no risk of spills. As a result, billions of cubic feet of natural gas that US consumers and industry desperately need today are not being produced. In the case of Florida alone, the resources in question appear sufficient to supply all of that state's gas needs for the next twenty-plus years.

If our demand for natural gas continues to grow--something I regard as positive, because of its lower emissions of greenhouse gases, compared to oil or coal--then sooner or later we will need to import more of our needs from outside North America. But with sensible stewardship of the domestic resource, including differentiating between the risks of offshore gas drilling and offshore oil production, that time needn't have come so soon.

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