Shale gas is giving a big boost to America’s economy
Jul 14th 2012 | from the print edition
PENNSYLVANIA, THE SITE of America’s first oil wells back in the 1850s, is now home to the world’s second-largest gas field after South Pars, on the border between Qatar and Iran. At the turn of the millennium America’s conventional gasfields were in decline. The country was preparing to become a significant importer: around $100 billion was invested in LNG import terminals that may now be redundant. Shale gas was known to geologists but had never been worth extracting. As recently as 2000 hardly any of it was coming out of the ground.
Now shale contributes a third of America’s gas supplies. By 2035 the country’s share of total supplies (which may by then have risen to 820 billion cubic metres a year) could be nearly half. The rise has been helped along by a variety of factors, such as the liberalisation of access to existing pipelines by third parties that started in the 1970s, a deep and liquid gas market that allowed the risks of drilling to be hedged, ready access to capital, America’s home-grown oil industry and the entrepreneurial zip that provided the men and equipment. But the biggest difference was down to the efforts of one man: George Mitchell, the boss of an oil-service company, who saw the potential for improving a known technology, fracking, to get at the gas. Big oil and gas companies were interested in shale gas but could not make the breakthrough in fracking to get the gas to flow. Mr Mitchell spent ten years and $6m to crack the problem (surely the best-spent development money in the history of gas). Everyone, he said, told him he was just wasting his time and money.
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