How shale gas is changing the world

Say something like "We've got gas" in a crowded room and you may send the wrong impression.

I'd get "the look" from my wife.

However, in this case, having gas -- lots of it -- is a good thing.

New technology has improved the ability to extract natural gas from very hard sedimentary rock called shale. Improvements in hydraulic fracturing in which the rock is split in the depths of the earth and injected with sand to provide a conduit for trapped gas reservoirs coupled with horizontal or directional drilling have given producers the tools to economically bring product to market, said Chris Jent, a spokesman for independent oil and natural gas producer Triple Diamond Energy Corp. in an article on Triple Diamond is based in Addison, Texas.

"Much of the gas in the Texas Barnett Shale is lodged beneath the City of Fort Worth," Jent said. "Horizontal Drilling has helped create a financial windfall for the city."

These developments are such a big deal that they have given the United States an entirely new source for fuel.

"The U.S. shale gas phenomenon has transformed global energy markets," said David L. Goldwyn, U.S. State Department coordinator for International Energy Affairs at a briefing on the Global Shale Gas Initiative Conference in Washington, D.C. today. "Because we have discovered and we have the technology to develop efficiently large quantities of gas from shale, global prices of liquefied natural gas have decreased.

"Gas has become cheaper. Gas is now competitive with coal on a BTU basis, which means that countries that might use coal can now not make an economic choice, but on a competitive basis choose gas for their next level of power generation."

The conference drew representatives from 20 countries and a number of U.S. regulatory agencies. The purpose was to help other countries develop their own resources "safely and efficiently," Goldwyn said.

In light of the Gulf Oil Spill, safety has morphed into an even bigger concern when extracting underground resources.

Goldwyn called shale a terrific boon for global energy security. He also said many countries and hundreds of millions of people need access to electricity and diversity of energy supply -- making the issue of great concern to the State Department.

Another benefit, he said, is improving the climate.

Goldwyn said 10 percent of U.S. production comes from shale gas and that reserves have increased eight-fold over the past 10 years. He said projections from the National Security Council show about 30 percent of future gas supply in the United States, Canada and China coming from unconventional sources such as shale-type gas and coal bed methane.

"For the U.S., this has been a game-changer in the sense that we thought we were on the decline and now we’re very significantly on the rise," he said.