The days of lease-bearing landmen making it rain on the Barnett Shale are over. The industry became so proficient at fracturing the rock thousands of feet beneath the surface and extracting the gas trapped within that they glutted the market. Gas prices took a swan dive and have stagnated ever since, and lower prices meant less interest from drilling companies. That's why only a quarter of the rigs that once spudded wells in the shale's 2008 heyday are still running.
Meanwhile, the price of oil continues to hover around $100 a barrel. The big money once sunk into the Barnett has flocked south to the Eagle Ford Shale, an oil- and condensate-rich formation.
All of which is why energy companies are working so hard to export the gas they're taking out of the ground -- and why on Wednesday, Massachusetts Congressman Edward Markey, the ranking member of the House Natural Resources Committee, sent a letter to Energy Secretary Steven Chu about Chu's approval of an application by Houston-based Cheniere Energy to export liquefied natural gas.
"I am worried that exporting America's natural gas would raise energy costs for American consumers, reduce the global competitiveness of U.S. businesses, make us more dependent on foreign sources of energy, and slow our transition away from dirtier fuels," Markey writes. And he has a point.
It's easy to see why the industry would want this. Starting in the 1990s, energy companies began investing in liquefied natural gas (LNG) terminals overseas to satisfy domestic demand. But when hydraulic fracturing enabled them to tap a plentiful, domestic source, there was little need for the terminals. That was before natural gas prices tanked.
From a business standpoint it makes sense -- create other markets for your product, thereby fueling demand. The depressed price of natural gas rises and suddenly those shale gas wells can again be profitably produced. Like Markey said, the result is that the consumer gets stuck with higher natural gas prices.
But as Mike Norman asked in yesterday's Star-Telegram, "Wasn't one of the benefits of expanded natural gas drilling supposed to be to supply us with cleaner energy at a lower price?"
Ostensibly, yes. But the move to export it exposes the "Energy Independence" mantra repeated by the industry and its elected stooges for what it is: an expert play on our fear of unfriendly Middle Eastern governments. Whip up enough anxiety about some sneering shah and, hey, maybe dismantling federal regulations isn't such a bad idea after all. No one did that better than presidential candidate Rick Perry, who promised at campaign stop after campaign stop that drilling was the answer to the country's every woe, especially unemployment and our dependence on foreign oil.
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"We're creating foreign jobs, we're creating foreign profits," he said at a campaign stop in Pittsburgh, where he unveiled his energy plan, emphasizing the development of domestic energy reserves.
Similarly, in its Energy Tomorrow campaign, the American Petroleum Institute claims "U.S. and Canadian supplies can provide 100 percent of our liquid fuel needs by 2030 with the implementation of two straightforward policies -- (1) accessing U.S. oil and natural gas reserves that are currently off-limits; and (2) partnering with our friendly neighbor to the north, Canada, in the development of the Keystone XL pipeline."
But what both API and Perry fail to mention is that the number of petroleum products we export has doubled since 2005. The U.S. is now a net exporter of petroleum products. Yet Perry and API claim our every energy need could be satisfied domestically if only we freed an industry shackled by "job-killing" regulation.
It's gonna suck when my heating bill goes up, but does this mean we can stop pretending that Perry, the industry and its men in the GOP establishment actually give a rat's ass about "energy independence?"