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By , Published: November 14 in The Washington Post

The shale gas revolution is firing up an old-fashioned American industrial revival, breathing life into businesses such as petrochemicals and glass, steel and toys.

Consider the rising fortunes of Ascension Parish, La.

Methanex Corp., which closed its last U.S. chemical plant in 1999, is spending more than half a billion dollars to dismantle a methanol plant in Chile and move it to the parish.

Nearby, a petrochemical company, Williams, is spending $400 million to expand an ethylene plant. And on Nov. 1, CF Industries unveiled a $2.1 billion expansion of its nitrogen fertilizer manufacturing complex, aiming to displace imports that now make up half of U.S. nitrogen fertilizer sales.

These companies all rely heavily on natural gas. And across the country, companies like them are crediting the sudden abundance of cheap natural gas for revving up their U.S. operations. Thanks to new applications of drilling technology to unlock natural gas trapped in shale rock, the nation’s output has surged and energy experts almost unanimously forecast that prices will remain low or moderate for a generation. The International Energy Agency says that by 2015, the United States will overtake Russia as the world’s biggest gas producer.

“The supply of natural gas and the price are the driving factors, and we’re swimming in natural gas down here,” said Mike Eades, president of the Ascension Economic Development Corp.

Ascension Parish falls inside the Haynesville geological region — one of the nation’s big shale gas prospects.

“It has become clear to me that the responsible development of our nation’s extensive recoverable oil and natural gas resources has the potential to be the once-in-a-lifetime economic engine that coal was nearly 200 years ago,” U.S. Steel Chairman John Surma said in a speech this year.

Industrial companies are betting that the surge in the domestic production of natural gas is much more than a blip. Cheap and plentiful supplies of natural gas are flooding the U.S. market, and prices in the United States are as low as a quarter of what they are in Europe or Asia.

“For the foreseeable future, thanks to the recovery of vast U.S. underground gas deposits of shale, natural gas is likely to remain 50 to 70 percent cheaper in the U.S. than in Europe and Japan,” said a recent report by the Boston Consulting Group.

“That will translate into significantly lower costs for electricity generation, for fuel used to power industrial plants and for feedstock used across many industrial processes,” said Justin Rose, a BCG principal and co-author of the report.

Manufacturers have plans to invest as much as $80 billion in U.S. chemical, fertilizer, steel, aluminum, tire and plastics plants, according to Dow Chemical. And the main reason, said George J. Biltz, Dow Chemical’s vice president for energy and climate change, “comes back to the massive competitive advantage the United States has with natural gas today.”

A changing conversation

The shale boom has not just changed corporate plans. It has also altered the way we think and talk about oil and gas.

For decades, most of the conversation about U.S. oil and natural gas has revolved around the idea of scarcity, declining output and rising prices. The seminal work by M. King Hubbert — the Shell geologist who accurately predicted in the 1950s that U.S. oil production would peak in 1971 — defined this framework.

Natural gas supplies traditionally have been seen as limited and gas prices have been volatile — burning utilities that bet too heavily on gas-fired power plants in the 1990s.

But past assumptions have been challenged by new technologies — and new uses of old technology. Years of pioneering work on drilling techniques by an independent oilman, George Mitchell, paid off. Despite concerns about water pollution risks linked to hydraulic fracturing of shale, drilling and production have soared.

The United States is rife with these shale plays, some rich in natural gas and others rich in oil. The United States is still producing less oil than in 1971, and prices are high. But the country is producing more oil than in any year since 1994, and production is rising.

Meanwhile, natural gas production has jumped to record levels. In 2000, shale gas was 2 percent of the U.S. natural gas supply; by 2012, it was 37 percent.

Natural gas supplies suddenly look bountiful enough to last a century at current consumption rates, the National Petroleum Council said in a report last year. Some advocates of natural gas have called it a “bridge” to a clean-energy future because its greenhouse gas emissions are half those of coal and because gas plants can start up quickly and pair with wind and solar to provide a reliable alternative to coal.

Others call it a detour, since it is still a fossil fuel and it is undercutting nuclear, wind and solar energy as well as coal. “Bridge to clean future or U-turn to dirty past?” said a headline on the blog of the environmental group Earthjustice. The United States has drilled more oil and gas wells than any other country, and the new wave of supplies has brought a new wave of rigs dotting the countryside and new crisscrossing pipelines.

For environmentalists, the abundance of shale gas poses a political and environmental dilemma. As new gas supplies fuel more and more industrial plants, new constituencies will have stakes in gas production, making it politically harder to impose new regulations. The Environmental Protection Agency is weighing whether to issue additional federal guidelines on various disruptive aspects of shale gas drilling, including the disposal of toxic water used to fracture formations and air pollution from drilling operations. The EPA might also issue rules requiring drilling techniques that would make contamination of water aquifers less likely.

But one thing is clear: Tumbling natural gas prices have changed every calculation and assumption about the energy business.

Petrochemical reaction

Perhaps no one benefits more from low natural gas prices than the petrochemical industry, which relies on natural gas as a feedstock and as a source of power. Natural gas, in turn, produces the building blocks for other products, including paints, solvents, plastics, packaging, inks, dyes and lubricants.

And no industry better demonstrates just how much has changed in a short period of time. Chemical-industry employment slid 17 percent from January 2002 through January 2011, according to the Bureau of Labor Statistics.

In October 2005, after Hurricane Katrina pounded Louisiana, the price of natural gas had spiked to $14 per thousand cubic feet. Supplies were scarce even before the storm, and Dow Chemical had temporarily shut down one of its biggest petrochemical plants.

 

“We say it unequivocally — the U.S. is in a natural gas crisis,” Dow Chemical chief executive Andrew Liveris said in Senate testimony at the time. “The hurricanes have dramatically underscored the problem, but they did not cause it.” Natural gas prices, once $2 per thousand cubic feet, had soared sevenfold. Gas accounted for half of Dow’s costs, he said.

“We simply cannot compete with the rest of the world at these prices,” Liveris added. “We and others are now investing in China and the Middle East, where energy is much cheaper, to our incredulity. Our industry will continue to grow. It’s simply a question of where we will grow.”

Among the deals it made: one with Kuwait and a $20 billion joint venture with Saudi Aramco to build facilities in Saudi Arabia using cheap gas found along with oil there.

Today, Dow Chemical is drawing up plans to construct a plant in Freeport, Tex., and is restarting a plant in St. Charles, La. And year-end nationwide chemical-industry employment has edged up for the first time in a decade, the Bureau of Labor Statistics says.

Methanex chief executive Bruce Aitken said natural gas prices made moving operations to Louisiana attractive.

“The proliferation of shale gas in North America has resulted in a structurally low natural gas price environment, which underpins the very attractive economics for this project,” he told investors in a July 26 conference call.

He said moving the methanol plant from Chile to Louisiana will pay off in less than four years if gas prices stay around $4 per thousand cubic feet. He said the company was considering moving a second plant from Chile to Geismar, La.

CF Industries was also lured by the price and proximity of natural gas in Ascension Parish. Gas makes up about 70 percent of manufacturing costs at its ammonia and urea units. The company said the site is served by five pipelines at prices set at the nearby Henry Hub, which is the nationwide benchmark for spot gas prices.

Foreign companies are also eyeing U.S. natural gas.

In September, a large Egyptian construction company announced that it would build a new nitrogen fertilizer production plant in southeast Iowa to supply customers in the U.S. Corn Belt. Cairo-based Orascom Construction Industries, one of the world’s largest fertilizer makers, said the $1.4 billion plant would be “the first world-scale, natural gas-based fertilizer plant built in the United States in nearly 25 years” and would reduce U.S. dependence on imported fertilizers.

After years of losing manufacturing jobs, most American communities are vying to lure industries.

Orascom chose Wever, Iowa, over Illinois because part of its investment will be funded by a tax-exempt bond. The Iowa Economic Development Authority approved an incentive package that is expected to provide tax relief “in the order of $100 million,” the company said.

Royal Dutch Shell has unveiled plans for a $2 billion petrochemical plant northwest of Pittsburgh, where it can use natural gas supplies from the state’s enormous Marcellus shale formation. It chose Pennsylvania despite being wooed by Ohio and West Virginia.

The broader effect

The economic growth from natural gas abundance extends to companies providing supplies to the drilling boom.

On Oct. 1, Honeywell announced that it paid $525 million for a 70 percent stake in Thomas Russell, a privately held provider of technology and equipment for natural gas processing and treatment. With the acquisition, Honeywell will offer technologies and products that allow producers of shale and conventional natural gas to remove contaminants from natural gas and recover high-value natural gas liquids used for petrochemicals and fuel.

Another example: U.S. Steel. The company is churning out new pipe for natural gas drilling rigs, wells and pipelines. And as a big consumer of power, it is paying less for fuel.

Surma, U.S. Steel’s chief executive, said in a speech recently that the company used 100 billion cubic feet of natural gas in 2011, “so just a few dollars’ difference in the price . . . allows us to realize important and significant cost savings.” For every dollar change in the price of a thousand cubic feet, the company saves $100 million.

Surma said the company is also improving its North American blast furnaces to allow for increased injection of natural gas to reduce its consumption of coke, a fuel derived from coal. The reduction could cut blast furnace fuel costs by $15 per ton of hot metal produced — and U.S. Steel can produce more than 20 million tons of steel a year.

“In addition to these kinds of cost savings opportunities, natural gas should provide North American steelmakers with another operating advantage over our foreign competitors,” Surma said.

Once some of these basic industries come home, companies further down the value chain could return, too.

“If you make plastics in the United States, there are a bunch of things produced in China that might tip back to being produced in the U.S.,” said Harold L. Sirkin, a senior partner at the Boston Consulting Group.

“You could think about toys,” he said. “We talked to a few companies thinking, ‘Does this mean I can re-shore some toy production to the U.S.?’ The energy cost in plastic toys is reasonably high. And the labor content is relatively low because we’re talking about automated injection molding facilities.”

Chinese exporting factories could be vulnerable, especially given the risks of intellectual property theft, transportation costs and long supply chains.

“All of a sudden, the equations start changing about where you produce things,” Sirkin said. “Even in industries where the cost structure includes only 1 or 2 percent electricity, that could make the difference.”

November 16, 2012 at 6:59 am by Associated Press in Fracking, Natural Gas

ALBANY, N.Y. — New York’s health department has named experts from George Washington University, the University of California Los Angeles and the Colorado School of Public Health to review the state’s environmental study on shale gas development using hydraulic fracturing, a state official said.

The official spoke to The Associated Press on condition of anonymity because the announcement had not been formally made.

Health and environmental groups have pressed for a comprehensive and independent health impact analysis before hydraulic fracturing, or fracking, is allowed. Environmental Conservation Commissioner Joe Martens rejected that request in September, saying state Health Commissioner Nirav Shah would do the review with help from outside experts.

The DEC faces a regulatory deadline of Nov. 29 to complete new regulations for fracking. Martens said the agency’s proposals won’t be finalized until Shah’s health review is finished. If the deadline isn’t met, the regulations may have to be reopened to public comment.

New York has had a moratorium on shale gas drilling since 2008, when regulators began an environmental review of fracking, which releases gas from rock by injecting a well with millions of gallons of chemically treated water.

Regulators contend that overall, water and air pollution problems related to gas drilling using hydraulic fracturing are rare, but environmental groups and some scientists say there hasn’t been enough research on those issues.

The experts chosen for the health review were John Adgate, chairman of the Environmental and Occupational Health Department at the Colorado School of Public Health; Lynn Goldman, dean of George Washington University’s School of Public Health and Health Services; and Richard Jackson, chairman of the Department of Environmental Health Sciences at the University of California Los Angeles’ Fielding School of Public Health.

Environmental groups criticized the state agencies for not making public the DEC health review that the outside experts will be evaluating.

“We continue to call on the state to perform a comprehensive public Health Impact Assessment,” said Katherine Nadeau of Environmental Advocates. “And to ensure the credibility of this study, strongly encourage the administration and the governor’s appointees to undertake a more open and transparent process that fully involves the public.”

A letter signed by 91 health professionals and scientists was sent to Gov. Andrew Cuomo on Thursday saying there’s no indication the health department’s review will meet the standards of a full health impact assessment.

“New York’s community of medical professionals reiterate our call for an independent, comprehensive health impact assessment,” Dr. Andrew Coates of Albany Medical College said in a statement. “Nothing less than a transparent investigation with full public participation is acceptable.”

Associated Press in Wall Street Journal 11/13/2012

PITTSBURGH — A top official with the U.S. Environmental Protection Agency is optimistic that a nationwide project examining natural gas hydraulic fracturing and potential drinking water impacts will provide comprehensive guidelines to help scientists and the public identify the key issues to focus on. But the industry said past studies have already shown the process is safe.

Glenn Paulson, the EPA's science adviser, said Friday that a progress report on the study, mandated by Congress in 2010, should be released before the end of the year and a final report in 2014. He spoke at a University of Pittsburgh conference on health impacts of hydraulic fracturing, or fracking, which involves blasting chemical-laden water deep into the ground.

Paulson said the study of fracking and drinking water "is one of the most aggressive public outreach programs in EPA history." He said the progress report will show the "range and depth" of what EPA is looking at, and will be open to public comment."

"It will really be a lot for experts to chew on in their particular fields," Paulson said, noting that EPA is reaching out to geologists, academic experts, the industry, environmental groups, and even Indian tribes.

"I think the drinking water study is going to be useful to local governments, and state governments, too," Paulson said. He added that "a lot of people have their minds made up" about fracking, even though many aspects of research are still in the early stages.

Paulson said President Barack Obama's administration is providing enough support to study the issue. The EPA says in the project overview that natural gas "plays a key role in our nation's clean energy future" but that serious concerns have been raised about potential impacts to the environment and human health.

The fracking process has made it possible to tap into deep reserves of oil and gas. Large volumes of water, along with sand and hazardous chemicals, are injected underground to break rock apart and free the oil and gas. Contaminated wastewater from the process can leak from faulty well casings into aquifers, but it's often difficult to trace underground sources of pollution. Some studies also have shown air quality problems around gas wells, while others have indicated no problems.

Dan Alfaro, a spokesman for Energy in Depth, an industry group, said it believes the EPA study will show that gas drilling and fracking are safe.

"There have been numerous studies and a multitude of research on oil and natural gas extraction methods," Alfaro said. The EPA study "will confirm once again previous findings that current industry practices used in development are safe, responsible and effective means of extracting and producing our natural energy resources."

Environmental groups and some scientists say there hasn't been enough research on fracking. The industry and many federal and state officials say the practice is safe when done properly and many rules on air pollution and disclosure of the chemicals used in fracking are being strengthened.

Bernard Goldstein, an emeritus professor at the University of Pittsburgh School of Public Health, said that when the conference began three years ago researchers had very little actual data to present. Now, more and more hard data on air and water quality measurements are being collected and shared at the conference. He also praised Shell Oil Co., which explained the steps its takes to protect the environment and public health.

"I thought the industry presentation by Shell was superb," Goldstein said, adding that Paulson, of the EPA, is "the right kind of person" to make sure that health is included in the research being done on gas drilling.

In Pennsylvania, the EPA study is focusing on water quality and quantity issues in Washington, Bradford and Susquehanna counties. There are also study sites in North Dakota, Texas, and Colorado.

US self-sufficiency in energy is likely to end American reliance on despotic Gulf regimes but biggest loser of all may be Russia

An Iraqi policeman shouts instructions at the scene following an attack on an oil pipeline
An attack on a pipeline during the Iraq war. American foreign policy has been shaped by its need to secure oil supplies in the Middle East but that reliance is likely to end. Photograph: Jamal Nasrallah/EPA

After the fall of the Berlin Wall, the rise of China and the Arab spring, American energy independence looks likely to trigger the next great geopolitical shift in the modern world.

US reliance on the Gulf for its oil – and its consequent need to maintain a dominant presence in the Middle East to keep the oil flowing – has been one of the constants of the post-1945 status quo. That could be turned on its head.

It's been dubbed "the homecoming". After decades in which the hollowing out of American manufacturing has been chronicled in Bruce Springsteen's blue-collar laments, cheap energy is being seen as the dawn of a new golden age for the world's biggest economy.

The reason is simple. The US is the home to vast shale oil and gas deposits made commercially viable by improvements to a 200-year-old technique called fracking and by the relentlessly high cost of crude.

Exploitation of fields in Appalachian states such as West Virginia and Pennsylvania, and further west in North Dakota, have transformed the US's energy outlook pretty much overnight. Professor Dieter Helm, an energy expert at Oxford University, said: "In the US, shale gas didn't exist in 2004. Now it represents 30% of the market."

If all the known shale gas resources were developed to their commercial potential in North America and other new fields, production could more than quadruple over the next two decades, and account for more than half of US natural gas production by the early 2030s, according to recent study by the Harvard Kennedy School Belfer Centre.

Pennsylvania – where the first oil well was drilled in 1859 – produced about 30m cubic metres (1bn cubic ft) of natural gas in 2008. By 2010, the state was producing 11bn cubic metres, helping to put the US on course to be the world's biggest supplier of oil and gas within a decade.

Looming self-sufficiency in energy has three economic benefits to the US. The first is the direct impact on production and employment in the sector, with Barack Obama noting in this year's state of the union speech that fracking was likely to support 600,000 jobs by the end of the decade and that the US now had enough gas to keep it supplied for the next 100 years if current consumption patterns were maintained.

Regime stress

Long-term consequences for the rest of the world are hard to predict but it is probably safe to say that many of the regimes whose global role rests on hydrocarbons alone are likely to be significantly weakened, if not swept away.

That includes the monarchies that have thus far withstood the Arab spring. Their persistence has depended on a historically high oil price and unquestioning western backing. Both those conditions are now in question.

Shashank Joshi, a fellow of the Royal United Services Institute, said: "The Gulf Arab political order for almost the entire post-war period has depended on US interest in the region.

"The monarchies endured for so long not because of any sort of popular legitimacy but because they could depend on enormous external support. Those regimes, which have already had to deal with a high degree of domestic mobilisation will come under unbearable stress and they cannot survive without the technical advantage of western weapons."

Few are expecting the US Fifth Fleet to pack up and sail home in the immediate future, just because America has found enough oil and gas for its needs in its own back garden. Geopolitical change tends to lag a decade or two behind economic change, but as the US finds itself less reliant on regimes with which it has little in common there will be powerful pressure on the Pentagon to begin to bring home its troops and hardware.

The speed of US disengagement will depend to a large extent on whether the alternative is a vacuum and instability, as a variety of religious and tribal forces vie to inherit the Gulf kingdoms. The role of Iran, an economy largely dependent on oil sales that already faces severe budget shortfalls from sanctions, is likely to be critical. Whether it responds to crisis by collaboration or confrontation with its traditional Gulf adversaries will shape the region's future.

A lot depends, too, on whether the new biggest customers for Gulf oil are ready to take America's place in patrolling the tanker routes.

Joshi said: "There is a mismatch between China and India's reliance on Middle East energy and their provisions for its security. India will have three carriers and both China and India are building blue-water [ocean-going] navies. They may be compelled to engage if the US pulls away."

Nicholas Redman, senior fellow for geopolitical risk and economic security at the International Institute for Strategic Studies, doubts that the US, even if freed of Gulf oil dependence, would want to cede the space to Indian or Chinese rivals.

"If the Gulf goes haywire, there is a transmission effect on the economy, whether or not it gets its oil from there," Redman said.

Oil powers

The US alliance with Israel is also likely to be highly resistant to change. As the presidential elections have just demonstrated, it has become an article of faith in security policy for both American parties – a fact that is largely independent of the geopolitics of oil.

The Gulf is not the only area where the established oil powers are in danger of crumbling. The biggest single loser of all will most likely be Vladimir Putin's Russia, a regime largely dependent on high energy prices and a captive market with no real alternative plan.

Russia is already feeling the direct impact of the new gas age. Development of its Shtokman field – believed to be one of the largest gas fields in the world – deep under the Barents Sea, has been shelved, because its intended customer, the US, now has its own home-grown source of natural gas.

Russia is the most vulnerable of the current petro-states because of the central role of gas to its international standing. Moscow's sway over eastern and central Europe is dependent on Gazprom, which has used its dominance to set favourable terms, selling long-term contracts linked to the oil price.

Now, as more and more of the liquefied natural gas (LNG) formerly intended for the US finds its way on to the western market, the spot gas price is coming adrift of the oil price and the Europeans have new options, which will lessen their dependence on a single dominant seller.

"Russia has just seen its aspiration market disappear. The US is already a bigger gas producer than Russia," Redman said.

He pointed out that there were deep obstacles – environmental and economic – to large-scale European exploitation of its own oil shale resources, but imports from the US and elsewhere could still transform the continent's uneasy relationship with Moscow.

"Europe doesn't want to get into deeper reliance on Russia. They are looking at other options like: can you bring gas in from places like Turkmenistan? If the import of American LNG becomes a serious option in northern Europe, it could have very interesting implications."

Russia has tried to look east, but China prefers to keep its energy sources spread around the world – emerging LNG producers such as Qatar, Australia and west African states, for example.

The Putin government has talked a lot about diversifying the Russian economy, but very little has happened in that direction. It remains essentially a petro-state dependent on an oil price of $120 to balance its budget. With a current price of $109, Moscow already faces a serious shortfall, which is only likely to grow in an age of energy abundance, deepening its long-term problems and narrowing its capacity to diversify.

David Clark, chairman of the Russia Foundation, said: "Russia needs $200bn [£125bn] a year in investment over the next 20 years, to open new fields and modernise its infrastructure. But it faces $60bn-$80bn capital flight a year. It cannot meets its requirements."

The consequences are a greatly weakened Kremlin, both in relation with Russia's own regions and the rest of the world. If Moscow manages its decline well, that could have positive impacts in multipolar collaboration. Obama could find he has a partner in his bid to make deep cuts in the world's two biggest nuclear arsenals, and there could be a more collaborative atmosphere in the UN security council over issues such as Syria.

The geopolitics of an energy surplus world will be quite unfamiliar. Australia is tipped to emerge as a major player, rivalling Qatar as the world's largest LNG exporter by 2030. As a region, west Africa is likely to emerge as a major hub, alongside Argentina. It will also, arguably, be a more interesting, more multipolar planet.

Whether it will also be a better one will depend largely on how the shift is managed from the old world to the new.

Why now?

• Shale gas is natural gas – methane – that was generated from the rotting of forests millions of years ago, and is now held close within deep geological formations of dense rock.

• Blasting open this rock requires vast force – the jetting of water, sand and chemicals against rock formations at extreme pressure – and the technology to do so has been developed only very slowly since the 1950s.

• More importantly, conventional drilling for oil and gas has involved vertical wells that open up oilfields, which then spew their contents to the surface, where it can be captured. Shale gas release is entirely different, requiring the blasting open of rocks across vast distances at close quarters, making vertical wells useless. It was only in the early 2000s that the necessary horizontal drilling techniques were perfected.

• Wells can now be drilled down 5,000ft-7,000ft, then diverted at right angles to produce tunnels 5,000ft-8,000ft long. These allow rocks to be blasted apart across huge distances.

Wall Street Journal Editorial

Sometimes the revolution politicians seek isn't the one they get. Consider the irony—and the opportunity—in Monday's report that the U.S. is likely to surpass Saudi Arabia as the world's largest oil producer as early as 2020.

In its annual world energy outlook, the Paris-based International Energy Agency (IEA) says the global energy map "is being redrawn by the resurgence in oil and gas production in the United States."

The U.S. will increase its production to about 23 million barrels a day in 10 years from about 18 million barrels a day now, the IEA predicts. That's more optimistic than current U.S. government estimates and a change from a year ago when the IEA said Russia and the Saudis would vie for number one.

image
Getty Images/Fickr RM

Oil Refinery in Detroit

As readers of these pages know, the key to this U.S. energy boom has been technological innovation and risk-taking funded by private capital. Specifically, the private oil and gas industry pioneered the use of horizontal drilling and hydraulic fracturing (or fracking) to tap unconventional deposits such as shale that once were technologically out of reach. It also wouldn't have happened if the industry wasn't able to drill on private land, free from federal regulation.

This is a real energy revolution, even if it's far from the renewable energy dreamland of so many government subsidies and mandates. In his 2007 State of the Union, George W. Bush—the Oil Man President of liberal myth—said America was "on the verge of technological breakthroughs that will enable us to live our lives less dependent on oil."

His main solution: "We must continue investing in new methods of producing ethanol—using everything from wood chips to grasses to agricultural wastes." The wood-chip revolution remains nowhere in sight, though that didn't stop President Obama from doubling down on the taxpayer investment in renewables, with similarly failed results.

The fad also caught on in Britain, with Conservative Prime Minister David Cameron promising a "Green Deal" that was supposed to make the U.K. a world leader in all things green. After two and a half years in office, Mr. Cameron has little to show for it besides rising energy prices for consumers and a burgeoning collection of subsidy-dependent wind farms.

One point to keep in mind is that this U.S. energy revolution wasn't inevitable and could still be undone. The Sierra Club and other environmentalists are demonizing fracking the way they have coal, never mind that increased use of natural gas instead of coal is helping to reduce carbon emissions. They hate carbon energy—period.

New York state has imposed a moratorium on fracking, even while the economy of neighboring Pennsylvania is being transformed by the exploitation of the Marcellus Shale that lies under both states. The French, who import 98% of their natural gas, have also banned fracking, despite sitting on shale reserves estimated to be the second-largest in Europe. The British, unsure of what to do, are supposed to make a fracking announcement sometime next month.

The biggest potential threat may come from federal regulation in Mr. Obama's second term. Though he tried to take credit for the fracking revolution in his second debate with Mitt Romney, his EPA has long wanted to supplant state regulators and will grab any opportunity to do so. Perhaps the election of pro-fracking Democrats like soon-to-be Senator Heidi Heitkamp of North Dakota (home to the monster Bakken Shale field) can give the new energy revolution some needed bipartisan buy-in.

Historians will one day marvel that so much political and financial capital was invested in a green-energy revolution at the very moment a fossil fuel revolution was aborning. But politicians failing to spot the trend until they start taking credit for it is an old story. Let's hope they don't ruin it now that they've noticed.

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