“Global Gas Push Stalls” – Wall Street Journal, 2 December 2012

Fuel has been cheaper than ever in the last couple months, as the US is teeming with shale oil and natural gas sources, easing pressure on the US economy. US oil companies are going abroad to try to replicate the US experience; however, the US has a leg up on competing foreign countries: huge shale production, like in the US, might not occur internationally for at least a decade.

The US and Canada will see huge benefits from other countries’ inability to develop shale: in both countries, the surplus of natural gas has persuaded oil companies to build new plants; Texas and North Dakota, which are swimming in shale deposits, are seeing boosts in their local economices from drilling activity.

There are a multitude of reasons why foreign countries are lagging behind the US: government ownership of mineral rights; environmental concerns; a lack of infrastructure to drill and transport oil and gas; and, in most foreign countries, a lack of geological knowledge. US oil companies have been exploring drilling options in Poland, China and Argentina; however, companies have been unsuccessful. Other countries, such as France and Bulgaria, have completely outlawed hydraulic fracking due to environmental concerns.

Drilling in the US has been going on for over a century. Small, independent companies spearheaded the shale rock movement in the late 1990s, when the first shale rock was drilled north of Forth Worth, Texas. In these situations, private landownership plays a big role, as landowners sell the mineral rights to their land for a share of the profits — an often uncommon experience in other countries, and more unique to the US. In the US, environmental concerns are thwarted by landowners looking to make a profit.

In many foreign countries, mineral rights are not privately owned, but owned by the government; private owners don’t benefit, and have little reason to endure large-scale drilling. Unlike in the US where extensive geological date exists on shale deposits, there has been little exploration into foreign shale deposits. Geologists know where the deposits are, but are unsure if fracking technology would work on differently-formed rocks.

With advanced, sustained and well-documented knowledge of shale geology; established private and public energy research infrastructure; and an appetite, the current global situation puts the US in the lead towards energy independence.

Conceived, Developed and Written by Dr. Subodh Das and Tara Mahadevan

December 11th, 2012

Phinix LLC

Copyright 2012. All rights Reserved by Phinix, LLC.

www.phinix.net    skdas@phinix.net

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