Make sure shale-gas boom doesn't go bust
During this election year, President Obama and Republicans may not agree on much. Yet they share a common interest in a very hot topic: changing America’s energy strategy to favor natural gas.
The United States is on a “dash for gas” from Texas to New York. A new drilling method (“fracking”) allows abundant gas to be extracted from underground shale, creating tens of thousands of local jobs. The US may have a 100-year supply. The two political parties are competing to outdo each other with promises to support this cleanest of fossil fuels.
In his State of the Union message, Mr. Obama said that investments in shale gas mean “we don’t have to choose between our environment and our economy.” Natural gas can serve as a “bridge fuel” for at least a decade until renewable sources reach a more competitive scale and curb climate change. Gas produces about half the carbon emissions that coal does.
On Thursday, the president visited a United Parcel Service facility in Las Vegas to showcase a refilling station for trucks that run on liquid natural gas. He proposed a tax credit for trucking companies to convert their fleets to natural gas, which costs about a third less than gasoline or diesel. Converting a truck can be costly. A five-year tax incentive would reduce the payback time to three years, speeding up the use of gas.
Trucks are the frontier for what should be a bipartisan strategy on gas. Transportation eats up about 70 percent of petroleum in the US. But the nation has only about 1,000 filling stations for gas-powered vehicles. Many of the stations are for companies whose trucks make only daily deliveries. Obama also proposes subsidies to spur more stations, which would spur carmakers to shift toward making vehicles that rely on natural gas.
While the GOP and Democrats should cooperate to pass bills that would take advantage of this unexpected bonanza, they also need to be cautious.
Gas drillers need tougher state regulations to prevent pollution of water sources. And any tax credits must have a sunset clause that brings them to an end when goals are achieved. More research is needed to determine the best fracking techniques to extract the maximum amount and to better estimate the long-term prospects for shale gas. About half of current wells end up not being economical.
Most of all, the US must be careful not to put all its energy eggs in one basket. Britain provides an example. In the 1980s, it rushed to tap gas from the North Sea. Now it is a gas importer.
The wildcat exuberance of the current gas boom in the US suggests a need to husband shale gas carefully. If this year’s political competition leads to more government support of gas use, let it be smart support.
