The following "Letter to the Editor" by Bernard Weinstein, associate director of the Maguire Energy Institute at SMU, appeared in the November 9, 2009, edition of The Wall Street Journal.
November 13, 2009
Gas could literally transform the global energy equation because North America is endowed with huge shale formations in virtually every part of the continent. But while technology, price and demand are important factors in the prospects for higher production, new drilling will only occur if Washington and the various states provide an accommodating fiscal and regulatory environment. Unfortunately, this is not likely to be the case.
For example, President Barack Obama wants to hike taxes on the oil and gas industry and use those revenues to subsidize renewables, despite the conclusion of his own Energy Information Agency that fossil fuels will still account for 79% of energy demand in 2030 regardless of how many tax incentives are thrown at solar, wind, algae, biodiesel and the like. Opposition to gas drilling from environmentalists will also retard new gas supplies, as evidenced by New York's decision to ban drilling in the New York City watershed. Plans to drill on Colorado's Roan Plateau are also meeting stiff resistance.
New technologies now enable us to potentially extract trillions of cubic feet of natural gas from domestic shale formations that, in turn, can reduce our dependence on imported energy. Let's not squander this unique opportunity.
Bernard L. Weinstein
Maguire Energy Institute