November 5, 2009

It's a Gas

By Steve Feinstein

I've got a proposition for President Obama. How would you like to champion an issue that will do the following:

Be important to the general population, impacting virtually everyone, in all walks of life
Drastically improve our energy independence and significantly loosen the Mid-East oil restraints that drag down our economy
Satisfy the liberal environmental wing of your support base without penalizing or alienating the conservative business sector
Provide significant job growth
Give you "bragging rights" as the benefits take hold, with very little -- if any -- risk of political failure.

This may sound too good to be true, but such an issue is here, right now. The old adage says that "timing is everything," but it's yours for the taking -- if you act boldly and quickly.

The issue is the discovery and development of the technology required to extract previously unrecoverable natural gas that's locked in rock deposits: so-called shale gas.

This process and its benefits are described in great detail by the Wall Street Journal.

To sum up very briefly, the risk-taking private sector -- driven by the potential of huge future profits (anti-capitalists take note!) -- has developed the technology to recover natural gas that was previously thought to be unreachable. This technology has only come of age in the last two years, but already the amount of natural gas we're producing is on its way to transforming the U.S. into the leading gas-producing nation in the world.

The dramatic increase in U.S.-produced natural gas means that trucks and buses can switch from oil-based fuels to NG. Electric power plants will be built -- more quickly and less expensively -- than the coal-fueled plants of yesterday, and be far more environmentally friendly. Power will be cheaper and cleaner. Businesses will benefit without the artificial, arbitrary imposition of profit- and employment-killing "cap and trade" legislation.

With less oil being demanded for transportation and heating, world oil pricing will abate, gasoline pricing will stabilize, consumers will have more money to spend, and they'll be spared the confidence-sapping roller coaster ride of gasoline price swings from one driving season to the next.

President Obama hasn't done anything to encourage this technological development (in all likelihood, he doesn't even know much -- if anything -- about it); he's just been fortunate enough to have had it happen on his watch.

But as a savvy politician, Obama should take full advantage of his good fortune. He needs to get out front by bringing it to the public's attention, encouraging the further development of the technology with federal assistance and tax breaks, and touting the "new natural gas" as a central chip in the free-from-foreign-oil game. The rise of this new industry will also mean significant new employment opportunities. He'd be wise to present this as an American issue, not as a partisan issue, not as a "Progressive Green vs. Conservative Business" issue.

Republicans, too, should heed another old adage: "Success has many fathers, but failure is an orphan." They need to embrace and encourage the economic and environmental benefits of the technology and not allow a Democratic President to glean all the electoral credit for himself. This is the prototypically perfect opportunity for "bipartisan cooperation" for the betterment of the country. Played correctly, there are enough political brownie points for everyone, with repercussions that will be felt well into future election campaigns.

Chances are, absent vigorous high-level political participation, the development of shale gas will proceed at some modest predetermined pace and achieve a reasonable level of import on our economic/energy situation. But with enthusiastic presidential recognition and engagement and a commensurate reciprocal response by the Republicans, shale gas will likely be thrust to the forefront of our national energy narrative with the double benefit of positive economic/environmental impact and political intrigue reaching far into the future.

One could hardly ask for more.