Total reserves: 1 trillion BOE
Natural gas, or simply “gas” in industry parlance, has long been oil’s biggest potential rival as a transport fuel. Gas is cleaner than oil--it emits fewer particulates and a quarter less carbon for the same amount of energy output--yet today it powers less than 3 percent of the U.S. transportation fleet (mainly in the form of compressed natural gas, or CNG). This proportion is poised to grow, though, in part because the overall supply of gas keeps growing.
With advances in a drilling technique called hydraulic fracturing, or “fracking,” companies can now profitably extract gas from previously hard-to-reach shale formations. Worldwide reserves of shale gas currently stand at 6,662 trillion cubic feet, the energy equivalent of 827 billion barrels of oil. And that doesn’t include the gas that is routinely discovered alongside oil in oil fields and that is sure to be found in some of those yet-to-be-explored deepwater basins.
Gas is so plentiful that, in energy-equivalent terms, its price is a quarter that of oil--a bargain that is already transforming CNG from a niche fuel, used mainly in bus fleets, to a product for general consumption. The Texas refiner Valero, for instance, will soon begin selling CNG at new stations in the U.S.
A gas-powered future could still have some high external costs, though. Fracking can be extremely hazardous to the local environment. The method uses high-pressure fluids to break open deep rock formations in which gas is trapped, and these fluids often contain toxins that might contaminate groundwater supplies. But such risks, which have received substantial media coverage and are now the focus of a new White House panel, may be controllable. Gas deposits are typically thousands of feet belowground, while groundwater tables are much closer to the surface, so most contamination is thought to take place where the rising bore intersects with the water table--a risk that could be minimized by requiring drillers to more carefully seal the walls of the bore.
That said, allocating too much natural gas to transportation might have surprisingly negative consequences. First, it would most likely increase demand for natural gas so much that prices would rise, thereby undermining the current cost advantage. Second, shifting a large volume of gas to the transportation sector would mean pulling that volume away from the power sector, where it is more constructively displacing coal, whose carbon content is far higher than oil’s. But converting specific sectors of the transportation system (delivery fleets, for instance, or buses) could simultaneously cut CO2 emissions and reduce oil demand.single page
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