Natural Gas offers the immediate opportunity to displace material amounts of oil used in transportation. Natural gas is a domestic resource in abundant supply that can help the United States reduce its dependence on foreign oil. Natural gas vehicle and fuelling technologies also provide the bridge in the inevitable transition of transportation away from petroleum to hydrogen.
Making America less dependent on foreign oil is a national priority. The threat of higher oil prices and dwindling oil supply due to tensions in the Middle East, and China and India's growing consumption have resulted in an increased focus on domestic natural gas consumption. President Obama has stated a goal of zero oil imports from the Middle East within ten years. In his 2006 State-of-the-Union address, former President Bush stated that we are “addicted to oil,” and his Administration was dedicated to reducing that addiction. Congress, too, is strongly on record in support of reducing petroleum use, and has passed a number of pieces of legislation to incentivize Americans to move to non-petroleum fuels.
About 98% of the natural gas we use comes from right here in North America. Conversely, 70% of the oil we use is imported. Every gallon equivalent of natural gas used in vehicles is one less gallon of petroleum that has to be imported.
We export about $1.7 billion a day to pay for foreign oil, adding to our trade deficit and weakening the dollar. By using domestic natural gas, we strengthen both our nation’s economy and energy security keeping jobs and revenues at home.
According to a June 2008 study by Navigant Consulting, North America has at least a 120-year supply of natural gas – contradicting the notion that America is running out. And as large reserves are developed that five years ago weren’t possible to produce, that supply is growing. It’s vital because many experts agree that global oil production has peaked, even as demand is still rising. Because of its growing abundance, domestic natural gas will play a major role in meeting our 21st-century energy needs.
“The assessments and estimates on natural gas supply are very impressive and have, frankly, caught industry forecasters off guard,” shared Rick Smead, one of the study’s co-authors and overall project manager for NCI. The study found that while all three unconventional gas sources have increased production over the past decade, natural gas production from shale formations is growing exponentially, increasing from less than a billion cubic feet a day in 1998, to about 5 billion cubic feet a day now. That’s a compound annual rate of growth of over 20%, which is over 600% for the time period.
“The extent of this ramp-up has not been fully captured by many reserve estimators,” said Smead, “probably because their emergence has been too rapid for existing models to capture accurately.”
There are at least 22 shale basins located onshore in more than 20 states in the U.S. including Texas, Oklahoma, Arkansas, Louisiana, West Virginia, Wyoming, Colorado, New Mexico, West Virginia, Pennsylvania, New York and Michigan.
New technologies have allowed the rapid emergence of gas-producing shales as a major energy source, representing a truly transformative event for U.S. energy supplies. American producers can clearly supply enough natural gas to meet today’s uses and become an economical source of transportation fuel in the form of CNG or greater supplies of electricity for plug-in hybrids for generations to come.