Energy Abundance?

In a testament to how technology and markets make energy (and other commodities) infinite in abundance, there are two interesting developments - the first which is already happening is shale/unconventional natural gas, the second is considerably more speculative from Joule Biotechnologies, that uses microorganisms to generate biofuels. Both have the potential to be game changers in how we consume energy around the world.

I was put onto the first about a month ago by a good friend. The developments in shale gas have been relatively recent but because of radical improvements in horizontal drilling and fracturing making their extraction economical. The additional remarkable news is that they're finding economical deposits everywhere - from China to all sorts of places in the US and pretty much everywhere they find them, the deposits are massive. There is enough energy there to wean the US of foreign dependence on energy AND natural gas is considerably more clean burning.

Yesterday, the news broke that the Marcellus Shale formation (in 5 states mostly in Pennsylvania) has significantly more natural gas than previously estimated (Pittsburgh Tribune-Review):

"If the natural gas from the Marcellus could be extracted on demand, the Marcellus alone would last the U.S.A. more than 19 years, producing 489 trillion cubic feet of gas," [Terry] Engelder (Penn State University geosciences professor)

Elsewhere in Texas/Mississippi, they've been estimating that the Barnett Shale formation has in excess of 200 Tcf of gas and that estimate was in 2005 (GeoScienceWorld). To recognize just how dramatic this turn of events has been, consider that in 2000, the Energy Information Administration only thought 254 Tcf of natural gas were "technically recoverable" - another words not even economically so (NaturalGas.org) and Marcellus estimated to only have 1.9 Tcf in 2002 - yes, that's one point nine (Geology.com).

This is bad news for practically every other form of alternative energy out there as we may be entering a new era for cheap energy - particularly for those companies that can shift usage to natural gas. The first to go will be coal power plants.

The second tidbit is from Joule Biotechnologies, a startup based in Cambridge, MA that claims it has a high yield process with microorganisms that poop gasoline and diesel using (amont other things) sunlight and carbon dioxide (MITTechnologyReview via Instapundit). It's a process that hasn't been tested yet on a large scale but the company claims that it could be as cost effective as fossil fuels. These developments are a reminder that developments in technology are inherently unpredictable. It begs the question why governments therefore even attempt to play favorites.