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Thursday, November 3, 2011

David Brooks, "Shale Gas Revolution": I Told You So

In June of this year, I wrote a blog entry (http://jgcaesarea.blogspot.com/search/label/oil%20shale), explaining the benefits and blessing of oil shale:

"For example, if oil prices remain high, shale oil, of which there are world reserves exceeding 3 trillion barrels, will become commercially viable. And guess who owns most of it? More than 60% of world deposits are located in the U.S., primarily in the Green River Formation. Indeed, better answers will need to be found to extract the shale oil without damaging the environment, but what better way to create a vast new industry, offering both hi-tech and low-tech jobs?"

Today my optimism is echoed in a New York Times op-ed entitled "Shale Gas Revolution" (http://www.nytimes.com/2011/11/04/opinion/brooks-the-shale-gas-revolution.html?partner=rssnyt&emc=rss), in which David Brooks writes:

"This kind of balance is exactly what our political system doesn’t deliver. So far, the Obama administration has done a good job of trying to promote fracking while investigating the downsides. But the general public seems to be largely uninterested in the breakthrough (even though it could have a major impact on the 21st-century economy). The discussion is dominated by vested interests and the extremes. It’s becoming another weapon in the political wars, with Republicans swinging behind fracking and Democrats being pressured to come out against. Especially in the Northeast, the gas companies are demonized as Satan in corporate form.

A few weeks ago, I sat around with John Rowe, one of the most trusted people in the energy business, and listened to him talk enthusiastically about this windfall. He has no vested interest in this; indeed, his company might be hurt. But he knows how much shale gas could mean to America. It would be a crime if we squandered this blessing."

Yes, I believe oil shale could fuel economic recovery in the US, while also eliminating dependency upon Middle East oil and vastly improving America's trade imbalance.

And now another fact largely unknown to the public: Israel also has huge deposits of oil shale. As reported by Amiram Barkat in a Globes article appearing in
The Jerusalem Post (http://www.jpost.com/Business/Globes/Article.aspx?id=240173):

"‘Within a few years, Israel will become one the largest producers of oil and gas in the world,' according to Dr. Harold Vinegar, who until three years ago was chief scientist of energy giant Royal Dutch Shell.

Vinegar told Globes he estimates that exploration for gas will yield impressive results, but that Israel’s true future lies in oil.

He believes the chances of finding regular oil are not high, but that huge quantities of oil shale will make it possible to produce oil in quantities approaching the production of Saudi Arabia.

. . . .

'I have examined oil-shale deposits all over the world, and nowhere have I seen a reservoir to compare with what we have here in terms of the richness and thickness of the stratum,' Vinegar said. 'Just in IEI’s license area there is a potential for 40 billion barrels of oil. In Israel as a whole there are, in my estimation, 250 billion barrels of oil and perhaps more. The reserves of Saudi Arabia, for the sake of comparison, are estimated at 260 billion barrels.'"

Can you imagine tiny Israel becoming one of world's energy giants? It sounds insane, but it's not far away.

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