Federal Government Support Led to Shale Gas Breakthroughs

Washington Post
December 16, 2011

A Boom in Shale Gas? Credit the Feds
Michael Shellenberger and Ted Nordhaus

This insightful article from the Washington Post makes the point that the breakthroughs that revolutionized the natural gas industry — massive hydraulic fracturing, new mapping tools and horizontal drilling — were made possible by strategic financial support from the U.S. Department of Energy (DOE). It should be noted that this same DOE is under serious attack for being unable to invest wisely in new technology, in the aftermath of the Solyndra bankruptcy (the solar firm that received $535 million in federal support but nonetheless slipped into bankruptcy last fall). In a nutshell, the technologies now used to extract natural gas from shale in a cost-effective manner were developed with the support of taxpayer dollars. And much of the early work in the 1970s was done right here in Morgantown, at the Energy Department’s Morgantown Energy Research Center. According to this article, the federal government generously subsidized drilling for non-conventional gas throughout the 1980s and 1990s, when oil and gas were cheap. The authors conclude that:

“[T]he lesson of the shale gas revolution is that we should not be so quick to judge government investments in energy technology. Between 1978 and 2007, the Energy Department spent $24 billion on fossil energy research. Billions more were spent through the Gas Research Institute and non-conventional gas tax credits. Those investments were widely panned as a failure during the ‘80s and early ‘90s, when gas was plentiful and cheap.”