The Importance of Natural Gas in Our Energy Future
(From Michigan Green) – Energy’s future may have come to light with Exxon Mobil Corp.’s proposed purchase of XTO Energy. If ExxonMobil’s predictions are right, unconventional formations such as shale would provide significantly more of this country’s generation and transportation fuels.
Texas-based XTO, which has the resource equivalent of 45 trillion cubic feet of shale gas, shale oil and coal-bed methane, might be the perfect fit for ExxonMobil — or any deep-pocketed oil partner, for that matter. Indeed, Big Oil has made huge profits from high-priced gasoline in recent years and that money must get reinvested. By betting on natural gas, ExxonMobil is saying that fossil fuels will remain paramount but that tighter air quality restrictions are coming; natural gas emits far fewer emissions than either oil or coal.
“This is not a near-term decision; this is about the next 10, 20, 30 years,” says Rex W. Tillerson, Exxon Mobil Corp.’s chief executive, in a conference call. “We think there will be significant demand for natural gas in the future.”
The $31 billion deal that also includes the acquisition of $10 billion in XTO debt is expected to conclude in the second quarter of 2010. ExxonMobil’s venture comes atop earlier estimates this year from the Potential Gas Committee that said the country’s natural gas reserves are 35 percent greater than two years ago. Reserve levels now stand at more than 2,000 trillion cubic feet, it says, which is the most they have been in 44 years.
The increase is because of shale, which is a sedimentary rock that is less porous than sandstone where traditional natural gas is found. While explorers have always known that such formations are filled with gas, it has only been in recent years that retrieving those resources has been technologically feasible. With horizontal drilling, producers can move laterally beneath cities and neighborhoods to extract the product.
