The world is in the midst of a natural gas revolution. Even the sober International Energy Agency refers to a scenario it calls a "golden age of gas". If such optimism proves right, the implications would not only be far greater than those of the eurozone's painful dissolution, but would also be economically positive. Never forget that ours is a civilisation built on cheap supplies of commercial energy. The economic rise of emerging countries is bound to make the demand for commercial energy increase dramatically in the decades ahead. Gas matters.

This revolution has a name: "hydraulic fracturing", colloquially known as "hydrofracking" or just "fracking". As is true of nearly all of the technological revolutions of the past century, this one also originated in the US. The US Energy Information Administration explains that "[t]he use of horizontal drilling in conjunction with hydraulic fracturing has greatly expanded the ability of producers to produce natural gas from low permeability geologic formations, particularly shale formations."*

David Fuller's view This is a very familiar subject for veteran Fullermoney subscribers (this cite has posted 115 items on the subject, commencing in 2008 - see 'Search' facility in menu shown upper-left).

Shale gas most certainly is a 'game changer', evidenced by a cost for natural gas in the US which is approximately one-quarter of European prices. Moreover, shale gas is extremely plentiful as Martin Wolf also points out. So are reserves of shale oil which is also recovered by similar fracking techniques.

For these reasons, Fullermoney has maintained for approximately two years that energy prices will be lower in the next decade, in real (inflation adjusted) terms. Meanwhile, the US is the main beneficiary today, having pioneered this industry. America can achieve energy independence - regarded as unthinkable only a few years ago - much sooner given legislation which favours the development of domestic reserves.

Therein lies the rub. All extraction industries are polluters. Should countries slam the door on developing this abundant and much needed energy source because there are risks to ground water, or should they regulate it responsibly and sensibly? I view this as a rhetorical question.

The concluding portion of Martin Wolf's article also addresses responsibility and regulation, and here is a letter critical of fracking, also published by the FT.

Mankind cannot live without energy and there are drawbacks to all viable forms of its production. Nuclear power does not damage the environment, unless there are radiation leaks either from the reactors or spent fuel. Renewables are not yet economic but they have rapidly become a NIMBY issue, particularly windmills.