Energy Charts of the Year (Updated)
Below are my six (updated) "Energy Charts of the Year" that help tell the story of the "shale revolution" that is transforming America's energy outlook, with major, positive implications for U.S. energy security, economic growth and job creation, a manufacturing revival, and even government revenues.
1. U.S. net oil imports in 2011 (through November) were only 45.4% of domestic consumption, which is down from the peak of 60% in 2005 and at the lowest level since 1995, thanks to greater energy efficiency and reduced demand, but also in large part due to increased domestic oil production (see chart below).
3. North Dakota currently boasts ten counties with jobless rates below 2% in October, but at the epicenter of the Bakken region in Williams County, home of the city of Williston, the jobless rate in October was an unbelievable eye-popping 0.9%, see chart below.
4. Moving east to the gas-rich Marcellus shale formation covering Pennsylvania, Ohio and West Virginia, the chart below shows the dramatic increases in domestic natural gas production over the last five years. After about a decade of stable gas production, the advanced fracking technologies starting becoming available about five years ago and boosted domestic gas production by almost 25% since 2006 (see chart below). The boom in unconventional shale gas made America the world's No. 1 producer of natural gas, when it passed Russia in 2009.
5. Thanks to the new abundant supply of unconventional shale gas in the U.S., we've now got access to a 100-year supply of the energy resource at the current consumption rate, and prices have dropped significantly. The chart below displays the monthly inflation-adjusted price of natural gas back to 1997, and shows that the current spot price of gas is close to a ten-year low, and is 70-80% below the peaks in 2001, 2006 and 2009. Additionally, gas prices over the last two years have been more stable than any two-year period since the late 1990s; so gas prices are not only close to historic lows adjusted for inflation, but are more stable than in more than a decade. It's the fact that gas prices are now both low and stable that makes it such an attractive source of energy for American manufacturers.
PricewaterhouseCoopers predicts that lower gas prices will help add one million new U.S. manufacturing jobs by 2025. And residential consumers around the country are saving hundreds of dollars this winter, as utility companies in many areas have started to lower rates for piped natural gas.
Bottom Line: Thanks to the shale gas revolution, there's never been a time in recent history when natural gas has been cheaper than oil on an energy-equivalent basis.