I live near the Haynesville shale area, it’s another unconventional shale play that should keep a lot of the blue-collar folks here who run rigs and fractionation equipment busy for years. IF, and it’s a big if, some things can be avoided:

1. Chesapeake, XTO and other NG companies spent like crazy to secure drilling rights. $20K and up per acre for people who knew what to ask for. They’re deep in debt, and now NG prices are bottoming along with oil. Will the gas drillers hold on long enough to make good on their investments? At least in LA what I hear about mineral rights is that unexploited mineral rights revert to the landowner if no drilling is done for a decade, meaning that there may be chicken farmers in northeast Louisiana who win the lottery AGAIN in ten years.

2. Cap & Trade could bollux even natural gas, which while a lower CO2 emitter is nevertheless a CO2 emitter when used for generation. Meanwhile solar and wind limp along with massive subsidies and less than 2% of US power output.

3. Horizontal drilling and fractionation are spectacular technologies that allow harvesting of far more energy than before. Without these improvements, the Barnett shale was essentially useless (that’s why Barnett & Haynesville are ‘unconventional’ gas plays). Any time there is something that’s good and keeps people employed in the private sector, there is likely someone who will regulate it out of existence.

It’s nice to be living next to a giant geologic cash register, but just because it’s there doesn’t mean we can use it.