By Don Briggs
President, Louisiana Oil & Gas Industry

On Tuesday night, President Obama addressed the nation during his State of the Union speech where he called for
swift and immediate measures to speed up job creation and cut federal spending. On the top of his agenda was a call
to ensure a cleaner environment and foster clean energy like wind, solar, and biofuels. The President
straightforwardly acknowledged that the clean environment he envisions would come at a significant cost. Who’s to
pay for this visionary clean environment? – That’s right, the American taxpayer and the oil and gas industry.
It’s the President’s hope to spur American innovation and job creation through advancements in clean energy
technologies. In order to pay for these advancements the President plans to eliminate billions of dollars in tax
breaks for oil and gas companies. Obama candidly remarked, “And to help pay for it, I’m asking Congress to
eliminate the billions in taxpayer dollars we currently give to oil companies. I don’t know if you’ve noticed, but
they’re doing just fine on their own.”
In his address, President Obama noted that oil was “yesterday’s energy” and urged all Americans to pursue a change
of course. Obama stated, “With more research and incentives, we can break our dependence on oil with biofuels,
and become the first country to have a million electric vehicles on the road by 2015.” The President also added,
“Some folks want wind and solar. Others want nuclear, clean coal and natural gas. To meet this goal, we will need
them all — and I urge Democrats and Republicans to work together to make it happen.”
While we commend the President for his advocacy of clean burning natural gas playing a role in our nation’s energy
future, it’s important that the President’s policies reflect his rhetorical support. A question he may consider is,
“How can we increase taxes on natural gas production and ensure its affordability to meet his economic and
environmental goals?”

It’s time to get real
We need to be clear about the difference between tax breaks and direct subsidies. The President notes that the U.S.
taxpayer is in someway footing the bill for America’s oil and gas industry. This could not be further from the truth.
Taxes are an interesting and complex tool utilized by politicians and government. For instance, if you create a tax
one day, distribute the revenue, and then eliminate the tax on down the road – you’ve essentially created the
perception that tax dollars were “taken” from the public. It’s one thing to offer tax breaks to an industry, but to
directly subsidize it is an entirely different scenario.
Take for instance the U.S. renewable energy market. Companies developing windmills, solar panels, and other
renewable energies receive financial start-up money from the federal government that covers 80% of all their costs.
In reality, the American taxpayer is footing the bill for renewable energies that cannot compete in the marketplace.
The President may think that oil is the energy of the past, but the American consumer is saying something different.
According to a 2007 Department of Transportation study, there was an estimated 254.4 million registered passenger
vehicles in the United States. It’s safe to say that 99.9% of those vehicles run on fossil fuels. Until cars and trucks
run on windmills and solar panels, I don’t suspect the public will shift significantly from petroleum usage.

What about these electric cars?
Unfortunately, electricity is not an energy source. It takes energy to create electricity. The majority of electricity
generation comes from coal and natural gas. If the President plans to put a million electric cars on the road it may
be a good idea to incentivize natural gas production rather than stifle it with his tax increase plans. Higher
electricity costs mean less affordable electric vehicles.
According to the U.S. Energy Information Agency, less than 7% of U.S. energy consumption derives from
renewable energies like wind, solar, geothermal, and biofuels. Natural gas and petroleum make up nearly 70% of
energy consumed in America. There is a reason why alternative energies makeup such a small percentage of our
energy production – these technologies are significantly inferior to the energy provided by affordable fossil fuels and
renewable energy is too costly for the American consumer.
Even with billions of dollars in incentives, alternative sources of energy like solar and wind are not cost effective.
The only way they can become competitive in the marketplace is to increase the cost of fossil fuels through raising
taxes on the oil and gas industry. Raising taxes on fossil fuels will not bring about job creation and economic
growth. If anything it will lead to increased energy costs, higher food prices, and result in a lower standard of living
for all Americans. If the President is serious about getting us out of this economic situation and job creation is his
top priority, he should refrain from stifling an industry that will help our nation rise above our economic challenges

By Don Briggs – Louisiana Oil & Gas Association -

The mood of the industry today is what I would call “cautiously optimistic.”

From the low forties this time last year, oil prices have steadily climbed to the low eighties, a 100% increase.  Of course, the bottom of the low forties was a cliff dropper from $147 a barrel in 2008.  Regardless, $80 oil prices help to build the coffers for exploration budgets.

As well, natural gas prices have climbed to around $4.30 per Mcf from a low of $2.90 this past summer, a 48% increase.  Again, $4.30 per Mcf is a long way from the record setting $13 per Mcf in mid-2008.

Another contributor to the optimism within the industry is that drilling activity has significantly increased following the climb of oil and natural gas prices.  Historically, drilling activity (rig count) will mirror the up and down trends of oil and natural gas prices.  Our industry is a price driven industry.  Simply put, higher prices mean more drilling activity, while lower prices bring about lower drilling activity.

Louisiana’s current rig count in mid-March is 209 rigs, compared to 132 rigs drilling this time last year.  That’s a 58% increase and a noteworthy sign of growth.  Furthermore, the total domestic rig count today is approximately 1,410 rigs, up from 1,085 rigs in March of 2008.  That represents a 38% increase from mid-March of 2008.

Louisiana’s recovery in drilling activity has consistently outperformed all US drilling activity.  Individually, Louisiana has outperformed all of the major producing states.  Of course, the Haynesville Shale activity in Northwest Louisiana is the shinning star responsible for this growth.  Currently, there are 138 rigs drilling in NW Louisiana, up from a total of 73 rigs drilling this time last year.  That represents an astounding 89% growth in rig activity.  Projections for continued growth in rig activity for the next six months estimate that another 20 rigs could be added to the NW Louisiana fleet.

Another bright spot in Louisiana’s rig activity is in the South Louisiana Inland Waters.  Approximately a year ago, the inland water drilling activity hit an all-time historic low of 5 rigs, causing a near hysteria within our industry.  Today, there are 15 rigs drilling in the inland waters of Louisiana.  This ten drilling rig increase has resulted in the creation of nearly 1,800 direct and indirect jobs.

As for Gulf of Mexico drilling activity, there are currently 42 rigs in operation.  Over the past year, this number has remained consistent.  It’s important to note that the 42 active rigs in operation today are up from an all-time historic low of 25 rigs this past summer.

A further encouraging statistic comes from the recent MMS Lease Sale 213 that encompassed bids from 77 oil and gas companies and raised $949 million in revenues, up 34% from Lease Sale 208 in the Central Gulf of Mexico in March of 2009.

When you step back and look at the big picture, you cannot help but feel optimistic about the oil and gas industry in our state and country.  Though I do not want to throw optimism to the wind, there is more to this picture.

Several game-changing issues that stand in the way are the potential regulation of Hydraulic Fracturing by the EPA, EPA regulating greenhouse gases, the President’s budget stripping industry of incentives, and cap and trade. Although the future of our industry seems bright, we all must remain cautiously optimistic with these detrimental issues on the table.

Don Briggs – Louisiana Oil & Gas Association -

As we all know, natural gas production is an essential part of Louisiana’s economy. We have consistently ranked as the No. 2 gas-producing state in the U.S. Additionally, natural gas consumption is also important to Louisiana’s economy. We are the No. 3 gas-consuming state. With increased production and recent discoveries of groundbreaking shale gas reserves, many are asking important questions. In particular, where and how do we store all of this gas?

Quantcast

A major component in providing natural gas to the consumer is “natural gas storage.” And Louisiana is a leader in the development of natural gas storage.

Production of gas is generally at steady rates from a well or field. On the contrary, gas consumption varies widely from season to season, from day to day and from hour to hour.

Louisiana has a number of gas storage facilities and several under development. Our state has 18 gas storage facilities permitted by the Federal Energy Regulatory Commission.

Man-made salt caverns have been identified as an excellent location for gas storage facilities in Louisiana as well. Salt caverns, designed, engineered and created for the purpose of storing gas, crude oil, and other hydrocarbon products are characterized by extreme flexibility in injection and withdrawal of their stored products.Currently, hundreds of caverns are being used to store natural gas and other products used in the petrochemical and refining industries. Recently, a $500 million proposed St Mary Parish gas storage project would use salt cavern storage to supply and connect eight of the most important natural gas pipelines in the country.

Gas storage developments under consideration in Louisiana anticipate multibillion dollar investments. These investments create hundreds of jobs and further strengthen our state’s position as an energy leader.

As an important economic factor in our state, gas storage facilities use the

well-developed engineering, construction and operations skills available in Louisiana. Energy and economic security is enhanced by pipeline and storage development. With potential to become the No. 1 gas-producing state in the union, it’s important that Louisiana maintain its leadership in all aspects of the energy world.

Don Briggs – Louisiana Oil & Gas Association -

When the fog lifts and all of the rhetoric clears, what is the realistic outlook for the oil and natural gas industry in 2010?  I certainly do not pretend to have a crystal ball, and I do not believe anyone else does.  How often have we been blind-sided by major swings in the industry?

The first oil crisis occurred in 1974 with the Yom Kippur War and Arab Oil Embargo, which drove oil prices to $10 per barrel.  The 1979 Iranian Revolution was the second oil crisis, driving oil prices even higher.  With OPEC flooding the world market with their surplus crude, the crash of the mid-80s drove crude prices to the cellar.  The U.S. active drilling rig count plummeted from 4,000 plus rigs to 800 rigs almost over night.  In 1990, the fourth crisis commenced when Iraq invaded Kuwait.  Oil prices quickly rose followed by a drop in prices that put Louisiana’s drilling rig activity at its lowest point in decades.  In the late 90s and at the turn of the century, the Southeast Asia economic downturn caused oil prices to crash to $8 per barrel.  From 2002 to 2008, oil prices tracked upward.  The U.S. invasion of Iraq in 2004 and the economic growth of China and India both drove prices to a record high in 2008 of $147 per barrel.  China and India’s crude oil demand literally devoured OPEC’s surplus crude capacity.  In addition, speculators in the commodity markets were blamed for the unprecedented rise.  However, the spike in prices was short-lived with prices crashing to $35 per barrel in 2009 due to the collapse of the U.S. economy.  It will be interesting to see how history will treat the collapse of 2009.  Today, crude oil prices have recovered to near $80 per barrel.

Step back and observe all of the major swings in the oil industry.  What comes mind?  I cannot help but think of the saying in the mid-80s, after the crash, “Please Lord, give me just one more boom; I promise I won’t mess it up.”  The fact is we have no control in the ups and downs of the oil industry, nor, as you can see from the swings above, can we predict with pinpoint accuracy the geo-politics of the world.

The bottom line is the U.S. is addicted to oil.  We consume 25 percent of the world’s crude oil demand, which equates to roughly 20 million barrels per day.  The U.S. only produces 5 million barrels per day and has a mere 2.5 percent of the world’s proven reserves.  Importing nearly 65 percent of our demand from countries around the world, which for the most part dislike the U.S., puts our country in a most tenuous position.  A key fact in all of this is that 96 percent of the transportation fuel that runs the engines of the 250 million vehicles in the U.S. comes from a barrel of oil.  Dating back to President Truman, every U.S. president has been warned by the Department of the Interior that our dependency on foreign oil is a threat to our national security.

On January 12, the U.S. Energy Information Administration (EIA) released their Short-Term Energy Outlook through December 2011. The following are some highlights from EIA’s Energy Outlook.  However, keep in mind that the EIA also does not have a crystal ball.  Forecast in past years could not predict the major swings mentioned above.

Crude Prices -EIA expects that the price of West Texas Intermediate (WTI) crude oil, which averaged $62 per barrel in 2009, will average about $80 and $84 per barrel in 2010 and 2011, respectively. EIA’s forecast assumes that U.S. real gross domestic product (GDP) grows by 2.0 percent in 2010 and by 2.7 percent in 2011, while world oil-consumption-weighted real GDP grows by 2.5 percent and 3.7 percent in 2010 and 2011, respectively.

Comment: I believe that is a fair expectation, especially for 2010.  Consideration of a floundering U.S. economy could fluctuate crude demand upward or downward from EIA’s forecast.  China’s economy continues to show signs of upward growth and will have a significant impact on the forecast.

Also, at OPEC’s 155^th Conference held on December 22, 2009,  the Organization for the Petroleum Exporting Countries decided to maintain its current quota of oil production at 24.84 million barrels per day. Before the meeting, OPEC’s Secretary-General Abdalla Salem El-Badri described the current oil price, hovering between $70 and $80 per barrel, as “very comfortable” and signaled that output would remain unchanged.

For years we have heard and/or read about OPEC’s meeting to discuss the oil market, where they decide one of three options:

1. Increase oil production, putting more oil into the market to lower prices;
2. Cut production, taking oil out of the market, thus driving prices higher;
3. Leave production quotas of the OPEC countries at current rates, as the status quo.

The chart above, “OPEC Surplus Crude Oil Production Capacity,” depicts the amount of surplus crude (barrels per day) OPEC can put into the market.  In other words, OPEC can either open or close the valve, thus controlling the price of a barrel of oil.  From 2003 to 2008, the surplus capacity was around 1 to 2 million barrels per day.  In that period, China and India devoured the surplus.  World demand for crude decreased in 2009 thus putting 2 million barrels per day back in surplus capacity.  It is also very telling how tenuous and delicate the Middle East front is to our country’s energy infrastructure.

Natural Gas – EIA estimates that total marketed natural gas production increased by 3.7 percent in 2009, despite a 59-percent decline in the working natural gas rig count from September 2008 to July 2009.  Working natural gas rigs have since turned around from the mid-July 2009 low of 665, increasing to 759 as of December 31, 2009.  While production growth in 2009 was supported by the enhanced productivity of new wells being drilled, steep declines from initial production at these newly drilled wells and the lagged effect of reduced drilling activity are expected to contribute to a 3-percent decline in 2010 production.  EIA expects marketed production to increase by 1.3 percent in 2011 with growth in production from lower-48 non-Gulf of Mexico (GOM) fields offsetting a decline in GOM production.

Comment: EIA is predicting natural gas prices to be somewhere in the range of a lower limit of $3.88 to and an upper limit of  $8.47.  If the winter continues to be as cold as it has been, I believe we will see prices average close to $7 and up for 2010.

The recession has had a big impact on the natural gas market with prices collapsing from $13 in 2008 to $3 in 2009.  Additionally, the demand for natural gas declined in 2008 causing a severe gas oversupply, which actually started prior to the recession with 80 percent of the U.S.’s rigs drilling for natural gas.  Today 65 to 70 percent of the active drilling rigs are drilling for natural gas.  We can expect to see more rigs move to the oil side in the next year until gas prices firm up.

However, a colder winter than normal will change the oversupply problem in a hurry.  “A 266-Bcf gas storage withdrawal during last week’s deep freeze didn’t quite break the all-time weekly record but managed to carve a big chunk from the year-ago and five-year-average surplus in the nation’s inventories, the Energy Information Administration reported Thursday.” – Platts Gas Daily, January 15, 2010.

As if predicting oil and gas prices was not difficult enough, we are currently facing the most liberal, anti-industry administration the U.S. has ever seen.  Serious pieces of legislation are working their way around the halls of Congress.  In some cases where the legislation has stalled, such as cap and trade, governmental agencies have stepped in and are threatening to take control.   2010 is going to be a game changing year to say the least, but it is anyone’s guess how it will finish out….

Don Briggs – Louisiana Oil & Gas Association –

As we close the door to 2009, the New Year is looking brighter for Louisiana’s oil and gas community. After a year plagued with uncertainty and price instability, 2010 may prove to be a more promising year.

Here’s the good and the bad. Oil and natural gas prices are steadily improving, climbing from the record declines of last year. Thirty-five dollar oil, and $2.80 natural gas certainly does not work for the industry. With oil prices near $80 and natural gas climbing to $6, the industry’s near future is looking more encouraging.

Have we seen the bottom in drilling activity behind the door of 2009? Yes we have. Drilling activity in South Louisiana crashed to record lows in 2009, however with the recovery of oil and natural gas prices, the industry is gearing up for what looks like a significantly more productive year. In 2009, only 5 inland water drilling rigs were in operation in South Louisiana. Today that number has doubled to more than 11. Additionally, South Louisiana land rigs were at a record low of 9 in 2009. Today that number stands at 12. The Gulf of Mexico rig count was down to a record low of 25, and today remains at 39. And of course, the “diamond in the rough” has been the sustained growth and activity of the Haynesville Shale in North Louisiana. Currently, rigs in operation in the Haynesville have reached a staggering 126 rigs drilling. That’s the good.

As we look toward 2010, there are three major obstacles that will make it more difficult for oil and gas companies to explore in the US.

First, this past week Secretary of the Interior Ken Salazar announced his new reform program for federal oil and gas leasing, requiring more detailed environmental review, more public input and less use of streamline leasing. According to Salazar, “The previous administration’s ‘anywhere, anyhow policy’ on oil and gas development ran afoul of communities, carved up the landscape and fueled costly conflicts that created uncertainty for investors and industry.” Responding to the announcement, American Petroleum Institute Pres. Jack N. Gerard stated, “In what has become increasingly familiar double-talk from this administration, Interior Sec. Salazar today again spoke of the importance of domestic oil and natural gas while making it more difficult to produce.”

Secondly, on December 7^th of last month, President Obama unveiled to the world that the U.S. Environmental Protection Agency (EPA) will regulate greenhouse gases. EPA proclaimed in a public statement, that “greenhouse gases (GHGs) threaten the public health and welfare of the American people.” In a letter to the EPA, Governor Jindal responded by saying, “Any consideration for such a comprehensive regulatory scheme belongs in a thoroughly vetted legislative process. There is no doubt that this change will certainly have profound negative economic impacts on the state of Louisiana, as well as the entire country.”

Lastly, the Interstate Natural Gas Association of Americas estimates that nearly 300,000 natural gas wells will be drilled and completed using the technology of hydraulic fracturing by 2030. The oil and gas industry has utilized this technology for nearly 50 years without a single environmental incident. A liberal Democratic majority in Congress and an anti-oil and gas Administration are pushing for EPA to regulate hydraulic fracturing, which is currently under the regulatory authority of the states.

It’s my hope that 2010 be a brighter year. As prices become more stabilized, oil and gas companies in Louisiana are gearing up. However, with the incessant tampering with private industry by the Obama Administration and bureaucrats in Washington, our potentially brighter year could quickly darken.

Don Briggs – Louisiana Oil & Gas Association -

We all are familiar with the term expo or exposition. As defined by Wikipedia, an expo is “an exhibition organized so that companies in a specific industry can showcase and demonstrate their latest products, service, study activities of rivals and examine recent trends and opportunities.”

This week, energy companies head to Shreveport for the Gulf Coast Prospect and Shale Expo, just as they have traveled to Lafayette for the past 13 years. (During the last week of October, Lafayette plays host to one of the largest expos in the country — Louisiana Gulf Coast Oil Exposition. This is a true expo or trade show and is very different from a prospect expo.) These same companies attend prospect expos in Houston, Dallas and across the country all year long.

A prospect expo is most easily defined as a shopping mall for oil and gas deals, referred to as “prospects.” An exploration prospect normally begins with a petroleum geologist using his knowledge of geology and geological structures of a particular area to determine if oil and/or natural gas is trapped in the rocks below the surface.

The geologist often uses 3-D seismic technology to explore the geologic formations that make up the Earth’s crust. This very technical and expensive process provides the imagery necessary to determine if oil and/or natural gas is present. Once oil and/or natural gas is found, a prospect is created.

However, a prospect is merely a potential prospect until the company can obtain the mineral leases surrounding the prospect. Landmen, or as they were called decades ago — “lease hounds,” go into the field to secure from landowners or mineral lease owners the mineral leases surrounding the prospect. Thereafter, an oil and gas prospect is created; the company now has a drilling deal to sell.

Most independent oil and gas companies retain a percentage of their oil and gas prospects for themselves. They sell the remaining interest to investors, made of independents like themselves, or institutions, companies and individuals. Historically, selling a drilling deal on the “street,” so to speak, can take months traveling to Houston, Dallas, Denver, Lafayette and Shreveport showing your deal over and over again. Thus, about 14 years ago the prospect expo was developed.

A prospect expo is nothing more than a “mall” full of drilling prospects. The oil companies love the idea; in two days, they can show their “drilling prospect” to more potential investors than they could in three months of traveling. Potential investors love it for the same reason of being able to view a variety of drilling deals in just a few days.

The buyers of these prospects are often from companies showing prospects elsewhere in the show. But, mostly, they are investors from companies across the globe that are looking for the next great oil or gas discovery. They come to the show looking for just the right deal for their company. When they find that deal, they sit down with the company and begin to work out some of the details.

If the details work out for everyone, the prospect is sold, and a successful show is in the books. This is exactly what will be happening in Shreveport this week, or at least, this is what everyone is hoping.

150 Years from Oil to Natural Gas -

by Don Briggs/Gifford Briggs -

On August 27, a major landmark will be reached in the oil & gas industry. For all but a small few Americans, this day will pass by without even a thought about what happened exactly 150 years ago. However, on that day 150 years ago the most important step towards industrialization was taken in Titusville, Pennsylvania.

Edwin L. Drake drilled down 69-½ feet into the ground near Titusville, Pa., and struck oil. It was the first well deliberately drilled for oil, and was the launching point for the modern petroleum industry. Unfortunately for Drake, about a month and a half later that same well caught fire and burned to the ground and was the first well fire on record.

The world has changed quite a bit since Mr. Drake drilled that first well, and most of those changes occurred because of his actions. The industrial revolution, creation of the automobile, planes, space travel, plastics, and polymer are just a few of the accomplishments that have come about because of oil. The United States economy quickly became the largest economy in the world as we embraced oil and energy. The more oil we consumed, the more we wanted. We became addicted. There was always going to be plenty of oil for everyone. Right?

Fast-forward 150 years from Edwin Drake’s discovery and you will find a nation in the middle of an energy crisis. A nation that was once a global leader is now dependant on foreign oil. We have become accustomed to extremely low gasoline prices, and when those prices climbed a little, the country went into an uproar calling for the heads of the companies causing these high prices. We have begun to think that low energy prices and abundant oil are a RIGHT of the American people.

Unfortunately, the numbers don’t always agree. The United States makes up 5% of the world’s population and we consume 25% of the world’s oil (20 million barrels/day). We also hold only 2.5% of the world’s reserves. Combine that with the fact that ageing fields a running out of oil faster than they have in the past (depletion rate), and fewer large fields are being discovered, and now you see a national disaster brewing.

For the past 25 years, our Presidents have said to the American people that they are going to end our addiction to oil. Campaign promise after campaign promise has been left unfulfilled as Presidents met face to face with the truth about our oil addiction. Once again we are faced with the same campaign promises. The current administration has promised to end our reliance on foreign oil by increasing renewable energy supply in the U.S. The two areas that are receiving the most attention from the administration are wind and solar.

Wind energy and solar energy have been around for years, but have never made a substantial impact on the US economy. The President has told the American people that this is the answer to our addiction to oil. Congress has allocated BILLIONS of taxpayer dollars to fund these sources of energy in an effort to make true on the President’s promise. These dollars may help build more wind farms and solar panels, but it will do absolutely nothing to end our addiction to oil. Wind and solar currently make up a combined 0.35% of the US energy supply. Even if we double the amount of energy produced by wind and solar, it would not account for 1% of the total US energy consumption. What is worse, it doesn’t even address the real problem – transportation.

Everyday, Americans drive over 250 million cars and trucks as they head to the office, school, friend’s house, shopping malls or wherever else their desires may take them. These 250 million vehicles are powered by gasoline, which is produced in refineries and comes from oil. In fact, 76% of the oil we consume (~15 million barrels/day) is used in transportation. We could cover the US with wind farms and solar panels, and it would not replace oil in its role in transportation. Why is the President not talking about this? Why isn’t he focusing his attention on the 250 million cars and trucks running on oil? “Cash for clunkers” is not even a band-aid on this problem.

150 years after Drake successfully drilled the first oil well, the very solution that can end our addiction to oil was the very thing that burned his well to the ground – natural gas. Natural gas will not be the end all solution to our transportation needs, but it will be the bridge fuel that gets us there.

The biggest challenge is the “chicken or the egg” question. Who will buy a car if there are no stations to fill up, and who will build the station if there are no cars to fill up. The great thing about natural gas or CNG (compressed natural gas) is that the technology exists to convert existing automobiles to run on CNG. Each year more and more conversion kits are being built for other models, and as demand increases more kits will be designed. Since existing cars can be converted, we don’t have to purchase a new car in order to take advantage of the new fuel.

The second biggest challenge is the distribution network that needs to be in place to service the 250 million cars – how are we getting the fuel to the fueling stations and then how are we retrofitting the stations to provide the new fuel. One great thing about natural gas is that the distribution network already exists. Natural gas vehicles run off the same natural gas that you use in your home to cook with. Stations need a bigger line, but the network is there. We don’t have to re-invent the wheel to get CNG into the transportation network.

And the last challenge is the one that CNG can’t promise, at least not forever, and we don’t expect it to. The problem that all administrations have had over the past 25 years is that they are looking for the Silver Bullet- the one thing that will solve all their problems. The problem is, that bullet does not exist. Natural gas is not the end all solution to our reliance on oil. Eventually we will run out of natural gas as well. However, with the recent discoveries on the shale plays in the US, it has been calculated that the US has enough natural gas for the next 100 years. Natural Gas is the bridge fuel to the future.

150 years ago Edwin Drake began the largest expansion of the US economy. One might say that he is responsible for just about every major accomplishment and innovation the world has seen over that time period. The next 150 years will not belong to oil; it will belong to natural gas.