“THE BARBARIANS ARE AT THE DOOR” - The Power Surge: Energy, Opportunity, and the Battle for America's Future - page 43

i xed; as a result, slightly lower performance can all too easily destroy
the economic prospects of a given well. In practice, one of the big-
gest costs of production—the cost of leasing gas-rich territory from
landowners—isn't i xed at all. If the value of the gas falls because it
turns out to be less economical to extract it, lease prices will drop too,
blunting the ultimate impact on production. Moreover, as drillers gain
experience and innovate, their other costs fall too.
h ese shock absorbers kick in impressively when you try to simulate
what will happen to shale gas if EUR estimates turn out to be badly
wrong. h e U.S. Department of Energy did just that in 2011 in one
of its big annual energy studies. 62 Its “reference case”—the best guess
of what will happen unless policies change—predicted 26.32 trillion
cubic feet of annual natural gas production by 2035. h en it asked what
would happen if the per-well output—the EUR—was slashed in half.
h e result? Production came in at 22.43 trillion cubic feet, less than in
the original case, but not drastically lower. Prices also rose about 30
percent above what they otherwise would be. None of this is trivial,
but none of it is a deal killer for shale gas development either.
Most analysts project U.S. natural gas prices set ling somewhere
between four and six dollars for a thousand cubic feet over the long run.
Such prices would be enough to make money for producers and facili-
tate a wide range of uses in industry, power generation, and beyond.
Something truly drastic would need to happen for shale gas economics
to fall apart and for prices to consistently clock in higher. Policymakers
and the public would be unwise to stick their heads in the sand and
assume that nothing could go wrong. If they're worried that shale gas
might collapse, though, they would be wiser to turn their at ention
toward a force potentially more powerful than mere geology: public
skepticism of drilling, which can fuel i rm opposition to it.

m m m

None of the potential benei ts of shale gas—not the economic gains,
not the geopolitical consequences, not the prospect of using less oil—
sway Warren Taylor or the people who joined him in Columbus to
protest gas development. h eir at itudes aren't unusual. For every claim