Good news about gassy rocks

If you are feeling the need for some good news this morning, try this. The author, who writes for The Telegraph newpaper in the UK, was on NPR this morning with a decidedly optimistic assessment of the future of U.S. energy production and its resultant impact on the current account: easier extraction of natural gas from shale rock in the U.S. means natural gas prices decline, so oil prices must decline (because natural gas is increasingly a substitute for oil), so the U.S. will be sending much less overseas.

As for the US, we may soon be looking at an era when gas, wind and solar power, combined with a smarter grid and a switch to electric cars returns the country to near energy self-sufficiency.

This has currency implications. If you strip out the energy deficit, America's vaulting savings rate may soon bring the current account back into surplus – and that is going to come at somebody else's expense, chiefly Japan, Germany and, up to a point, China.

Have a look at the article. Before you get too excited, note one important caveat:

Shale gas is undoubtedly messy. Millions of gallons of water mixed with sand, hydrochloric acid and toxic chemicals are blasted at rocks...

Nor is it exactly green.

Nonetheless, the article notes, "[n]atural gas has much lower CO2 emissions than coal, even from shale." The article concludes with a note that we can be prone to hyperbole... but also that "we may need to rewrite the geo-strategy textbooks for the next half century". So I'm glad we resolved that.