Inventing Energy

Coal produces less of your electricity than it did a couple years ago.

Some experts think the U.S. could actually achieve energy independence soon, after 40 years of trying.

A worldwide helium shortage could affect your plans for sending that Valentine’s Day gift bouquet.

Here’s the weird part: all those things are happening for the same reason—American ingenuity.

The big energy story these days is the boom in U.S. natural gas production. In 2010, a new branch of the gas industry took off as entrepreneurs combined business and financing techniques with new technologies of horizontal well drilling and underground rock fracturing to release shale gas.

The revolution in supply has analysts predicting more seriously than ever that within a couple of years our country could realize the decades-old dream of producing more energy than we consume.

The abundant supply has also dramatically reduced natural gas prices. One effect is that cost-conscious electric utilities, which traditionally rely on coal as the most available and economical fuel, are firing up natural gas turbines. In Kentucky, that means the share of your electricity generated from coal has dropped from nearly all of it, 98 percent, to 90 percent—still a huge share, but a significant change. Nationally, coal’s share of electricity generation has dropped from 50 percent to 40 percent.

In another effect that shows the complex and interconnected nature of the energy economy, the drop in natural gas prices has reduced the incentives for producing helium, which is a byproduct of natural gas extraction. You might want to check with your local party store before you do a lot of planning for your next celebration.

But that natural gas expansion could deflate as fast as it appeared. Pipelines and storage sites have limited capacity; environmental questions are being raised about the shale extraction process known as fracking; and natural gas prices and supplies have an extremely volatile history.

For the real lesson of this current energy development, read The Future of Electricity column this month about how massive efforts of financing and technology are finding better ways to burn coal. What clean coal and the natural gas boom have in common is that our energy future is not about any one fuel, but our ability to solve problems.