By Jason P. Brown – Economic Review, Federal Reserve Bank of Kansas City
The extraction of natural gas from shale and tight gas formations is one of the largest innovations in the U.S. energy sector in several decades. According to the Energy Information Agency’s (EIA) 2013 Annual Energy Outlook, total U.S. recoverable natural gas resources were estimated to be 2,327 trillion cubic feet, up from 1,259 trillion cubic feet in 2000. Using projected annual growth in U.S. natural gas consumption, current U.S. reserves of natural gas represent an estimated 70 years’ worth of supply. This energy boom has reversed a long downward trend in U.S. natural gas production. In the 1970s the U.S. energy sector seemingly conceded its decline and began investing in global markets to survive. That trend reversed course in the mid-2000s.