pipeline from the east or by ship in the form of LNG.18
But it is still early days, and a great deal of effort will be required to develop such resources. Obstacles will range from local opposition and national policy to lack of infrastructure and sheer density of population. Still the imperatives of diversification will likely fuel the development of unconventional gas resources in some parts of Europe, as elsewhere—most notably in Poland and Ukraine. The new supplies will compensate for declining conventional domestic supplies. Moreover, by enhancing the sense of security and diversification around gas supplies, the development of unconventional gas could end up bolstering confidence in relying on expanded gas imports.
A FUEL FOR THE FUTURE
Natural gas is a fuel of the future. World consumption has tripled over the last thirty years, and demand could grow another 50 percent over the next two decades. Its share of the total energy market is also growing. World consumption on an energy-equivalent basis was only 45 percent that of oil; today it is about 70 percent. The reasons are clear: It is a relatively low-carbon resource. It is also a flexible fuel that could play a larger role in electric power, both for its own features and as an effective—and indeed necessary—complement to greater reliance on renewable generation. And technology is making it more and more available, whether in terms of advances in conventional drilling, the ability to move it over long-distance pipelines, the expansion of LNG onto much larger scale, or, most recently, the revolution in unconventional natural gas.
A few years ago the focus was mainly on rapid growth in LNG. With that went a widespread belief that a true world gas market was in the making, one in which supplies would easily move to one market or another, and one in which prices would converge. The arrival of shale gas has, for the time being, disproved that assumption. Yet the emergence of this new resource in North America is certainly having a worldwide impact—demonstrating that the gas market is global after all—just not quite in the way that would have been expected.
PART THREE
The Electric Age
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ALTERNATING CURRENTS
Electricity underpins modern civilization. This fundamental truth is often expressed in terms of “keeping the lights on,” which is appropriate, as lighting was electricity’s first major market and remains a necessity. But today that phrase is also a metaphor for its pervasiveness and essentiality. Electricity delivers a precision unmatched by any other form of energy; it is also almost infinitely versatile in how it can be used.
Consider what would not work and would not happen without electric power. Obviously, no refrigerators, no air-conditioning, no television, no elevators. It is essential for every kind of industrial processing. The new digital world relies on electricity’s precision to drive everything that runs on microprocessors—computers, telephones, smart phones, medical equipment, espresso machines. Electricity makes possible and integrates the real-time networks of communications, finance, and trade that shape the world economy. And its importance only grows, as most new energy-consuming devices require electricity.1
Electricity may be all-pervasive. But it is also mostly taken for granted, much more so than oil. After all, gasoline usage requires the conscious activity once or twice a week of pulling into the filling station and filling up. To tap into electricity, all one needs to do is flip a switch. When people think about power, it’s usually only when the monthly bill arrives or on those infrequent times when the lights are suddenly extinguished either by a storm or some breakdown in the delivery system.
All this electrification did indeed begin with a flip of a switch.
THE WIZARD OF MENLO PARK
On the afternoon of September 4, 1882, the polymathic inventor Thomas Edison was in the Wall Street offices of the nation’s most powerful banker, J. P. Morgan. At 3:00 p.m., Edison threw the switch. “They’re on!” a Morgan director exclaimed, as a hundred lightbulbs lit up, filling the room with their light.2
Nearby, at the same moment, 52 bulbs went on in the offices of the New York Times, which proclaimed the new electric light “soft,” and “graceful to the eye . . . without a particle of flicker to make the head ache.” The current for these bulbs flowed underground, through wires and tubes, from a coal-fired electric generating plant that Edison had built a few blocks away, on Pearl Street, partly financed by J. P. Morgan, to serve one square mile of lower Manhattan. With that, the age of electricity had begun.
The Pearl Street station was the