“I’m sorry for you—coming to Texas [in 1915] to look for oil. Don’t you know there is no oil in Texas?!”

– Wallace Pratt (oil and gas geologist), quoted in “Oil Finding—the Way it Was,” Petroleum 2000 Issue, Oil & Gas Journal, August 1977, p. 144.

The New York Times has published two amazing front-page articles on shale gas (here and here), which raise a number of issues about the prospects for the resource, suggesting that the reserves and profitability are vastly overstated. A careful reading of the articles, however, suggests that it is more smoke than fire.

Two specific issues raised in the article are important: the profitability of shale gas wells and their long-term production profiles. Many ancillary issues are also raised but can be dispensed with.…

“Nothing is more fatal to a realistic and usable understanding of resources than the failure to differentiate between the constants of natural science and the relatives of social science, between the totality of the universe or of the planet earth … and … the ever-changing resources of a given group of people at a given time and place….  One has but to recall some of the most precious resources of our age—electricity, oil, nuclear energy—to see who is right, the exponent of the static school who insists that ‘resources are,’ or the defender of the dynamic, functional, operational school who insists that ‘resources become.’”

– Erich Zimmermann, World Resources and Industries (New York:  Harper & Brothers, 1951), p. 11.

Resource optimists are continually rewarded by oil and gas drillers. One can only imagine what world production would be like if private property rights and profit/loss entrepreneurship were the norm as it is in much of the United States.…

Editor note: This three-part series began with A Free Market Energy Vision (Part I: Worldview) and continued with Energy for a Free Society: The ‘American Energy Act’ (Part II: Real World Reform).

In their essay on energy policy for the 111th Congress, Jerry Taylor and Peter Van Doren of the libertarian Cato Institute offered nine priorities to move the United States from energy statism to free energy markets.

But there are more areas of pro-private pro-market exchange reform on the federal level. I offer four–perhaps readers can add more in comments.

Nine Policy Recommendations (Cato)

Congress should:

• Open up public lands currently off limits to the oil and gas industry in the outer continental shelf and the Arctic National Wildlife Refuge (ANWR) for exploration and drilling,
• Repeal Corporate Average Fuel Efficiency (CAFE) standards along with all other energy conservation mandates,
• Repeal subsidies for all energy industries including oil, gas, coal, nuclear, and renewable energies of all kinds,
• Repeal fuel consumption mandates for ethanol and resist prospective consumption mandates for other renewable energies,
• Eliminate all targeted public energy research and development programs and replace them with a generalized tax credit for private research and development undertakings,
• Transfer the maintenance of the nuclear weapons stockpile from the Department of Energy to the Department of Defense and privatize the national laboratories,
• Sell the oil from the Strategic Petroleum Reserve and shut the program down,
• Eliminate the Department of Energy and all its programs, and
• Refuse appeals to impose new taxes and/or regulations on energy producers and manufacturers.

Editor note: The first post in in this three-part series was titled A Free Market Energy Vision (Part I: Worldview); the third is“Federal Energy Policy for America (Part III: Cato’s priorities–and a few more).”

The Obama Administration has been implementing an anti-energy agenda since coming to Washington. From day one, Obama and his “dream ‘green’ team” have worked to increase the cost of traditional energy to reduce usage and try to make uneconomic consumer-rejected energy (wind, solar, ethanol, electric vehicles) more economic.

The effects of these policies are now playing out in front of the American people: rising energy prices, tens of thousands of jobs destroyed, and increasing dependence on foreign state-owned energy companies. In response, the free market community has been playing defense.

But even before Obama, multiple-hundred-page interventionist legislation has been signed time and again by Republican presidents.…