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Energy diversification = freedom

America has been handed a great gift, the gift of technological breakthroughs like horizontal drilling and hydraulic fracturing for oils and natural gas.

This gift, if we handle it properly, has the potential not only to free our nation from being hostage to other nations, but to allow Europe and other regions to free themselves from the tyranny of dependence on Russian sources of oil and gas.

Think how much differently our allies in Europe would behave in this time of crisis if they had the infrastructure, and the access, to handle natural gas and oil from America, Canada and Mexico.

New Mexico has played an important, I would say critical, role in this potential geopolitical and economic revolution.

Many know of George Mitchell, founder of Mitchell Energy and Development Corporation. His use of horizontal drilling, hydraulic fracturing and micro-seismic imaging – groundbreaking at the time he began – has spread throughout America.

But many may not remember the role New Mexico played. Decades of research and development, a partnership of government and energy producers, prepared the way to current innovation.

For example, Sandia National Laboratory, working on research done by the Bureau of Mines in 1975 in Laramie, Wyo., was a pioneer in development of downhole instrumentation. That downhole instrumentation was a direct result of Sandia’s work in underground nuclear weapons testing. Sandia proposed to apply this new knowledge to oil and gas well development. Then this breakthrough was applied to hydraulic fracturing.

A second effort I remember well was the research and development conducted at our national weapons labs that enabled companies to “see” the oil and gas reserves in tight formations using micro-seismic imaging technology.

The first systematic research into micro-seismic fracture mapping was done by Los Alamos National Laboratory in the 1970s. Later, the National Energy Technology Laboratory collaborated with Sandia to build and deploy receivers for testing similar mapping technology. In the 1980s this system was used at the Energy Technology Lab’s multi-well site experiment in Colorado, where major fracture experiments were successfully monitored.

What has this meant to us today?

First, it has freed the nation from the volatility of prices that plagued the industry in the first part of this century. Now, experts estimate that American gas resources can support more than 100 years of consumption at present levels. Within the next decade, United States production may well exceed that of Saudi Arabia.

What has this has meant for our state, its citizens and its economy? We are the sixth largest oil producer and seventh largest natural gas producing state in the union, employing thousands of New Mexicans.

We have seen the revival of the Permian Basin, once thought to be a hopelessly declining production area. And we now believe that in the San Juan Basin, Mancos shale may have up to 30 billion barrels of oil, with eventual economic recovery as high as 1.5 billion barrels.

Recently the New Mexico State Land Office announced that a record-breaking $817 million was collected from New Mexico oil and gas producers, directly benefiting public schools, universities and hospitals in our state.

Now, let’s look to the future.

After helping set national energy policy as a senator for the past four decades, I have learned that continuing basic research into new technology and inventing new uses for present technology is critical. And that government-industry partnership is paramount to future breakthroughs.

Earlier I alluded to the state of European energy and energy infrastructure development. Europe’s lack of progress in these areas has left it hostage to the whims of energy policy from Russia.

This shows we must diversify sources of global liquefied natural gas and crude oil; the United States must play a central role in this diversification and stabilization of supply; and we will have to continue looking at new frontiers, including shale formations outside the United States, ultra-deep water and Arctic resources, and some kinds of resources that now exist only in our imaginations.

It is not too extreme in my view to say that the real freedom of many nations on this globe depends upon Americans inventing new technologies and investing billions of dollars not just for profit, not just for the short term, but for fundamental re-structuring of global geo-politics.

Pete Domenici represented New Mexico in the U.S. Senate from 1973 to 2009.

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