TOM PRICE, Senior Vice President, Chesapeake Energy

The flurry of capital investment in America’s natural gas industry during the past several  years has occurred despite depressed prices caused by an abundance unimaginable five years ago and begs the question: what the “shale” is happening here to attract such worldwide investment and confidence in the future of natural gas?

Without question, the magnitude of the recent investments underscores the solid, unwavering confidence of energy companies regarding the long-term sustainability of America’s major shale gas plays, including the Marcellus and Utica, which are located near the nation’s premier urban gas markets.

Let me add some context to America’s shale gas reserve picture. In the past five years, vast natural gas reserves in shale reservoirs deep beneath American soil have been discovered. Estimates put these reserves at more than 2 Qcf of natural gas, which more than doubles previous estimates of America’s natural gas reserves and gives us close to a 200-year supply of this clean, affordable energy source. Our natural gas reserves hold more energy than Saudi Arabia’s approximately 264 billion bbl of oil reserves.

The enviable position the US has secured as the world leader in shale gas exploration and development occurred as a result of extraordinary technological innovation. The marriage of advanced horizontal drilling technology with high-volume, multistage hydraulic fracture stimulation technologies—an innovative improvement to a process that has been used for more than 60 years—cracked the code for economically developing large-scale onshore shale plays in the early 1990s.

If there is shale gas, there can also be shale oil. As natural gas prices drop to levels below the marginal cost of production, making dry gas drilling basically sub-economic, independent operators like Chesapeake Energy are shifting their operations towards finding and extracting liquids to take advantage of the huge disparity in the global price of oil vs. dry gas. Might America see a proliferation of shale oil production in the next several years that could greatly decrease oil imports from the Organization of Petroleum Exporting Countries (OPEC) cartel? We believe it can.

Natural gas and oil shales represent a modern, advanced technological breakthrough that can not only spur an American energy revolution, but a global one, too. As a recent EIA study revealed, an estimated two-thirds of the global shale reserves lie outside of North America. Although the US has a first-mover advantage in terms of shale development, there is every reason to believe that the global exploration of shale gas and oil could lead to enhanced economic and security stability around the world.

Beyond a doubt, domestically produced natural gas has enormous potential to displace foreign oil. Plus, the prospects of developing more oil from American shale and reducing our dependence on imported OPEC oil is becoming clearer every day. But there should be no question regarding the need to increase domestic demand for natural gas in order to retain our nation’s economic prosperity. Natural gas is the future, and it is the reason that international companies are choosing to invest in America.

So, what the “shale” is going on in America’s energy industry? Thanks to game-changing innovations, energy independence is no longer an empty slogan, but a tangible, achievable reality. For the sake of sustainable economic recovery and rejuvenation of our manufacturing sector, shale gas, gas liquids and shale oil must be developed responsibly, cooperatively, and sensitively with regard to the environment.