In retrospect the entire Alan Greenspan era at the Federal Reserve doesn’t look so good, though I attribute his bad judgment to his decision to marry Andrea Mitchell of NBC. In any case, Matt Ridley dredges up for us Greenspan’s assessment of the natural gas market in the U.S. ten years ago:
“Today’s tight natural gas markets have been a long time in coming, and distant futures prices suggest that we are not apt to return to earlier periods of relative abundance and low prices anytime soon.”
Heh. As Ridley notes (behind London Times paywall, so no link):
Abundance and low prices are exactly what America now has: so much so that it is using gas instead of coal to provide base-load electricity, investing heavily in manufacturing and chemical industry, and shifting some of its road transport from oil to gas. By 2020, shale gas will have boosted the American economy by £500 billion, 3 per cent of GDP and 1.7 million jobs, according to McKinsey Global Institute.
Meanwhile, the argument that the running out of fossil fuels is what has been driving up prices has been proven once again, for the third time in my lifetime, to be bunk. America, the most explored and depleted oil and gas field in the world, is now increasing its oil and gas production at such a rate of knots that it is heading towards self-sufficiency. If an oil field as gigantic as the Eagle Ford can be found (through technological innovation) in Texas, think how much awaits explorers in the rest of the world. Even five years ago, gas was thought likely to be the first of the fossil fuels to run out. Nobody thinks that now.