Less than a decade ago, the future of American energy looked bleak. Domestic production of both oil and gas was dwindling, and big U.S. energy companies, believing their fortunes lay offshore, had long since turned away from the mainland. But then something remarkable occurred: a surge of innovation allowed companies to extract vast quantities of natural gas trapped in once-inaccessible deposits of shale. The resulting abundance drove down U.S. gas prices to about one-third of the global average.
Natural gas has been a godsend for the United States. Already, gas has spurred a manufacturing renaissance, with investors spending and planning hundreds of billions of dollars on new facilities such as chemical, steel, and aluminum plants. The shale boom has created hundreds of thousands of new high-paying, middle-class jobs, and now, more than one million Americans work in the oil and gas industry -- an increase of roughly 40 percent between 2007 and 2012. Moreover, because natural gas currently supplies about 25 percent of the total energy consumed in the United States (a figure that is rapidly growing), the boom is saving U.S. consumers hundreds of billions of dollars a year. Combined with the other benefits, those savings have given the United States a long-term economic advantage over its competitors and helped the country recover from the Great Recession.
As much as other countries may envy this catalyst for domestic growth, they will not be able to replicate it, because only the United States possesses the unique ingredients necessary to fully develop shale resources. A legal system that enshrines the private ownership of land and the resources below it, along with open capital markets and a reasonable regulatory system, has led to the growth of thousands of independent oil and gas companies, all of which are in intense competition with one another. As a result, nearly four million oil and gas wells have been drilled in the United States, versus 1.5 million in the rest of the world. The bustle of drilling activity in
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