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Good Policy, Good Profits in Natural Gas

by Dr. Kent Moors | published May 2nd, 2012

In the past two weeks, a maelstrom of emails has been hitting my inbox from concerned readers, investors, academics, and even some prominent journalists.

What’s got everyone so heated?

It seems a lot of people are concerned, confused, and even outraged over a recent Executive Order signed by President Obama regarding the development of unconventional natural gas formations here in the United States. The executive order, issued on April 13, calls for greater coordination in federal oversight of “fracking” – a revolutionary, yet-still-nascent process of extracting natural gas from rock bed.

Questions ranged from the impacts of new regulatory standards to industry support levels. Concerns stretched from sector performance outlooks all the way to the highly alarming and somewhat foolish argument that such an order precipitates a “government takeover of the natural gas industry.”

Now, I’m overly cautious when the government announces any role in business. But when you take a close look, this announcement is rather benign.

That’s why I’d like to take a few minutes today to explore the ongoing developments in this story, set a few eager minds at ease, and explain a few benefits – yes, benefits – of this Presidential directive.

In the age of 24-hour media, one marked by rampant polarization and limited policy analysis, we often hear only a fraction of the full story.

And yes, it’s easy to get caught up in the immediacy or negative impacts of one single act.

But there’s a lot to like here.