The Extraction State: A History of Natural Gas in America

by Charlie Blanchard

The history of the United States of America is also the history of the energy sector. Natural gas provides the fuel that allows us to heat our homes in winter and cool them in summer with the touch of a button or turn of a dial—when the industry runs smoothly. From the oil crisis of the 1970s to the fall of Enron and the California electricity crisis at the turn of the century to contemporary issues of hydraulic fracking, poorly conceived government policies have sometimes left us shivering, stranded, or with significantly lighter wallets. In this expansive narrative, Charles Blanchard traces the rise of natural gas and the regulatory missteps that nearly ruined the market. Beginning in the 1880s, The Extraction State explains how the New Deal regulatory compact came together in the 1920s, even before the Great Depression, and how it fell apart in the 1970s. From there, the book dissects the policies that affect us today, and explores where we might be headed in the near future.

416 pages, Hardcover

Published January 12, 2021

Reviews

[Lawleyenda · Rating 5 out of 5]

This book deserves a higher rating than the current 3.90. This is a great introductory business history book on the evolution of the NG industry. The book not only describes the progress (or backwardation) of the natural gas industry over time but also draws the connection between how previous public policy and incentives changed behavior. Although some analyses are the author's own conclusions, they are sound and reasonable, and again... his opinion. I feel like I now have a much greater understanding of why the NG is the way it is today and why seemingly beneficial community initiatives (like building a pipeline) are more than what meets the eye.

Ironically, Rockefeller's first oil was found in Pennsylvania, and Pittsburgh was the first city to industrialize NG, which was soon replaced by Texas, and back again, like a spirit of the past, Pennsylvania/Marcellus has re-emerged as the King of NG and vital to the datacenter boom.

For someone not born during that time, the Fuel Use Act of 1978 (FUA) stands out to me as the policy seems backwards. Yet again, emissions were not at to top of policymakers' concerns when people cannot heat their homes. The FUA combined w/ new build electric homes had lasting impacts on a cyclical industry because of the multi-decade long time spans and breaks the ability for lower prices to spur up more demand leading to a decade long "gas bubble".

This is not to forget the other important policy initiatives like the breakup of the Power Cartel, the Phillips decision, the "Take-or-Pay" crises, the Orders that led to pipelines becoming common carriers, and ultimately the financialization of the industry.

Unfortunately, this book only goes up to 2020 (a lot has changed since then), so I will be using supplemental information to fill in the gap.