Step back in time to the 1970s when when America was short natural gas, and it makes the current abundance in the Northeast seem so unlikely and all the more surprising. Critics of the Department of Energy like to complain that its budget is billions of dollars, yet it doesn’t produce a barrel of oil or thousand cubic feet of gas, so what good is it? I disagree. We should remember that it was partly DOE research that helped unlock tight gas, develop fracking and advance horizontal drilling capabilities in the 1980s.

That research became urgent after the experience of 1976-77, an unusually cold winter that caused severe natural gas shortages across the U.S. It was so dire that factories, industrial and commercial facilities, malls and schools throughout the Midwest had to close, and Sunday church services were canceled. Priority of gas delivery was given to hospitals, nursing homes and residences. This crisis went on for a few weeks.

We were reminded of this history, and thus how dramatically the Appalachian gas picture has changed, courtesy of Stuart Nance, vice president of Reliance Holding USA Inc. He spoke at Hart Energy’s recent Marcellus-Utica Midstream (MUM) conference in Pittsburgh. Reliance is now importing Marcellus ethane to India.

In January 1977, Nance said, President Jimmy Carter came to Pittsburgh to address the huge gas problem. On Feb. 2, he delivered his now infamous “sweater speech” on TV. Carter addressed the American people while wearing a cozy sweater in the Oval Office, urging people to lower their thermostats to 65 or below, to use less electricity, to wear a sweater. This was his energy policy.

My colleague Peggy Williams, Hart Energy’s editorial director, worked at that time for Peoples Natural Gas in Pittsburgh. She recalls everything downtown was shut down—except People’s office building.

After Carter asked Congress to act, the Emergency Natural Gas Act of 1977 was passed in February, allowing the president to direct gas to areas where there was a shortage. Utilities were actually told not to burn gas, but to stick with coal.

Forty years later, “We have Tcfs [trillion cubic feet] and Tcfs of gas,” said Patrick Redalen, president of Stonehenge Energy Resources II, a gas gatherer in Pennsylvania: some 214 Tcf technically recoverable from the Marcellus and 184 Tcf from the Utica.

Pennsylvania is producing 12.6 billion cubic feet per day (Bcf/d), yet speaker Steve Woodward, Antero Resources Corp. senior vice president, speculated that in the future the region can produce 30 Bcf/d from the Marcellus-Utica combined. Supply is not the problem.

Demand is coming on fast. U.S. demand grew 15 Bcf/d between 2010 and 2016 but it’s expected to go up a further 18.2 Bcf/d from 2016 to 2021, according to Wood Mackenzie. To 2021, a lot of new production will come from the Haynesville and Permian, but most will come from the Marcellus-Utica.

At the moment, gas is searching for takeaway capacity and end-use markets.

The Marcellus-Utica resource is so plentiful it’s affecting the world. Marcellus ethane is being exported to Canada, Europe and India. Record volumes of propane and LPG are being exported. India’s Reliance Industries is partnering with Chevron Corp. and Carrizo Oil & Gas in the Marcellus-Utica. What’s more, it has ordered six very large ethane carriers from Korean shipbuilder Samsung, and it is building gas storage facilities on India’s west coast—and several ethane crackers, Nance said.

“We’re actively looking for ethane supplies,” he told MUM attendees.

Dominion is still on track to export its first Marcellus-sourced LNG later this year. Willbros CEO Harry New told the MUM crowd he counts 13 major pipeline projects scheduled out of the Marcellus for $28.4 billion, each in excess of 20 inches in diameter. Ten will come online in 2017.

However, two years of low rig counts may cause supply disruptions to loom. Speakers said 100 rigs need to be working to fill new capacity coming on; 39 are in the Marcellus and 23 in the Utica now.

By 2018 or 2019, deliverability will fall below regional takeaway capacity, several speakers warned. At the same time, the region’s resource potential could support another cracker or two, beyond the one Shell is clearing land for in Pennsylvania.

Meanwhile, Dallas-based Panda Power Funds has built the first new power plant to use Marcellus gas, in Bradford County, Pa.

The Sierra Club doesn’t like any of this. It just released a report decrying the massive pipeline buildout going on that will lead to more gas well drilling. It urged the U.S. not to use natural gas. “The new gas rush is the wrong solution,” it said, adding that new investment should focus instead on wind and solar, which release less methane than gas facilities do.

Tell the Sierra Club that the new gas rush will continue and won’t be denied.

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