Before the battle of Mine Run from Nov. 27 to Dec. 2, 1863, Union General George Meade expected troubles for his troops and encouraged them to write their names and unit designation on paper tags pinned to their uniforms. Some troops fashioned tags from wood chips with a hole in one end to be worn on a string around the neck. These soldiers wanted their families to know that they were not among the unidentified lost on this field of horrors (42% of Civil War dead remain unidentified). It was a New Yorker, John Kennedy, who offered to furnish all Union soldiers with ID tags in 1862. His letter, together with government’s summary refusal, can be viewed at the National Archives. Bureaucrats haven’t changed much in the past 150 years, have they?
The first official advocacy of personnel identification came in 1899 when Chaplain Charles Pierce, establishing a U.S. Army Quartermaster Office of Identification, suggested issuance of “identification discs.” By 1913 identification tags were mandatory, and all combat soldiers wore aluminum discs on chains around their necks by 1917. In World War II these were replaced by the oblong, steel shape known as “dog tags.”
The U.S. Army is currently using dog tags that achieve the original purpose of identification but now also contain 80% of every soldier’s medical and dental history on an embedded microchip. Dog tags are now plastic and not metal. There are now 668 identification-tag makers nationwide. All of this changed since 1863 because technology evolved to meet needs which industry converted via innovation into use with understanding of markets. Now we have an analog to this industrial evolution process.
In recent years this column has discussed the availability of fossil fuels for a healthy economy. While America is blessed with rich resources and our world is in transition, only recently has our country become the focus of an energy revolution and an incredible shift in global energy markets. This is brought on by new technology via well (hydraulic) fracking and horizontal drilling, which has opened vast, affordable, producible reserves of both natural gas and petroleum.
Looking at these supplies separately, U.S. gas prices are currently about $3 per mcf. In Europe the price is $11, and in Asia it’s about $17. But gas to meet many market needs does not go into a Texas pipeline or come from some well in Pennsylvania. It is transported on a ship as liquefied natural gas (LNG), which is expensive to make and export. Also, the U.S. has no export facilities. One is currently being built in Louisiana by Cheniere Energy that should be operational in 2015. Another – the Golden Pass terminal in Texas – is a joint venture between Qatar Petroleum and ExxonMobil that costs about $10 billion.
Most of the demand for natural gas imports comes from Asia. India, the world’s second-most populous country, consumes about three times more gas than it produces. Just 7% of India’s energy consumption in 2010 was fueled by natural gas. Like China, the country still uses coal for the overwhelming majority of its energy needs. Indonesia only produces about 2.7% of world supplies, but it has the world’s fourth-largest population. Japan is the largest importer and, according to International Energy Agency figures, increased its LNG imports by 20% last year. Korea is the world’s fifth-largest importer.
China, the world’s most populous country, produced 3% of the world’s 2011 supplies and became a net importer in 2007 as its demand for natural gas increased to meet the needs of its developing infrastructure. And while natural gas represented just 4% of China’s energy consumption in 2009, the government has pledged to increase the natural gas share to 10% by the year 2020. China increased its imports by a massive 31% in 2011, and experts expect volumes to increase more than threefold by 2020. This will be a huge fundamental driver for LNG for the next 50 years.
Europe is also chronically short on gas. Italy and Germany occupy the numbers two and three world-importer spots, respectively. Due to the sheer size of the U.S. economy, the amount of natural gas storage available and trade that America supports, we were the fourth-largest world net importer in 2011.
America can be on its way to becoming a self-sustaining domestic energy supplier as well as the world’s largest energy producer and one of the largest energy exporters. Nobody expects this, but it will happen. A reason to mention it here is to advise readers about this wonderful business opportunity. IH