Gas: It's the other hydrocarbon

■"Demand for Natural Gas Brings Big Import Plans, and Objections: Push for New U.S. Terminals Stirs Safety Worry," by Simon Romero, New York Times, 15 June 2005, p. A1.

■"As Mexico's Oil Giant Struggles, Its Laws Block Foreign Help: Born in Nationalist Fervor, Pemex Faces Drying Wells; CEO Wants to Open Doors; Gasoline Imports From Texas," by David Luchnow, Wall Street Journal, 15 June 2005, p. A1.

Opening sentence says it all:

Just as the 19th century was shaped by coal and the 20th century by oil, people in the energy industry say, this century will belong to natural gas.

The U.S. is shifting from self-sufficiency on gas to rapidly rising dependence on imports, just like it did on oil decades ago. Realizing it will be the demand center for an emerging global market for natural gas, the U.S. is trying to shape that market to its ends as much as possible. The role for the federal government? Figuring out how to move from 4 current importing port facilities to something like 40 or more, each costing from one-half to a billion to construct.

Natural gas overtakes coal in terms of global consumption around 2025. Right now the equivalent of a barrel of oil in natural gas goes for about half that barrel's price of $50, plus known reserves currently project out farther than oil (67 years to 41), and that's not counting the notion that gas exists in vast quantities besides those known reserves that are co-located with oil (so-called "associated gas" that typically rides on top of oil pools).

The U.S. imports about 2% of its gas now, but expects to import 20% within a decade. There is the usual NIMBY stuff, and complaints from environmentalists to try alternatives, plus the added specter of terrorist dangers (mostly imagined) since 9/11.

This will be one interesting struggle to watch, almost as interesting as watching Mexico get over its absurd nationalism on the subject of Pemex, it's national oil company known for lotsa corruption and setting up its own mini-welfare state. One big cow, but never enough teets to satisfy everyone who wants to be fed. Pemex is a testimonial to the disutility and waste associated with having a national government run an oil company. Mexico already imports gasoline from the U.S. and will become a net importer of oil, despite being the world's #3 producer today, within 10 years unless it changes its idiotic constitution that bars foreign investment.

Still, a crisis of this sort (purely political) would probably be a good thing for Mexico. Instead of relying on wealth in the ground, it might be pushed to developed its human capital more. Either way, something will give and soon enough. On a subject this testy, a decade can blow by very quickly.

Amazing how two smart advanced states can damage their economic futures with such self-inflicted political wounds. It's this sort of "wisdom" and "leadership" that got us a Great Depression once upon a time.