Shale gas: A golden age or Faustian bargain?
The world is in the midst of a natural gas revolution. Even the sober International Energy Agency refers to a scenario it calls a “golden age of gas”. If such optimism proves right, the implications would not only be far greater than those of the eurozone’s painful dissolution, but would also be economically positive. Never forget that ours is a civilisation built on cheap supplies of commercial energy. The economic rise of emerging countries is bound to make the demand for commercial energy increase dramatically in the decades ahead. Gas matters.
This revolution has a name: hydraulic fracturing, colloquially known as 'hydrofracking' or just 'fracking'. As is true of nearly all of the technological revolutions of the past century, this one also originated in the US. The US Energy Information Administration explains that “the use of horizontal drilling in conjunction with hydraulic fracturing has greatly expanded the ability of producers to produce natural gas from low permeability geologic formations, particularly shale formations." *
While some innovations date to the 1970s, the EIA notes that “the advent of large-scale shale gas production did not occur until Mitchell Energy and Development Corporation experimented during the 1980s and 1990s to make deep shale gas production a commercial reality in the Barnett Shale in North-Central Texas.” But, by now, it adds, “the development of shale gas has become a ‘game changer’ for the US natural gas market.”
The new activity has increased dry shale gas production in the US from 0.39tn cubic feet in 2000 to 4.8tn cubic feet in 2010, or 23 per cent of US dry gas production. Vastly more is to come. The EIA estimates 860tn cubic feet of “technically recoverable” US shale gas against just 273tn cubic feet in today’s “proved reserves”. If this estimate is correct, shale gas on its own would give the US 40 years of gas consumption, at current rates.
How large are the world’s shale gas reserves? The EIA asked consultants to examine 48 shale gas basins in 32 countries. Their report estimates “technically recoverable” global shale gas resources at 6,600tn cubic feet, roughly equal to today’s proved reserves. The largest identified resources, apart from those of the US, are in China (1,275tn cubic feet), Argentina (774tn), Mexico (681tn) South Africa (485tn), Canada (388tn), Libya (290tn), Algeria (231tn), Brazil (226tn), Poland (187tn) and France (180tn). Regions excluded from this analysis include Russia, central Asia, the Middle East, south-east Asia and central Africa. Global potential should be far larger still.
What difference might the abundance of natural gas (including of more conventional gas) make to the global energy future? In its World Energy Outlook 2011, the IEA remarks that “in all the scenarios examined... natural gas has a higher share of the global energy mix in 2035 than it does today”. Under its 'golden age' scenario, gas demand grows by 2 per cent a year between 2009 and 2035. Even under a more cautious scenario, which it calls “new policies”, demand grows at 1.7 per cent a year or by a total of 55 per cent over this period. As a result, gas substitutes for other fuels, particularly in electricity generation and heating. Gas also has substantial potential as a fuel for transportation. Overall, argues BP in its latest Energy Outlook, by 2030 gas might come to rival coal and oil as a primary energy source.
The substitution of gas for coal or oil is desirable from the point of view of emissions of greenhouse gases and many other pollutants. Gas emits slightly more than half as much carbon dioxide as coal and 70 per cent as much as oil, per unit of energy output. Emissions from gas of carbon monoxide are a fifth as much as from coal. Emissions of sulphur dioxide and particulates are negligible. In any plausible scenario for managing emissions of greenhouse gases, natural gas will have to substitute for other fuels, though development of cheap carbon capture and storage would also strengthen the case for coal. For China, in particular, with its burden of pollution from its use of coal, a 'dash for gas' seems to make sense.
So is shale gas the beneficial transformation its proponents claim? Maybe not. The controversial aspect of the new technologies is the impact on the environment. In an article in the November 2011 Scientific American, Chris Mooney, a writer on science, notes that “horizontal fracking requires enormous volumes of water and chemicals. Huge ponds or tanks are also needed to store the chemically laden ‘flowback water’ that comes back up the hole after wells have been fractured.” A single lateral shaft requires 2m to 4m gallons of water and 15,000 to 60,000 gallons of chemicals. It is little wonder that critics allege the new technology threatens severe pollution of groundwater and is, for this reason, an environmental nightmare. The article suggests that it is not yet known whether such contamination has occurred. At this stage, it concludes, risks are uncertain. The activities of the new industry need to be rigorously monitored, everywhere.
The wisdom of proceeding rapidly with this technology globally will depend on several considerations: first, the local opportunity costs of water; second, the abilities and reliability of the operators; third, the capacity of the regulators; fourth, the benefits of any extra gas, compared with those of alternative fuels (or conservation), including for security; and, fifth, better knowledge of the impact of the technologies. To take one example, the competing demand for water and dangers of pollution might make large-scale extraction of gas from Chinese shales dangerous.
Shale gas underlines the ingenuity of those engaged in finding new sources of energy. It also suggests the welcome possibility of cheap natural gas for many decades. But this revolution could prove to be a Faustian bargain. Care needs to be taken over how – and how swiftly – the technology is introduced: environmental costs might prove heavy. “Make haste slowly”, as the ancient Romans used to say.
* World Shale Gas Resources: An Initial Assessment of 14 Regions Outside the United States, April 5 2011, www.eia.gov.
Copyright The Financial Times Limited 2012.
Comments on this article
Gasland is compelling narative.
Gasland tells a story. The experience of individuals and families who live in the shadow of shale gas in the US. No one is saying it is not anecdotal, no one is claiming there is definitive proof for the inferences in the film.
But the circumstantial nature of the observations and the arrogant and underhand behaviour of the gas companies are certainly very compelling.
The onus of proving safety must reside with those who are proposing to extract gas and potentially conatminate water and air. Yet we are asked to accept ignorance and self interest as reasureance.
Be more discriminating in your veiwing habits
before promoting any so called documentary, it is orthwhile also determining if it is balanced, accurate and factual.
Honest might also be a criteria. None of these words have could eb aplied to that movie, many of the events have since been discredited, some are certainly true. But as a reference source on technology it is not.
I favour Faust
For those who've only seen this article, its worth checking out the documentary 'Gasland', for a more sobering look at the practice: http://www.gasland.com.au/
Gas is no climate solution.
Firstly, gas would have to sustitute for, and reduce the use of, coal. But it is being used in addition. As it is also a fossil fuel it adds to the total greenhouse gas emissions, when we must be reducing these ( dramatically over the next few years ).
Secondly, even a small fraction of fugitive methane emissions ( ~ 4% ) results in a comparable emissions profile to coal. As referred to in other recent posts current evidence suggests there is significnt leakage: http://www.nature.com/news/air-sampling-reveals-high-emissions-from-gas-...
Increasing gas will reduce the progress of renewable energy development and deployment.
Lastly, by assuming gas will provide long term energy security, you have ignored the depletion rates of unconventional gas. Many wells have very high early depletion rates meaning that an escalating number of new wells are drilled to keep gas flows up.
Experience with oil wells provides a good case study: there are around 2.5 million old oil wells in the USA from the oil era ( according to API, some suggest many more ) they are generally not well capped and not maintained, how many dry gas wells do imagine would cover the global landscape when we are done with fraccing? And how much fugitive emissions will continue to leak out over the coming centuries?
Makes you wonder about our grandkids doesn't it.
Faustian bargain
This article reminds me of how the Club of Rome's panic resolved, with human ingenuity finding more of previously scarce resources and resource pricing supporting discovery and development of lower value resources. Lets remember that recovery of any resource continues until the costs of recovery are no longer supported by the income generated by their sale. Its not always the case that the resource is totally exhausted. The best way to increase resource reserves is often to increase their market price.
Re Blue Planet's point, its interesting that using gas to decarbonise industry carries a product of releasing other green house gas. Unless of course the value of fugitive methane is so high as to pay for its capture and use.
Faustian bargain
This article reminds me of how the Club of Rome's panic resolved, with human ingenuity finding more of previously scarce resources and resource pricing supporting discovery and development of lower value resources. Lets remember that recovery of any resource continues until the costs of recovery are no longer supported by the income generated by their sale. Its not always the case that the resource is totally exhausted. The best way to increase resource reserves is often to increase their market price.
Re Blue Planet's point, its interesting that using gas to decarbonise industry carries a product of releasing other green house gas. Unless of course the value of fugitive methane is so high as to pay for its capture and use.
Faustian bargain
This article reminds me of how the Club of Rome's panic resolved, with human ingenuity finding more of previously scarce resources and resource pricing supporting discovery and development of lower value resources. Lets remember that recovery of any resource continues until the costs of recovery are no longer supported by the income generated by their sale. The best way to increase resource reserves is to increase their market price.
Re Blue Planet's point, its interesting that using gas to decarbonise industry carries a product of releasing other green house gas. Unless of course the value of fugitive methane is so high as to pay for its capture and use.
This raised more questions for me
The mention of how much water it took to extract the gas was interesting. Given our issues in Aus, does anyone know how that compares to coal/ conventional extraction? Does this save us water?
Also if the cost of gas form the Aus energy outlook 2010 (I think this was the paper) was heavily dependent on the price of fuel wouldn't that make our economy more unstable for business?
Wouldn't bio-gas provide a much better end game for Gas companies? As CCS becomes a benefit (negative carbon energy) instead of a requirement for work beyond 2050.
After reading the report some of my questions where answered. The sad thing though was that even though Emissions where lower in the golden age scenario then the new policy one it still dumped us at a 3.5 C hotter world. If we need more investment in Conservation, Nuclear and Renewable Energy (world wide) to get to the 2 C even with this plan. It seems insufficient for the climate still even though it meets demand.
Thank you for the post though it was a good read.
precautionary principle?
From a 19 July 2011, Monckton debating Richard Denniss, (via http://www.skepticalscience.com/monckton-misrepresents-specific-situatio... )say it all really!!!
"It is this theme that Denniss works with during his first ten-minute presentation. The underlying principle that he references for his argument is the "insurance principle," also known as the precautionary principle. This is an economic argument, and can be summed up as the idea that in the presence of suspected but yet scientifically unverified harm from a course of action, the burden of proof for a lack of harm rests on the proponent of that action. The implied result is that, in the absence of proof of no harm, the action should not be taken, and/or actions to insure against the results of that action should be taken (subject of course to their own consideration under the precautionary principle).
Faustian bargain
This article doesn't actually go into much detail about the faustian bargain. It just says environmental costs MIGHT prove heavy. But the rest of the article appears to be a glowing endorsement of shale gas. So if you do get to the end of the article you might miss this point. Given that fugitive emmissions were underestimated by 100% originally and that these emmissions will now be around 4% the might will turn into a WILL. Methane is one of the most potent green house gases there are and is between 25 times and 72 times as bad as CO2. Shale gas is methane. When burnt this leaves a byproduct of CO2 just like coal so you've got a double whammy in shale gas. There are estimates that there are no net improvements in the use of shale gas regarding its greenhouse effect over that of coal.