Shale Gas: Too Successful For Its Own Good?
After all, as the Book of Proverbs says, “The one who states his case first seems right, until the other comes and examines him.”
That sure rings true — when I lived in Istanbul in the early ‘90s the city still mainly heated with coal, and there were evenings, walking home, when I couldn’t see to the end of the street, the fog was so bad. Now the city has mostly switched over to gas heating and it is much, much cleaner.
So evidently shale gas is a substitute for coal. Good to know.
All to say, it’s impossible to choose energy sources solely for their efficiency or cost alone. Politicians need to be able to score their points, and other energy industries, of course, do not like competition, and will do what they can to eliminate it.
“Production of ‘unconventional’ gas in the U.S. has rocketed in the past few years, going beyond even the most optimistic forecasts. It is no wonder that its success has sparked such international interest… A few years ago the United States was ready to import gas. In 2009 it had become the world’s biggest gas producer. This is phenomenal, unbelievable.”
- Anne-Sophie Corbeau, International Energy Agency
- President Warren Harding‘s US Coal Commission, after interviewing 500 experts over 11 months, 1922Well, that’s what the combination of government and “experts” is worth. Reminds us when President Jimmy Carter considered the views of experts to say in the 1970s that the world’s oil could be used up that decade.
“Part of the reason for these false predictions was that strict price regulation of gas in the 1970s halted gas exploration in its tracks, producing a peak that some mistook for the beginning of exhaustion of reserves.”
Another example of boneheaded politics screwing up the development of alternate energy resources.
“The key question about shale gas is not therefore whether it exists in huge quantities, but whether it can now be exploited on a large scale at a reasonable price. This is what potentially makes it different from shale oil, tar sands and clathrates: its champions claim that it can compete on volume and price, and even undercut conventional gas reserves.”
- Art Berman, interview with the Energy Bulletin, 19 July 2010Not everybody thinks shale gas will be as recoverable as its proponents think. Ridley writes that Berman is correct in that the more that’s produced the lower the price goes and the less worthwhile it is to continue to extract the resource, something the coal and oil industries learned, but notes that the shale gas industry will learn, as coal and oil did, how to lower the costs of extraction to render further production feasible.
(By the way, we like it that the paper devotes considerable space to fairly presenting the opposing view and treating it seriously.)
Plus, as Ridley points out, the new extraction techniques mean that we can find shale gas in more places — exploration is currently underway in such places as Poland, Morocco, New Zealand and China, among others. Bottom line: Nobody has any idea how much recoverable shale gas there is in the world, but we find more and more of it and it’s getting easier and cheaper to extract.
“None the less, shale gas will encounter formidable opposition from entrenched and powerful interests in the environmental pressure groups, in the coal, nuclear and renewable industries, and from political inertia.”
Well-funded lobbyists are rarely welcoming to new entrants to their industries, and with a decades-long head start, shale gas has its work cut out for it.
“The claim of repeatable and uniform results by the shale play promoters cannot be supported by case histories to date.”
- Art Berman
It’s a young industry. So far Berman’ correct.
Now we get to the heart of the matter: Shale gas could be too successful for its own good, specifically in the eyes of environmentalists who realize hey, it could render their pet unprofitable industries, such as solar, unneeded as well as oil and coal:
“Shale gas was welcomed at first by environmentalists as a lower-carbon alternative to coal. However, as it became apparent that shale gas was a competitive threat to renewable energy as well as to coal, the green movement has turned against shale.”
As Ridley notes, greenies now accuse shale of using dangerous chemicals during fracking, that gas can escape in water wells, could pollute streams and who knows what else. None of which seemed to be a concern back when they were using shale as a club against the oil and coal industries.
Gas is not easily transportable, however, unlike oil and coal, so it’s not accurate to compare prices around the world, since as Ridley notes a genuine world market in gas does not exist and prices can vary sharply between regions.” And in America now, prices are low and the supply plentiful.
“The dominant fuel in the world fuel mix has gradually shifted from wood to coal to oil over the past 150 years, with gas the latest fuel to grow rapidly. At this rate gas may overtake oil as the dominant fuel by 2020 or 2030.”
Unless those with other agendas find a way to screw it up.
Well, there you go. I now have a decent grasp of the issues and contentions involved with shale gas. Next up: Read something that thinks shale gas is the worst thing ever.