As I write this sentence, I know nothing about shale gas, except that it seems to be one of those sciencey — as opposed to “scientific” — footballs that gets kicked around now and then. I have in front of me, however, a study titled “The Shale Gas Shock,” produced in April 2011, by The Global Warming Policy Foundation.

 

I know little about natural gas, beyond that it is the most efficient fuel for generating electricity, and the fact that while the price of oil is going up, with so much more gas discovered the price of gas is dropping.I’m reading the paper to at least get a start understanding shale gas, what the main issues are, what the problems are — who thinks what should happen with it and why. No I don’t think this is where I download my opinions, I’ll need to read something that thinks what I’m reading now is so much sheep dip.

After all, as the Book of Proverbs says, “The one who states his case first seems right, until the other comes and examines him.”

Live Blogging As We Learn.So let’s see what The Global Warming Policy Foundation and the report’s writer, popular science author Matt Ridley, think shale is all about and, basically, live blog as we go.“The environmental costs of shale gas are much smaller than the environmental costs of coal. Because of shale gas, the air in Beijing will be cleaned up as the air in London was cleaned up sixty years ago,” noted physicist Freeman Dyson says in his forward, recalling that when he attended a concert at the Royal Albert Hall as a child he literally could not see the performers, the yellow coal fog was so thick in the room.

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.

Politicians Vs. Reality.“Abundant and low-cost shale gas probably will — where politics allows — cause gas to take or defend market share from coal, nuclear and renewables in the electricity generating market, and from oil in the transport market, over coming decades.”Politicians, of course, have a different set of priorities than energy producers or consumers have. President Obama promised higher energy prices before his inauguration, and he’s kept that promise, much to the detriment of the economy and ordinary Americans. And each of those alternatives Ridley mentions, coal, nuclear, oil and others, have strongly entrenched interests.

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

Okay, so how do we get shale gas? Among other methods, Ridley mentions fracking, a procedure where the rock is fractured with hairline cracks, sand is used to prop open the fissures and the gas extracted that way. I’ve heard of fracking, the greenies don’t like it.Fracking, it seems, is what made shale gas profitable to extract, and which put so much of it on the market. It worked to revitalize what had been considered “played out” drilling sites. Evidently it’s hard to tell exactly how much gas is available, but everybody agrees that there’s a whole lot more of it than we once thought we could get at.

Government + Experts = ?“Already the output of [natural] gas has begun to wane. Production of oil cannot long maintain its present rate.”
- 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.”

Nobody with any sense questions the reserves of coal, oil or gas in the world. We have more than we could ever use in centuries, but much of it is so hard to get to it’s not worth the recovery costs. That’s what makes shale gas so attractive to some, with new techniques it can be had more cheaply than before, rendering it a realistic option.“So if you take the position that we‘re going to get all these great reserves because these wells are going to last 40-plus years, then you need to explain why one-third of wells drilled 4 and 5 and 6 years ago are already dead.”
- 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.

China In, Supply Up, Prices Down.“There is little doubt that there will be a shale gas boom in China, for three reasons: China has a policy of encouraging gas use to replace coal; Chinese firms have invested $6 billion in buying into US shale gas firms to learn techniques; and Chinese recoverable resources of shale gas are estimated by EIA/ARI to exceed US ones by 40%.”Well, if China’s going to start producing it, get ready for world prices to drop considerably.

“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 Profitable. Is That A Problem?Ridley also writes that wherever well water has been tested before and after gas drilling, no evidence has been found of groundwater contamination by fracking fluids, that “state regulators from Alaska, Colorado, Indiana, Louisiana, Michigan, Oklahoma, Pennsylvania, South Dakota, Texas and Wyoming have all asserted in writing that there have been no verified or documented cases of groundwater contamination as a result of hydraulic fracking.”And gas is, well, profitable. It requires and receives no government subsidies, unlike solar, wind and other industries which seem to always be promising profitability but never achieving it.

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.

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