We're in a new era of cheap, plentiful shale gas
"A chap called George Mitchell turned the natural gas industry on its head. Using just the right combination of horizontal drilling and hydraulic fracturing – both well-established technologies — he worked out how to get gas out of shale, where most of it is, rather than just out of (conventional) porous rocks, where it sometimes pools. The Barnett shale in Texas, where Mitchell worked, turned into one of the biggest gas reserves in America. Then the Haynesville shale in Louisiana dwarfed it. The Marcellus shale mainly in Pennsylvania then trumped that with a barely believable 500 trillion cubic feet of gas, as big as any oil field ever found, on the doorstep of the biggest market in the world.
The impact of shale gas in America is already huge. Gas prices have decoupled from oil prices and are half what they are in Europe. Chemical companies, which use gas as a feedstock, are rushing back from the Persian Gulf to the Gulf of Mexico. Cities are converting their bus fleets to gas. Coal projects are being shelved; nuclear ones abandoned.
Rural Pennsylvania is being transformed by the royalties that shale gas pays . Drive around the hills near Pittsburgh and you see new fences, repainted barns and — in the local towns — thriving car dealerships and upmarket shops. The one thing you barely see is gas rigs. The one I visited was hidden in a hollow in the woods, invisible till I came round the last corner, where a flock of wild turkeys was crossing the road. Drilling rigs are on site for about five weeks, fracking trucks a few weeks after that, and when they are gone all that is left is a ‘Christmas tree’ wellhead and a few small storage tanks.
Jesse Ausubel is a soft-spoken academic ecologist at Rockefeller University in New York, not given to hyperbole. So when I asked him about the future of gas, I was surprised by the strength of his reply. ‘It’s unstoppable,’ he says simply. Gas, he says, will be the world’s dominant fuel for most of the next century. Coal and renewables will have to give way, while oil is used mainly for transport. Even nuclear may have to wait in the wings.
The best thing about cheap gas is who it annoys. The Russians and the Iranians hate it because they thought they were going to corner the gas market in the coming decades. The greens hate it because it destroys their argument that fossil fuels are going to get more and more costly until even wind and solar power are competitive. The nuclear industry ditto. The coal industry will be a big loser (incidentally, as somebody who gets some income from coal, I declare that writing this article is against my vested ¬interest).
Little wonder a furious attempt to blacken shale gas’s reputation is under way, driven by an unlikely alliance of big green, big coal, big nuclear and big gas providers. The environmental objections to shale gas are almost comically fabricated or exaggerated. Hydraulic fracturing, or fracking, uses 99.86% water and sand, the rest being a dilute solution of a few chemicals of the kind you find beneath your kitchen sink.
To persist with a policy of pursuing subsidised renewable energy in the midst of a terrible recession, at a time when vast reserves of cheap low-carbon gas have suddenly become available, is so perverse it borders on the insane. Nothing but bureaucratic inertia and vested interest can explain it."
The chart above shows the significant increase in America's natural gas production, thanks to the shale gas revolution (data here
) which has contributed to a 20% increase in domestic gas production in the last five years.
HT: Warren Smith