Saturday, October 15, 2011

Nat Gas: World's Dominant Fuel for Next Century

We're in a new era of cheap, plentiful shale gas

From Matt Ridley's article "Say No to Wind Farms: Shale of the Century" in The Spectator:

"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."

MP: 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


At 10/15/2011 9:04 AM, Blogger Larry G said...

can we get some kind of scope and scale for this?

how do the current perceived stocks compare to the stocks before fracking was "discovered"?

how big a reserve do we have compared to the world and major reserves in places like Russia?

If we were to switch over automobile to natural gas - how long would the reserves last?

so much of the reporting basically distills down to "big" with little or no context.

At 10/15/2011 10:20 AM, Blogger Che is dead said...

During a keynote lunch speech at the conference presented by the Colorado Oil and Gas Association, Halliburton Co. CEO Dave Lesar talked about addressing public concerns about hydraulic fracturing, which extracts natural gas by blasting a mix of water, chemicals and sand underground.

He raised a container of Halliburton’s new fracking fluid made from materials sourced from the food industry, then called up a fellow executive to demonstrate how safe it was by drinking it, according to two attendees.

The executive mocked reluctance, then took a swig.


At 10/15/2011 10:36 AM, Blogger Buddy R Pacifico said...

The best drilling fluid is Newpark Resources' innovative Evolution. This is a water based fluid that replaces oil-based mud(OBM). Water based drilling fluid negates clean-up and environmentel liabilities of OBM.

At 10/15/2011 11:34 AM, Blogger arbitrage789 said...

I'm all for natural gas.

But I see no reason to give up on wind power.

At 10/15/2011 11:36 AM, Blogger Mark J. Perry said...

Don't you care about the birds though? Millions of deaths?

At 10/15/2011 11:43 AM, Blogger Larry G said...

ten times more birds are killed every year by cars - and cats.

where is the outrage?

At 10/15/2011 1:42 PM, Blogger Benjamin said...

Natural gas can be made into methanol, a terrific liquid fuel.

At 10/15/2011 2:15 PM, Blogger arbitrage789 said...

Larry G,

Yes, I've got a cat who has more than met her bird-killing quota.

At 10/15/2011 2:21 PM, Blogger PeakTrader said...

Larry says: "Ten times more birds are killed every year by cars - and cats...Where is the outrage?"

In this economy, some people wouldn't be eating without road kill.

At 10/15/2011 2:32 PM, Blogger PeakTrader said...

The good news is the federal government is squandering less money:

US gov't runs $1.3 trillion budget deficit in 2011
October 14, 2011

WASHINGTON (AP) -- The government ran a $1.3 trillion deficit for the budget year that ended last month, the third straight year it has operated more than $1 trillion in the red.

The 2011 budget deficit was the second highest on record. It's slightly ahead of the previous budget year's $1.29 trillion deficit but below the $1.41 trillion imbalance record in 2009.

For 2011, the government had to borrow 36 cents of every dollar it spent...For 2011, net interest payments rose 15.7 percent to $227 billion.

A slightly improved job market helped boost income tax revenue this year. From October 2010 through last month, the economy added 1.3 million net jobs. That compares with only 339,000 net job gains in the previous 12-month period.

Still, that hasn't been enough to bring the millions of Americans who lost jobs during the recession back into the work force.

Total revenues increased 6.5 percent to $2.3 trillion for the budget year that ended Sept. 30; spending rose 4.2 percent to $3.6 trillion.

The nation's debt is now $14.8 trillion.

The Obama administration is estimating that the 2012 deficit will total $956 billion.

At 10/15/2011 2:41 PM, Blogger PeakTrader said...

Of course, employment needs to increase.

So, people can work very hard to pay for the spending spree.

At 10/15/2011 4:57 PM, Blogger NormanB said...

George Mitchell the oil baron talked to Obama about NG. Obama sloughed it off saying that was a temporary solution the long term belongs to solar, wind, etc. That's why our gov't isn't out in front of this obvious solution. Liberal politics, it makes you cry.

At 10/15/2011 6:36 PM, Blogger Craig said...

But I see no reason to give up on wind power.

Look harder. Wind is unpredictable and the energy that can be squeezed from it is limited by the size of the turbine's propellors. The current 40 story models are a result of that. Do we really want to spoil the landscape by making them even larger?

Oh, and did I mention that wind is unpredictable?

At 10/15/2011 7:41 PM, Blogger PeakTrader said...

Craig says: "Look harder. Wind is unpredictable...Oh, and did I mention that wind is unpredictable?

It looks like a safe yes.

At 10/15/2011 9:30 PM, Anonymous Anonymous said...

Forget methanol. Syngas can be made and synthetic diesel from syngas. No real conversion of existing technologies necessary. Just more diesel engines in our cars.

At 10/15/2011 9:50 PM, Anonymous Anonymous said...

Congress must stop this gas frack mania asap. Waters, Frank and Dodd must rip a page from their Fannie Mae handbook. If they can do the subprime shuffle surely they can help the greens and coal guys stop this, huh?

At 10/16/2011 1:26 AM, Blogger arbitrage789 said...


"Do we really want to spoil the landscape by making them even larger?"

Just stick 'em in the Midwest somewhere, far away from me.

At 10/16/2011 5:05 AM, Blogger Larry G said...

re: syngas - if not mistaken it's one half as energy dense as natural gas which itself is 1/2 as energy dense as gasoline.

that means cars with enormous tanks and/short ranges.

re: wind turbines in the midwest.

Any landowner anywhere there is reliable enough wind would love to have the steady income that would derive from it.

Now I'm quite sure when we talk about "productivity" in CD - and "drill baby drill" - that no one here would begrudge a farmer from being able to also "harvest" wind, eh?

And that kind of farmer does not need ethanol and other "subsidies".

we should WANT to take advantage of the resources that we have, right?

we forget - that coal plants, while most folks don't live next door to them have enormous impacts also not the least of which is widespread mercury contamination of most water bodies - to the point where there are warnings to kids/women not to eat fish.

At 10/16/2011 9:59 AM, Blogger juandos said...

"we forget - that coal plants, while most folks don't live next door to them have enormous impacts also not the least of which is widespread mercury contamination of most water bodies - to the point where there are warnings to kids/women not to eat fish"...

Leave it to a 'wiki' leftie to run with the fraud of coal fired electric plants...

What's next? Acid rain fairy tales??

At 10/16/2011 10:15 AM, Anonymous Anonymous said...

Re: Re: Syngas. You are mistaken. Methane is CH4. CH4 + 3H2O <=> CO + 3H2
Google fossil fuel reforming.
Where do you thi.k the Germans got thierdiesel in WWII? A similar process called Fischer Tropse.

At 10/16/2011 10:49 AM, Blogger Larry G said...

re: syngas:

" Syngas has 50% the energy density of natural gas"

" Syngas consists primarily of hydrogen, carbon monoxide, and very often some carbon dioxide, and has less than half the energy density of natural gas"

At 10/16/2011 10:55 AM, Blogger Larry G said...

re: coal fired plants


air quality:

mountaintop mining:

isn't it funny that the folks worried about the scenic impact of wind turbines don't seem to have that problem with mountaintop removal and the ensuing acid runoff?

All I am saying here is that all forms of energy have impacts and that wind turbines are among the lesser comparably ....

and why would anyone be opposed to a property owner/farmer harvesting wind ... i.e. being productive... generating taxes... and not needing entitlements?

why would anyone oppose that?

At 10/16/2011 11:03 AM, Anonymous Anonymous said...

Re syngas... I can find dozens of links to argue back and forth with you, but why bother. I'm going to instead take my family to the coast for the day while you sit in your Moms basement picking fights with strangers. Have a good tme with that, i'm sure you will find joy in it in your own wierd way.

At 10/16/2011 11:03 AM, Blogger juandos said...

The U.S. Environmental over-Protection Agency proposed “the first-ever national standards for mercury, arsenic and other toxic air pollution from power plants.”

The EPA stated,

Toxic air pollutants like mercury from coal- and oil-fired power plants have been shown to cause neurological damage, including lower IQ, in children exposed in the womb and during early development.

This statement is false. There is no such evidence from any credible scientific study.

At 10/16/2011 11:06 AM, Blogger Larry G said...

re: " Re syngas... I can find dozens of links to argue back and forth with you, but why bother"

because all I was doing was trying to get some facts ... and you chose to not provide them... so go somewhere and do something more useful.

At 10/16/2011 11:09 AM, Blogger Larry G said...

At 10/23/2011 8:50 PM, Blogger hrc999 said...

when will the car companys build a car that runs on nat gas ???
if buses and trucks use nat gas
why not cars ??


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