Shale gas: a welcome energy shock

Last month, I got my energy bills for the past quarter. They hurt. After the combination of a bitterly cold winter and rising energy prices, the cost of keeping warm the Victorian terraced house I live in is becoming eye-watering. And with the UK government determined to reduce greenhouse-gas emissions further by bumping up fuel costs through renewable energy subsidies and carbon taxes, things are only going to get worse.

This is the lack-of-energy future that environmentalists have long warned about. Just as we seem to be hitting peak everything – peak oil, peak gas, you name it – we are desperately throwing money at inefficient renewable energy sources like wind and solar that just aren’t developed enough or reliable enough to take up the slack. Maybe we should all start wearing cardigans, just like US president Jimmy Carter did when he told the American people about apparently looming energy shortages back in 1977.

Wouldn’t it be great if a new, cheap, reliable and well-understood energy source came along and helped us out of this chilly, expensive problem. Well, it looks like it has – and in time honoured fashion, there are queues of vested interests trying to strangle the new upstart at birth. The new kid on the block is shale gas and the potential for this new energy source – and the numerous important ramifications of its exploitation – are explored in his typically clear-headed fashion by science writer Matt Ridley in a new report, The Shale Gas Shock.

The shock of the old – and new

‘The knowledge that shale rock contains gas is old’, writes Ridley, explaining how ‘brief bursts (“shows”) of gas would be encountered when drilling through shales to reach oil reservoirs’. However, these stores of gas were always assumed to be too difficult or too expensive to exploit. What changed was the bringing together of a number of technologies, some fairly old, some new.

For example, hydraulic fracturing (‘fracking’) has been around since the 1940s. Essentially it means digging deep underground, setting off small charges along the length of the subterranean pipe, then forcing water and sand into the gaps created to release the gas or oil from the rock. On the other hand, horizontal drilling at large depths was first developed only in the 1970s and was much improved in the 1990s. In conventional oil or gas extraction, you dig down to a reservoir of fuel, so only vertical drilling is required; once you hit one part of the reservoir you can easily pull up the fuel within it. With shale rocks, you need to be able to stretch out into rock formations in a wide area around the vertical drill shaft. That’s now possible.

Through the combination of fracking, horizontal drilling and sophisticated exploration techniques, US firms have been making huge strides in extracting gas ever more efficiently, so that the cost of shale gas can be as cheap as conventional gas – and could become even cheaper.

Lots of gas, everywhere

And what is becoming clear is that there is a lot of gas down there. Estimates of just how much gas there is have been zooming upwards in recent years. For example, in the Marcellus shale which lies partly under the US state of Pennsylvania, estimates in 2007 suggested there could be 50 trillion cubic feet (tcf). Given that the US uses just over 20 tcf per year, that seemed like a handy new resource. But by 2011, some estimates put the amount of gas recoverable from the Marcellus shale at 516 tcf – equivalent to about 25 years worth of total US gas consumption from just one (admittedly enormous) gas field. In 2010, Ridley notes, total US estimated shale gas resources stood at 2,000 tcf (discovered) and 3,000 tcf (‘expected’) according to one report. That’s 150 years’ supply at current levels.

As Ridley notes, one of the best things about shale gas is not just that there is a lot of it, but that it’s widely spread. While conventional gas supplies are concentrated in a few big fields, like the one shared by Qatar and Iran, many countries will have some shale gas supplies and others could be on the verge of a bonanza. For example, Poland – which has for a long time been reliant on Russian energy supplies – could be sitting on a major shale gas field. This ubiquity means that gas supplies will often be much nearer to the point of use, obviating the need to exploit supplies in a far-off wilderness like Alaska. That keeps such isolated environments pristine and reduces the need for new pipelines. It also has geopolitical implications for those who currently supply the world’s gas. Russia, rich with conventional gas supplies, is none too keen on this new-fangled technology which threatens to drive down gas prices.

One useful feature of Ridley’s report is that it gives space to the sceptics. We are, says Ridley, in the midst of a shale-gas bubble. For every company making a fortune, another will go to the wall. It may turn out that the larger estimates for shale-gas supplies are fanciful, or prove not to be economic to exploit. We could just be harvesting the low-hanging fruit.

Clearing the air

But, as he notes, there are lots of good reasons to believe that shale gas will have a major impact. Firstly, the obvious one that it could greatly postpone any possible ‘peak’ in fossil fuel energy. Secondly, it is relatively ‘clean’, in a low-carbon sense. Ridley notes that the world has been decarbonising since the days of Queen Victoria and Abraham Lincoln because the fuels we use – from wood to coal to oil to gas – have steadily less carbon and more hydrogen in them.

Even those who are sceptical about climate-change alarmism will appreciate the fact that gas is cleaner than other fossil fuels in other ways. Coal and, to a lesser extent, oil produce a lot of other pollutants when they are burned that we’d rather do without. That’s why smog-laden China, while knowing that coal-fired power stations have been essential to rapid economic growth, is now encouraging the rapid development of gas resources.

In his foreword to The Shale Gas Shock, veteran physicist Freeman Dyson reminisces about an incident in the days before the Clean Air Act when he was sat in a fug in the Royal Albert Hall, one not produced by the patrons inside but by the coal fires burning across the city. ‘London is no longer the place where your shirt-collar is black with soot at the end of each day’, he writes. But London still has some air pollution thanks to all those cars, buses, lorries and taxis. Switching some of these vehicles from oil to compressed natural gas (CNG) would be relatively easy and would help to reduce air pollution. Taxis running on natural gas are already common in bustling, fast-growing major cities like Bangkok, Kuala Lumpur and Rio de Janeiro.

Plugging the gas leak

So why would anyone be against shale gas? For one thing, there are plenty of commercial interests in coal, oil and renewable energies that could lose out if gas takes off. More threatening is the green backlash against gas, as epitomised in the scaremongering, Oscar-nominated movie Gasland. There is much talk about how fracking will pollute water supplies (Ridley accepts this is possible but unlikely) and involves the use of many dangerous chemicals. As Ridley points out, what goes down the well is typically 99.86 per cent water and sand, and the other chemicals used are widely used elsewhere in society without ill effect. These scare stories are at best misplaced or exaggerated and at worst deliberately misleading.

What shale gas really does is screw up a major environmentalist narrative: ‘We’re running out of fossil fuels, they’re really polluting anyway, so we should just use less energy or use renewables instead.’ In practice, fledgling wind and solar power aren’t up to the job, so the upshot of this argument is that we should retreat to a low-energy society. But if there is a lot of potential energy out there, and it is also less polluting and more flexible than current energy supplies, where does that leave the greens? The shiver-in-the-dark alarmism is ruined.

In the rest of the world, it is quite likely that this option of clean, cheap energy will be warmly embraced. In Europe, however, where politics is ruled by the regressive notions of sustainability and the precautionary principle, we can expect great efforts to try to stop shale gas from being developed. While there are some genuine uncertainties about just how important shale gas will be, it would be a tragedy if European politicians are allowed to suffocate the potential of this new energy source.

For all its efforts at balance, what’s really nice about Ridley’s report is an optimistic tone that was commonplace 40 years ago but is usually absent today. Gosh, imagine what we could do with all that energy… The report is well worth a read.

Rob Lyons is deputy editor of spiked.

The Shale Gas Shock by Matt Ridley is published by the Global Warming Policy Foundation and is available to download here.