Shale gas: Saviour or dangerous diversion?

It’s strange to think that 30 years ago, geologists failed to rouse even a flicker of interest from the then ‘Department of Energy’ on their discovery of extensive shale gas resources in the UK. A decade later, in 1995, the British Geological Survey also noted the potential of UK shale gas production. But again, bureaucrats and policymakers stirred not.

Meanwhile, on the other side of the Atlantic, the US flirted with its own shale gas resources, just as it had for more than 60 years. As technologies developed – particularly instruments and computer models that allowed precise identification of ‘sweet spots’ (an area within a shale gas region that contains a high concentration of gas) – development of shale gas began to gather pace.

But, it wasn’t until US demand began to outstrip conventional natural gas supply – and with it a growing reliance on imports – that shale gas production took-off. Now, 30 per cent of US natural gas demand is met by shale gas extraction, up from just 1% in 2001.

It’s this remarkable transformation in the US that finally threw the Brits into a shale gas frenzy. The announcement late last year by the International Energy Agency that the US shale gas boom would help it achieve the holy grail of energy policy – energy security – by the end of the next decade only further inebriated ‘frack heads’ already tanked-up on the potential of a UK shale gas revolution.

fracking2Protesters at Occupy Wall Street, October 2011Although still only at the very first stages of exploration, shale gas development in the UK is now championed as a route to a secure energy future, whilst concerns about the societal, environmental and economic impacts of exploitation appear to have been flung into the debris of the scramble.

Yet, there are a growing number of academic studies carried out in the US and the UK that have demonstrated we can’t frack our way out of climate change – even with carbon capture and storage, should that ever become commercially viable. Even the Committee on Climate Change has argued a future energy system based on gas will guarantee the UK overshoots its own legally binding emissions targets. But this is apparently no deterrent.

What about cost? Will the UK be able to replicate the US’s cheap gas prices? It seems highly unlikely.

The US is highly unusual in that the subsurface mineral resources are owned by the landowners. In virtually every other country on Earth the mineral rights are owned by the state.

This matters because the reason for cheap shale gas in the US is largely the result of landowners rushing to develop their gas resources. Landowners issue fixed-term development leases, which contain obligations to drill a number of wells within the term of the lease, typically 5 years, with extension provisions.

The gas company owning and operating the lease massively increases the value of the acreage they have leased by proving that it is productive by drilling up and producing gas. They then have the option of selling the gas and/or selling part or the entire lease. This has produced a glut and depressed prices to below properly accounted development costs. One estimate suggests that the industry is running at a loss of about $3.5-4 million per BTU (British Thermal Unit). The expectation is that US gas prices will return to rather higher prices in a few years’ time making shale gas a truly economic proposition and shale leases well worth hanging onto.

Other concerns regarding water contamination from fracking fluids entering the water table and earthquakes have been raised. But a recent report jointly published by the Royal Society and the Royal Academy of Engineering dismissed these risks as small, especially if the UK enforces strict regulations. History, however, tell us that regulations are there to be broken.

While economic and wider environmental concerns must not be dismissed, climate change is the primary concern here.

If an energy source effectively guarantees the UK will miss its legally binding climate targets then it is effectively unburnable. So what is the value of even flirting with the idea?

The University of Kassel has demonstrated a 100% renewable energy system is technically possible, without nuclear. But it does require a fundamental shift in the way we view energy. Energy systems don’t have to be based on large centralised plant, as Germany and Denmark both demonstrate. And, if more attention is devoted to reducing the demand for energy, the transition to a low carbon future will be much easier.

Perhaps solar panels and loft insulation aren’t as sexy as shattering rocks several kilometres below the ground, but those on the front line of climate change will thank us for resisting the urge to frack.

This post was originally published in Sublime Magazine.

Comments
4 Responses to “Shale gas: Saviour or dangerous diversion?”
  1. thiesen1S says:

    By all means – 100% renewable energy IS possible, but we are also running against an increasing wind here in Germany with the big utility and other big industry and financial interests re-grouping themselves to oppose the energy transition strategies and re-structure it in their favor. That process is, unfortunately, well under way, and during the last three years small and medium sized innovative RE companies have been dying like flies.

    One of the mataphors I use for “fracking” and other “unconventional” methods to extract fossil fuel from the ground is that of an alcoholic ransacking a glass recycling container in search for liquor bottles to desperately suck out the last drops he might find in there. Fracking is not a revolution, it is a symptom of peak oil, peak gas. We have run out of easily accessible sources and are figuratively beginning to burn our furniture and our books to keep our houses warm. If we don’t get serious about energy transition, passive house building and the usage of multiple combined RE energy sources, demand side management and distribution technologies, we will, in the end, quite literally burn our books and furniture – and other peoples’ food – to survive.

    • bronitri says:

      Thanks for your comment. It is a shame to hear about what is happening in Germany – we hold it up as an exemplar! Absolutely frustrating, but also fascinating about what the incumbents are doing, and what lengths they’ll go to before accepted they need to adapt their business model. I do think, however, there will come a point where there will be no other option but to go 100% renewable. Economies can only take a certain price of energy before demand destruction occurs and we slump into a recession. However, I suspect there will be several more cycles like the one we’ve just experienced before that happens. I’d be interested on anything about diffusion of Passive Haus from a German perspective btw!

      • Stefan Thiesen says:

        After working for many years in RE R&D I actually was a bit proud of our achievements here, but the politics have become somewhat muddy and unreliable. I also don’t know what to make out of Merkel, being a physical chemist and former environmental minister herself – plus a protegé of Klaus Toepfer – she surely has one of the best understandings of both, RE and global climate change, of all heads of state. I just cannot make her out. Moving towards RE also isn’t over in Germany, it’s more as if the decision makers are trying to figure out how to best shift the profits from small companies and even ordinary citizens to the usual suspects.

        Diffusion of passive houses? Water vapor diffusion of various types of wall designs, I suppose? Not exactly my field of expertise, but I could put you in contact with our former CEO Klaus Schweitzer, who is now retired, but was in charge of building two passive house office buildings. He is a real enthusiast and knows just everything about passive houses. The first one simply was “Das Passivhaus” (see http://www.sonnewindwaerme.de/sites/default/files/field/image/st_wagner_solar.jpg) built in the late 90s, when it was the first office building built to passive house standard in Europe. The University of Marburg accompanied the endeavor scientifically. The other one is really sophisticated, completed two years ago. Perhaps make a Google image search for “Sonnenforum”.

        Oh – if I’m to guess, I suppose that all water vapor diffusion issues are managed by proper active ventilation. The Passivhaus has an electronically regulated underground ground-air heat exchanger. I wonder how they do it with the new Passive House Swimming Pool facility in my birth-town Lünen (the world’s first)… I shall find out… here is a Link to a short English description: http://inhabitat.com/worlds-first-passivhaus-public-pool-opens-in-lunen-germany/lippe-bad-lunen-passivhaus-pool-7/

        Maybe what Merkel thinks to herself: oh well – we already have too much PV, and Wind and solar thermal pays for itself – what needs support is passive houses and more efficient heating. After all that’s where CO2 is best reduced.

  2. Some news on the topic from the continent: The German Umwelt-Bundesamt (Federal Environmental Administration) published a report that sees prohibitive long-term risks related to fracking. As a result the federal minister of the environment announced the world’s strictest regulations in the field and added that “there will be no commercial fracking in Germany in the foreseeable future”. See http://www.zeit.de/politik/deutschland/2014-08/hendricks-zu-fracking” (German). At the same time the head of the “Bundesanstalt für Geowissenschaften” (Federal Ressources Administration) stated that there are no significant risks involved in fracking. Meanwhile a research team published a paper that warns against unintended consequences. See: https://blogs.princeton.edu/research/2014/08/01/fracking-in-the-dark-biological-fallout-of-shale-gas-production-still-largely-unknown-frontiers-in-ecology-and-the-environment/

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