Will shale gas derail renewables?

Natural gas comes from both ‘conventional’ and ‘unconventional’ geological formations.

These are basically industry euphemisms for places that are ‘difficult to source gas’ and ‘very difficult to source gas’.

Shale gas falls firmly into the latter category. It is found in the place where gas is actually created, deep, deep underground.

These vast reserves are located in what the energy industry colourfully calls ‘the kitchen’ - where hydrocarbons are first ‘cooked’.

To give an idea of how difficult it is to get to, this is how the National Energy Board of Canada explains shale rock:

Shales are less permeable than concrete, so the natural gas cannot easily move through the rock and into a well. In fact, the gas is so tightly trapped within the shale, that in order for it to flow, it must pass through pore spaces that are 1,000 times smaller than those in a conventional sandstone reservoir.

Despite this, energy firms are having increased success in tapping into this massive resource.

Shale production in the U.S. has increased from almost zero at the turn of the century to about 30% of the country’s natural-gas supply.

The U.S. Energy Information Administration predicts that shale gas may grow to account for about 46% of natural gas production in 2035.

Supporters of shale drilling say this is the reason why the US enjoys such cheap natural gas prices compared to its Western neighbours.

Some of the world’s biggest energy firms are getting on board. For example, Conoco Phillips is investing $2bn in gas in 2011, up from $500m in 2009. In October the rush to shale gas led Kinder Morgan to acquire rival El Paso for a very respectable $21.1bn.

The most important factor driving this trend is the development of technology, including improved ‘horizontal drilling’ distances and hydro-fracturing techniques – known as ‘fracking’.

The former technique means drillers accessing the shale laterally rather than just vertically, exposing more of the surface area of the rock for extraction and enabling multiple wells to be dug in one place.

Fracking involves pumping millions of gallons of water mixed with chemicals and sand deep underground at extremely high pressure. This creates cracks in the shale, which are held open by the sand, allowing the gas to be released.

These improved techniques are driving the cost of mining down, which is a big plus since horizontal shale gas wells typically cost $5 to $10m.

Further development will make it even more attractive; shale gas producers generally only recover 20% of the gas reserves they are tapping, while in conventional reservoirs more than 90% of the gas is normally extracted.

The vast reserves of the gas located around the world make it an attractive investment in terms of energy security. Proponents also say it ticks the ‘green’ box as natural gas is considerably less polluting than other fossil fuels, releasing about half the amount of CO2 as coal when burned.

John Podesta, former chief of staff to  Bill Clinton, and now head of the Center for American Progress in Washington, wrote on his think tank’s website that natural gas could act “as a bridge fuel to a 21st century energy economy that relies on efficiency, renewable sources, and low-carbon fossil fuels”.

Natural gas is cheap and plentiful. That makes shale drilling an appealing alternative to wind and solar power, which are currently expensive and unreliable, say its converts.

Unsurprisingly, environmentalists do not agree. In fact, many hate the idea of hunting for gas in shale.

Their biggest concern is about ‘fracking’ and what it does to the environment, particularly supplies of drinking water.

In 2010, New York State stopped issuing permits for ‘fracking’ to give environmental authorities there time to study complaints by locals.

While some residents had objected to heavy truck traffic and rural vistas marred by rigs, noise and murky wastewater pools, others complained that after gas operations began, well water started tasting bad and children fell ill.

A 2010 documentary called Gasland claimed to show local residents near drilling sites setting fire to their tap water, blaming chemicals associated with ‘fracking’.

France has stopped ‘fracking’ shale altogether pending further investigation into its consequences.

Gas producers have vigorously denied that ‘fracking’ is responsible for water pollution. Among many other arguments, they point out the procedure usually takes place a mile or more below sources of drinking water and is separated from it by millions of tonnes of impermeable rock.

They point to a study of fracking released in 2004 by the U.S. Environmental Protection Agency, which shows millions of ‘frack jobs’ have been undertaken with no proof of adverse consequences.

But drillers have not helped themselves by being very cagey indeed when asked what goes into the fracking liquid, prompting all sorts of conspiracy theories. They say it is commercially sensitive information.

Less easy to defend were the tremors caused when Cuadrilla Resources, the first company to drill for shale gas in Britain, started work to exploit a shale reserve in Lancashire, purportedly holding 200tn cubic feet of gas.

The tremors were no worse than an underground train passing but have outraged locals worried that more wells could lead to earthquakes.

Local pressure group ‘frack off’ recently invaded the Cuadrilla site; its spokesman compared shale gas exploration to the environmental anathemas of tar sand and deepwater drilling.

"The move towards 'extreme energy' is literally scraping the bottom of the barrel, sucking the last, most difficult-to-reach fossil fuels from the planet at a time when we should be rapidly reducing our consumption altogether and looking for sustainable alternatives,” he said.

The alternative argument was laid out by Benny Peiser, head of the Global Warming Policy Foundation, at the recent Shale Gas Environmental Summit in London.

He said that the UK could not afford to squander a potential “goldmine of abundant and relatively cheap energy”.

He railed against the UK government, which he said had a “stubborn and wrong-headed commitment to renewable energy”, leading to “so-called green stealth taxes…adding substantially to domestic power bills”.

Such ‘tete-a-tetes’ are being repeated across the globe wherever the debate is raised over the merits of shale gas exploration.

It is far from clear whether John Pedesta will realise his dream of shale gas acting as a bridge to a future dominated by renewable energy. The rival camps will have to do a lot more to build bridges themselves first.