March 12, 2012

Shale gas 'revolution': Reasons to question it

By Sunita Narain

The world does not need another cheap energy option, it needs options that will drive it to secure its future

In the US, the climate change issue has lost so much traction that President Barack Obama, who came with a promise of change, has backed down on any discussion on it. After his election in 2008, Obama announced: “This is the moment when the rise of oceans began to slow and our planet began to heal.” But since then, little has happened to cut emissions at the scale and pace needed. In the current elections, Obama does not mention the C-word, and climate change is a non-issue. The US has no interest in taking the lead in this matter.

This is what we know. There is a new development afoot that could push the US to “clean energy” — but the zillion-dollar question is if this will be good or bad for the future.

The US, it is said, is close to a shale gas revolution. Reserves of this natural gas – which is extracted from deep rock formations using hydraulic fracturing – are said to be huge. The US Energy Investigation Agency’s 2012 estimate is that recoverable natural gas reserves are some 860 trillion cubic feet — enough to last 40 years at current consumption levels.

The most important development is that this highly intrusive extraction of gas, which involves pumping a concoction of water, chemicals and sand deep into the earth to unlock gas trapped in shale formations, is turning out to be cheap. The price of extraction and sale has dropped low enough for this gas to compete with coal and all other energy sources. It is the game-changer in global energy supply. It is also a possible game-changer in climate change. The combustion of natural gas emits roughly half the carbon dioxide emitted by coal or oil per unit of output. This means the US can substitute its coal power stations with gas and cut its emissions, without doing anything to reduce energy use. It can also replace gas in the transport sector, by either using it as compressed gas or liquefying it. All this means more business, more jobs and less pollution, without the dreaded C-word and the imperative of changing lifestyles or reducing consumption.

The excitement is so high that the country, it seems, has little time to spare on the downside of this energy source. There are clear and present dangers in shale gas extraction. One, the opportunity cost of the huge quantities of water needed to push open the gas trapped in rocks. Two, there is the possibility of deadly contamination of groundwater from the mixture of chemicals used in the process. Not enough is known about the chemical concoctions because companies say the chemical formulae essential to break down shale are proprietary and they will not disclose them. The water and chemicals first pumped down are also pumped back up — water flows back up the hole after the wells have been fractured. Disposal of this wastewater is a challenge, admits the US government. Then there is the danger of earthquakes, caused by both hydraulic fracturing and disposal of wastewater into deep wells. As yet, little is known or understood of these problems.

Local communities in US states are on the warpath against moves to change land use to allow drilling and against contamination of water. Pennsylvania’s Senate has passed legislation allowing drilling, but a New York court has struck down the power to change land-use zoning.

US environmental groups are also divided — between the enormous potential of this gas-transition to combat climate change and the present dangers of its extraction. The Sierra Club – a powerful green group – is a strong proponent of gas. A recent expose in the US media claimed this was due to huge donations – often secret – it received from gas companies to run its anti-coal campaign. But all said, the push for this “clean” gas is inexorable.

The other big question is: what will the gas-rush do to the fight against climate change? The world needs to find inventive technologies for the transition away from fossil fuels. Natural gas is, at best, a transitory option. But the availability of this underground reserve at cheap rates will mean that there will be less incentive for new research and investment in new technologies. Solar energy, even with its decreasing costs, will be uncompetitive relative to gas. The fuel switch at cheap rates will also provide no real price option for industries to invest in efficiencies or new clean technologies. What will this do to the clean energy futures of the world?

The fact is that the world does not need another cheap energy option. It needs options that will drive it to secure its future, not just safeguard its present. The shale gas “revolution” could be what does not work in this respect.

Source: Business Standard