Skip
to Navigation

Login

home

start here

about

faq

contribute

contact us

Energy Bulletin

Don't
Worry, There's Plenty of
Oil...

4916
reads

Printer-friendly version

Published May 16
2011 by The Tyee,
Archived May 17 2011

Debunking the 'shale gale'

by Andrew Nikiforuk

For several years now, the natural gas industry has been exclaiming
Hallelujahs about the marvels of shale gas with the passion of a church
choir belting out Handel's "Messiah."

The hallelujahs, which spring from the U.S. Energy Information
Administration (EIA) or the likes of Chesapeake Energy ("American's
Champion of Natural Gas"), come in three happy choruses.

The first says that the shale gas revolution will miraculously create
100 years worth of methane; the second chorus maintains that the price of
natural gas, a volatile commodity, will stay low for decades; and the last
chorus says that natural gas will green the economy and arrest climate
change. Hallelujah.

But a new report by J. David Hughes, one of North America's foremost
coal and gas experts, challenges every single one of these faith-based
assumptions with hard science and clear-eyed math. In the stunningly lucid
64-page report for the Post Carbon Institute, Hughes squarely
concludes that all three assumptions are highly questionable, if not total
"impossibilities."

Hughes is no wide-eyed greenie or industry basher. He happens to be one
of Canada's most credible energy scientists. The geologist worked for
Natural Resources Canada for 32 years and mapped Canada's coal and coal
bed methane fields. He has also served on Canada's Natural Gas Potential
Committee and is regarded as one of the continent's top global energy
analysts. (B.C. politicians take note: Hughes lives on Cortes Island on
the West Coast.)

"Natural gas is a truly important resource. But industry has overblown
what shale gas can do for us," says Hughes. "Shale gas is an exercise in
creating greater complexity with lower and lower returns."

Shale industry 'hubris'

Until shale gas appeared on the scene, analysts predicted a high noon
for natural gas. Gas production in the U.S. peaked in 1973, and has been
on a bumpy production plateau ever since. But then companies started to
use horizontal drilling, combined with hydraulic fracturing, to open deep
rock formations once considered as inaccessible as bowhead whales in the
Arctic.

Hydraulic fracking, a high-energy technology that uses millions of
gallons of water, sand and toxic chemicals to blast open methane trapped
in dense rock, created a shale boom from Pennsylvania to northern B.C. and
beyond.

The fracking energy binge, which industrializes rural landscapes,
sparked moratoriums in Quebec and New York due to widespread concerns
about surface and groundwater contamination, and earthquakes from
reinjected fracking fluids. U.S. Energy Minister Steven Chu just ordered a high level investigation on fracking
issues. Even France has banned the practice to protect its water-dependent
cheese makers and grape growers.

Although T. Boone Pickens, the natural gas lobby and some environmental
groups now champion shale gas as a "transition fuel" that could possibly
retire coal plants and even power vehicles, Hughes says the real
production numbers don't add up without unprecedented levels of drilling.

For starters, industry hubris simply defies the law of thermodynamics.
From 1990 levels, U.S. gas drilling tripled to 33,000 wells per year
between 2006 and 2008 before collapsing back to 20,000 wells. In order to
build a modest 21 per cent increase in natural gas production, the gas
industry constructed a complex infrastructure nearly 100 per cent larger
than what previously existed in 1990.

"What matters are flow rates and how fast the gas can be produced,"
explains Hughes. "There may be 100 years worth of methane in the ground,
but it may take 800 years to produce it." Meanwhile, conventional gas
production in both Canada and the U.S. is declining rapidly. In other
words, shale gas might temporarily replace some of the air leaving the
conventional gas tire -- but not for long.

Extreme, expensive, emissive

Next come the resource's extreme economics. A shale gas well with
multiple fracks costs between $2 million and $10 million to drill. But
unlike a conventional well, which declines between 25 and 40 per cent in
its first year of production, a shale gas well drops like lead from 63 to
85 per cent. So, an initial whale of a return bought by fracturing an
industrial scale land base (and watershed) abruptly becomes a sardine in
short order.

Due to the high amount of capital, energy and water needed to frack a
formation at high pressure, shale gas is expensive and is only economic in
the best portions of today's shale plays. But due to over-drilling and the
recession reducing demand, the actual market price has sunk to below the
cost of production in many areas.

Source: Post Carbon Institute.

This explains why many producers have shifted their activity to shale
oil exploration or sold a portion of their assets to foreign companies.
(The British Columbian government has unwisely subsidized shale gas
drilling with roads and low royalties and other billion dollar giveaways.)

"One thing is certain," adds Hughes. "Shale gas is expensive gas, much
of which is marginally economic to non-economic at today's gas prices. The
resource will require unprecedented rates of drilling to grow production,
and we will need higher prices to justify that. We'll have to carpet bomb
landscapes in Pennsylvania and New York with rigs and gas production
infrastructure -- those folks haven't seen anything yet."

Last but not least, Hughes demolishes the claim that shale gas is
green. For years, scientists generally assumed that the burning of natural
gas produces 44 per cent fewer greenhouse gas pollutants than coal. But
that's no longer true.

A recent study based on U.S. Environmental Protection Agency data, for
example, found that the cleaner-than-coal claim fell to 25 per cent or
less when scientists included methane leaks or "fugitive emissions" from
wells and pipelines.

Two Cornell University studies went even further. After accounting for
methane vents and leaks over the lifetime of a gas well, (and methane is a
much more powerful climate changer than CO2 over the first few decades),
these studies found that shale gas has few or no climate
change benefits.

According to Hughes' analysis, shale gas repeatedly comes out a loser
compared to dirty old coal for power generation over the next half
century.

He concludes: "Best technology coal compared to best technology gas
produces less emissions over a 50 to 60 year time frame... Thus, the
concept of natural gas as a low-carbon bridge fuel to a future powered
largely by renewable energy is cast in considerable doubt as a strategy to
reduce global warming. Employing the best available methane capture
technologies could reduce this impact, but shale gas would still be worse
than coal over a 20-30 year timeframe because of the near-term global
warming potency of methane."

'A small but important flame'

Asked if his U.S. report applies to Canada, Hughes replied "mostly
yes." Since 2001, Canada's marketable gas production has declined by 18
per cent. Alberta's gas production (74 per cent of Canadian production)
will drop by 44 per cent from 2006 levels by 2019, according to the
Alberta Energy Resources Conservation Board. Given a National Energy Board
prediction that shale gas will account for only 3.5 per cent of supply by
the end of 2012, Hughes doesn't think that shale gas will begin to make up
for conventional gas production declines.

"Why are all these companies planning on building a gas pipeline to
Kitimat with an LNG terminal to export Canadian gas? It really leaves me
scratching my head, except for the shale gas growth hype and the fact that
global LNG prices are much higher than North American gas prices
currently."

The implications of the Hughes report are disturbing. Without dramatic
reductions in consumption of fossil fuels from outright conservation to
energy efficiency (he strongly recommends more co-generation and targeting
fuels to their highest-value applications), the rapid exploitation of
shale gas will only confirm Eric Sevareid's law: "the chief cause of
problems are solutions."

Moreover, "the growth mindset that has served us so well for the past
few centuries no longer suits the situation we find ourselves in. Fossil
fuels are a finite, one-time resource. Neither natural gas, nor oil, nor
coal can fuel the 21st century to its end in the manner which we have
become accustomed."

But that's not what industry or captured regulators are telling the
public. "The people who own centre stage right now are the natural gas
lobby," says Hughes. "The big picture analysis of where this is taking us
and future generations really doesn't have much of a voice."

So the truth on shale gas burns down to this: It's a small but
important flame. Due to extreme depletion rates and costly economics, it
won't fuel the future or replace coal or imported oil. Like Alberta's
dirty bitumen, the resource requires such high water, energy and
environmental costs, that regulation must demand greater accountability.
Incredibly, the resource may produce more global warming gases than coal.

What industry once pronounced as a "game changer," looks and sounds
more like an Elmer Gantry sermon than Handel's "Messiah."

Andrew Nikiforuk is an award-winning Calgary journalist and
author.

Editorial Notes

Thanks to the Andrew and the Tyee for allowing us to repost selected
pieces of Andrew's work. -KS

Original article available
here

The Conversation

NOTE: The new Disqus has changed the wording that commenters receive when
their comment goes into moderation. You may therefore receive a message that
your comments have been hidden due to abuse reports. Please be assured that this
is not a mark against you. Your comment is in moderation and we will get to it
shortly. We have raised this issue with Disqus.

View EB Comments
Community guidelines

news by category

Resources

Coal

Methane
hydrates

Natural
gas

Condensates & NG
liquids

Liquid
natural gas

Nuclear

Oil

Arctic
oil

Conventional
oil

Deep
water oil

Heavy
oil

Other
resource depletion

Renewable
energy

Biofuels

Biomass

Geothermal

Hydro

Hydrogen & fuel
cells

Ocean
energy

Ocean
thermal

Tidal

Wave

Solar

Photovoltaic

Solar
thermal

Wind

Shale
oil

Tar
sands

Regions

Africa

Asia
South and East

Australia
& Oceania

Europe

Global

Latin
America

Middle
East

North
America

Polar
Regions

Russia
& Central Asia

Related Issues

Community

Economics

New
currencies

OPEC

Petrodollars &
US dollar

Privatisation &
globalisation

Education

Energy
literacy

Electricity

Environment &
sustainablity

Climate

Consumerism

Energy
demand

Human
ecology & behaviour

Overshoot

Population

Food
& agriculture

Health

Housing
& urban design

Industry

Energy
companies

Energy
infrastructure

Exploration

Technology

Media
& persuasion

Politics

Energy
policy

Geopolitics &
resource wars

Military

Political
movements

Solutions

Transport

Waste

Water

Women

featured content

Authors

Dan
Allen

Cecile
Andrews

Sharon
Astyk

Megan Quinn
Bachman

Albert
Bates

Ugo
Bardi

Dan
Bednarz

Jeff
Berg

David
Bollier

Stuart
Jeanne Bramhall

Rebecca
Burgess

Sarah
Byrnes

Molly
Scott Cato

Kurt
Cobb

Dave
Cohen

Erik
Curren

Lindsay
Curren

Andrew
Curry

Herman
Daly

Kris De
Decker

Rob
Dietz

Charlotte Du
Cann

Rahul
Goswami

John
Michael Greer

Nate
Hagens

Richard
Heinberg

Øyvind
Holmstad

Rob
Hopkins

Robert
Jensen

Brian
Kaller

Frank
Kaminski

Paul
Kingsnorth

Justin
Kenrick

Amanda
Kovattana

Ellen
LaConte

Gene
Logsdon

Mary
Logan

Andrew
McKay

Kathy
McMahon

Asher
Miller

Bill
McKibben

Rick
Munroe

Tom
Murphy

Andrew
Nikiforuk

Dmitry
Orlov

Christine
Patton

Damien
Perrotin

Dave
Pollard

Joanne
Poyourow

Barath
Raghavan

Wayne
Roberts

Staff

Stuart
Staniford

John
Thackara

Gail
Tverberg

Tom
Whipple

More
authors...

Publishers

ASPO-USA

Civil
Eats

Climate
Progress

Culture
Change

Energy
Bulletin

Fernand
Braudel Center

Feasta

HomeGrown

Nourishing
the Planet

Oil
Depletion Analysis Centre

On
the Commons

OpenDemocracy

OpenEconomy

Post
Carbon Institute

Shareable

Solutions

The
Daly News

The
Oil Drum

Shareable

TCLocal

TomDispatch.com

Transition
Milwaukee

Transition
Network

Transition
Voice

Yale
Environment 360

Yes!
Magazine

Media Publishers

Agroinnovations

Climate
One

Crop
to Cuisine

Deconstructing
Dinner

Equal
Time Radio

The
Extraenvironmentalist

Google
Tech Talks

KrisCan.com

KunstlerCast

Peak
Moment Television

Post
Carbon Institute Media

Radio
Ecoshock

Reality
Report

Sustainable
World Radio

Reviews

Book
reviews

Film
reviews

Web chats

Web
chats

Transition 2.0 The
Movie

editor's picks

Words
which matter to people

Dog
days

Woody
Agriculture - On the Road to a New Paradigm

Hope
is for the lazy: The challenge of our dead world

Survival
of the fittest?

more

New! The End of Growth Update

Get
the update as a standalone

In Power from the People, In the second PCI Resilience Guide,
Greg Pahl explains how to plan, organize, finance, and launch community-scale
energy projects that harvest energy from sun, wind, water, and earth.
Buy
now
Friends of PCI
discount code: PFTP

YOU ARE HERE: The Oil Journey - from PCI

The Post Carbon Reader

A must-read collection by some of the world’s most provocative
thinkers on the key issues shaping our new century.
Buy now.

The Oil Age Poster

Buy the
2010 edition.

Content on this site is subject to our fair use notice.

Energy Bulletin is a program of Post
Carbon Institute, a nonprofit organization dedicated to helping the world
transition away from fossil fuels and build sustainable, resilient
communities.