Articles from 2012
China accepts the challenge on shale gas
- Written by Nick Grealy
- Published: 09 August 2012
Last week the FT recycled the conventional wisdom of why European shale gas either won't work at at all or will be so problematic we should give up before starting:
Yet there are plenty of sceptics prepared to bet that the shale boom will never cross the pond. Environmental opposition to fracking, which involves injecting huge volumes of water, sand and chemicals deep underground to blast open the shale rock and release the gas trapped inside, is stronger in Europe than in the US. Fears that it could contaminate groundwater prompted France and Bulgaria to ban the practice. Romania and the Czech Republic could follow suit.
The FT didn't actually name one single sceptic, but I will. The Oxford Insitute for Energy Studies Can Unconventional Gas be a Game Changer in European Gas Markets? report was commissioned in 2009 yet took six months longer to produced than the original plan. There is barely a single reference to any event past 2008 and as such it was hopelessly outdated even then. Yet similar points were repeated by Pøyry to produce a report which said shale gas will never amount to anything for Ofgem a year ago. From there it's only a small step to being official government policy. Let's look at the details again from the FT, which are no different from OIES:
There are also widespread concerns that the process of exploiting shale releases large amounts of methane, a powerful greenhouse gas. Environmentalists also fret about the small earthquakes that shook parts of Lancashire in the UK last year in the vicinity of a shale gas drilling site. Oil companies insist fracking is safe when performed properly.
Another big obstacle is property rights. In the US, private individuals own the minerals underneath their land: in Europe, they are generally owned by the state. Persuading governments to let oilmen exploit their resources can be hard: US companies say it takes them a year to permit a well in Poland, compared with a few months in the US.
Beyond that, there is the argument that Europe is just too densely populated for intensive shale gas production. Unlike in the US, where shale plays tend to be far from human habitation, Europe’s can often be close to built-up areas.
There are also real doubts about the quality of the resource. In June, ExxonMobil said it was pulling out of Poland after tests failed to find gas in commercial quantities. And recently the Polish authorities radically downgraded their estimate of how much shale gas the country had.
Those negative reasons are broadly similar to those described in National Geographic on China shale gas
But challenges lie ahead in China's effort to replicate the U.S. shale gas revolution. Early indications are that China's shale geology is different. And above ground, China lacks the extensive pipeline network that has enabled the United States to so quickly bring its new natural gas bounty to market. A daunting issue is whether water-intensive energy development can flourish in China given the strains the nation already faces on water and irrigation-dependent agriculture.
But there is one key difference:
Even though there are more questions at this point than answers, China is determined to move ahead.
The article describes shale gas progress, as opposed to only obstacles. Firstly, China seems to manage without individual mineral rights being much of an issue. Also imporant is how although some parts of China are as empty as South Texas, the drilling is taking place in Chongqing, one of the worlds larges cities with 28 million people. Bang goes the China is too crowded theory.
On June 9, state-owned oil giant Sinopec started drilling the first of nine planned shale gas wells in Chongqing, expecting by year's end to produce 11 billion to 18 billion cubic feet (300 to 500 million cubic meters) of natural gas—about the amount China consumes in a single day. It's a small start, but China's ambitions are large; by 2020, the nation's goal is for shale gas to provide 6 percent of its massive energy needs.
So despite the same issues present in Europe, China is eager to solve problems instead of creating them.
At least Europe, and the UK are being consistent: having given up a massive competitive advantage to the USA, they are equally happy to give one to China as well. After all, as yesterday news shows,
Chancellor George Osborne said the government had an opportunity to give "110% attention and effort and energy to getting the economy moving."
Bu the UK Energy Minister is determined to give 110% attention to concentrating on problems the Chinese appear to be solving.
'But there are fundamental differences between the US and here.'
'In US you own resources beneath your home, here you don't. You have to get permission from landowners.'
The UK unlike China, seems sometimes desperate to give up on shale before we even start. But of course, China seems to be able to handle their neighbours better than we can
Russia and China have failed to agree the terms of a long-awaited gas deal that both sides had hoped to sign this week.
China is eager to import Russian gas to help meet its surging energy needs and reduce dependence on environmentally damaging coal.
However, during the five years that the Russian gas deal has been under negotiation, China has moved to secure alternative supplies, signing contracts with gas producers in the Middle East, Australia, Burma and central Asia. China has also discovered large reserves of shale gas that could eventually provide a large source of indigenous energy, easing the pressure to import gas.
But going back to what is really important, what about global warming and CO2 reduction in the China context? A common European objection by critics is that shale won't help with carbon reduction targets which it won't if we look only at carbon targets for Europe, because the potential for disruptive, yet positive change well within the 2050 time frame on a global basis looks increasingly possible.
Because natural gas generates electricity with half the carbon dioxide emissions of coal, China's primary power source, the hope is that shale development, if it is done in an environmentally sound manner, will help pave the way to a cleaner energy future for the world's number one greenhouse gas producer. "Clean, rapid shale gas development in China would reduce global emissions," says Julio Friedmann, chief energy technologist at the U.S. Department of Energy's Lawrence Livermore National Laboratory
The logic of European carbon reduction has been that we have to cut our emissions because of increasing power demand via coal in China. Yet that central foundation is now shifting:
China now realizes it has incredible opportunity to find another major fuel source other than coal," says Albert Lin, chief executive of EmberClear, an Alberta, Canada-based energy project developer that is a partner of China's largest power producer, China Huaneng Group
Shale gas denialists in Europe are not simply local neighbours who can generally be won over with an application of the facts to counter fears. The most dangerous opponents in Europe are those who see their government subsidised projects disappear. They care about their corner of the world first and the planet second.
The most dangerous opponents of shale in Europe are tied not to drill rigs, but to outdated concepts.