Articles from 2012
California Dreaming on European Shale
- Written by Nick Grealy
- Published: 16 January 2013
The European shale debate mess we're in has been dominated by issues arising in the Marcellus Shale of Pennsylvania and upstate New York with the result of the gridlock highlighted by Alan Riley in the FT today:
Far less positively, Europe will become the only big economic bloc without significant energy resources. The US, India, China and Latin America will all have access to shale, as well as offshore fossil fuels. As the US approaches energy independence, Washington will probably insist Europe invest in its own energy security by taking up part of the burden of protecting the flow of Gulf oil to the west currently provided by the US Navy.
If you are lucky enough to read French or trust Monsieur Google Translate, something broadly similar published in Le Monde today headlined The Geopolitical Revolution of shale gas is happening without Europe, which is encouraging on a European scale. But perhaps California provides a better example to Europe. California has been a thinking outside the box world leader on energy from way back. Smart metering, renewables, nuclear, solar, wind and efficiency combined with lots of seed money from the liberal billionaires of Hollywood, Santa Barbara, Silicon Valley and the Bay Area combined with California's vehicle emission and mileage standards to create a progressive government environment especially suited to green sensibilities even during Republican administrations.
One of the pioneers was the hip young 34th Governor 1975-83, Jerry Brown. His administration had a sensibility based on hippies meet the first oil shock via Ecotopia. Nowhere like the Left Coast so rapidly adopted green policies that still today are more advanced than those of Germany, France or the UK. Whatever happened to that guy? He had a track record that inspired European greens. Some things are too good to publish here so I'm saving a tidbit of someone mentioned in this next clip for my book. I was present bizarrely enough at a meeting with one of them and Petra Kelly, founder of the German Greens way back when we were all younger, and I might add, considerably prettier. It wasn't exactly a meeting, more of a bacchanal, but, going back on topic:
As governor, Brown held a strong interest in environmental issues. He appointed J. Baldwin to work in the newly created California Office of Appropriate Technology, Sim Van der Ryn as State Architect, Stewart Brand as Special Advisor, John Bryson as chairman of the California State Water Board. Brown also reorganized the California Arts Council, boosting its funding by 1300 percent and appointing artists to the council and appointed more women and minorities to office than any other previous California Governor. In 1977, he sponsored the "first-ever tax incentive for rooftop solar" among many environmental initiatives. In 1975, Brown obtained the repeal of the "depletion allowance", a tax break for the state's oil industry.
Where's Jerry Brown now? He went on to run for President with Jesse Jackson among other things, and won a few primaries too, but few in Europe realise he's now the 39th Governor of California, and doing a far better job than the 38th, who, most definitely, will not be back. Yes, they do things different in Caliornia and Jerry Brown is now mentioned approvingly by the WSJ for his role in fracking in California:
Could 2013 find California lawmakers and Gov. Jerry Brown finally making the connection between fiscal challenges and energy markets? The Golden State is well positioned to become an exporter of hydrocarbons and enjoy a gusher of oil revenues. While many Californians will find that hard to contemplate, ideology bends more easily than the laws of physics and the imperatives of economics.
California has Saudi Arabia-scale oil resources, notably in its largely untapped Monterey shale field, which stretches northeast for more than 200 miles from Bakersfield in central California. New technologies, especially smart, horizontal drilling and hydrofracturing, aka "fracking," make that oil accessible, and cleanly. The U.S. Energy Information Administration estimates that the Monterey shale field alone holds 15.4 billion barrels of oil, rivaling America's total conventional reserves.
I've noted California's resources before, and even predicted them becoming important in my predictions for the next three years only a couple of weeks back. I may have to recant that prediction based on it happening already.The similarities between California and Europe are powerful. Both are progressive social democracies, and the German Greens, the original and most successful Green political party especially respect them. They also share the fact that they are both broke, something Jerry Brown, older and wiser, now sees as being paramount. What good is the greenest government ever if you can't even keep the schools open?
Technologies of the early 20th century unleashed oil fields from Long Beach to Bakersfield. Beverly Hills sits atop a legacy field still in production, its surface hardware hidden artfully off Pico and Olympic Boulevards in large windowless buildings. Black gold, not the gold rush, funded many California businesses for the first half of the 20th century.
In the heyday of the 1960s, when the state's education system was first in the nation, California's oil production ranked second nationally, at about 400 million barrels annually.
The fracking and smart-drilling revolution that has unlocked "tight" oil and reversed America's 40-year production decline, emerges from the same constellation of information and materials technologies that yielded the iPad and MRI. Bill Gates recently observed that the "one thing that is different today [in energy] is software, which changes the game." Those few words contain more wisdom than most energy tomes.
Gate's opinion, which matches several observers thinking that technology is as least as responsible for opening up shale as fracking and horizontal drilling, is interesting in light of how a European player recently told me to of their ambition to be the Apple of shale. (Let me assure you that is nowhere near as nutty as it sounds). But Europe will not have a shale revolution until it has a shale realisation: This time it's different and those who insist on negativity condemn us to live in the past. I prefer the future, as so the Greens long ago when we were all young.