Shale gas is not going away

The US Potential Gas Committee publishes updates every two years of US natural gas resources and their latest report is the third one covered here, which makes me feel almost like the Rip Van Winkle of European shale. A more apt description may be the Bill Murray character in Groundhog Day. It's deja vu all over again: The 2009 Report:

The report by the Potential Gas Committee, the authority on gas supplies, shows the United States holds far larger reserves than previously thought. The jump is the largest increase in the 44-year history of reports from the committee.

From 2011

The Potential Gas Committee (PGC) today released the results of its latest biennial assessment of the nation’s natural gas resources, which indicates that the United States possesses a total resource base of 1,898 trillion cubic feet (Tcf) as of year-end 2010. This is the highest resource evaluation in the Committee’s 46-year history, exceeding the previous record-high assessment by 61 Tcf

The Groundhog syndrome also comes from the common meme of shale gas as bubble about to burst: same stuff, different year. In 2009:

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The dog in the sinkhole and other controversies of shale gas

If people know much about shale gas in Europe, they know there has been environmental damage in the US significant enough for shale gas to be described in the press, and thus perceived by both policy makers and the investment community as being inherently “controversial”.

What is the exact reality of the damage?  I’ve pointed out on several occasions that we are long on anecdote but lacking in data. On the anecdote front the up to the minute Pennsylvania Alliance for Clean Water and Air List of the Harmed consists of 1123 cases of ‘harm’ several of which are, trying to be polite, somewhat tenuous:

Symptoms: Constant fatigue, headaches, nausea, fatigue and dizziness

Symptoms (animal): Lost cows to toxic oil and gas waste; testing of sick cattle from the area by the Texas Veterinary Medical Diagnostic Laboratory in 2005 found petroleum in the hair of 54 out of 56 cows

Symptoms: Weakness, dizziness, fainting, nausea, pain, burning skin and breathing difficulty; four of her grandchildren, who live on the same property, have asthma

Symptoms (animal): Dog has asthma

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What’s More Dangerous – Puppies or Fracking?

Here’s another guest post from one of our far flung correspondents and co-conspirators in the shale revolution at No Hot Air, Allen Gilmer, CEO of Drilling Info. This was originally posted at The Wireline Blog at info.drillinginfo.com

What’s More Dangerous – Puppies or Fracking?

Humans have a tough time quantifying risk or perceiving proportionality. We tend to overstate some risks while ignoring others based upon a variety of factors…things like “what scares us”, “what motivates us” and “what we DON’T know we don’t know”.

Another reality is that our emotions are largely fed by fear. We tend to act more quickly and instinctively to fear or pain. A person holding his or her hand over a flame will move it away quickly to avoid pain, far faster than someone seeking to touch a fine leather or satin. People trying to sell us stuff know this. Not just people selling us goods and services, but ideals and values. In America, selling ideals and values is a pretty big business in itself…tens of billions of dollars per year. Although fear clearly sells, it rarely buys us something we really want to own. There is no real joy in the state of NOT burning your hand…you just avoid the pain.

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A conversation the UK needs to have

Spectra Energy is one of North America's leading pipeline operators so they would say this wouldn't they.  But it's hard to understand why infrastructure operators in Europe, and especially the UK don't engage politicians the way Spectra does

Ontario is rushing too quickly into expensive renewable energy plays, when natural gas offers some breathing room on energy supply, says Greg Ebel.

Ebel has an interest in the issue. As chief executive of Houston-based Spectra Energy, which owns Union Gas, he’s in the natural gas pipeline business.

But Ebel says the development of shale gas deposits has so vastly increased reserves of relatively clean energy in North America that there’s time to take a more measured approach to renewables.

Ebel figures that today’s shale reserves give North America a 100-year supply of gas. That’s a reservoir than should allow North America to dramatically lessen its burning of coal and oil, he says.

He also argues that the massive supply will also keep prices far more stable than over the past decades.

“I literally believe that the technology changes around shale may be as dramatic as going from the horse and buggy to the car,” Ebel said.

Coal-burning electric plants in the U.S. can be rapidly converted to gas, he said. And he thinks commercial vehicle fleets could be converted to natural gas on a huge scale.

Note that the words security of supply weren't mentioned.  Shale gas has a direct impact on UK gas prices today. To think that shale is a US only play, and we should continue down the CCS dead end, flies in the face of geologic logic.

Ontario is signing big contracts with wind and solar-powered generators, at high prices. (Consumers currently pay about 6 cents a kilowatt hour for the energy portion of their electric bill. Wind generators will get 13.5 cents, and solar generators from 44 to 80 cents.)

Ramping up natural gas-fired generation would produce power relatively cleanly, and at far less cost, Ebel argues.

“I think the gift of natural gas is giving us time to make the transition, so you don’t kill the economy,” he said.

Ontario’s Green Energy Act, introduced by former energy minister George Smitherman, is likely to have too drastic an effect, he said.

“I don’t think he fully recognized the massive benefits of natural gas, or of having a balanced approach to energy.”

Which can also be said about Gordon Brown, Ed Miliband and Alistair Buchanan. But one guy is still there.