Shale gas the next big thing?

File:Shell insitu.gif

Shell's experimental in-situ oil shale facility, Piceance Basin, Colorado. courtesy USGS.

Will shale gas indeed be the next big thing as suggested in today’s (10/10/09) article in the NYT ? The numbers in this article are correct. Shale gas estimates are indeed very high. The article does not discuss any potential negative environmental impacts. Water quality, for example, is heavily debated in Pennsylvania, which is one of the major shale gas states. I would applaud a move tomorrow to shale gas from coal, whilst going full throttle on renewable development. I worry about heavy investments in shale gas and liquid gas transport as that may halt or hinder a move to cleaner electricity.

My guess is we’ll hear a lot about shale gas in the next couple of years. It is being heralded by many in the fossil fuel industry and shale gas states as the answer to coal, and will be pushed very strongly by the industry. Gas fired power plants emit less carbon dioxide, approximately half of the emissions from coal-fired power plants. A move to electricity generation powered by gas therefore has advantages. How fast we could move to shale gas depends on several factors including the gas price, and available infrastructure. I am in two minds about shale gas. Investing huge amounts in shale gas is bound to lead to long term use, that is, it will be harder to wean ourselves of shale gas and move full throttle to renewable energy (wind and especially solar). This will be even harder if we start building a transport system that relies on liquid gas.
There are also environmental concerns. The largest of these is probably the potential negative impact on ground water quality. The USGS has an overview of water use and wastewater generation in the large Marcellus shale gas area .

One interesting issue related with gas is the volatile gas price. Generally it is believed that gas prices are closely connected to the oil price. This is however not always the case. Unstable gas prices create uncertainty in the industry. At the moment the gas price is so low that extensive shale gas investments don’t look profitable. If shale gas is to take the crown from coal, price regulation is a must. Perhaps a sharp increase in gas-fired electricity would lead to a price regulation of some kind through the utilities.

In the meantime though, Europe is happy. Shale gas may gain them freedom from Russian gas. And as you know, the dependency on Russia for gas has lead to all sorts of political intrigues and power shifts.

What are your thoughts?

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