Hydraulic fracturing. Shale gas. Tight oil. Boom-Time. Golden Era.
There is a growing excitement about this moment, and the potential future, of energy coming out of the United States. Natural gas and oil production in the US are experiencing significant increase, and the global energy system receives a new layer and new potential.
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I was recently asked the question - and thought it deserves some unpacking. I think the underlying challenge to a having a stable and coherent grand energy strategy is the lack of coherence about what we want our future to look like, and what factors are actually influencing it. If we want a future reality, we need to be informed and have no illusions about what our current reality is – and understand the transition needed to get from ‘now’ to ‘desired future’. To this end, I again state that we need a ‘national energy dialogue’ to go along with a national energy policy. Whether it comes from grassroots or top down, the dialogue needs to take place so people understand what the choices are, and what the factors are guiding those choices – choices about where the energy we use comes from, it’s environmental and economic impact, as well as how it shapes the future of our country and world. …
http://theenergycollective.com/jesse-parent/87121/does-us-need-national-energy-policy
By Fareed Zakaria
Last year, the world’s energy watchdog published a report which asked an important question: “Are we entering a golden age of gas?”
So I was struck when I saw the International Energy Agency’s 2012 report. Gone is the question mark.
Instead it says, simply: “Golden rules for a golden age of gas.”
And the starting point of that golden age is right here in America.
It’s becoming increasingly clear that the shale gas revolution is a game-changer not just for the energy industry, not just for the U.S. — but for geopolitics.
The technology behind shale gas production, where shale rock is blasted with a mixture of water, sand, and chemicals, is only two decades old. The process is called fracking.
Related: Fracking — What is it?
And in a short time, its success has led to the drilling of 20,000 wells in America, the creation of hundreds of thousands of jobs, and a guaranteed supply of gas for perhaps 100 years. The International Energy Agency says global gas production will rise 50% by the year 2035; two-thirds of that growth will come from unconventional sources like shale — a market the U.S. completely dominates.
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So … what is this really saying? That there is nothing risky ‘outside of the ordinary’ for hydraulic fracturing compared to other drilling operations? “Many reports of contamination can be traced to above-ground spills or other mishandling of wastewater produced from shale drilling and not from hydraulic fracturing”.
I feel like this conclusion is somewhat misleading, or could potentially be misleading, if it is not explained properly. Hydraulic fracturing is the process by which the shale rock holding the natural gas is ‘fractured’, such that the gas can be extracted (compare this to conventional gas extraction, where the gas is contained within a permeable rock that doesn’t need to be fractured for gas extraction). I’m not sure that the ‘drilling’ or ‘fracturing’ problem itself is what people are concerned about, so declaring that the act of fracturing is ‘safe’ seems somewhat irrelevant.
Hydraulic fracturing in shale formations “has no direct connection” to groundwater contamination, a study released Thursday concluded.
The study, conducted by the Energy Institute at the
University of Texas at Austin, found that many problems attributed to hydraulic fracturing “are related to processes common to all oil and gas drilling operations,” such as drilling pipe inadequately cased in concrete.
Many reports of contamination can be traced to above-ground spills or other mishandling of wastewater produced from shale drilling and not from hydraulic fracturing, Charles “Chip” Groat, an Energy Institute associate director who led the project, said in a statement.
“These problems are not unique to hydraulic fracturing,” Groat said.
…The UT Energy Institute’s report stands in stark contrast to a draft report released in December from the Environmental Protection Agency, which said its examination of a hydraulic fracturing site in Pavillion, Wyo., found hydraulic fracturing fluids and chemicals associated with natural gas production in deep water wells.
New York: a hydraulic fracturing battleground state.
A state judge’s decision this week supporting the rights of individual towns to determine whether to allow hydraulic fracturing has added a new wrinkle to the fight over the natural gas drilling process in New York.
Parties on all sides are trying to figure out what the ruling will mean, but a consensus emerged on Wednesday that there will be further court challenges and delays over when, how and where the process, known as hydrofracking, will be allowed in the state, and by whom.
Officials of natural gas companies voiced concern that such local restrictions could render more areas of the Marcellus Shale off-limits to drillers in a state that is already proposing strict regulation of where the industry will be allowed to operate.
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The ever-changing fuel situation continues to develop in curious ways….
Also, note how Albany is specifically mentioned -I’m going to assume, since the link doesn’t specify otherwise, they mean Albany, NY…. specifically New York’s current deliberation about how to best allow Hydrofracking in New York.
‘Hurt Themselves’
Chevron Corp. (CVX) and ConocoPhillips, the second- and third- largest U.S. energy companies by market value, also are expected to post their largest full-year profit declines in 2012 since 2009, when worldwide fuel markets were reeling from the collapse of demand in the wake of the financial crisis.
“In a sense, they’ve hurt themselves,” Leonard Coburn, president of Washington-based Coburn International Energy Consultants LLC and a former director of Russian and Eurasian affairs at the Energy Department. “But that’s why we’re seeing them shifting away from gas toward more oil.”
Shale formations will account for 49 percent of total U.S. gas production by 2035, up from 23 percent in 2010, the Energy Department said in a Feb. 14 report. When other geologic formations such as tight sands that require the same intensive drilling techniques are added in, unconventional fields will pump 77 percent of domestic supply by 2035, the department said.
The supply bonanza of gas and oil made possible with fracking means the U.S. will become increasingly independent of foreign energy producers at the same time as burgeoning economic powers such as China grow more reliant on overseas supplies, said Jonathan Chanis, managing member of New Tide Asset Management LLC in Torrington, Connecticut. That outlook assumes lawmakers and regulators at the federal and state levels won’t place expensive restrictions on drillers, he said.
“With the right policy decisions in Washington and places like Harrisburg and Albany, the United States will be in an extremely positive position,” Chanis said.
When US government scientists began sampling the air from a tower north of Denver, Colorado, they expected urban smog — but not strong whiffs of what looked like natural gas. They eventually linked the mysterious pollution to a nearby natural-gas field, and their investigation has now produced the first hard evidence that the cleanest-burning fossil fuel might not be much better than coal when it comes to climate change.
Led by researchers at the National Oceanic and Atmospheric Administration (NOAA) and the University of Colorado, Boulder, the study estimates that natural-gas producers in an area known as the Denver-Julesburg Basin are losing about 4% of their gas to the atmosphere — not including additional losses in the pipeline and distribution system. This is more than double the official inventory, but roughly in line with estimates made in 2011 that have been challenged by industry. And because methane is some 25 times more efficient than carbon dioxide at trapping heat in the atmosphere, releases of that magnitude could effectively offset the environmental edge that natural gas is said to enjoy over other fossil fuels.
“If we want natural gas to be the cleanest fossil fuel source, methane emissions have to be reduced,” says Gabrielle Pétron, an atmospheric scientist at NOAA and at the University of Colorado in Boulder, and first author on the study, currently in press at the Journal of Geophysical Research. Emissions will vary depending on the site, but Pétron sees no reason to think that this particular basin is unique. “I think we seriously need to look at natural-gas operations on the national scale.”
The results come as a natural-gas boom hits the United States, driven by a technology known as hydraulic fracturing, or ‘fracking’, that can crack open hard shale formations and release the natural gas trapped inside. Environmentalists are worried about effects such as water pollution, but the US government is enthusiastic about fracking. In his State of the Union address last week, US President Barack Obama touted natural gas as the key to boosting domestic energy production.
Cutting the potential output as being able to supply the US for 6 years instead of 18? Ouch. On the other hand, perhaps this will be good news for renewable energy R&D.
The U.S. Energy Department cut its estimate for natural gas reserves in the Marcellus shale formation by 66 percent, citing improved data on drilling and production.
About 141 trillion cubic feet of gas can be recovered from the Marcellus shale using current technology, down from the previous estimate of 410 trillion, the department said today in its Annual Energy Outlook. About 482 trillion cubic feet can be produced from shale basins across the U.S., down 42 percent from 827 trillion in last year’s outlook.
“Drilling in the Marcellus accelerated rapidly in 2010 and 2011, so that there is far more information available today than a year ago,” the department said. The estimates represent unproved technically recoverable gas. The daily rate of Marcellus production doubled during 2011.
The estimated Marcellus reserves would meet U.S. gas demand for about six years, using 2010 consumption data, according to the Energy Department, down from 17 years in the previous outlook.
The Marcellus Shale is a rock formation stretching across the U.S. Northeast, including Pennsylvania and New York. Shale producers use a technique known as hydraulic fracturing, which involves pumping water, sand and chemicals underground to extract gas embedded in the rock.
Interesting Read. Check it out
The Takeaway: We Gotta Get Natural Gas Right
After yesterday’s session, a small group of us retired to the Faculty Commons for a glass of wine, dinner, and conversation. We were treated to a short talk by Richard Newell, a Duke professor and the director of Duke’s Energy Initiative, who returned last fall from a stint in the Obama administration as the head of the Energy Information Administration. Richard provided a fascinating overview of the issue from the perspective of someone who has spent the last two years trying to make sense of the nation’s long-term energy future.
Some relevant history: Hydraulic fracturing is as old as … well if not quite the hills, let’s just say it’s not new. A kind of hydraulic fracturing was first done in the late 19th century using nitroglycerin (see here, here and here [pdf]). Horizontal drilling is also not all that new, dating back to the 1950s. It wasn’t until the 1990s that the two were put together, and the application of the process to extract shale gas didn’t really begin until the middle part of the last decade, but since then, it’s become a game changer — initially responsible for a percent or two of all natural gas production, it’s now producing about 30 percent of U.S. supply.
The economic impact has been huge. For instance, in 2006, the federal government was discussing ways to accelerate the construction of billion-dollar port facilities for processing imported liquified natural gas because it was believed we faced an imminent natural gas shortage that would put our electricity supply at risk. Today we have an overabundance of natural gas, prices are down and few are lining up to invest in such a facility.
Another point Richard made: The global shale gas resource is huge, so large that exploiting it will dominate supply and therefore set natural gas prices at least for the next decade. So from today’s perspective, shale gas is here to stay, a resource that will be exploited. So we’d better get it right.
MIT report hints at the battle between Shale’s short term usefulness vs the long term issues of fueling growing global energy demand.
“People speak of [natural] gas as a bridge to the future, but there had better be something at the other end of the bridge,” Henry Jacoby, co-director emeritus of MIT’s Joint Program on the Science and Policy of Global Change, said earlier this year after co-authoring a report by the MIT Energy Initiative (MITEI) on The Future of Natural Gas.
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An uncertain international gas market, an unpredictable regulatory environment with more stringent emission goals and decreasing natural gas reserves over time all point to the growing need to continue developing renewable technologies.
“Effective use of renewables, namely wind and solar, are still many years away,” Jacoby says. “How we tap into those resources and effectively work them into our electric grid still needs to be figured out. To get us there we need a robust R&D program so we’ll have renewable energies up and working effectively later in future decades when emissions regulations are stricter, and gas reserves are depleting.”
Shale might provide the flexibility to meet reduction targets at lower costs today, making it a strong “bridge” in the short term to a low-carbon future. But the report concludes that we can’t let “the greater ease of the near term … erode efforts to prepare a landing at the other end of the bridge.”
