Thursday, July 19, 2012

The Gas is Greener.

This summer, up and down the East Coast, as well as around the Triangle, I've been seeing a few "No Fracking" signs on lawns and telephone poles. A few states (NY, NJ and MD) have imposed temporary bans on the practice. I've also been reading a bit about the gas boom in the United States--about how North Dakota is thriving, and natural gas is cheaper than ever. To help sort out what this means for the future, the Economist has a special report in this week's issue. My takeaways after reading  it this morning is that, properly regulated, fracking is safe, and that we should be preparing for a century of gas power, while at the same time, figuring out what source we will transition to in the following century. That's the kind of visionary statement I'd love to hear from our president.

Following are my notes from the report. Like everything, I think the solution is somewhere between "no fracking" and "drill baby, drill," and I hope that's how the debate proceeds.

  • Gas is not like other commodities, because it is difficult to transport. This means that there is not a global price, like there is for oil. Gas is ten times more expensive in Asia than it is in North America.
  • There are about 200 years worth of global gas reserves, with the Arctic possibly holding an additional bonanza.
  • Gas is 50% cleaner than coal for generating power. And 25% cleaner than gasoline
  • Shale gas (i.e. fracked) constitutes 1/3 of current US supplies.
  • Over the past 5 years, US greenhouse emissions have dropped 450 million tonnes.
  • 40% of America's total energy consumption is from residential and commercial buildings.
  • The current gas price is the equivalent of $15 for a barrel of oil.
  • Fracking has a very small footprint above ground, and takes place thousands of feet below the water table.
  • There have been only a few instances of ground water contamination in the over 20,000 wells drilled in the last decade, and ALL due to breaches of existing regulations.
  • Fracking does use lots of water, but over its lifetime, a well uses less than a Florida golf course consumes in 3 weeks.
  • The biggest shale gas reserves may be in China, which is trying mightily to use more gas to generate electricity and power cars.
  • Liquefied Natural Gas (which is more easily transported) is five times more expensive in Europe and Asia than the US, suggesting exporting opportunities.
  • Fracking allows more countries to produce gas, which mitigates the risks of OPEC style cartelization of the industry.

I haven't heard anyone say that a country powered by natural gas would be a cleaner one, with more local jobs, less dependent on shadowy regimes in the Middle East, but it seems like a convincing one; and it's not something that depends on a technological breakthrough. It may win the battle of the marketplace anyway, but it seems like a few nudges (incentives for gas-fired power plants and electric cars) would help to speed the plow.

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