May 4, 2012 – Vol.17 No.7
AMERICA’S ABUNDANT NATURAL GAS: READY TO SQUANDER.
by Bruce Mulliken, Green Energy News
This is not a story about the environmental concerns over fracking, the hydraulic fracturing of shale to release natural gas. That story is for another time. This story is about the supply of natural gas in the U.S. It’s the shale gas that has turned dwindling natural gas reserves into a bonanza.
Or so it’s thought.
Take a few moments to read the following paragraph from the U.S. Energy Information Administration's Annual Energy Outlook 2012 (Early Release edition). It's on their website.
Read carefully. I'll wait.
"The U.S. Energy Information Administration's Annual Energy Outlook 2012 (Early Release) estimates that the United States possessed 2,214 trillion cubic feet (Tcf) of technically recoverable natural gas resources as of January 1, 2010. Natural gas from proven and unproven shale resources accounts for 542 Tcf of this resource estimate. Many shale formations, especially the Marcellus, are so large that only small portions of the entire formations have been intensively production-tested. Consequently, the estimate of technically recoverable resources is highly uncertain, and is regularly updated as more information is gained through drilling and production. At the 2010 rate of U.S. consumption (about 24.1 Tcf per year), 2,214 Tcf of natural gas is enough to supply over 90 years of use. Although the estimate of the shale gas resource base is lower than in the prior edition of the Outlook, shale gas production estimates increased between the 2011 and 2012 Outlooks, driven by lower drilling costs and continued drilling in shale plays with high concentrations of natural gas liquids and crude oil, which have a higher value in energy equivalent terms than dry natural gas."
Done? Look it over again. Does one sentence stand out? I think so and it's the one that everyone will quote, especially the last nine words:
"At the 2010 rate of U.S. consumption (about 24.1 Tcf per year), 2,214 Tcf of natural gas is enough to supply over 90 years of use."
Wow! We're all set. Look what it says " .... enough to supply over 90 years of use " Happy days are here again! No more worries about energy! We'll be energy independent!
We'll be rich!
They'll ignore the first few words of the sentence: "At the 2010 rate of U.S. consumption..."
Americans hear only what they want to hear and never seem to ask any critical questions. This where some questions should be asked. ( But probably won't.)
The EIA probably uses the year 2010 for the study because it’s was best data it had when the report was written. (We’ll have to wait and see what 2011 data brings.) Still, isn't 2010 kind of poor baseline for long term projections? After all, wasn't 2010 sort-of a recession year? (If not technically a recession, it felt like it to most.
Energy consumption usually follows a similar curve as economic activity. Slow times generally means low energy consumption. 2010 would have been a slow year for consuming natural gas. 2011 won’t be much greater.
Why compare natural gas consumption from a down year? What if the economy picks up? What if in a few year's time the economic activity doubles, won't we be using twice the gas as 2010? What if natural gas consumption doubles to 48 Tcf per year? (48 Trillion cubic feet) Doesn't that lower the 90-year supply prediction to only 46 years?
The report does address this issue ... in a way. The EIA doesn't see economic boom times ahead. Personally, I think because of our debt situation we might be choked at the neck for number of decades. So maybe 2010 as a baseline to compare against isn't so far off.
Yet I'm still skeptical about this 90-year supply thing.
The EIA mentions a couple of other things that will be missed. One, is that comparatively little drilling and fracking has been done, so there's very little hard data, good estimates of how much gas can be expected to be extracted. Reserves estimates (of just about any natural resource ) are really educated guesses. Since the education process has only started when it comes to fracking, the natural gas industry is about in the 6th Grade education wise. The industry has a few years to go before it can to some real research and earn its Ph.D.. So, there may not be as much gas as currently estimated. OR, there could be more. More research is needed.
Secondly, the EIA mentions that there will be more gas available than we, as a country, can use. That means exports will be available. Already those in the gas business are wringing their hands. "Let's freeze it up and ship it out ... There's cold hard cash in that fracking gas!"
The EIA doesn't do studies of the greed factor in business. But you can bet that if there’s more gas available that we can burn, business will do everything it can to chill-it, liquify-it (to Liquified Natural Gas (LNG)) and send it on its way in ships to the energy hungry world. If the LNG export business goes wild, the long term reserves estimates might be thrown off. Then we’ll end up running out sooner than thought.
There’s also the possibility of increased consumption of natural gas in a slow economy. Power plants have been converting to natural gas from coal for what seems like decades in order to clean up smoke stack emissions. What if this accelerates with even more conversions, as well as new plants built that burn natural gas?
There are also other industries to consider. Natural gas is used to make all kinds of chemicals and is used as a fuel for many manufacturing plants. The abundance of natural gas might encourage some industries to expand or even open up new shops to take advantage of the new supply. While at this point in our economy any new business is a good thing, new or expanding business could put a strain on natural gas supplies and again lower that long term estimate.
Going back in time, at least three quarters of a century ago, probably no one could imagine how much oil would eventually be found on the planet. But, looking back, it’s amazing that although more oil has been discovered than originally thought possible, we still went through so much of it. Had oil been conserved from day 1, there would be an abundance today.
The same will be true with the abundance of natural gas. We’ll burn through it quicker than we think. We’ll squander this precious resource. If we conserved now there WOULD be a supply for 90 years or more. Conserve, however, is not something Americans do naturally.
The Outlook only covers through 2035, a mere 23 years from now. Food for thought: The solar panels bought today will still be producing power then.
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