Shale gas: a potential game-changer restricted by cost

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12 September 2011, Gas, Nuclear, Solar, Wind

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While the enormous potential of shale gas is indisputable, major questions remain as to its viability as an energy source. France for instance has some of the largest shale reserves in Europe, but this has not stopped the country becoming very sensitive to environmental concerns, leading to a ban on hydraulic fracturing. With so little indigenous oil and with gas resources and imports costing E45bn, the country's attitude to shale gas is disappointing. This is a big contrast to that seen in Bulgaria, where the minister of energy has awarded Chevron a shale gas exploration license. The minister says that there could be enough gas to provide 300 years of consumption in Bulgaria.

Concerns about shale gas partly relate to its effect on drinking water. A recent assessment of drinking wells found that, of the wells studied, all those which contained a flammable amount of methane were within one kilometer of active gas wells. In densely populated Europe, this finding is far more significant than in the US, where there are large open spaces. Furthermore, a report from congressional Democrats said that 650 of the chemicals used in fracking were carcinogenic.

There are also concerns over how green shale gas is, as considerable amounts of methane are released into the atmosphere during its extraction, which is 21 times worse for the environment than carbon dioxide. Then there is the earthquake risk: Arkansas (US) came close to experiencing more earthquakes in 2010 (over 600, one of which was 4.3 in magnitude) than over the last 100 years. Tellingly, 3,700 natural gas wells have been drilled there in the last six years.

However, we are running out of options: something has to give, and it will probably be taxpayers' wallets. The alternatives to shale gas each have their problems: nuclear has added safety concerns following Fukushima and there are waste management issues; onshore wind is noisy and ugly (and Denmark has given up on building onshore wind farms because they are so ineffective); carbon capture and storage is many years from being fully commercialized, which will potentially never happen with the dampened carbon price forecasts due to the pending recession; hydropower often involves deforestation; and biomass can have sustainability issues and carbon neutrality ambiguities.

The major energy types with the fewest health/safety/environmental concerns appear to be offshore wind, solar, and energy from waste, all of which are commercialized solutions (albeit with subsidies) and are deployable on a mass scale. However, they are all also costly: let us hope that the projected falls in the cost of these technologies are realized on time.

Source: Datamonitor

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