Environmentalists are not the only ones freaking about shale gas fracking. So are Gazprom (Russia’s giant natural gas company), OPEC and other oil producers, and the coal mining magnates of Australia and southeast Asia.  Indeed, the whole world may soon witness a remarkable transformation to a new energy mix as natural gas begins to invade our homes, businesses and vehicles.

As we reported earlier, some believe our immediate future is natural gas.  Exxon: The Next 30 Years Belong to Natural Gas

It all started with the enormous discoveries of shale gas in the eastern and mid-western US after 2000 followed by large finds in Western Canada.  Since that time hundreds of billions of dollars have been invested by North American and non-North American firms in these regions as they realized the significance of these finds for North American energy independence.  In the past two weeks alone over $8 billion has been invested in US shale deposits by Chinese, French and Japanese firms.

And it is just not shale gas that is producing the sudden change, although it has been getting all the headlines.  As regular readers of our weekly Waste to Energy postings know, methane from urban landfills and human and animal feces are already generating electricity, heat and biofuel across the globe. Now there are reports that methane hydrate deposits in the frozen seabed contain more energy than all the world’s known coal, oil and gas reserves combined.  Indeed we are now witnessing a global natural gas rush reminiscent of the gold and oil rushes of earlier centuries.

The driving force behind these natural gas finds are all the same – the price of crude oil and the price of electricity. Currently oil is around $100 per barrel but both the immediate threat of a US/Israeli conflict with Iran and longer term concerns about Peak Oil have led to forecasts of $150 per barrel or more. These numbers make natural gas quite attractive.

At the same time, the move to green energy and abandonment of coal and nuclear is causing electricity prices to skyrocket.  Apart from nuclear and hydro, natural gas is the only baseload energy source that offers a lower carbon alternative to coal. In North America those low natural gas prices are a magnet for electric utilities and are causing them to rethink using coal and alternative energy sources such as wind and biomass.

On a daily basis we are seeing more and more articles in the everyday media about the natural gas revolution and its impact on national and global economics and politics.  So we thought we would bring you up to date on what the world is writing about.

 

Methane Hydrate Deposits in the Frozen Seabed

Methane hydrate is natural gas that is locked in ice and, we are told, represents by far the largest source for hydrocarbons on Earth. They are said to contain more energy than all other fossil fuels combined and are much cleaner than oil and coal. Global estimates “range from merely jaw-dropping to the truly staggering”, according to the American Department of Energy. Japan is even planning to drill for it in 2013 as it looks for new energy sources in light of the Fukushima nuclear disaster.

A study by Statoil, Norway’s state oil firm and a leading global gas producer, suggests that it should be reclassified as a significant fuel resource, with enough buried in the oceans to power the world for decades or even centuries. The challenge will be to make methane from the seabed cost competitive with shale gas.

Here are some posts that will bring you up to-date on the size and extent and promise of methane hydrate deposits.

Discovery News   Japan to drill seabed for ‘burning ice’

Nature     Gas-hydrate tests to begin in Alaska

Deccan Chronicle    KG basin, potential source for gas hydrate reserves

OILPRICE    Japan and U.S. DOE Looking into Economical Production of Methane Gas Hydrates

Chicago Now   Startling finding: More energy is frozen in methane deposits in the Arctic than all the known fossil fuels combined

Public Service Europe   Renewables must give way to ‘natural gas revolution’

Canada Free Press    Race begins for wonder gas ‘frozen under sea’

The Australian    Seabed gas find blows all other energy sources out the water

 

Shale Gas Everywhere

Shale gas – natural gas extracted from shale rock – is being found around the world including Canada, the United States, the UK, Poland, Ukraine, Bulgaria, China, Argentina, South Africa, Australia, France, Brazil, Chile, Sweden, Paraguay, Pakistan and India.

Global proven reserves of shale gas now are about the same size as conventional natural gas. The only difference is that the countries possessing these reserves are different. While ownership of conventional gas is dominated by Russia (1,580 Tcf), Irán (1,045 Tcf), Qatar (894 Tcf) and Saudi Arabia and Turkmenistan (283 Tcf each), large shale gas deposits have been found in China (1,275 Tcf), the United States (862 Tcf), Argentina (774 Tcf), Mexico (681 Tcf), South Africa (485), Australia (396 Tcf) and Canada (200 Tcf).

As IPS News reports, the implications are staggering:

Countries that have always depended on imported oil and gas, like Chile, Paraguay, Poland or Ukraine, and especially heavy consumers such as the United States and China, could become self-sufficient in natural gas in the near future and even start exporting it.

Shale gas may well be several times more abundant than the proven reserves of conventional natural gas on the planet…Moreover there are large volumes of natural gas in sandstones, and other non-conventional sources.

The enormous shale deposits in North America are having the most immediate impact. Asian gas prices are at $18 per million BTU and Europe at $12, But the shale gas revolution has pushed North American prices down to $2.50 as we write with the prospect of going lower.  Suddenly the US could become a major exporter of natural gas liquids to far distant markets, rivaling Russia. In addition, natural gas is beginning to replace coal as a generator of electricity in the US and Canada and trucking fleets in North America are moving away from diesel to compressed natural gas (CNG). Honda is selling a CNG car and more automobile companies are planning the same. From heating, to power generation, to transportation, natural gas is becoming an invasive pest.

For Russia’s Gazprom which has dreamed of dominating the supply of natural gas to Europe, the rise of shale is not a welcome sight. Certainly the threat of large exports of liquid natural gas to Europe from the US coupled with the ability of European nations to exploit their own shale resources would place a limit on Russia’s ability to charge high prices and threaten to cut off supply (as it has with Ukraine in the past).

While some European countries have said they will not develop their shale gas resources out of environmental concerns (eg. France, Bulgaria), the fact these reserves exist and are easily accessible will serve to place a cap on the prices of fuels in those countries.

For more on shale gas read these links.

OILPRICE   The Shale Gas Energy Revolution

OILPRICE    Shale Gas Changing the Energy Balance of Power

OILPRICE   Shale Gas and the Changing Global Energy Landscape

Foreign Policy   The Americas, Not the Middle East, Will Be the World Capital of Energy

San Francisco ChroniclElectricity Declines 50% as Shale Spurs Natural Gas Glut

Boston Globe   Electric plants shift from coal to natural gas

Globe and Mail    U.S. eyes supply-side economics of natural gas

Daily Markets      A New World Energy Map Is Emerging. Exhibit A: Natural Gas Glut In America Fuels An Export Debate

Montreal Gazette   Shale drilling goes global

fuel fix   International players jump at US shale

Baker Institute Policy Report, Rice University       Shale Gas and US National Security

energybiz   Will Shale Crowd Out Coal and Green Energy?

Globe and Mail     As shale deposits multiply, energy self-sufficiency becomes a reality

Energy & Capital    American Shale Deposits Garner International Interest

Wall Street Journal   Russia Sounds Alarm On Shale Gas

 

Earth’s Energy will continue to follow the natural gas revolution as it unfolds.  Keep up to date each week with our regular columns Energy Blog World, Waste to Energy News and Energy Facts of the Day.

 

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1 Comment on Freaking About Fracking: The Natural Gas Revolution Begins

  1. […] this week we wrote about the natural gas revolution that looks to transform global energy economics and politics over the next few decades. One of the […]