Government report and think tank also question rosy natural gas estimates

By Barbara Kessler
Green Right Now

The New York Times threw some water on the natural gas frenzy this weekend with its story about industry insiders questioning predictions for a bountiful U.S. harvest of natural gas, the so-called "bridge" fuel of the future.

We've been wondering for a while about why everyone seems to take the industry word on natural gas prospects. The Times storyquoted industry insiders with deep concerns about whether hydraulically fractured shale gas operations will produce as promised, and one analyst who likened the "shale gas plays" to "a Ponzi scheme”.

The skeptics point to data showing that many productive wells dwindle after a few years, and that regions around successful wells often come up dry.

Given that the bright promises about the new generation of gas wells come largely from industry (and lawmakers who’ve jumped aboard) – and that there's a dearth of independent information about how these wells will fare – the concerns seem well justified. Consider how the big financial houses saw smooth sailing ahead for derivatives or how the housing industry failed to acknowledge its bubble (why would it?).

The blog, run by journalist F.J. Gallagher, points out that The New York Times is not alone is raising these questions about the natural gas industry.

The most recent Annual Energy Outlook report by the U.S. Energy Information Administration (EIA) also expressed skepticism about natural gas projections.

The April 2011 EIA report notes that natural gas production is expected to grow threefold between 2009 and 2035, but says that prediction comes with a "high degree of uncertainty" because it's based on untested assumptions. The EIA report lists these concerns:

  • Estimates of shale gas production rates are typically based on a small portion of a formation, which may not be indicative of the returns possible across the entire formation. This is particularly true, according to the report, in the mostly untapped Marcellus Shale region.

"….experience to date has shown that production rates from neighboring shale gas wells can vary by as much as a factor of 3.  Moreover, across a single shale formation, there are significant variations in depth, thickness, porosity, carbon content, pore pressure, clay content, thermal maturity, and water content, and as a result production rates for different wells in the same formation can vary by as much as a factor of 10."

  • Emerging exploration has focused on "sweet spots" which could lead to inflated figures for the entire formation.

The report makes allowances for possible good news from the natural gas front, noting that technical advances could lead to "more productive and less costly well drilling and completion" and that some untested shale formations could prove to be "highly productive".

The remainder of the forecast tries to assess what would happen in high-production and lower-production models, which the EIA deemed a necessary exercise because the public information available currently comes from private sources and too little is known about their methodology or data collection.

Nor is the EIA alone in raising questions about the bullish projections for natural gas by the industry and some lawmakers. A recent report by Post Carbon Institute fellow David Hughes also questions whether we're on a primrose path.

Hughes' 66-page report examines what he sees as three assumptions that have fueled the optimism about natural gas. The assumptions:

  • That new methods of hydraulic fracturing to access shale gas deposits will yield enough natural gas for the next 100 years
  • That the price of natural gas will remain consistently stable, and low, for decades
  • That natural gas is much cleaner and safer than other fossil fuels in terms of greenhouse gases and public health

Hughes finds that all of these need to be re-examined, and he also questions whether natural gas can serve as a full replacement for coal in electricity production and for diesel in heavy vehicles, a pet project of Texas oilman T.Boone Pickens that has flowered into pending legislation in Congress.

"Replacing coal would require a 64% increase of lower-48 gas production over and above 2009 levels, heavy vehicles a further 24% and light vehicles yet another 76%. This would also require a massive build out of new infrastructure, including pipelines, gas storage and refueling facilities, and so forth. This is a logistical, geological, environmental, and financial pipe dream," according to Hughes.

Advocates may argue that substituting natural gas for coal in new power plants or for diesel in heavy trucks still makes sense because it burns cleaner.

Hughes concedes that natural gas has its place – but not, he says, as the new "bridge fuel" and panacea for the looming energy crisis, but as its currently used in commercial and residential sectors (i.e., to service your gas range; power rural homes).

But if America looked realistically at the environmental toll, as well as the economic realities, of shale gas exploration, it would see trouble on the horizon. The "fracking" of tightly bound underground shale gas deposits requires 2 to 6 million gallons of water per well, water that's poisoned with a cocktail of toxic chemicals. It releases greenhouse gases including the potent methane, which has a greater greenhouse effect than even carbon pollution in the short term.

And now we see , that natural gas fracking may be a fracking shame, sucking money into wells that produce sufficiently for a few years, but not the projected decades. That may earn someone short term gains, and then the country is left to pick up the mess. Sound familiar?  Shouldn’t we ask, what happens 10 years hence if we focus on short-term gains and allow ourselves to imagine a panacea in natural gas. Will we have lost the opportunity to be leaders in renewable energy?

If we looked more closely, Hughes contends, we would might conclude that natural gas, like its fossil fuel cousins, oil and coal, will be increasingly difficult to tap, pay for and justify.

Copyright © 2011 Green Right Now | Distributed by GRN Network

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