Natural Gas: Utopia’s #1 Resource?

Shale gas and other forms of tight gas are starting to become real alternatives to crude oil. Look at the Annual Energy Outlook (2011), published by the US Energy Information Administration (EIA): they more than doubled their estimate of technically recoverable shale gas reserves in the US, to over 23 trillion cubic meters from 10.0 trillion cubic meters ( see: http://www.eia.gov/forecasts/aeo/er/pdf/0383er(2012).pdf ). That is a lot of gas! If you consider that there are many initiatives to liquefy natural gas, so that gas can be used as a replacement for diesel (for example), is this the way forward?

On the plus side, natural gas is inexpensive, abundant and widespread, and if anything gas is likely to be substantially underestimated in it’s abundance! We could go on living the swinging lifestyles that we have become used to due to the availability of “cheap” crude.

There is a downside. The burning of NG still releases abundant CO2 into the atmosphere. Sure, it is cleaner, but it is not clean. Also, there are environmental concerns regarding fracing and infrastructure intensity, too. Finally, if we pursue natural gas, will this not just mean we more or less stop pursuing clean energy?

T. Boone Pickens, an American resource expert and former CEO of Chevron (among other things) has for several years put forward arguments for the embracing of natural gas. His angle is focused on energy security for the USA. But, he understands the issues. Those interested should search the multimedia and consider his arguments.

What do YOU think?

4 thoughts on “Natural Gas: Utopia’s #1 Resource?”

  1. natural gas sure is nice to heat a house, but and provide an emission friendly alternative to liquid hydrocarbons, but the trouble lies in compatibility. today our global economy runs on liquid fossil fuels, so the question is what are the pros and cons of converting our means of transportation to run on compressed gas. I’m not versed in the thermodynamics of natural gas, but if the compressed liquid version of it can’t provide the same magnitude of energy as an equal volume of liquid petroleum products such as gasoline, then it will be a hard sell for the public. The human desire for material goods will dictate what goods they spend their money on. Lets take geophysicist Tom, say he is deciding to purchase an AUDI, is he going to purchase the one that provides 400Hp running on gasoline or(given that natural gas provides less energy per comparable volume) the model that runs of natural gas, but only has 185Hp? or say a tradesman who needs a 410Hp truck to haul trailers around, can natural gas provide sufficient torque to provide the power needed by said tradesman, or is he going to stick with what works for him to make a living? Personally, as a landscaper, If the 800 ft-lb of torque Cummins I need to safely haul a 8000lb skid-steer around all of a sudden only puts out 400ft-lb of torque running on natural gas, then given the choice I would have to stick with the higher priced diesel fuel. The extent to which natural gas will become a market alternative depends on the consumer cost, If natural gas can provide a comparable energy to volume ratio, then market forces will allow for its acceptance as an alternative. The market forces independent of the oil and gas industry will ultimately determine whether petroleum/gas companies pursue natural gas as a dominant part of their portfolio; if people don’t want to drive cars that run on natural gas due to preformance reasons then they wont purchase them, thus vehicle producers wont change their production habits.

    1. Important observations, Andrew. I think the point is most slitcnccuy encapsulated in one sentence you wrote above, towit If you want emissions-free innovations, price emissions. I would amplify this by suggesting that if you wish to achieve a specific outcome, it is unrealistic (and frankly wishful thinking) to rely on an inadequately structured market to do your work for you. Reliance of this type suggests either a high degree of complacency or a fundamental failure to apprehend the complexity of society or both. In the end, markets are great tools, but they still need to be shaped by policy and that can be hard work.More generally, while it may be possible to set forth a few plausible statements of principle about the way markets function (eg scarcity leads to increased prices in light of continuing high demand and increased prices lead to a search for substitutes ), the outcomes arising out of the interactions between resources, technological innovation and markets over time are fundamentally unpredictable. Thus, if societies (or more precisely groups within societies, whether local, regional or global) wish to at least shape the field of possible outcomes in a context where markets are some of the key tools available to us, the proper conceptual space in which to operate is that in which social norms are formed and, in the case of the modern state, regulatory powers are exercised. (Obviously, I don’t accept the fundamentalist idea that free and open markets are themselves desirable outcomes markets are tools; important tools, but tools nevertheless.)Given this, regarding carbon emissions, the best way to proceed may be by getting adequate societal agreement to put a price on all carbon emissions in order to better shape the market for energy (as your remark quoted above suggests). Then, as non-carbon substitutes come to the fore in light of a market that discriminates against high-carbon outcomes, it will be necessary to be ever-vigilant and to deal with the deleterious consequences of some or all of those substitutes too; all in a never-ending process of adjustment.Alternatively, another possibility would be to coax into existence social norms that stigmatize excessive carbon emissions. Thus, even where the price of carbon remains low’, it may well be possible to stigmatize its use through non-market social mechanisms. Such a process might mirror the growth of the organic food industry in North America and Europe which has operated through a scheme of moral choices, combined with follow-through by markets that developed in order to cater to those choices (ever more efficiently), providing options that fit within the zone of acceptable moral bounds.Returning to your original thesis, then, because of the complexity of social and economic realities, without a much more detailed picture of the world over time (which we will never have), I agree that it is impossible to state what impact specific prices of carbon will have on the anthropogenic emissions of CO2 into the atmosphere (I’m not sure that you would state your thesis in this manner, so I may be taking some liberties). We do know however that, if we can achieve a consensus to limit those emissions by such means as are available, and are willing to make the efforts required to do so, the outcome that matters CO2 levels in the atmosphere can be influenced profoundly over time regardless of the price of carbon.

  2. I think that we should try to enhance our current energy system in North America by attempting to use natural gas as a substitute for oil where it is applicable. Not to say, that natural gas should replace oil’s role in society but simply relieve some pressure. Developing new technologies which employ natural gas as a fuel could strengthen North Americas economy in the long term by broadening our energy picture. Making us a little less volatile to changes in oil price.
    With regards to the abandonment of the pursuit of clean energy section, I believe natural gas is a step in the right direction for clean energy. A perfectly clean energy source is not currently viable, we dont have a “magic bullet” to fill the role of fossil fuels. Therefore, moving to a somewhat cleaner fuel, like natural gas, appears to be a good option in the meantime.

    1. Hi Surdas, thanks for rndeiag and taking the time to comment. I have to disagree with your contention that we are not going to find ways of extracting oil or gas at lower costs than conventional. Natural gas disproves that entirely. The line between conventional and unconventional is a moving target, but shale and tight gas are unconventional by almost anyone’s definition. The cost of gas out of shale wells in Alberta and elsewhere is far cheaper than out of conventional wells in the same jurisdictions. In fact, you do see people shutting-in conventional production while unconventional production expands. I do agree that we are unlikely to discover giant conventional fields. Importantly, high oil prices don’t drive people to seek out low GHG energy they drive people to seek out oil or a good substitute. Some of those might be low-GHG sources, but only high GHG prices will create a preference for low-GHG oil substitutes over high GHG ones.The thought process I am trying to drive here is not to think about oil prices as purely a force which acts on the demand side, and to also think of prices as a consequence of the interaction of supply and demand, not a driver for supply or demand. For example, you argue that low oil prices will drive lower investment in renewable energy this is certainly true in a vacuum, but I would push you one step further and ask you why oil prices are low? Suppose that there is a breakthrough on par with horizontal drilling and fracking that leads to massive cost reductions in next gen biofuels. The availability of a cheap substitute for oil would drive down the price of oil, and rather than that driving down investment in the renewable energy source, it would be because of the investment (and breakthrough) in the renewable energy source. I think it’s tempting to think of oil sands and renewable fuels as fundamentally different because of their environmental footprint. Unfortunately, in the absence of pricing policies on those environmental attributes, the race is simply to provide energy to the market which is signaling value through the price. Whether the ramp up is slow or fast, the technology which can best do this will be the one which is adopted the fastest. thanks again for rndeiag.

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