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Shale gas: play at your own cost


Natalya Turkina

By

September 27th, 2013


Natalya Turkina explores the rise of shale gas extraction and consumption, termed ‘fracking’, with unexpected implications ranging from the economic to the environmental.


Recently the world observed the transformation of the United States from being an importer of natural gas to a leading producer of this type of fuel. This miracle come about thanks to an increased production of natural gas from formerly inaccessible shale layers with the help of hydraulic fracturing (known as “fracking”). This has subsequently led to growing interest in such technology, alongside suspicious and protesting opinions.

Supporters of shale gas extraction mainly rely on the idea of the long-awaited ‘greater energy’: allowing for the political and economic independence of many countries, access to abundant energy resources at lower prices, and increased investment and employment opportunities in gas-consuming industries. Opponents, however, focus on the environmental externalities posed by fracking, which include traffic congestion, noise, social and economic disruption and increased risks of groundwater contamination, seismic activity, and air pollution.

Gas is one of the major sources of energy in many countries because of its considerable reserves, as well as its easy transportation, use and reasonable levels of carbon dioxide emission. All these factors make gas a relatively sustainable source of energy. Moreover, natural gas has a higher level of social acceptance than other energy carriers such as nuclear power plants, for example. That is why the United States has garnered such an interest for their use of an unconventional gas, especially in those countries where coal powered energy takes up the biggest share in the energy mix (such as Poland and China).

This interest is most definitely justified, due to the potential for great shale gas resources in conjunction with a growing demand for fuel (notably for China) and a dependence on imported gas. However, because of differing environmental considerations for both China and Europe, the future of shale gas development, at least in the short run, will vary.

According to China’s first five-year plan for shale gas exploitation, by 2015 the country aims to extract 6.5 billion cubic meters of shale gas, which would amount to only 3 percent of China’s total output of natural gas in 2015. Nevertheless, the ice has been broken; China has quite ambitious plans regarding shale gas and hopes to gradually replace its coal usage with the use of natural gases, shale gas in particular.

As for Poland, the country has also begun shale gas extraction despite a number of unsuccessful deposit developments, and it also aims to replace imported gas and local coal with shale gas in the long run. However, regional political and civil influences may make this development less smooth than in China. Europe has been divided by the issue and presents different attitudes to the question. France, for instance, has banned the fracking method of gas extraction. Bulgaria has done the same. Yet in case of any successful developments of shale gas deposits in Poland, the country may become a valuable source of this type of fuel for other European countries.

Thus, for countries where coal dominates in a country’s energy portfolio and where significant deposits of unconventional gas have been found, shale gas can be something of an Aladdin’s lamp, helping to reduce carbon dioxide emissions and improving the sustainability of energy sectors.

However, responsible fracking ought to consider all of the consequences of shale gas production; just because shale gas is more sustainable than coal does not mean that it can solve all our current environmental problems. On the contrary, shale gas extraction may bring about new environmental concerns such as unsustainable water consumption and, therefore, cannot be a panacea for any country, especially for states experiencing or threatened by water scarcity. In other words, fracking must only be used both gradually, and very carefully.

Another important aspect of shale gas production is related to a shift of interest from alternative sources of energy to shale gas, which can be cheaper and theoretically more accessible than current traditional sources of energy. On the one hand, this shift may trigger higher energy consumption and, hence, result in lack of sustainability in addition to little attention to development of such alternative sources like wind or solar energy. On the other hand, wind and solar energies are intermittent resources that should be supported by more reliable traditional resources of energy, and shale gas can partly take on this function.

One more point should be taken on board by leading oil and gas exporters: the development of shale gas sooner or later will lead to reduction of conventional gas consumption (which is already a major goal for European countries) and this will then inevitably decrease incomes from exports and shake the financial sustainability of the original exporting countries. Therefore, notorious economic diversification, including the diversification of energy portfolios, for these countries must soon find its place on the top of the agenda.

All in all, if a future free of fossil fuels is possible, this future is somewhere rather far off. While natural gases can be seen as a bridge to that future, if this “bridging” fuel becomes inexpensive and too accessible, the overall environmental impact of shale gas may not be much better than that of other types of fossil fuels. In other words, as we witness the emerging presence of natural gases like shale gas, not only must we prioritise sustainable extraction methods, but also introducing and maintaining responsible consumption habits.

 

Bibliography

Biswas, A., Kirchherr, J. (2013). Pros and cons of shale gas for China. China Daily. Available at: http://www.china.org.cn/opinion/2013-01/16/content_27701920.htm

Siemek, J., Nagy, S., Siemek, P. (2013). Challenges for Sustainable Development: The Case of Shale Gas Exploitation in Poland. Problemy Ekorozwoju – Problems of sustainable development, 8(1), 91-104.

Spence, D. B. (2013). Responsible Shale Gas Production: Moral Outrage vs. Cool Analysis. U of Texas Law, Law and Econ Research Paper No. 403. Available at: http://ssrn.com/abstract=2228398 or http://dx.doi.org/10.2139/ssrn.2228398

 

 

The views expressed within this article are those of the author and do not represent the views of the ESSA Committee or the Society's sponsors. Use of any content from this article should clearly attribute the work to the author and not to ESSA or its sponsors.

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