Thursday, June 18, 2009
The Good and Bad of Abundant Natural Gas
Plentiful natural gas could help reduce carbon emissions, but it could also delay zero-carbon technology.
The good news is that the United States has plenty of natural gas, according to a new report described in the New York Times. The bad news is that the carbon-emissions targets in the energy bill working its way through the United States House of Representatives didn't take this into account.
According to the report, there's 35 percent more accessible natural gas in the ground than previously thought, in large part because new technologies have made it possible to get at more of the gas. This tech has led to a boom in natural-gas supplies, and that seems to be why oil and gas tycoon T. Boone Pickens has been talking up using natural gas for powering vehicles: he could be looking for a new market for all of this gas to keep prices from plummeting in the future.
The fact that there's a lot of natural gas is good for reducing carbon dioxide emissions. Natural gas produces about half of the carbon emissions of coal when used to make electricity. Switching to natural gas could provide a relatively cheap way to meet emissions targets, especially in the near term. And that's a great thing. Except for this: natural gas can't take us all the way to an 80 percent emissions-reduction target, which is where scientists say we should be by 2050, if not sooner. Some experts are concerned that natural gas will allow utilities and others to put off investments in research and development needed to meet the stricter emissions goals.
There are a couple of potential solutions. One is to mandate more use of renewable energy, but economists argue that such mandates are expensive: it's better to let a market sort out which technologies to use. Another potential solution is to make the early-emissions targets in the bill more challenging, pushing investment, but this could be politically tricky. There are a lot of uncertainties about this natural gas; some experts warn that we shouldn't count on it. The best solution is probably increased federal funding for research, especially basic research into things like the physics of excitons in solar-cell materials. Then even if companies fail to plan ahead, the breakthroughs that they need to meet later targets could be ready for them.
Massachusetts Institute of Technology
Comments
So, let's say that we now have a whopping 1,000 TCF that may ultimately make it to market and suppose that we do shift to a larger use of natural gas. A reasonable estimate of average future consumption might be 30 TCF per year, which would exhaust that gas rather quickly - 33 years.
So, maybe we would have 30-50 years of natural gas if we could produce it rapidly. But can we? Not very likely. Drilling has risen sharply since 2000, yet domestic production continues its decline. The added gas production from a newly drilled well is just 25% of what it had been prior to 2000. And this number continues to decline.
Drilling in low-production areas like tight shale - which is where most of these new resources exist - would have to be intensive and on a scale not seen before. And costly, since horizontal drilling and added completion costs add significantly to the costs.
Investment in these areas is likely to remain cautious and choosy, not at all what is needed to suddenly bring online vast resources to meet our needs.
People need to be aware that in order to achieve rapid and widespread development of these resources would require a significant price stimulus. N.G prices have already leapt five-fold or more since 2000, when U.S. production permanently exceeded 90% of productive capacity.
Far from lowering the price of natural gas, this new resource number in a report confirms that the industry will progressively decline as it relies on higher prices to bring unconventional resources to market.
MakeSense
10/04/2009
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