by Emil Morhardt
Daniel E. Klein, an energy industry consultant, writes an interesting piece about fracking problems in Natural Gas & Electricity, an industry newsletter. His approach is to look at the prognostications of the Energy Information Administration Annual Energy Outlook (AEO)—pretty much the bible of energy projections—as they have changed from 2000 to projections of where we will stand in 2040. For example, there wasn’t much shale gas until 2005 and in 2005 the AEO predicted that US natural gas imports would increase sharply in the near future. The 2014 projection, however shows the opposite: a steady increase in US exports, at least through 2024. Similarly, “peak oil” in the US has also been reversed by shale oil production, with the crude oil production in 2013 the highest in 25 years, and imports falling sharply, at least so far. Yesterday, the news was that OPEC was debating, on the one hand, decreasing oil production, so as to increase global oil prices and therefore revenues (four members wanted that), or letting production stand so as to lower prices even further to put price pressure on American fracking operations. The latter option won, at least until June when OPEC meets again, but in the short term oil prices will have little effect on American oil operations.
A few years ago the AEO projected that natural gas would only ever constitute 10–20% of fuel for power generation; now it seems to be displacing coal sufficiently to account for 25% now, and 30% by 2040. This has led not to “peak oil”, but to “peak CO2”. It looks as if we are on a permanent CO2 emission downslope in the US without ever having had to bite any bullets; we are leading the world in CO2 reduction purely because the price of shale gas in the US has made it competitive with coal. When you hear the politicians from coal-producing states blaming the Obama administration for their troubles, it is largely disingenuous.
The bottom line of this article is that whatever the environmental problems with fracking, they can be fixed, and the benefits are so monumental that they ought to be. I imagine that this is more-or-less correct, but there’s probably nothing as disconcerting as having the bucolic farmland that once surrounded you turned into a heavily industrialized oil field—that’s almost impossible to fix. However, unless one is constitutionally opposed to fracking, one ought to hope that it can replace coal globally with time…at least long enough for renewables to come of age.
Klein, D.E., 2014. Fracking: Fix It or Forget It? Natural Gas & Electricity 31, 1-8.