Jan
30
DOE Revised Down US Natural Gas Estimates – But There Is Still Plenty, And Cheaper Than Renewable Energy – Yet NYT Pretends Gas Does Not Exist
By Paolo von Schirach
January 30, 2012
WASHINGTON - The US Department of Energy, DOE, just cut down significantly its previous estimates about the amount of recoverable shale gas in the US. This is largely about having reduced the outlook for one of the biggest basins, the Marcellus shale, located in Pennsylvania, Ohio and New York. However, even assuming that these new DOE estimates are correct, if we combine conventional and shale gas deposits scattered around the nation, there is still an awful lot of natural gas in the US. By now the US is the world largest natural gas producer, having outranked Russia in 2009. And, everything else being equal, with the development and refinement of more sophisticated drilling technologies based on hydraulic fracturing and horizontal drilling in the years ahead, chances are that estimates about recoverable shale gas will be once again adjusted upward.
Still plenty of gas
But even if we want to stick with the sharply lower DOE numbers as our guideline for US natural gas reserves, there will be plenty of American produced gas for at least 50 years. Given this long time frame, all sensible people would take notice of this vast supply and factor the availability of cheap and abundant natural gas in any new energy development plan in which one needs to perform a cost benefit analysis of major renewable energy projects against viable alternatives, such as gas.
You would think so. You would think that we should base our cost comparisons on the basis of the same facts. Something like: “If a new wind farm costs X but a gas fired plant costs 30% less, which one do we choose?” But it is not so. If you read the editorial page of The New York Times, you get an entirely different perspective on renewable energy, one in which “US shale gas simply does not exist“. And so the economic value of renewable energy cannot be compared against a viable alternative.
Natural gas does not exist?
Indeed, a recent Times lead editorial, (In Defense of Clean Energy, The president pushes back, finally, against the pro-fossil fuel, anti-regulatory crowd, January 28, 2012), extolled president Obama’s affirmation of the need to proceed with renewable energy plans. It said that it is good to see the president coming back to the issue, notwithstanding the Republicans predictable, ex officio defense of “big coal and big oil”. Fine. But what about cheap, super abundant and comparatively clean “big natural gas”? Mentioned in passing at the end of the piece, and without any consideration.
Serious analysts would compare renewables and gas costs
The point is that any serious analyst should reconsider the actual value of large, subsidised renewable energy projects when we have all this cheap and environmentally much more benign natural gas that will last at least for decades. This is not “dirty coal”. This is “clean gas”. And now it costs a fraction of what it cost just a few year ago. In other words, if it is a lot cheaper to generate electricity with natural gas, what is the economic justification for subsidizing wind farms?
In the long run, whatever the arguments about greenhouse gases and climate change, it is obvious that we shall need new, non fossil, energy sources. Although not soon, at some point we shall run out of fossil fuels. And so we should continue investing in research and development of renewable energy. But we should do so judiciously. Research is one thing, rushing to deploy non economically viable systems is quite another. As some have said: subsidize development, not immediate use. Do not rush to establish mandates for use of renewable energy today.
Until yesterday there was a semi-plausible argument in favor of the early adoption of still imperfect , even if not cost effective, renewable energy systems for electric power generation because they are clean, while a coal fired power plant is dirty. But now that we have all this more environmentally friendly gas, this argument does not hold anymore. Gas is very cheap, easy to use and relatively clean.
Let’s pretend there is no gas
But, of course if you omit gas existence altogether, just like the editors of The New York Times, then the cost effectiveness calculations regarding renewable energy will go in a different direction. As I said, I thought we all lived on the same planet and shared the same facts; but apparently it is not so. Much easier to conduct advocacy by omitting the facts that challenge our thesis. Ideologues do this all the time. Sadly, main stream media do it too.
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