Title &
author: “FRACKING GREAT” from the print edition
Source &
date: The Economist, Jun 2nd 2012
THE story of
America's shale-gas revolution offers hope in hard times. The ground was laid
in the late 1990s, when a now-fabled Texan oilman, George Mitchell, developed
an affordable way to extract natural gas locked up in shale rock and other
geological formations. It involves blasting them with water, sand and
chemicals—a technique known as hydraulic fracturing, or “fracking”. America's
shale-gas industry has since drilled 20,000 wells, created hundreds of
thousands of jobs, directly and indirectly, and provided lots of cheap gas.
This is a huge advantage to American industry and a relief to those who fret
about American energy security.
The revolution should continue, according to a report
published this week by the International Energy Agency (IEA). At current
production rates, America has over a century's supply of gas, half of it stored
in shale and other “unconventional” formations. It should also spread, to
China, Australia, Argentina and Europe. Global gas production could increase by
50% between 2010 and 2035, with unconventional sources supplying two-thirds of
the growth (see article).
A number of things could prevent this, however. Many
of the factors behind America's gas boom, including liberal regulation of
pipelines (which encouraged wildcat exploration by small producers), a
well-aimed subsidy and abundant drill-rigs, do not exist elsewhere. Its sheer
rapidity is therefore unlikely to be matched. A greater threat stems from
environmental protests, especially in some European countries, which could kill
the shale-gas industry at birth. France and Bulgaria have banned fracking.
Greens in America and Australia (see article) are also
rallying against the industry.
The
anti-frackers have reasonable grounds for worry. Producing shale gas uses lots
of energy and water, and can cause pollution in several ways. One concern is
possible contamination of aquifers by methane, fracking fluids or the
radioactive gunk they dislodge. This is not known to have happened; but it
probably has, where well-shafts passing through aquifers have been poorly
sealed.
Another worry is
that fracking fluids regurgitated up well-shafts might percolate into
groundwater. A graver fear is that large amounts of methane, a powerful
greenhouse-gas, could be emitted during the entire process of exploration and
production. Some also fret that fracking might induce earthquakes—especially
after it was linked to 50 tiny tremors in northern England last year.
But the risks
from shale gas can be managed. Properly concreted well-shafts do not leak;
regurgitants can be collected and made safe; preventing gas venting and flaring
would limit methane emissions to acceptable levels; and the risk of tremors,
which commonly occur as a result of conventional oil-and-gas activities, can be
contained by careful monitoring. The IEA estimates that such measures would add
7% to the cost of the average shale-gas well. That is a small price to pay for
environmental protection and the health of a promising industry.
For as well as
posing environmental risks, a gas boom would bring an important environmental
benefit. Burning gas emits half as much carbon dioxide as coal; so where gas
substitutes for coal, emissions will fall. America's emissions have fallen by
450m tonnes in the past five years, more than any other country's. Ironically,
given its far greater effort to tackle climate change, the European Union has
seen its emissions rise, partly because of an increase in coal-fired power
generation in response to Europe's high gas price.
Cleaner, but not clean enough
By itself, switching
to gas will not reduce emissions to anything like the levels required to avoid
a high risk of serious climate change. This will take much crunchier policies
to boost renewable-energy sources and other clean technologies—starting with a
strong price on carbon emissions, through a market-based mechanism or,
preferably, a carbon tax. Governments are understandably unwilling to take
these steps in straitened times. Yet they should plan to do so; and in the
coming years cheap gas could help free cash for more investment in low-carbon
technologies. Otherwise the bonanza would be squandered.
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