9/29/2013

Shale Gas Boom: The Angel or Devil for Earth? Part II

Previously on this blog, I discussed the potential impact of shale gas boom on global climate, and in short, I concluded that the net impact could be either positive or negative. While shale gas emits far fewer GHG emissions than coal and petroleum to produce heat or electricity, some believe that its extraction process is associated with a large volume of fugitive methane emissions, another major cause of climate change. At the same time, the low costs of shale gas can keep the electricity prices low, which could possibly slow down the renewable energy development and curb the incentives for energy efficiency.

Shale Gas Well (Source: Bureau of Labor Statistics)

A recently published study seems to have solved one of the concerns; the fugitive methane emissions measured at various shale gas wells are NOT significantly higher than the ones from traditional gas wells. The study was funded and carried out by the Environmental Defense Council, a prominent environmental organization in DC, and nine gas/petroleum producers, and the authors are prominently researchers in this field, so the scientific basis and neutrality seem to be solid.

This study's findings may put an end to the age of coal in the US much sooner than expected. When EPA is planning to launch a new CO2 regulation on new and existing power plants, the findings verify that shale gas not only costs less than coal but also emits far fewer emissions, and thus no power generators would wish to operate coal power plants under such condition in the US. The last hope for the mining companies is to export the excess coal to Asia (mostly China), but the unexpected shrink in Asian demand for coal is likely to nullify the last ditch effort by the American coal industry.

Of course, the impact of shale gas wells on the local environment remains a major concern, as the chemicals used for the hydraulic fracturing process are believed to result in groundwater contamination. At the same time, some report that the investment on renewable energy is slowing down in the US, possibly due to the rise of the inexpensive gas.

However, even with such possible negative impact, a push for shale gas with the CO2 regulation on power plants may be an effective and only viable policy option for the Obama administration to achieve its 2020 GHG emission target at a time the Congress cannot take any meaningful actions on climate change.