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Gas and the New World Energy Mix

Posted: 10/10/2012 21:07

In this blog post, David Howell argues that using more gas is not only consistent with our green objectives, it reinforces them and that wind farms will anyway necessitate heavy stop-start gas back-up.

Five established facts about the worldwide shale gas (and oil) revolution, and four debatable views.

Facts

  1. The big improvement in gas and oil recovery technologies (notably fracking) has already radically changed the world's energy mix. America's advance towards gas self-sufficiency, with a big switch from coal-burning for power generation, has left the rest of the world with much more available gas. And it has brought very cheap energy to America, attracting back all sorts of industries and jobs which had fled abroad.
  2. With more gas becoming commercially recoverable worldwide, the economic prospects of many countries are being transformed - notably countries on both sides of Africa (viz. Mozambique, Tanzania, Kenya, and even Somalia, plus Ghana, Angola, Sierra Leone and of course Nigeria); also, Latin American economies, including Argentina. China, too, reckons it has vast shale gas reserves, as yet barely exploited. And there are big shale deposits in Ukraine and throughout Europe (including the UK), although developing them will be harder than in America.
  3. Gas when burned produces 45% fewer carbon emissions per energy unit than coal.
  4. With gas everywhere, it is becoming a customers' buyers' world. The UK is already favourably placed, despite declining North Sea output. Norway is longing to sell us more of its immense gas resources (offshore) by pipeline; and Qataris are supplying more and more frozen gas (LNG), along with Algeria and others.
  5. The shale gas prospect is worrying the Russians and Gazprom no end, since it threatens their dominant position as natural gas suppliers to eastern and central Europe.

These are recorded facts. Now four debateable questions and views:

Debatable questions and views

  1. Does shale gas extraction pose environmental risks? Yes, but the Royal Society and the Royal Academy of Engineering say they are manageable, as long as operational best practices are applied. In America, stringent controls are already being applied.
  2. Do we need to develop our own UK shale deposits here at home? Given the world's increasingly plentiful gas and the UK's good positioning as an importer, we are OK without for the time being, although a bigger, indigenous supply would obviously be good insurance if external supplies were ever interrupted (e.g. from the Gulf states).
  3. American carbon emissions are dropping fast - 14% down in the last five years. Recession obviously accounts for some of this but, according to the EIA, the bulk comes from switching over to gas from coal - which American producers are now exporting cheap to Europe.
  4. In short, using more gas is not only consistent with our green objectives, it reinforces progress towards them. More electricity from gas in the future holds out the hope of curbed power prices and lower CO2 emissions. Windfarms will anyway necessitate heavy stop-start gas back-up. On the other hand, resisting gas expansion means a) higher bills for the millions of poorer families already in fuel hardship; b) more coal burning, instead of less, thus setting back low carbon objectives, and c) higher, instead of lower industrial costs, thereby damaging competitiveness and jobs, and slowing recovery, and d) less energy security.

The Government is publishing a new gas generation strategy later this year. Let's hope it takes account of these commonsense factors.

David Howell is personal adviser to the Foreign Secretary on energy security, and former Minister of State at the Foreign and Commonwealth Office with special responsibilities for the Commonwealth and international energy issues.

Join Howell and four other world experts at Intelligence Squared's A Natural Gas Revolution: Hot Air or Dose of Sanity. An Evening of Debate, at One Birdcage Walk, London on 18th October. The event is part of the Switched On series of live debates and discussions in partnership with Shell.

 

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