Natural Gas, what is all this buzz about?
The century of the 1800’s was the century of coal, the 1900’s was the century of oil and the 2000’s, led by fracking, will be the century of natural gas.
Injecting a mixture of water and chemicals at high pressure to create pores in the shale rock, combined with horizontal drilling is called Fracking. This has unlocked unconventional gas and could be arguably one of the biggest technology breakthroughs in decades.
Evolution of unconventional drilling:
We are now entering the most significant adjustment to the worldwide energy picture since the 1973 oil embargo and OPEC led run-up in oil prices.
Few could have predicted the current boom just a decade ago. Back then the consensus was that America was beginning to run out of oil and that it would be forced to import vast quantities of fossil fuels to keep the economy buzzing. In 2012 the IEA stated that the United States would surpass Russia and Saudi Arabia and become the world’s largest oil producer sometime between 2017 and 2020 due to shale development.
While clearly this does not mean that natural gas will completely replace coal and oil anytime soon, natural gas is set to become the incremental fuel for power generation and industrial applications.
This new technology will have a big impact on Oil export countries. OPEC countries are now entering a new paradigm; they will need to find new sources of revenues as the US and other countries will buy less and less of their oil. Nevertheless, this does not mean the US will cut its ties with OPEC once they are completely independent. Not least, because many of its allies will still remain dependent on the region.
The US started the shale gas revolution but China is the one who needs it the most.
China faces major oil challenges going forward. They need to decrease their oil import dependence, especially as China is thought to have twice the recoverable shale reserves estimated in the US.
The US Energy Information Administration estimates that China has more than Canada and the US combined (The US alone is estimated to have a 100 year supply).
If shale gas lives up to its promise, it could be a game changer for China. The nation’s thirst for energy continues to surge. Over the next 20 years the country is expected to double its demand for power. To meet its insatiable demand, they are currently building 29 nuclear plants and adding vast amounts of wind, solar and hydro power.
Coal plants are the largest generators of greenhouse gas and unfortunately, coal remains king for now in China. They generate 80% of their electricity from coal and consumes as much of the fossil fuel as the rest of the world combined.
(Shale gas emits only half the CO2 of coal) The sooner they switch the better.
The shale gas boom does not come without risk. From gas leaking into water table to wastewater being dumbed into rivers to the disruption that the drilling causes to natural habitats and nearby communities, Fracking can do a lot of damage to the environment.
The industry is still experimenting and its latest breakthrough is called EnviroFrac technique, which replaces toxic chemicals used for fracking with natural fluids made from soybean and organic acids from fruit juice. Hopefully, strong regulations will be implemented and we’ll have a healthier planet and economy.