Is Natural Gas the Next Bubble ? Has Fracking Promised More Than It Can Deliver?
This article was published in partnership with GlobalPossibilities.org.
Coal and nuclear power industries in the United States have seen better days. The main culprit, energy industry analysts say, is the low cost of domestic natural gas, coupled with carbon-reducing regulations imposed by the Environmental Protection Agency and the efforts of environmental groups.
Instead of paying the high costs to upgrade coal-fired plants and repair aged nuclear facilities to meet environmental regulations, power companies across the country have been making the switch to natural gas.
The Los Angeles Water and Power Company just announced a plan to go coal-free within 12 years, selling one coal-fired plant in Arizona and converting another in Utah for natural gas production. Both plants currently power roughly 40 percent of Los Angeles. Last month, in a Clean Air Act settlement, American Electric Power agreed to stop burning coal at its power plants in Ohio, Indiana and Kentucky, and either make the switch to natural gas or retire the coal-fired units. Dozens of coal plants have closed in recent years under the same pressure, in large part, from cheap natural gas.
In February, Duke Energy decided it was more cost-effective to close its Crystal River nuclear plant in Florida and replace it with natural gas turbines than it would be to repair a $1.5 billion crack in its dome. Last year, Dominion Power opted to shutter its Kewaunee reactor in Wisconsin, citing low natural gas prices. Multiple decrepit U.S. nuclear power plants are being faced this same dilemma.
The American Electric Power settlement was celebrated by smaller grassroots organizations and national environmental groups such the Sierra Club and the Environmental Defense Fund, whose campaigns, respectively, to reduce coal use and to promote safer fracking regulations, are heavily funded by New York City Mayor Michael Bloomberg, an outspoken champion of shale gas drilling.
But while environmentalists are helping to accelerate this move away from coal, the attendant reliance on natural gas – and hydraulic fracturing, or fracking, to obtain it -- offers a garden variety of environmental and health concerns of its own. The slowdown in domestic coal use and its related benefits in carbon reduction may also be offset by the simultaneous explosion of U.S. coal exports to Asia and Europe.
Additionally, nuclear power has glaring environmental, safety and health issues. But in relation only to carbon reduction, the switch from nuclear to natural gas – which emits about half the amount of carbon than coal – concurrent with booming coal use overseas, could leave global carbon emissions at roughly the same levels or even increase them. And that's without considering another very problematic greenhouse gas, which is emitted during the fracking process: methane.
But what if cheap, domestic natural gas isn't actually sustainable? What if rosy claims of fracking our way to energy independence is just an industry pitch that Washington has bought?
Two new reports reveal that the natural gas narrative may be more hype than reality and warn that putting too much of our eggs into this energy basket could be detrimental to our future economic health.
Shale Gas Boom or Bust?
Currently, natural gas remains cheap, around $3.50 per thousand cubic feet (Mcf). In the short-term at least, this has been good for consumers, as it has translated into lower energy bills. But in the near-term, it has been deadly for the companies drilling for shale gas and their stakeholders, who are losing their shirts.
"I've spent thousands of hours working through data and consulting and collaborating with very knowledgeable colleagues," said Art Berman, an oil and gas geologist who heads Labyrinth Consulting, a Houston-based geological consulting firm. "Right now, everybody's losing money. And the whole picture is highly tenuous."