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U.S. shale gas boom could tilt global ‘petro-power’ balance

Conservative think tank advocates for responsible development of  domestic resources, saying increased U.S. production could curb Russia’s petro-power

U.S. natural gas production could quadruple in the next 30 years.

By Summit Voice

SUMMIT COUNTY — In Colorado, the debate over natural gas production from shale formations like those in the northwestern part of the state often focuses on environmental impacts, including the growing fragmentation of wildlife habitat and concerns about air and water quality from hydraulic fracturing, or fracking.

But there’s also a geopolitical dimension dimension to the rising tide of U.S. gas production. By some recent estimates, shale-gas production will quadruple by 2040, to more than 40 billion cubic feet per day. And that level of production has the potential to affect Russia’s ability to wield an “energy weapon” over its European customers, according to a recent study by the Baker institute.

In the past, Russia has threatened to shut down critical natural gas pipelines to Europe as a way of exerting political influence.

According to a study from the Rice University’s Baker Institute, Russia’s natural gas market share in Western Europe could decline to as little as 13 percent by 2040 as U.S. production increases.

The study was funded by the U.S. Department of Energy. It incorporates independent scientific and economic literature on shale costs and resources, including assessments by organizations such as the U.S. Geological Survey, the Potential Gas Committee and scholarly peer-reviewed papers of the American Association of Petroleum Geologists.

“The geopolitical repercussions of expanding U.S. shale gas production are going to be enormous,” said Amy Myers Jaffe, the Wallace S. Wilson Fellow for Energy Studies and one of the authors of the study. “By increasing alternative supplies to Europe in the form of liquefied natural gas displaced from the U.S. market, the petro-power of Russia, Venezuela and Iran is faltering on the back of plentiful American natural gas supply.”

The study concludes that timely development of U.S. shale gas resources will limit the need for the United States to import liquid natural gas for at least two to three decades, thereby reducing negative energy-related stress on the U.S. trade deficit and economy. By creating greater competition among gas suppliers in global markets, shale gas will also lower the cost to average Americans of reducing greenhouse gases as the country moves to lower-carbon fuels.

“The idea that shale gas is a flash-in-the-pan is simply incorrect,” said Kenneth Medlock III, the James A. Baker III and Susan G. Baker Fellow for Energy and Resources Economics and co-author of the study. “The geologic data on the shale resource is hard science and the innovations that have occurred in the field to make this resource accessible are nothing short of game-changing. In fact, we continue to learn as we progress in this play, and it is vital that we understand and embrace the opportune circumstances that shale resources provide. U.S. policymakers should not get diverted from the real opportunities that responsible development of our domestic shale resources present.”

Other findings of the study include that U.S. shale gas will:
•    Reduce competition for LNG supplies from the Middle East and thereby moderate prices and spur greater use of natural gas, an outcome with significant implications for global environmental objectives.
•    Combat the long-term potential monopoly power of a “gas OPEC.”
•    Reduce U.S. and Chinese dependence on Middle East natural gas supplies, lowering the incentives for geopolitical and commercial competition between the two largest consuming countries and providing both countries with new opportunities to diversify their energy supply.
•    Reduce Iran’s ability to tap energy diplomacy as a means to strengthen its regional power or to buttress its nuclear aspirations.

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8 Responses

  1. This reads like the P.R. from the Industry. Colorado has to review what is taking place on the East Coast in regards to the Water issue, waste – both disposal and the Aquifer – before even considering allowing any “Fracking” to take place. Also, the amount of gas out of each well peaks at the beginning, then drops off rather quickly, requiring a continual re-“fracking” to maintain production. The water that is used in conjunction with the chemicals used in the process is poison afterward, with no way of cleaning it up so as not to be harmful to the environment. Considering the pristine state of land today, the past performance of the Industry, not to forget all those users down the line, especially the Colorado river, the costs are prohibitive to chancing this folly. In a word, it’s B.S. to think this process doesn’t have risks.

    • Norman, this is based on information from a pro-oil, pro-drilling group. It’s folly to think that all the identified natural gas fields could be safely developed. But I posted it because I think sometimes we get so caught up in our local environmental battles that we lose sight of the bigger picture. It’s food for thought. As much as we need to move away from fossil fuels, we are still going to need them for the foreseeable future, and if we can develop domestic resources, there are benefits along with the environmental risks.

  2. Bob, “If we can develop domestic resources, there are benefits along with the environmental risks”, in itself a no brainier, but in the case of “shale gas”, especially in Colorado, the risks are to great. The process may be old, as far as “fracking” is concerned, but it’s quite new as to the large scale implementation that is being undertaken today. There is another downside, the composition of the gas isn’t as clean as the easier natural gas we all know today. The money thrown around may be tempting, especially in these times, but it’s what is known in the business as part of doing business. The “environment” is where all living breathing beings live and are dependent upon. The drillers are from out of state, as are many of their employees, as well as the companies behind them, so they have little or no interest in whether or not rules are adhered too or not. The risk to the few, is not worth the risk to the many, for once the land/water is poisoned, the length of years to restore the “environment” as well as the money required to do so, far outstrips any benefits that are achieved. To coin an old phrase: ‘BIP BAM, THANK YOU MAME”, is very appropriate in the case of “fracking”. There is also one other “minor” issue involved, that being the political corruption which seems to go hand in hand with the permit process by the local government body[s]. There is enough of that in the politics as it is, we don’t need more of the same.

  3. Fracking has been used as a completion technique for over 60 years in over 2 million wells and there are 6 incidents that have been confirmed as technical failures. That’s it. The effects of horizontal drilling and hydraulic stimulation completions on our economy are enormous and the benefits to future national security are unquantifiable.

    Environmentalists have been very successful at swaying popular opinion against fracking. Look a little deeper and you’ll understand the main reason why they are so motivated. Cheap hydrocarbons make solar and wind uneconomic, and not many of these companies can stay afloat without major subsidies. That bubble will soon too burst…. Sad but true, eviro groups are also motivated by profit.

    • sonja, you read like a shill for the industry. The costs of “Fracking” is not cheap. The type of gas produced is not the same as the easier reached natural gas we are used to. Also, the chemicals used in the “Fracking” process don’t all come out of the wells, but are left there.

      As for the environmental groups being motivated by profits, tell me what they are, besides keeping the land, water pristine? Are you against such? Do you think alternate energy sources are unreasonable? Di you dispute what the findings have found? Are you aware that the main energy producing company on the east coast has suspended its quest for the shale gas?

      One other thing, If the drilling leaves some of the water/chemicals in the ground, that same reached the aquifer, as well as the above ground storage of waste water/chemicals, enter the creeks/streams that is used for drinking & irrigation for both food/livestock, would you eat/drink that polluted food/water?

  4. This is quite a collection on looney tunes here. The non-profit is a big industry which employs hundreds of thousands to retard economic growth. The people commenting on the composition of natural gas – what is the difference? Does it have different carbon compounds (other than methane and ethane mostly that are part of natural gas)? Environmental groups are motivated by the specter of cashing in on the donations from most carbon generating people like Al Gore and entire Hollywood.

  5. Voice of reason, whose reason? As for the collection of loony tunes here, you’re including yours I presume? But, where is your back up, because you read just like the shill’s for the industry, or perhaps you’re a Tea Party person who drank the kool aid? Willing to destroy out of ignorance, because you don’t do your own homework, is folly. Repeating the mantra that has been scripted isn’t any voice of reason.

  6. Whether the growth in production levels materialize depends on how much we ignore the local consequences. As dirty energy likes to say, this process is happening thousands of feet down, what’s the problem. Well it takes time for hydrocarbons and toxic fracking fluids to escape those damaged formations. By the time the associated aquifers are ruined, those doing the damage will be long gone.

    As far as whether these gas supplies have geopolitical repercussions, they already have in that the LNG terminals import terminals built around our coasts are essentially idle and most are considering converting to LNG exports.

    As a nation we really need to decide if the environmental disruption of fracking is justifiable when the gas produced is being exported by multinational companies to power other economies.

    We also need to realize that these reluctant gas formations may exist all over the planet and any nation prepared to compromise their lands can get in the game – next generations be damned.

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