In the House of Lords this week, one of the noble lords (are there any ignoble ones?) mentioned shale gas. He got it a bit wrong, but still:
My Lords, it is now possible to convert the world's oil shale deposits outside Russia into enough natural gas to meet energy needs for the next 200 years. Will the Government increase gas storage facilities to switch more coal-fired power stations to gas to maintain stable energy prices,..
The obvious mistake is that oil shale and gas shale shouldn't be confused. Oil shale via oil sands is an environmental nightmare totally as different from gas shale as well, oil and gas.
But then Lord Tanlaw, missed an important, and rather obvious to us, point. If we have enough gas for 200 years why on earth do we need to store it? I'll do a post on storage one of these days because it's a classic example of the anecdotal beating the prosaic, and technically complex reality that we don't need to worry about storage. We have a huge herd of dairy cows. Why should we get milk delivered? We have at least 8 gas import terminals. The chances of concurrent failure are literally astronomical. If 8 meteorites hit the terminals at the same time, which is what it would take, the impact on gas prices would be the least of our problems.
The answer was this:
Lord Hunt of Kings Heath (Deputy Leader of the House of Lords, House of Lords; Labour)
My Lords, I can assure the House on the latter point. We can depend on the world's scientists to take great care and note of what the noble Lord has suggested. On shale gas, he is right to suggest, as I think he does, that the availability of gas supplies has changed and is much more liquid as a result of activities in the US. In a sense, this country is in a good position because of the increased possibility of LNG coming to this country and the increase in our import facilities. Again, I am confident—one can never be complacent—that we are in a good position in relation to energy supplies at the moment.
Paying Lord Hunt's ticket to the Buenos Aires World Gas Conference was not wasted. Although it must be asked: Why can't we be complacent, given the facts of shale? Why spend a lot of money putting gas that is flowing out of various holes in the ground into other holes in the ground. This is simply energy whack a mole. But Lord Hunt, along with almost everyone else in the UK, has to break the habit of a lifetime, and that habit is confusing a carbon constrained future with an energy constrained future.
Meanwhile in another place, sadly not the House of Commons but the US Senate, an upper house that actually has some power, they are both better informed and way ahead of us in planning for the new world:
Development potential from unconventional sources in the Lower 48 states has definitely changed the domestic gas supply outlook, they told members of the Energy and Natural Resources Committee. Richard G. Newell, administrator for the Energy Information Administration, called it “the major and very positive story” in terms of production, proven reserves, and estimates of technically recoverable reserves.
Very positive story and DECC or Ofgem have never been known to appear in the same sentence. The EIA then went on to admit they got it wrong:
"EIA has traditionally taken a relatively optimistic view of the unconventional natural gas resource, even at a time earlier this decade when many other analysts were suggesting that the lack of gas resources in North America would lead to a rapid and inexorable increase in our reliance on imports of LNG,” Newell said. “Recent shale gas developments suggest that even our perspective was not optimistic enough.
Lamar McKay, president of BP America was there. There was a time when the UK press and energy establishment hung on every word uttered by chief executives of companies like BP or Shell, but now the press simply calls up a switching site and asks them for a unbiased opinion. McKay noted:
“Current legislative proposals do not create a level playing field and, as a result, natural gas is danger of being squeezed,” he said. “In spite of its economic, energy security, and environmental benefits, gas is caught between support for emerging low-carbon technologies on one hand, and relief for coal generation on the other.”
Jack Fusco, CEO of Calpine,
Fusco said existing gas-fired power plants could make a bigger immediate contribution if they were more fully utilized. “In other words, a near and medium-term solution to our climate-change solution is at hand. No guesswork. No huge spending programs needed. The power would reliable—available all day, every day,” he testified. “And if we embrace this solution with the right incentives, American business would continue to invest its own capital in existing proven technologies to build even more gas-fired plants to dramatically further reduce emissions for the longer term.”
Fusco said Calpine, a Houston-based operator of power plants in 16 US states and Canada, already emphasizes lower-carbon sources with its geothermal and gas-fired installations. The company has historically been involved in the climate change and clean energy policy debate and generally supports the bill which passed the US House on June 26 as well as the measure currently before the Senate. But it also believes that real incentives to encourage more gas use to generate power are missing from the bills, he said.
Imagine if a Big Six Utility CEO in the UK said that. One reason they don't is that they have no incentive to disagree with regulators who consistently predict woe and havoc and high prices. It would be nice to have some regulation from the reality based community.