The triple revolutions of shale, efficiency and renewables

Is-This-The-UN-Or-A-Wile-E-Coyote-Cartoon-Plus-The-Top-5-Most-Bizarre-Speeches-Ever-at-the-United-Nations-feature8Two reasonable sounding arguments against UK/EU shale is a fear that cheaper natural gas makes investments in efficiency and renewables uncompetitive. That was the argument proposed by both Craig Bennett of Friends of the Earth and Tom Burke of E3G on Sky News and BBC News Channel on July 28 during the few minutes we were allowed together.

Is it a reasonable argument? As usual, the US provides some answers. European Greens like Craig and Tom don’t quite get that the US energy transformation (energiewende) is not only about gas. It’s about several systemic disruptions across energy. The shale revolution isn’t the only game in town anymore and disruptions are breaking out in efficiency, wind and solar

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UK onshore licensing round takes off at last: Let’s make it fly

starting-line-200x200With the 14th Onshore License Round in the UK finally starting tomorrow I’m going to be looking more towards the future than ever, but this is a good time to revisit reasons used in the past to prove/predict that there would be no future for UK shale gas. We’ve been hearing these reasons from back in 2009,either from Gazprom funded academics, city “analysts” and any number of green NGOs. There are five basic reasons Russians, Greens and some un-disinterested City experts use to try and strangle UK shale at birth by withholding capital. This is from a presentation I prepared for the London School of Economics Energy Conference earlier this year (2014), but I’ve been pointing the same things out since way back. 

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A tale of four earthquakes: Mind the gap on earthquake and shale gas perception

The Gap Band - Mind The Gap 2007People complain about the Fracking word, but there’s nothing we can do about the earthquake word. There can’t be a single word so emotive, and so inaccurate, yet the use of it has caused damage to the shale industry worldwide.

A note here is to talk about UK earthquakes. The “fracking” earthquakes that cause concern in the USA stem from shale gas and oil exploration by second-hand, in that they allegedly are set off by injecting waste water in disposal wells, something entirely unrelated to the hydraulic fracturing process itself. Since waste water disposal has not been allowed for any industry in Europe for many years, this can’t be an issue in the EU. There are cheaper and simpler ways to treat produced shale well water. In a similar vein as it were, we’ve seen earthquakes from water injection involving geothermal power take place in Switzerland, but until the famous Blackpool earthquakes of 2011, this wasn’t a shale issue itself.The Royal Society report of June 2012 gave this description:

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From Hero to Zero and the way back: How Greens did a U Turn on Natural Gas and why they need to do another


Once upon a time, natural gas, the lowest carbon and least polluting fossil was embraced by almost every environmentalist. But that was back in the bad old days of a Peak Oil and Peak Gas story of rapidly declining/expensive natural gas. Greens could rightly say that although gas was far better than coal, the decline would make alternate fuels competitive. No one did any analysis for example of scenarios where gas could replace coal because it was considered physically impossible or financially pointless. Any idea gas would be abundant enough to replace coal on economic grounds wasn’t considered possible pre-2008. On the subject, I’ll cover the excellent WWF Europe  Dirty Thirty report on coal in Europe next time, only stopping to quote James Hansen from page 3.

“Coal is the single greatest threat to civilization and all life on our planet”

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The “Europe can’t live without Russian gas” energy myth

johnny paycheckIn the almost five months since Russian “protectors” appeared in Crimea, conventional wisdom, sometimes from Moscow/Londongrad PR companies, sometimes from their opposites on the US right, continues to propose a view of Europe powerless in the crises due to a dependence on Russian natural gas.

That may have been the case in 2009, but this time it’s different. What’s especially interesting is that it’s different for reasons mostly unrelated to the shale revolution, still contained in North America and not exporting any molecules to anywhere else until 2015/16.

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Do North American LNG protests harm the earth they try to save?

Pretzel Logic albumNothing highlights how quickly shale disrupted the gas business than the question of US LNG. In 2004 there were a half dozen terminals that imported LNG. By 2010 Cheniere LNG started the current trend of converting them to export, and they are on track to be exporting from the Gulf of Mexico in less than two years. At the same time every import terminal but one is planning to export, and there are enough other projects to make the US the largest gas exporter in the world, dwarfing Qatar and Australia combined. Not all of those will come to pass, but enough will, to change international gas price dynamics.

I often accuse UK greens of not quite getting that it’s called global warming for a reason. Some US activists also completely miss the point as they try, with what can only be described as Pretzel Logic to explain why they prefer the world to burn coal rather than US LNG

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The shale bubble myth deflates

bubbleArguing against the economic basis for shale production has been a consistent bee in the bonnet of both green antis and “conventional wisdom” analysts and academics. 

The failure to understand the paradigm shift of shale is often more wilful than actual. Dismissing shale as a defeat before the event is not only a mark of recalcitrant greens, but also a signifier of a stubborn refusal to face reality among some investor groups. The majority of those investor groups have been not on Wall Street but in the City of London where opposition coalesced in the writings of John Dizard of the FT. He first wrote on shale in November 2009 in an article titled “Shale Gas Numbers Don’t Add Up” and he’s been saying it ever since.

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Scottish Shale : What’s behind the debate?

falkirk scotland flip flopsThe recent BGS survey of Scottish shale resources brings to mind one of the more bizarre objections raised by green opponents of UK shale,  which is a we don’t really have any resource worth bothering about, the let’s call the whole thing off misperception peculiar to the UK. I find the concern for investors money touching, but it is their money after all, and the risk is on them. As to the size of potential resources, there is, and always shall be only one way to settle the argument, but no, it’s not to frack. First things first and one word the public need to hear more often is “explore”. Most people would find it a prettier and more hopeful word and it’s certainly accurate. We simply don’t have anywhere near the data necessary to make any more than educated guesses about resources in many parts of the UK, let alone the recoverable reserves.

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The Unholy Alliance

putinpriestAnother incisive post from Rudolf Huber, the pit bull and guru of LNG.  

In September 1815, 3 leading powers of the 19th century Europe signed a document that gave birth of the so-called holy alliance. At the behest of Alexander I of Russia, the rules of Austria and Prussia decided that the revolutionary idea fomented in the French revolution should be suffocated wherever it rises. God given rights of the ruling families were not to be touched and liberal reforms in the whole of Europe should be stymied.

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Zombie Myth: Volatile International Gas Prices

fear knobI’m surprised how often I hear “volatile international gas prices”(VIG) still mentioned in the UK.The idea that international energy prices are on a fundamental rise used to provide a key rationale  behind green technology and renewables economics and thus provides an elemental explanation of why UK greens fear and fight natural gas. However, it’s not just them: many people still believe for a range of reasons. The one thing they have in common is that they’re all wrong.

VIG  been cited so often for  so long that otherwise intelligent people have it hard-wired into energy thought processes. This is the ten thousand hour rule of energy journalism: If you get the idea repeated often enough it becomes second-nature and no one ends up giving it a first thought. This explains why over the past month at various places, I’ve heard so many fundamentally opposite energy participants singing the same old song. Chatham House rules apply to many on this list, so I won’t embarrass anyone:

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