In a Natural Gas Glut, Big Winners and Losers
“Low prices for consumers. Big profits for bankers. But the gas glut in the United States has meant much pain for gas exploration companies and their investors.” (Source: NY Times)
Brilliant article on America’s natural gas glut and the influence of financial capitalism on its boom and future bust. Must-read article for European policy-makers who dream of a Golden Age of Gas for Europe.
“Like the recent credit bubble, the boom and bust in gas were driven in large part by tens of billions of dollars in creative financing engineered by investment banks like Goldman Sachs, Barclays and Jefferies & Company.
After the financial crisis, the natural gas rush was one of the few major profit centers for Wall Street deal makers, who found willing takers among energy companies and foreign financial investors.“
The global financial crisis and the prospects for ‘Green Growth’
“The global financial crisis offers a big opportunity for progressive politicians to reenergise the green agenda.” (Source: Policy Network)
British energy expert Dieter Helm provides a good analysis of why EU climate policy has failed to make a difference but his plea for "green growth" suffers from technology optimism and belief in the overhyped gas eldorado.
“From the outset Kyoto made Europe look good¬—and hence could be presented as a political “success”. But much was “smoke and mirrors”. Europe has been exiting energy intensive industries, and these have moved to developing countries like China. … But sadly reducing carbon production in Europe does not — and has not — made much difference to global emissions. Europe just imports the carbon instead – so carbon consumption replaced carbon production.” …
“None of the existing technologies are likely to meet the decarbonisation challenge. There simply is not enough land and shallow water for wind or biofuels to make a difference. Current renewables just can’t do it. So we need future renewables, and the good news is that on the technology front there are lots and lots of opportunities. What Europe should do is take some of the hundreds of billions being spent on current expensive renewables and spend it on the future renewables and technologies — on things like the next generation of solar, on batteries, on smart information systems, electric cars and on a host of new concepts.”
EU Commission study on shale gas raises serious doubts about European "golden age of gas"
A new research report written by the Joint Research Centre of the EU Commission suggests that under a best case scenario, taking into account environmental considerations, future shale gas production in Europe could help the EU maintain its dependency on energy imports at around 50 % of its total energy needs. But the report also reveals the sometimes considerable uncertainty about recoverable volumes, technological developments, public acceptance and access to land and markets.
This courageous JRC study will without doubt lead to furious reactions from the shale gas lobby.
Read the full report ‘Unconvential Gas: Potential Energy Market Impacts in the European Union”
See also Reuters: Shale Gas will not cut EU import dependence .
The ‘Shale Gas Revolution’: Developments and Changes
“The ‘shale gas revolution’ in the United States created an oversupply of liquefied natural gas and downward pressure on gas prices across the globe. Disappointing outcomes have reduced the hype about the prospects for shale gas in Europe”.
Excellent new report from Paul Stevens of Chatham House. One of the most important conclusions: shale gas does not substitute for coal but is a big danger to renewables.
Main conclusions of this must-read report:
- The ‘shale gas revolution’ in the United States created an oversupply of liquefied natural gas and downward pressure on gas prices across the globe.
- Disappointing outcomes have reduced the hype about the prospects for shale gas in Europe, and led to the realization that, at least in western Europe, there are serious obstacles to its development.
- There has been considerable debate over the level of technically recoverable shale gas resources together with significant revisions to some estimates of those resources.
- Growing opposition to shale gas is driven by concerns over the environmental impact of hydraulic fracturing and the impact on greenhouse gas emissions.
- In the United States, energy self-sufficiency has increased in importance, making the continuation of the ‘shale gas revolution’ there more likely.
- There is a growing fear that shale gas may substitute not for coal as many originally hoped, but for renewables.
- Overall, levels of investor uncertainty remain as high as ever, particularly with regard to developments outside the United States.
Shale gas strategy ‘not the optimum path’: Fatih Birol
“An energy strategy without fossil fuels would be preferable to the regulated gas pathway outlined in the International Energy Agency (IEA)’s new report, the paper’s own author told EurActiv in an exclusive interview yesterday (30 May).”
Excellent interview on EurActiv showing the tightrope Fatih Birol has to walk when communicating the IEA’s views on the golden age of gas. When you read the report well, you understand the IEA clearly sees shale gas as the wrong path leading to unacceptable climate impacts.
How green is shale gas?
“The rise of ‘fracking’ means the IEA is hailing a ‘golden age for gas’. But what impact does shale gas have on the environment? Leo Hickman, with your help, investigates.”
Good overview in the Guardian of immediate reactions to today’s IEA report on "golden rules" for the golden age of gas.
Launch of IEA report: Golden Rules for a Golden Age of Gas
The International Energy Agency will next week (29 May) launch an important report on the "golden rules" for governments and industry if they are to overcome serious risks and concerns (social and environmental) about the Golden Age of Gas.
There will be a special presentation of this report by Fatih Birol, IEA’s chief economist, in the European Parliament in Brussels on Wednesday, May 30, at 09h30.
Registration for this event in the European Parliament is possible via boguslaw.sonik@europarl.europa.eu before 29th of May. Mr Sonik, a Polish Member of the European Parliament recently wrote a heavily criticised report in favour of large-scale shale gas extraction in Europe.
On the same day (30 May), I will have the pleasure to moderate a debate on the same subject of shale gas in Europe during the annual conference of ASPO, the Association for the Study of Peak Oil and Gas in Vienna. One of the world’s most renowned critics and expert on shale gas in the USA, Arthur Berman, will be the top speaker in this debate.
Read one of Arthur Berman’s latest papers on this issue: After The Gold Rush: A Perspective on Future U.S. Natural Gas Supply and Price (Febr. 2012)
Total’s North Sea Gas Leak Could Turn Into Lengthy Problem
“The gas leak from French oil company Total’s Elgin oil field in the U.K. North Sea could turn into a lengthy problem for the company, not unlike the challenge BP faced shutting down its leaking well in the Gulf of Mexico two years ago”. (Source: Wall Street Journal blog )
How many "extreme energy" accidents will it take before policymakers understand it is time to prepare for the end of the fossil fuel age.
You Can’t Slow Projected Warming With Gas, You Need ‘Rapid and Massive Deployment’ of Zero-Carbon Power
“Another major study finds confirms natural gas is a bridge fuel to nowhere. A must-read new study by climatologist Ken Caldeira and tech guru Nathan Myhrvold (!) makes clear the world’s only plausible hope to avert catastrophic temperature rise this century is aggressive deployment of zero-carbon technologies and conservation.”
Brilliant summary on Joe Romm’s blog of new major study on natural gas. Conclusion of this study: there is no climate value in switching to gas.
“BOTTOM LINE: If you want to have a serious chance at averting catastrophic global warming, then we need to start phasing out all fossil fuels as soon as possible. Natural gas isn’t a bridge fuel from a climate perspective. Carbon-free power is the bridge fuel until we can figure out how to go carbon negative on a large scale by the end of the century.”
Gas galore?
Energy journalist David Strahan ("The Last Oil Shock") provides a well-researched and critical article on the global natural gas glut.
"Shale gas production may grow strongly in some parts of the world, but it is unlikely to be the “game changer” its cheerleaders claim. LNG output is also set to rise, especially in Australia where a slew of export terminals will come on stream towards the end of this decade, but the IEA forecasts global demand will soar by half by 2035, and that can only be supplied at a cost."
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