Natural gas emits less CO2 than coal and fewer smog-causing pollutants. As a source of power generation, it helps smooth out the intermittent nature of renewables such as wind and solar. It appears to be plentiful, thanks to improved horizontal drilling technologies and “fracking” techniques that allow us to better exploit and monetize shale-gas reserves. In fact, the International Energy Agency has hailed the coming “golden age” of natural gas, while the wise folks at MIT see natural gas use worldwide as “likely to continue to expand under almost all circumstances.” Shale gas reserves are local, meaning natural gas relieves much of the angst regarding America’s energy security, or its current lack of it.

That’s the good news — and let’s be clear, that is truly good news. But it comes with some bad news as well that we simply can’t ignore.

Indeed, the list of items on the bad news side is just as long — maybe even longer — which makes me wonder whether this love affair we seem to be having with natural gas is justified. It’s a relationship that can’t end well over the long term, not on a planet that needs to end its dependence on fossil fuels — all forms of fossil fuel. Natural gas, increasingly coming from shale gas projects, is like smoking “light” or “mild” cigarettes as part of a strategy to stop smoking and lower the risk of getting lung cancer. It’s an illusion. As we know from studies, smoking light cigs only strengthens the addiction, it doesn’t reduce cancer risks, and it gives the smoker a false sense that they’re taking meaningful action to avoid a deadly disease.

So, what is so bad about natural gas? Used strategically to realize efficiencies or as a bridge to renewables, there’s not a heck of a lot wrong with natural gas. But with shale gas on the scene, natural gas is cheap and plentiful, meaning that it is being used less strategically and more generally as a fuel of choice. What were once called “smart gas” strategies are out the window. To use the smoking analogy again, natural gas was once thought of as a more expensive nicotine patch designed to gradually wean us from smoking. Now, it’s a lower-cost light cigarette that only encourages us to smoke more. As a result, we’re seeing a mad dash to gas, and because a greater portion of that gas is coming from shale projects, we should be concerned. Here’s why:

• Shale gas projects are a serious threat to local drinking water, as concluded in a recent Duke University study. It found that methane levels were 17 times higher in water wells located within 1 kilometer of a shale-gas fracking site, adding weight to anecdotal evidence from folks living near shale-gas projects. The study also shined a light on the lack of research and regulation in this area, and how the industry’s “trust us” approach doesn’t provide the transparency needed to keep this emerging industry in check.
• There’s also big concerns about the chemical cocktails used during the hydraulic fracturing process. Do they leak into wells? Certainly, there’s the potential for accidents.  A Chesapeake Energy shale gas well in Pennsylvania had a blowout in April that sent thousands of gallons of toxic fracking fluid into nearby farm fields and streams. Companies are not required to disclose what chemicals they use for fracking. Why not? Again, the trust-us approach doesn’t cut it and has failed us in the past.
• There are even concerns that the fracking process can trigger earthquakes. This is, in my view, an overblown concern but it adds to the public’s perception that fracking on a large scale is potentially dangerous.
• There is concern that fugitive methane emissions from shale-gas projects make this form of natural gas no better than coal from a GHG emissions perspective, as raised by Cornell University’s Robert Howarth in a recent study. This, of course, has been widely challenged by industry and others, such as MIT. Again, it’s tough to know for certain as the industry has not historically disclosed the data required to make a proper assessment. At this point, IMHO I think it’s fair to say that shale gas lies somewhere between conventional natural gas and coal and the outcome depends heavily on drilling and fracking practices. Also, I think we underestimate the short-lived climate impacts of stray methane emissions from shale-gas projects. If methane emissions aren’t a big issue, why is the U.N. Environment Program churning out reports preaching the need to crack down on tropospheric ozone, including methane, to slow down the global temperature increase and delay tipping points that could trigger runaway climate change?

I’d like to say at this point that many of the above issues can be addressed with technology and best practices, but without adequate industry transparency or regulation, and with environmental protection agencies seeing budget cuts across the continent, how can we assume industry will act in the best interests of the environment and citizens? There’s the added challenge that these projects are small and distributed — i.e. there’s a heck of a lot of them, making it difficult even under a stricter regulatory environment to monitor compliance. Furthermore, what happens when developing countries such as China begin their shale gas revolutions? Can we expect the highest of standards and most advanced technologies to be used there? Yes, shale-gas development can be made to be cleaner. That industry worldwide will aim for the highest bar is a big, dangerous assumption to make.

Here are some other reasons why shale gas is potentially a greater problem than solution:

• Certainly, it’s great if plentiful, cheap natural gas is used instead of coal for power generation. The concern is if, in a post-Fukushima world, natural gas is chosen to fill the gap left behind in countries that have declared a moratorium on nuclear power generation or declared their intention to close down older nuclear plants. Likewise, it wouldn’t be good if solar, wind and other renewables are impacted by the dash to gas. Yes, natural gas generation is a good bedfellow with certain renewables, but the fear is that natural gas will hog the bed, steal the covers and overstay its welcome. It may bridge the transition to renewables but it could also delay it significantly, and time is something we can’t afford when it comes to keeping the worst effects of climate change in check. Nobuo Tanaka, executive director of the International Energy Agency, made this point recently when the agency issued its “golden age” of gas report. “An expansion of gas use alone is no panacea for climate change,” Tanaka warned. Absent a carbon tax with some bite, it’s unlikely industry or utilities will care much.
• One of my biggest concerns is how cheap gas — i.e. the impact of shale gas on natural gas prices — is spurring the production of dirtier oil, mainly from oil sands. It’s well known that natural gas is a key fuel input for oil sands mining, bitumen extraction and refining. It can represent more than half the cost of production, and in-situ projects that represent about half of all projects require tremendous amounts of steam, meaning tremendous amounts of natural gas. We’ve got this interesting scenario in which natural gas is consistently below $5 per million BTU and oil is consistently around or above $100 a barrel, creating a 20-to-1 spread. For perspective, the spread at the height of the 2008 oil sands boom was 13-1, so certainly the economics of producing dirty oil in an age of plentiful, cheap shale gas has improved significantly. The end result is a dirtier form of natural gas threatening to slow down the deployment of renewables while also driving greater production of a dirtier form of oil.

Again, this is why a carbon tax is so important. In B.C., for example, a $25 a tonne carbon tax is having a significant impact on natural gas costs by effectively adding a 25 per cent levy. “This sends quite a different price signal in terms of substitution,” say Don Roberts, who heads up the cleantech and renewables practice as CIBC World Markets. “At the end of the day it’s still the best policy to get that carbon tax.”

On a final note, I’d like to consider the land footprint of shale gas. Some people in the oil and gas sector take issue with the land footprint of wind turbines while ignoring the similar footprint that comes with shale gas development. Let’s compare the two. In the United States, there are roughly 20,000 installed wind turbines and roughly 20,000 shale-gas wells. Both forms of energy extraction require access roads, access to ideal sites, and connection to a main collector (transmission in the case of wind; pipelines in the case of shale gas). Over 25 years, the average shale gas well might produce 2 billion cubic feet of gas that, when used for power generation in a combined-cycle natural gas plant, produces about 285,000 megawatt-hours of electricity. Over 25 years, a 2.3-megawatt onshore wind turbine would produce about 150,000 megawatt-hours of electricity based on a 30 per cent capacity factor.

From this very rough calculation, it would seem that a shale gas well could result in roughly twice as much electricity production than a wind turbine over a 25-year period, but the question we need to ask is whether the additional energy is worth it for the footprint it occupies. A shale-gas well results in both upstream and downstream GHGs emissions; a wind turbine doesn’t. A shale-gas well poses a risk to local drinking water; a wind turbine doesn’t. A shale-gas well requires that a stew of toxic chemicals be injected underground at high pressure; a wind turbine doesn’t. A shale-gas well can pose local odour problems; a wind turbine doesn’t. A shale-gas well can leak bad stuff; a wind turbine can’t. A shale-gas well requires a large amount of water during drilling and fracking; a wind turbine doesn’t require water. I should point out that a wind-turbine site can produce energy practically forever, though the turbine will have to be replaced with a new one around the 25-year mark. Not so for shale gas — once a well is depleted it is of no more use, though its impact on the surrounding environment can be felt much longer.

Yes, wind turbines can kill birds and bats, and yes, some people don’t like the look of them and they can produce bothersome noises, but given the choice — a wind turbine within 1 kilometre of your home or a shale-gas well — which would you choose?

All of this isn’t to completely crap on natural gas and the many benefits it can offer. We need natural gas, and it will be an important part of the transition to an economy powered by renewables and other emission-free sources of electricity. It is, generally, cleaner than the other fossil fuels out there. But shale gas is making natural gas dirtier than it has been, just like the oil sands are making the world’s oil resources dirtier and less climate friendly. And if we depend on it too much, we risk taking a serious step backward by delaying our embrace of truly low-carbon and zero-emission energy sources. This will happen — guaranteed — if the market is left to its own devices.

Increased environmental regulation, requiring both transparency and best practices, and a carbon tax are what will keep natural gas a climate-friendly fuel. Left unchecked, it will become a climate enemy and our hope of keeping the global average temperature from exceeding 2 degrees C will be sunk.

There’s been a lot of investment and deployment in renewable energy technologies for power generation and for displacing petroleum products, but as far as we’ve come over such a short time, and as much as triple-digit oil prices are helping to accelerate the transition, the disturbing fact is that higher-priced oil is leading to dramatically more investment in dirtier, harder to access and riskier to extract heavy oil. So while we may be experiencing the beginnings of “peak” conventional oil we’re also seeing the word “conventional” being refined to include heavier crude, starting with the oil sands and now moving toward oil shale and heavy oil trapped in aging oil fields of the Middle East. My Clean Break column takes a closer look at this issue and comes to the conclusion that higher fossil fuel prices alone won’t wean us off fossil fuels, it will only make us go for deeper, heavier and more remote resources in an effort to feed our petro addiction. The answer is to put a meaningful price on carbon, impose stricter environmental regulations and eliminate unnecessary incentives for the oil industry. Sadly, we’re heading in the wrong direction and there’s no sign in Canada or the United States of the political will, or public pressure, required to shift course. What we’ve seen so far is window dressing.

George Monbiot raised this issue in one of his recent columns. He cited the fact that Fatih Birol, chief economist of the International Energy Agency, revealed in late April that crude oil production peaked in 2006. Yet the global economy didn’t collapse as predicted. Why not? “The reason, as Birol went on to explain, is that natural gas liquids and tar sands are already filling the gap,” Monbiot wrote. ”Not only does the economy appear to be more resistant to resource shocks than we assumed, but the result of those shocks is an increase, not a decline, in environmental destruction.” The problem, Monbiot continued, isn’t that we have too little fossil fuel but too much. “As oil declines, economies will switch to tar sands, shale gas and coal; as accessible coal declines they’ll switch to ultra-deep reserves (using underground gasification to exploit them) and methane clathrates. The same probably applies to almost all minerals: we will find them, but exploiting them will mean trashing an ever greater proportion of the world’s surface.”

We’re letting it happen. Until we stop letting it happen, things will continue as they are, despite talk of peak oil and despite rising oil and commodity prices.

It’s getting crowded on this rock.

The United Nations, which tracks world population growth, has upped its estimates. We know that we’ll pass the seven billion mark sometime this October, but the U.N. is now saying we could hit 10 billion within the century – nearly a billion more than expected. Actually, by 2050 we will likely hit 9.3 billion. For some perspective, the planet held five billion people back when Johnny Depp was just starting his career on the TV show 21 Jump Street (Yes, I admit, I was a huge fan of that show). That was the mid-1980s – not so long ago, is it?

Ten billion people are a lot of mouths to feed, bodies to hydrate and families to shelter. It translates into more vehicles on roads, more gigawatts of electricity demand, and more land needed for growing crops. And dramatically more garbage and pollution. It will become much more difficult for supply to meet this demand. Commodity prices will continue to rise, as they have been. Fresh water resources will become more scarce. Regional conflicts will grow. Greenhouse gas emissions will rise. This isn’t scaremongering, this is reality. Even climate skeptics must appreciate that the current path is unsustainable. Global warming isn’t the only reason to be concerned.

Now, reducing waste, eliminating inefficiency and doing things in a more intelligence way will help, but ultimately dealing with the planet’s population explosion will also require a complete rethinking of where we get energy and how we use it. We can’t simply “shoe-horn” renewables into an existing fossil-fuel infrastructure, at least not in the long term. We need to imagine an infrastructure that puts renewables and low-emission energy sources first, and then begin the difficult task of making the transition. Many barriers (entrenched interests, risk aversion, lack of political leadership and citizen buy-in) will need to be overcome, but what’s the alternative?

The Intergovernmental Panel on Climate Change released a short preview of an upcoming report today that asserts we can make the transition. It concludes that nearly 80 per cent of the world’s energy supply could by 2050 be met through deployment of renewable energy technologies — particularly those that capture solar energy. Now, it’s a highly optimistic scenario, but it’s what we need to help keep GHG emissions below 450 parts per million and keep the global temperature from rising beyond 2 degrees C.

Are we too intimidated by the daunting task ahead? Perhaps that’s part of the problem. The IPCC spends many years putting together a massive and comprehensive report on the climate and then plunks it down for all the world to see. It’s information overload — simply too much to digest in one sitting — and it gives the impression that we have a problem that’s too big to tackle. The IPCC’s Fourth Assessment was roughly 3,000 pages! The Fifth Assessment, currently in the works, will be an equally large tome filled with depressing conclusions and broad calls for action that no countries appear ready to embrace.

I agree with folks like Andrew Weaver from the University of Victoria, who is perhaps Canada’s top climate scientist. He says we need to start targeting the science and dividing the problem into smaller, more manageable chunks. ”The science behind the problem is so utterly solid is that what we need to do is start carving pieces off and dealing with those,” Weaver recently told me. (more…)

When are people are going to wake up and realize that business-as-usual is no longer an option? Even Royal Dutch Shell is starting to sound the alarms about our inability to keep up with the growing demand for energy and how this is contributing to profound uncertainty around the world. Shell released today a report titled “Signals and Signposts” and it doesn’t paint a feel-good image of the world over the coming decades. Some highlights of the report, based on Shell’s own summary:

• Emerging nations like China and India are going through materially intensive development and a tighter market will continue to put pressure on prices and generate volatility.
• Developing nations, including population giants China and India, are entering their most energy-intensive phase of economic growth as they industrialise, urbanize, build infrastructure, and increase their use of transportation. Demand pressures will stimulate alternative supply and more efficiency in energy use but these alone may not be enough to offset growing demand tensions completely.
•  Ordinary rates of supply growth — taking into account technological, geological, competitive, financial and political realities — could naturally boost energy production by about 50%. But this still leaves a gap between business as- usual supply and business-as-usual demand of around 400 EJ/a - the size of the whole industry in 2000. This gap – this Zone of Uncertainty – will have to be bridged by some combination of extraordinary demand moderation and extraordinary production acceleration.
• By the end of the coming decade, growth in the production of easily accessible oil and gas will not match the projected rate of demand growth.
•  Timescales are a key factor. Buildings, infrastructure and power stations last several decades. The stock of vehicles can last twenty years. New energy technologies must be demonstrated at commercial scale and require thirty years of sustained double-digit growth to build industrial capacity and grow sufficiently to feature at even 1-2% of the energy system. The policies in place in the next five years shape investment for the next ten years, which largely shape the global energy picture out to 2050.
• Future generations may see 2008 as the turning point. The world faces a period of uncertain global politics. Strategic fault lines are emerging. Rising powers are increasingly and confidently asserting what they see as their national interests. This is undermining global mechanisms for ensuring collective security.
• Even with the moderation of fossil fuel use and effective CO2 management, the path forward is still highly challenging. Remaining within desirable levels of CO2 concentration in the atmosphere will become increasingly difficult.

It’s incredible that an oil company can come out with this kind of information yet continue to contribute to the very problems it identifies. Clearly our destiny is on autopilot.

Economist Paul Krugman writes in the New York Times about our Finite World and points out that the rise in commodity prices that will continue into 2011 isn’t as much about speculation, as it was in 2008, or about excessive money creation driving runaway inflation. It’s about one simple thing: we’re running out of stuff, and we need more stuff. Think about it, the world — North America and Europe, in particular — is still struggling to climb out of recessionary doldrums but oil is about to crack $100 a barrel? One might understand triple-digit oil prices if the global economy were on fire, but it’s not on fire — it’s struggling to stay lit. What will happen when it is on fire? Scary, the thought. Krugman’s column is, as usual, worth the read.