One of the recurring themes I read while researching fracking is the incredible supply of natural gas contained in the shale plays across the country. The President mentioned the 100-year supply of natural gas during the State of the Union last month. Even North Carolina’s supply is touted as enough to supply the state with 40 years’ worth of energy. Well, the New York Times tracked communications and calculations of principle staff in these energy companies and several agencies to discover they question the high estimates. Please read the article and associated series (multimedia: documents) that includes copies of email correspondence among energy executives, geologists, financial analysts expressing their question of forecasts:
Discovery of the NYTimes piece is due to finding the presentation included below from financial analyst Deborah Rogers, who served on the Advisory Council for the Federal Reserve Bank of Dallas since 2008. She presents very succinctly what gave her great pause in reading the estimates of the “game changer” that shale gas will provide the energy sector and the corresponding number of jobs to be created. She draws particular attention to the misleading total increase in gas supply that is actually due to an increase in number of wells drilled rather than sustained production from existing wells. She presents documentation to support her concern:
Within the context of creating a market overseas for natural gas, as Deborah Rogers alludes to in her presentation, Bloomberg cites the former CEO of Exxon as questioning the actual supply of gas in the shale plays in the country:
“There is going to be a big debate in the U.S. as to whether or not they’re going to permit the export of liquefied natural gas,” [former Exxon Mobil chief Lee] Raymond said in an interview in Oslo yesterday. “Even if you get past the politics, you have to test whether or not the resource base is sufficient.”
Remember that the Department of Energy just last month updated their calculation on the amount of natural gas to be dramatically less than the original estimate. What makes the updated calculation telling is the fact that it includes data from wells in production.
The concerns expressed by Deborah Roger and Lee Raymond are echoed by Chris Nelder in Foreign Policy aptly titled: “Is there really that much shale gas in the ground?“. He actually calls attention to previous hyped energy solutions that failed to deliver to the extent promised. He states that the estimates of gas supply in shale plays are significant, but really would only supply energy needs for 11 years based on current consumption. Based on the current low price of gas, existing production wells are simply not profitable.
Supporters of the development of gas extraction through hydraulic fracturing accuse citizens and scientists concerned about protecting water quality as spreading fear by exaggerating or overstating the threat. It looks like industry has been spreading their own exaggeration and overstating the situation. There is more that needs to be said on the subjects raised in this post, but they will come at another time.