Horizontal drilling techniques, known as hydraulic fracturing, or fracking, are the latest and greatest development in the energy industry. Previously inaccesible natural gas located in shale, a type of rock, is now being exploited at low cost, and the increased supply has lead to a drop in the price of the commodity. The Marcellus Shale formation – stretching from Southern New York to Western Kentucky – alone may contain 10 trillion cubic meters of natural gas, according to Scientific America.
Natural gas is cleaner than oil and coal. According to the American Clean Skies Foundation gas-fired generation is about 58 percent less greenhouse gas intensive that the average coal-fired plant. And it has many of the advantages shared by other fossil fuels, such as low cost, an established infrastracture for usage and transportation, familiarity, and the fact that it is a mature technology. According to Resources for the Future, a Washington think tank, natural gas will account for between 29 and 36 percent of the United State’s electricity generation by 2035, up from 20 percent in 2010.
The speed at which it is able to gain market share and volume (the RFF estimates solar’s share will remain miniscule in 2035) and it’s cleaner status have earned it the tag “bridge fuel.” Natural gas is viewed as sort of compromise solution until renewables are more competitive. Is this view a myth?
At a news conference at the National Press Club, energy economist Alan Krupnick of the RFF said, yes, it is. The very quality that makes natural gas attractive – abundance and the associated low cost – will lead it to permanently displace high cost renewables unless a clean energy standard is implemented.
According to RFF’s estimates, without a clean energy standard, carbon free sources of energy (renewables and nuclear) will actually lose ground by 2035 (the “bridge” to the future must be very long). They will account for 29 percent of electricity production, down from a third of production in 2010. With a clean energy standard, natural gas’s 2035 share will rise from 29 percent to 36 percent, but the main winner will be wind energy, which will see its share rise from from four percent in 2035 to 19 percent in 2035 if a clean energy standard is implemented. That is because wind energy is acheiving cost parity with fossil fuels, but technological challenges, such as an inadequate transmission grid are holding it back. A federal policy would give wind energy a boost, and help it to overcome the inertia of fossil fuel usage.
Unfortunately, the glut of natural gas due to fracking is “raising the bar” on price competitiveness for renewables. And a scenario of increased natural gas usage at the expense of a decline in renewables by 2035 is hardly ideal. Fracking produces methane, which traps heat more efficiently than carbon dioxide. The process requires a lot of fresh water and the use of toxic chemicals that contaminate the water supply. In some instances, residents living near natural gas wells that use hydraulic fracturing have been able to light their drinking water on fire!
In conclusion, low cost natural gas will displace other fossil fuels and renewable energy – chiefly wind energy. It is already happening. Low natural gas prices contributed to the defeat of Gov. Martin O’Malley’s wind power legislation.
Banning fracking rather than regulating it appropriately is a bad idea. But so is allowing it to crowd out innovation in the energy industry. Without federal action to promote clean energy, relying on newly abundant natural gas to solve our problems is a bridge to nowhere.