10 facts about the natural gas 'boom'

In the US and elsewhere, a lot of news coverage lately has focused on the vast new supplies of natural gas that can be unlocked from unconventional sources like shale and coalbeds.

“Are we entering a golden age of gas?” a report from the International Energy Agency (IEA) asked last year (with the answer, “Yes.”) “We have a supply of natural gas that can last America nearly 100 years,” proclaimed US President Barack Obama in his 2011 State of the Union address. The “fuel of the future,” the Wall Street Journal noted more equivocally in a blog post titled, “The Natural Gas Riddle.”

Like all things prone to hype, however, the natural gas “boom” comes with more down-to-earth realities that often get overlooked. Here are a few worth remembering:

1. Natural gas alone isn’t a “game-changer” for fighting climate change. In its latest “World Energy Outlook,” the IEA points out: “Although gas is the cleanest of the fossil fuels, increased use of gas in itself (without CCS (carbon capture and storage)) will not be enough to put us on a carbon emissions path consistent with limiting the rise in average global temperatures to 2 degrees C.” Furthermore, without a price on carbon dioxide emissions, the IEA says, coal is likely to remain a cheaper fuel than natural gas for power plants in many parts of the world.
2. Production is rising, but so is demand. According to the IEA, global gas demand in 2010 rose to 3.3 trillion cubic meters — more than double the demand in 1980 (1.5 trillion cubic meters).
3. The US is number one … in natural gas consumption. The world’s top four gas consumers are the US, Russia, Iran and China.
4. It’s not replacing oil for our cars. The leading uses for natural gas today are, in order, generating electricity, space and water heating in buildings, and industrial heat and steam production.
5. It probably won’t replace oil for our cars. While natural gas can be used to fuel transport, very little actual goes toward that currently. In fact, according to the IEA, “more than 70% of the world stock of natural gas vehicles is in only five countries: Pakistan, Argentina, Iran, Brazil and India.” While the IEA predicts that natural gas consumption for transport will quadruple between now and 2035, it will account for only 3 percent of all transport-related energy use by that time.
6. A lot is going to waste. Around 150 billion cubic meters of natural gas is flared — that is, burned as waste, without producing any energy benefits — by the oil and gas industry every year. The reason? There’s either no way to transport or process the gas from the well site, or it’s flared to prevent pressure buildup in equipment. The amount of gas burned this way annually is equal to all the natural gas used by US homes each year, and equivalent to the annual emissions of 77 million cars.
7. A lot of the sources are unconventional. Global unconventional gas resources — such as natural gas from shale or coalbed deposits — are now believed to equal conventional resources, states the IEA’s “golden age” report.
8. The unconventional stuff is water-intensive. Hydraulic fracturing — often called “fracking” — to release natural gas from shale requires large amounts of fresh water: a single horizontal shale well will require anywhere from “one million to eight million gallons of water and thousands more gallons of chemicals than a conventional gas well,” according to “Discovering Shale Gas: An Investor Guide to Hydraulic Fracturing,” a new report from the IRRC Institute, an environment- and social-focused not-for-profit.
9. The caveat of “current consumption.” Conventional global resources contain enough natural gas to meet current consumption needs for more than 120 years, according to the IEA. Add in all recoverable resources, and that time period rises to more than 250 years. Of course, the caveat here is “current consumption needs.” If we start converting more cars, trucks and power plants to natural gas power, the supply timeframe will naturally drop.
10. Wells deplete quickly. Natural gas wells tend to show a dramatic decline in production after the first year. This table compiled by petroleum engineer Gary S. Swindell shows that the average decline rate per natural gas well in Texas rose from 10 percent in 1971 to 61 percent in 2005.