On shale gas

A propos this. A few thoughts.

  • I think shale is pretty safe geologically speaking. North Dakota’s not collapsed into a caldera and they do some pretty cowboy stuff out there.
  • I wouldn’t want it in my village because it’s ugly.
  • I would like cheaper stuff. It’s another word for everyone getting richer.
  • I would like to avoid climate change and because we’re not reducing demand enough, reducing supply is the only option left.

So you think the choice would be easy, but I’m in a quandary.

  • Local ugliness is basically irrelevant relative to climate change. The main issue is whether shale is a complement or competitor to other fossil fuels.
  • If shale gas squeezes out coal, it helps save the planet.
  • If shale gas squeezes out renewables or nuclear energy, it helps doom the planet.
  • Burning gas is more similar to burning coal (easy to turn on and off, variable output) than renewables (on when it fancies it and variable)  or nuclear (on or off baseload generation)

A priori I’d think it should squeeze out coal, but my priors aren’t shifted enough to come off the fence.

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11 thoughts on “On shale gas

  1. I used to think that high fossil fuel prices were desirable because they made renewable energy relatively more attractive and accelerated investment and adoption, but now on balance I think they are a bad thing because they make it worthwhile to dig up fossil fuels from ever more hard-to-get places (tar sands, small seams of coal, deep offshore oil etc.) and if we want to stop climate change then we want to leave as much fossil fuel in the ground and unburnt as we can. Low fossil fuel prices mean it’s not worth digging the stuff up. Although if learning-by-doing affects in renewable technology are particularly strong, then maybe in the long-run a phase of high prices, shortly to be followed by low prices as super renewable tech blows away fossil fuels, would be better. So I could be wrong.

    With that in mind, assuming shale gas will push down fossil fuel prices (contrary to that rather bizarre letter Sunny liked so much) … this has two potential effects, slowing adoption of renewables, slowing extraction of other more marginal fossil fuels. The later would only matter, from a climate change point of view, if burning gas is more efficient that burning whatever the marginal fossil fuel now no longer extracted would have been.

    it’s almost the kind of question that would have me reaching for a formal economic model.

    I am sat next to you on the fence

  2. Ah, but don’t low fossil fuel prices increase the utility of fuel use in much the same way that increasing efficiency does, thereby encouraging greater use? (Jevon’s Paradox)

    I’m sceptical that shale will squeeze anything out. I think it’s more likely that it will simply be yet another source of carbon. While shale gas may displace coal domestically, that doesn’t necessarily mean that the coal will stay in the ground. At the end of the day, as long as somebody can make money by digging it up, that’s exactly what they’ll do. The only way to reduce carbon extraction is to make it uneconomic – but the demand for fuel is highly inelastic, so that’s rather difficult to do in practice, short of jacking up prices to the point where the economy collapses.

    I’m increasingly coming to think that we’re fucked no matter what we do.

  3. For those who fail to understand how prices work – the price will go up until the total supply of energy from fossil fuels AND OTHER SOURCES matches demand (both of which are affected by price).
    Reducing supply of gas without reducing demand for energy will *increase* climate change by increasing use of coal. The subsidy to “renewable energy” (er, that is an oxymoron) raIses the price to the consumer so reducing demand.
    Anyone with a second brain cell should see that we need to reduce demand – so get women to wear clothes instead of turning up central heating in offices,insulate houses, make car engines more efficient etc

      1. If you would be so kind as to read my first paragraph where I said demand was affected by price….

        1. Sorry, you’re right.

          I don’t see the point you’re really making. You’re just restating what Luis said but with less subtlety.

          Depends on substitutability and complementarity. It’s not clearly a good thing for mitigating climate change to dig up more hydrocarbons.

          1. What on earth is misogynistic about asking you to read my post?
            My experience in the past leads me to suppose that subtlety is wasted on most readers of most blogs. I am not making the same point as Luis – what would be the point? I *am* saying that what is important is reducing consumption (the best way is by reducing demand) and that reducing supply of the least harmful fossil fuel will make global warming worse. Until solar can supply a majority of our needs, gas is the least worst option. I object to the form of New Labour’s subsidies for solar and windpower because they mean the poor are subsidising the well-off but if you are more worried about climate change they do reduce demand (and hence energy consumption) by pushing up the price. Personally I should prefer to ban city-dwellers owning Range Rovers and foreign copies.
            Unlike Luis I am not on the fence: fracking subject to serious safety checks is a good thing because it reduces energy consumption in liquefying gas in Qatar or wherever, shipping it thousands of miles with the associated energy waste in keeping it at – 100C or so and then regasifying. Consumption matters more than demand and *they are not the same*
            The UK directly affects a tiny percentage of fossil fuel consumption but China, the user of coal and the biggest polluter sees no reason to cut back on energy if we don’t so we must reduce waste and frivolous consumption of energy. Overheating offices so that men have to take off their jackets (but not their ties) is one of the most glaring examples and one that has annoyed since I sweltered through three successive winters in my early twenties so it immediately jumped to mind and one of the easiest to cure.
            For asking you to read my post to be misogynistic would require that (i) I assumed that you are female (why should I?) and (ii) I assumed that being female made you stupid. I had no reason to assume that you were any particular gender and since my little sister is noticeably brighter than I, my mother went to Oxford and my wife went to Cambridge (ii) is definitely very wrong.

  4. 1) specifically having a go at women “so get women to wear clothes instead of turning up central heating”

    2) I don’t know your views on this: “quite a few women throw a sickie for other causes of absenteeism since the differential between male and female sick pay is far too great to be accounted for by “period pains”. popularly viewed as being mainly to look after sick kids rather than meet their teacher” But this seems to me to be a bad justification of the gender pay gap since it presupposes women should be taking care of sick kids and going to teachers evening

    3) personal association with clever women isn’t enough to inure yourself against misogyny unfortunately.

    I don’t think you’re a misogynist. I just think you might have said some misogynistic things. Difficult to tell on the internet. I’m not saying you’re a bad person. I say misogynistic things too sometimes. I just like them pointed out to me and to ponder them. I have a willie for the avoidance of any doubt.

    I feel I’ve been probably unnecessarily rude to you, so sorry. But you did use shouty capitals. This is a blog that likes subtly, but I also like flaming commenters, so perhaps we can meet in the middle.

    I appreciate your point about

    In the US shale has squeezed out nuclear, which is hideously expensive, but is very safe and virtually zero carbon.

    Shifting to less carbon intensive fuels is good, but this will slowdown the shift to renewables in the future as less is invested in their development now.

    Like Luis says, I want a proper model I can put some estimates in and work this out. The long run effects dominate as far as I can tell as the actual difference in emissions over the next decade or so will be small, but shale disincentivises investment in green tech and marginal hydrocarbon extraction tech.

    One makes the switch from carbon to clean slower, the other frees up more hydrocarbons to burn.

    I’m on the fence. None of those involved on either side are people I think are especially wise or virtuous and most of the people I respect are on the fence.

    I wish I had your self assurance shale would work.

    1. i) No, I was not getting at women- I was getting at office policy which enforces dress codes for men but allows/encourages stupid behaviour by women and then puts the heating up to 70F to compensate.
      ii) That is hard fact. The differential between male and female sickness rates is far greater than can be accounted for by “period pains”. The differential between sickness absence rates for single and married women cannot be due to “period pains”: many people attribute it to looking after sick kids – I have no data on whether that is virtually all or a trivial part of it, but that is widely believed. I had to go to teacher/parent evenings and I am a man so that has nothing to do with “sickies” (I also had to take a day or half-day of my annual leave, on occasion, to go to a daytime meeting). It is not a justification of the gender pay gap (although it could be if systems were so sophisticated that employers knew how much each individual worked and paid them accordingly).
      iii) No, but it *is* enough to make sure that I do not assume women are, per se, stupid. So if you assume that I am being misogynist by assuming that women are stupid then your chain of reasoning breaks down. The chain broke down when you assumed that I assumed you were female – Will Straw and Richard Murphy seem deliberately not to read stuff which doesn’t suit them and both are male. As you are not female your assumption that I was being misogynist beggars belief.
      I reserve the right to use shouty capitals when needed: partly because they work, partly because they reduce the pressure to be rude. If you don’t like that I’m sorry but this could be the only left-wing website that likes subtlety so I need time to adjust.
      In the US shale has significantly displaced coal with moans in Europe about power stations using cheap coal imported from the USA. The decline in nuclear (apart from Japan which I thought at the time they built the stations was an unsuitable place for nuclear power stations) has largely been in Germany (the government seems to have panicked about the Greens claiming that tsunamis might flood Bavaria). Running costs of nuclear stations are quite low, which is why they form the base-load for the UK Grid – the reason why they are expensive is all the safety features which account for a large part if not an overall majority of the construction cost. In the ’70s Kraftwerke Union when it tendered asked the potential customer “do you want German safety of US safety?” “What is the difference?” “German safety costs an extra DM1 million” – a brilliant sales pitch.
      I see no reason why using gas instead of coal should reduce investment in developing solar or other renewable technologies.
      It is not so much that I have confidence that shale will work as the fact that shale *does* work in the USA, despite my initial scepticism. Forty years ago I wrote, as part of a report on oil, that shale oil would never be commercial because it consumed more energy than it produced, then I backtracked when it was announced that Shell was investing hundreds of millions in shale (I assumed that Shell knew something I didn’t). Shell was wrong and I seemed right for decades but new technology has changed the economics and the US has a gas surplus and reduced oil shortage as a result.

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