Fracking has cracked open vast new reserves of natural gas tucked away in shale rock, and in doing so has remade America’s energy landscape in just a few short years. The United States is riding high on its shale gas spoils, but like any other fossil fuel, these reserves won’t last forever, and the FT‘s Edward Luce is concerned that an overreliance on this new source of energy could leave Washington scrambling when the wells run dry:
[G]as euphoria has pushed risk management out of the window. However cushioned the basket might look, it is unwise to put all your eggs in it. Next month President Barack Obama’s administration will issue a new set of emissions rules that are likely to put most existing US coal-fired power plants out of business. Coal was always the largest source of US electricity. Gas has now overtaken it.America has likewise turned away from nuclear power. In his first term Mr Obama announced plans to revive a sector that had essentially been frozen since the Three Mile Island leakage of 1978. Nothing has come of it. Only one new US nuclear power plant is planned and that is years away.Likewise, Mr Obama set great store in the scaling up of alternative energy supplies such as wind and solar. But in each case the numbers have disappointed. Just 5 per cent of US power comes from non-hydroelectric renewables. In its current mood, Congress looks unlikely to approve the renewal of alternative energy tax credits, which will further limit their potential.
Luce’s view of America’s energy policy as being “one of the above” may be a bit too critical. Last January, natural gas produced nearly 30 percent of America’s primary energy—more than any other single source—but coal, crude, nuclear, and renewables all made significant contributions.Still, his point is well taken. This isn’t an immediate problem, but it is one we should start addressing immediately. The speed at which shale transformed the U.S. energy mix is an anomaly; planning how we’ll match energy supply with demand takes time, and new power plants aren’t built overnight. Natural gas is displacing coal as America’s source for baseload power, and that’s a decidedly good thing, given the air pollution and greenhouse gas emissions produced by burning coal. But coal still has a role to play, as does nuclear energy, and, yes, renewables like wind and solar.Every source has its own unique challenges and advantages, risks and rewards, but underlying each is the need to invest in the research and development of better ways to deploy them. Carbon capture and storage systems could greatly reduce the emissions of coal plants; a wave of new nuclear energy technology, including thorium and molten salt reactors, promises safer and more robust systems; solar and wind will need to get more efficient at converting the sun’s energy if they want to compete with fossil fuels on price. For now, we’re enjoying the spoils of a technological breakthrough, namely the dual-use of hydraulic fracturing and horizontal well drilling, and over time we’ll get ever more efficient at this process, giving us more access to more reserves of shale gas and tight oil. But we also need to be working and planning for what comes next.