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all of the above
Is the US Overreliant on Shale Gas?

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.

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  • Fat_Man

    Isn’t that the reason why we need more drilling in more places. I am looking at you, Andrew Cuomo, and at you, Jerry Brown.

  • Jacksonian_Libertarian

    In a word “NO” the US isn’t overly reliant on natural gas. This is just what happens when free markets are allowed to perform. If the government would just stop wasting taxpayer money subsidizing environmentalist boondoggles, we would see the “Feedback of Competition” forcing continuous improvements in Quality, Service, and Price across the entire energy industry instead of just fracking. The EPA and its rules are especially damaging twisting the energy market for political purposes and creating inefficient dislocations which a free market naturally avoids. The Energy Department should be abolished as it thinks its entire job is to stop the free market development of Energy, not a single new nuclear power plant has been built since Jimmy Carter created the unconstitutional Energy Dept. in 45 years.

  • ShadrachSmith

    Re: planning for tomorrow

    Elect a Republican and start drilling on government land 🙂

  • Boritz

    Drill in ANWR et. al. If our energy situation is soooooo dire, then ‘dire’ measures (like getting easy to reach oil out of the ground) are called for,

  • S Morris

    We don’t hear anymore about “peak oil,” and the Chicken Little’s have switched to focusing on running out of natural gas, which we have at least 100 years of supply — and that’s just counting what we’ve discovered onshore, and offshore. The whole premise of this “analysis” is flawed. What, we shouldn’t become over-reliant on a limitless domestic supply of clean natural gas? Perhaps we should go back to being over-reliant on gas from countries that export gas, and terrorism, to our shores?

  • Andrew Allison

    We’ve been “running out of oil in 10 years” for well over half a century but production is at all-time highs. Spare us the same fairy tale for natgas. And if all else fails, we have a 300 year supply of coal in the ground. Nuclear power is the optimal solution for electricity, but I fear that only the threat of switching back to coal will bring it to fruition.

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