The shale gas industry is still in its adolescence. And as adolescents are wont to do, it presents us with a dilemma: while the energy supplies in shale are too important to overlook, the potential health and environmental impacts of extracting them are too great to disregard. How we choose to respond to these contradictory priorities will have huge and long-lasting consequences.
The challenge is to learn how to produce the same amount of energy in a cleaner, safer way. As discussed, one of the main rationales in support of hydrofracking is that shale gas acts as a “bridge fuel” to ease the transition from dirty hydrocarbons to cleaner power supplies. The next energy revolution is likely to be based on clean, sustainable energy that will gradually supplant the Oil Age.
“Renewables”—energy from continually available supplies, such as sun, wind, moving water, and geothermal heat—are, in a sense, the earth’s most basic energy source.
A 2011 estimate by the IEA claimed that most of the world’s electricity could be provided by solar power within 50 years.1 Indeed, many nations that once relied on a fuel mix akin to America’s have made tremendous strides to replace fossil fuels with cleaner energy over the last two decades.
While the United Sates generated 12.3 percent of its power with renewables in 2011, 13 other nations got at least 30 percent of their power from renewables, according to the IEA, and are aiming for even better results.2 Iceland generated 100 percent of its electricity from hydroelectric and geothermal supplies; Norway got 97 percent of its power from hydro plants; Canada got 63.4 percent of its electricity from hydro and wind power; Portugal got 47 percent from renewables; and Spain got 30 percent from renewables.3
To be sure, many of these countries don’t have the carbon-based energy resources that the United States does, so their citizens are accustomed to high energy costs. Some nations, like Portugal and Denmark, created financial incentives to drive the development of solar and wind power; others, like Germany, have strong green movements that made it politically palatable to keep energy prices high in order to reduce greenhouse gases.
But reducing carbon is as much about politics as it is about economics and engineering. Germany, which got 20.7 percent of its power from renewables in 2011, has a new set of incentives to push that share up to 35 percent by 2020.4 But for the plan to work, Germany will have to bolster its electrical grid in order to transfer power generated in the windy north to the industrialized south more efficiently. That is expensive, and it comes in the midst of a global recession. So German leaders are carefully assessing public support for clean energy before committing to the new incentives.
In the United States, by contrast, reliance on fossil fuels seems an article of faith. Thanks to hydrofracking, cheap natural gas has made it easy to cling to that view. But as renewables become more commonplace and prices decline, this is an opportune moment to ask the kinds of questions raised in Europe.
“It’s absolutely not true that we need natural gas, coal or oil—it’s a myth,” said Mark Z. Jacobson, an engineering professor at Stanford.5 He and his colleagues have designed a renewable energy blueprint, which envisions New York—which is hardly as sun-baked as Nevada or as wind-swept as South Dakota—powered entirely by solar, wind, and hydro power by 2030. The blueprint calls for an energy mix: 10 percent from land-based wind; 40 percent from offshore wind; 20 percent from solar plants; and 18 percent from solar panels; plus a smattering of hydroelectric and geothermal power.
“You could power America with renewables from a technical and economic standpoint,” Jacobson said. “The biggest obstacles are social and political—what you need is the will to do it.”
A recent study by the National Renewable Energy Laboratory suggests that with targeted investments, emissions of CO2 from US power plants could be reduced by as much as 80 percent by 2050.6 In this scheme, most electricity would come from a combination of wind and solar, with gas-fired plants providing backup when the renewables are unable to meet peak demand (on a hot summer night, for example). Studies by researchers at Stanford University and other institutions have found that the United States has plentiful renewable resources; and, unlike Europe, the United States has enough open space to build sizable solar and wind generating plants.
Skeptics point out that renewables are not steady suppliers—the wind doesn’t always blow and the sun doesn’t always shine. They maintain that until a solution is found, we will rely on fossil fuels for the next several decades. Moreover, a shift in America from fossil fuels to wind, water, and sun would be expensive and cumbersome. To use renewable energy on a large scale requires modifying power grids and is generally more expensive than sticking with traditional carbon-based fuels.
Fatih Birol, chief economist at the IEA, says that as important as reducing greenhouse gases is, improving the energy efficiency of industry, vehicles, and homes is a quicker, easier approach than revamping the nation’s grid.7
The transition to renewables will take time. It is likely that for quite awhile, users will rely on a combination of natural gas, other hydrocarbons, and renewable energy. The question remains, though: what will the ideal mix prove to be?
The free market can instill a rigid discipline on energy markets, and one side-effect of fracking is that it provides so much cheap natural gas that it undermines the more expensive renewables it is supposed to provide a “bridge” to.
According to the Harvard researchers Michael McElroy and Xi Lu, the break-even price for electricity produced by a modern coal-fired plant is about 5.9 cents per kilowatt-hour. At $5 per million BTUs, the price of electricity from gas is about the same as that from coal; but when natural gas prices drop below $5 per MBTU, then coal cannot compete.8
The cost of producing wind power is about 8.0 cents per kilowatt-hour. Wind can compete with $5 per MBTU gas only if it can continue to benefit from the government’s production tax credit (PTC), currently 2.2 cents per kilowatt-hour. If gas prices were to rise above $8.3 per MBTU, wind would be competitive even in the absence of the PTC. But in this case, coal plants would be cheaper than either gas or wind-generated power.
Thus, as McElroy and Lu pointed out in a Harvard Magazine article, the free market alone might not ensure that renewables succeed. If gas prices rise above $5 per MBTU, a carbon tax may be required to ensure that gas maintains its edge over coal. Similarly, should gas prices drop below $8.3 per MBTU, the PTC or similar initiatives might be required to support wind and solar energy.
If we are to achieve a low-carbon future, the Harvard researchers write, then gas prices must remain low enough to marginalize coal but not so low that renewable energy is rendered uncompetitive.
In a few short years, hydrofracking has fundamentally changed the energy landscape—for better or for worse. It has given us access to vast and previously inaccessible sources of natural gas and oil, provided jobs, stimulated the economy, lowered greenhouse gas emissions, altered the global marketplace, and changed policy. It is equally true that it adds methane to the air, pollutes water, dredges up toxic and radioactive substances, and has on occasion negatively impacted human and environmental health. As the hydrofracking boom widens, people are increasingly forced to weigh the benefits of shale resources against the costs of providing them.
To assess the pros and cons of hydrofracking, shale gas should be evaluated in the context of other readily available energy sources, especially coal. Coal is cheap and plentiful, but burning it emits twice the carbon dioxide per unit of energy as shale gas does and produces toxic metals, such as mercury, and other pollutants. Moreover, coal mining is more dangerous and environmentally destructive than hydrofracking for shale gas.
Based on what is known at this point, the shale gas delivered by hydrofracking is, on balance, better for the environment than coal. In the second decade of the twenty-first century, the United States is supplanting coal with natural gas. But Europe, China, and India are increasingly reliant on coal. Those nations have only just begun to investigate hydrofracking, and conditions there will make it more difficult to expand the use of shale gas as quickly as the United States is doing.
In America shale gas was seen as an overnight sensation, but in reality it took decades of research, testing, false starts, and tentative steps before it unlocked a new energy supply. For its part, Europe could take a decade or longer before it begins to use hydrofracking in earnest, if it ever does. There are many opportunities and pitfalls still to come.
Fracking is not inevitable. Important questions remain about the ultimate impact of the technology on health and the environment. Research is ongoing and should provide a useful guide in coming years. In the meantime existing techniques are being improved, and new technologies are being developed.
Hydraulic fracturing provides an epochal opportunity as a long-term supply of relatively clean fuel that will act as a bridge to more sustainable, renewable energy sources. But if it is used irresponsibly, undermines efforts to develop nonhydrocarbon energy, and does not supplant dirty fuels, then the great shale gale experiment will be judged a failure. With great opportunity comes great responsibility: how will we respond?