Friday, July 01, 2011

Shale Gas Ponzi Scheme? EPA Says No

For much of the past week, the US shale gas industry has been on the defensive because of two stories in the New York Times. Michael Giberson of Knowledge Problem offers a good summary of the reaction. The "Enron Moment" piece is ridiculous and does more to stifle discussion than to advance better policy/regulation. Leave the hyperbole to us bloggers, thank you very much.

If you are keeping score and trying to figure "which side are you on", the EPA tips the Federal Government hand:

"What we are seeing now, with the change in the market that inexpensive natural gas has brought to the table, is a change in the marketability of those [coal] units and the electricity they generate," said Gina McCarthy, the Environmental Protection Agency's assistant administrator for air and radiation.

"So many retirements are expected just simply as a result of inexpensive natural gas."

Here is where the story gets complicated. You see, shale gas is seen to be both "friend and foe" to the US power grid:

As a foe, natural gas is a leading alternative to electricity for cooking, heating homes and water, drying clothes, and even in transportation.

In this case, gas competes with the generation of electricity (as opposed to fueling it). So, some big, bad energy companies might be looking to pop the alleged Marcellus bubble. You can count Big Coal among those enemies, marching side-by-side with environmentalists. Ahem!

There is quite a bit of hype surrounding the natural gas rush. I'm still confident that the boom is real. The overall policy narrative, industry and opposition (and folks between the two), points in that direction. As for the New York Times, I have lost a lot of respect for the newspaper. Churning out conspiracy theories isn't investigative journalism.


Anonymous said...

Take a look at Steve LeVine's take on shale gas boom or bubble. Plus, other entries on shale gas.

Jim Russell said...

Thanks for the reference. Good stuff. For anyone else looking for cogent skepticism of the shale boom, check out the links from Anonymous 5:14pm.

Paul Wittibschlager said...

Shale gas still puts carbon into the atmosphere. The more you burn, the more carbon goes into our air and water.

There are plenty of good stories by reputable sources on the negative environmental impacts of shale gas extraction. Just google them. There is a lot of evidence to support the impact on water quality in rural areas.

The jobs will come and go, the environmental impacts will stay for much longer.

Anonymous said...

Yes, correctly.