Welcome to The Shale AgeDecember 20, 2011
For as long as I have been writing this blog, I have been identifying the early 21st century as a new era of energy, but not as new as many others would have it. I do not see a century of exotic, renewable energy resources, but rather a continued and increasing use of fossil fuels. What makes this new is that technology is finally allowing us to unlock the tremendous reserves of shale based carbon resources. The Shale Age, I have called it, will overwhelm the efforts to develop exotic alternatives because of the combination of the Three Ps that fossil fuels, especially when converted to liquids, offer us: Potency, Price and Portability. Coal, oil and natural gas are much more chemically dense with energy than any other viable alternative source (save uranium and other nuclear fuels); even with the rapid rise in the cost of oil in the last decade, it is still much cheaper than all viable alternatives (and, those prices will crash if an open fuel standard is mandated); and it is far easier to transport liquid fuel via tanker, truck or pipeline to point of use than by building massive electrical grids.
The big game changer is shale gas. I have written often about the vast supplies of shale gas available in the United States – estimated to be at least 750 trillion cubic feet, enough for century or more even with greatly increased usage – and that doesn’t even count the similarly huge reserves of shale oil which are also on the cusp of becoming widely accessed. As large as the American resources are, it is dwarfed by new estimates of China’s shale gas resource. At 12750 trillion cubic feet, it is 70% greater than even the tremendous US reserve. If China and the US both maximize their use of shale gas, they will completely transform the world geo-economic and geopolitical structure. Indeed, such an occurrence might even make this blog and my chosen specialty superfluous. I would gladly welcome being made redundant if that is the case, though I still warn that there are pitfalls ahead – not the least of which is the increasing possibility of a shale gas bubble that delays the entire enterprise.