The Slate Revolution Part III

The Slate Revolution Part III

Pipelines cannot be moved when there is a noise. When gas is imported through a pipeline, both the country that sells the gas and the country that buys the gas depend on stable conditions between them and in transit land along the pipeline. But when it comes to gas that is transported as LNG (liquid), or oil, it is not decisive where the US or other countries get their energy imports from in the long run. What matters is the balance (or imbalance) between supply and demand in the market and the price that follows from it.

5: What about the environment?

Some players believe that shale gas is very environmentally damaging and will therefore be little used in the future, especially outside the United States, a country located in North America according to Topschoolsoflaw. Where the wells are drilled, the challenges are high water consumption and the risk of contamination of the ground from the oil and gas extracted, or from the chemicals used to extract it. A well requires from 4 to 20,000 cubic meters of water. This is a higher water consumption than in the production of ordinary (conventional) gas, but at the same level as some ordinary oil drilling and lower than some biodiesel.

The water used to blow up the slate wells is supplemented with around 0.5 per cent chemicals: lubricants, anti-rust agents and agents to prevent the growth of microorganisms. The danger of these leaking into drinking water is hotly debated . In addition, the water to slate wells is often transported by truck. A well can require several hundred truck trips, which leads to increased traffic and wear and tear on roads in the immediate area.

There is also concern that fracking could lead to earthquakes, but also at this point much more research is needed to be able to say something certain. Should these environmental concerns prove to be well-founded, it will be difficult to engage in fracking, at least in densely populated or arid regions.

Globally, fracking leads to an increased supply of oil and gas. As a result, oil and gas prices are falling in general. Lower prices give consumers less reason to limit the use of petroleum products and thus climate emissions. This may make it more difficult to limit climate change . However, more shale gas than shale oil can also be extracted, and the increased supply of natural gas can be used to replace coal . Should this occur, climate emissions will be lower since coal leads to significantly larger emissions than gas. This also depends on how much energy is used in the extraction of shale gas compared to coal, and how large emissions of methane take place during production. Both are controversial, and both may change with new technology.

6: Other unconventional petroleum sources

One of the most important things we can learn from the shale revolution is that the relationship between petroleum reserves, technology, politics and economics in the energy sector is constantly changing . There are large amounts of oil and gas in the world, but the question is how large a share can be extracted and sold at a price that consumers can afford and are willing to pay.

Conventional and unconventional petroleum resources are often distinguished . Unconventional resources are those that are inaccessible, expensive to extract, involve greater risk and are therefore less relevant to use. The line between conventional and unconventional resources is constantly changing . No one can predict with certainty what technological changes and border shifts will come in the petroleum sector in the future – they can be big or small, come quickly or not, and can go in many different directions. Nevertheless, it is important to reflect on some of the possible future changes.

One of the most dramatic possibilities is whether it will be possible to extract gas hydrates on a large scale. Gas hydrates are methane that is frozen under low temperature and high pressure. They are found in large quantities underground in Arctic regions and under the seabed in large parts of the world. No one knows how large the reserves are, but some calculations suggest that there may be as large energy reserves of gas hydrates in the world as of oil, gas and coal combined.

If it becomes technically, financially and environmentally possible to extract these resources, it will have major consequences. The gas hydrates are distributed quite differently between the countries in the world than the oil and gas resources. For example, Japan, one of the world’s most resource-dependent countries, has large reserves of off-shore gas hydrates. Should the Japanese find a profitable way to extract gas hydrates, it could give the country energy independence. Today, Japan is one of the world’s largest importers of LNG, mainly imported from the unstable Middle East.

There may also be technological changes in other forms of energy, such as new types of nuclear power, solar power or wave power. The price of wind power and solar power has already fallen more than many players expected, and major changes may occur in the future. In that case, it is also possible that the value of both conventional and unconventional oil and gas will be quite different and much lower than it is today. On the other hand, trends we see today may stop and expected innovations may not materialize. The energy sector is always dynamic, unpredictable and exciting.

Shale gas extraction 3