The gas and shale gas revolution, its prospects for continuation in the USA and possible replication elsewhere were the topics covered by Chatham House, Senior Research Fellow (Energy), Professor Paul Stevens at a CEDA event in Queensland.
Despite the advantages gas holds as an energy source, until the 1990s the industry was highly constrained meaning its share as a primary energy source had hardly changed since 1967, Professor Stevens said.
The constraints included:
Gas share of primary energy went from about 20 to 40 per cent in the UK between 1990 and 2009, due to these constraints being removed, he said.
On shale gas, Professor Stevens highlighted that: "These are not new technologies the first well was fracked in 1947 in the United States," he said.
This technology has been a long time coming; the US government spent billions of dollars on research and development which was then made available to industry, he said
Estimates put shale gas at 25 per cent of US production in 2010 and estimates suggest 50 per cent by the 2030s.
The consequences from the shale gas revolution in the US so far include:
Professor Stevens said that the industry can continue in the US but "there is significant uncertainty over whether the shale gas industry can be replicated in Europe."
He said its ability to be replicated is hindered by:
On the industry uncertainty, Professor Stevens warned that if (as predicted) gas demand increases, we want to ensure that there won't be serious supply constraints five to 10 years down the track because we didn't invest now and account for project lead times.
In addition, Professor Stevens warned it would be extremely dangerous to hold off on renewable investment and developments (which he acknowledged are expensive) based on the argument that ample cheap gas is sufficient for a transition to a lower carbon economy.
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