How long can the fracking spending spree last?
— Houston Chronicle headline, Sept 14, 2018.
The answer to the Chronicle’s question is: for as long as investors have money to burn. Justin Mikulka, writing Dec 18, 2018, for Desmogblog, puts it this way: “Fracking in 2018 was another year pretending to make money. . . . Whether fracking companies are profitable or not doesn’t really matter to Wall Street executives who are getting rich making the loans that the fracking industry struggles to repay.”
Yet the industry is currently pumping more fracked gas than ever before. The market is swamped and prices are at or below break even (see “Natural Gas Prices Fall Below Zero In Texas” – Oilprice.com, Nov 28, 2018). And now there’s a push to liquify as much of the stuff as possible for shipment overseas to anyone who’ll buy it.
Speaking at a July 11, 2019 hearing of the U.S. Senate Committee on Energy and Natural Resources on “The Important Role of LNG in Evolving Global Markets”, Nikos Tsafos, Senior Fellow, Energy and National Security Program Center for Strategic and International Studies (CSIS), said:
There is an oversupply of LNG on the market, leading to historically low prices in Europe and Asia . . . Despite [these] historically low prices today, companies are betting billions to enable the next wave of LNG supply—and this wave will be far bigger, more diverse, and perhaps more politically complicated than earlier waves. . . . [There are an] unprecedented number of proposed LNG supply projects that might reasonably start construction over the next two year.
Since the U.S. Senate is controlled by Republicans, only people supportive of the oil and gas industry and its LNG subset were invited to give evidence at the Senate Energy Committee hearing. The talk was all about how best to promote the industry and take advantage of an imagined “window of opportunity” to strengthen its global competitiveness. There was no mention of global warming or the need to restrain the production of fossil fuels. This is how Steven E. Winberg, Assistant Secretary for Fossil Energy U.S. Department of Energy, summarized his testimony:
“Natural Gas has transformed our Nation and the world for the better. The increased use and production of natural gas has grown our economy, created countless American jobs, and made our air cleaner. Further, increasing exports of domestically produced natural gas to 36 countries around the world has given our allies a stable, reliable and secure source of clean energy.”
Here’s what’s wrong with that picture: Hydraulic fracking is a filthy business, it poisons the water table, adds greenhouse gasses to the atmosphere, and far from making the world better, it makes it bad (see below for specifics on just how bad); The people employed in the industry would be far more constructively employed in building the nation’s renewable energy economy; Natural Gas is not a stable, reliable, or secure source of energy, let alone a clean one — gas deposits are bound to become stranded due to the superior economics of renewables. And considering the political and social pressures surrounding climate change, “our allies” would be well advised not to get hooked on it.
Renewables are displacing fossil fuels. During this transition, the U.S. has more than enough natural gas to satisfy its current domestic needs. That’s what energy security means. The push to export LNG is not about energy security, or even about making money, it’s about building expensive infrastructure (pipelines, liquefaction plants, terminal facilities, etc) to keep the Oil & Gas Industry in business. Pitching the benefits of investing in this LNG boondoggle is Charlie Riedl, Executive Director of the Center for Liquefied Natural Gas. Here’s part of his testimony before the above mentioned Senate hearing on LNG markets.
“The U.S. is now home to four LNG export terminals in operation, six projects under construction, and seven projects that are permitted and awaiting Final Investment Decisions. There are another fourteen projects in the [Federal Energy Regulatory Commission] FERC queue. Each of these projects individually represents billions of dollars of investment in America’s energy future. . . . Technological breakthroughs in the oil and natural gas industry have unleashed an energy renaissance, establishing the United States as the world’s largest natural gas producer – and domestic production continues to grow. We have enough natural gas to supply affordable energy domestically for at least 100 years with current technology, as well as to significantly increase U.S. participation in the global market for LNG.” (my underlines)
Mr. Riedl paints a picture of a world living indefinitely on fossil fuels, a world much to the liking of the Oil & Gas Industry. He does not mention the impact of global warming or the Paris Climate Accord which calls for a sharp reduction in the total use of fossil fuels. The International Energy Agency’s ‘Sustainable Development’ estimate of World Energy Demand to 2040, shows no increase in natural gas consumption beyond 2020 (see post of July 6, 2019, titled Oil & Gas Industry aims to make global warming even warmer).
Witnesses to the Senate hearing, including Mr. Riedl, refer to natural gas as a clean fuel. It isn’t. Here’s how it compares to other fuels in terms of CO2 emissions:
Lbs of CO2 emitted per million BTU of energy:
Coal (anthracite) – 229 Lbs
Gasoline – 157 Lbs
Natural Gas – 117 Lbs
Solar (wind or PV’s) – zero emissions
During its production cycle, natural gas also releases methane, a greenhouse gas 80 times as potent as CO2. Last month, the Trump Administration announced plans to weaken existing rules designed to curb the release of methane. That’s not all. Natural gas is routinely flared (burned off) or vented when emitted from wells drilled primarily for oil. The following table from Bloomberg News June 12, 2019, shows the amount of gas flared by certain companies operating in the Permian Basin oil field of Texas:
An article in Bloomberg Businessweek Sept. 10, 2019, by Ryan Collins and Rachel Adams-Heard, contains the following passage: “Gas flaring globally emits more than 350 million tons of carbon dioxide equivalent in a year, according to the World Bank. . . . In the U.S., flaring accounts for an estimated 9% of the greenhouse gas emissions of the oil and gas industry. In addition, the practice spews particulate matter, soot and toxins into the air that have been shown to be hazardous to humans.”
Fracking natural gas is bad for the climate, bad for the country, bad for the world. The current scramble to increase — at any cost — LNG production and shipping, is nothing more than a hostile and antisocial scheme by the Oil & Gas Industry to prolong its own life by delaying an orderly transition to renewable energy. It’s an industry scheme that’s being eagerly supported by the Oil & Gas-dependent Republicans in Congress and their like-minded buddies in the Trump Administration.