Is compressed natural gas a green bargain?

February 22, 2012

Wells for the production of tight gas in the United States. According to a European Parliament report: “In case of tight gas production, the wells are surface well pads with up to six wells per pad. The spacing is tighter than in the case of the Barnett shale because most of the tight gas wells are drilled vertically.” (Photo by EcoFlight courtesy of SkyTruth (www.skytruth.org))

By Drs. Robert & Sonia Vogl
President and Vice President, Illinois Renewable Energy Association

Converting vehicle fleets to compressed natural gas is a way to save fuel costs while escaping wide swings in the price of gasoline and diesel fuel. It reduces reliance on oil imports and, as a cleaner fuel, will cut local air pollution.

The price of compressed natural gas has been relatively stable and has been at least 30 percent below that of diesel fuel. Assuming the prices remain low, the savings remain favorable.

Compressed natural gas vehicles are costly. A Chevrolet Express costs $14,000 more than a conventionally-powered model, so low fuel prices are essential to recovering the higher initial costs.

Wide price swings have occurred with natural gas. In 2008, prices fell from a peak of $10.82 per mcf to an average of $5.87 per mcf by December.

The Energy Information Administration (EIA) expects prices to stay below $5 per mcf until 2022. But energy consultant Arthur Berman believes the long-term cheap natural gas notion may be an illusion. Some firms have stopped drilling for natural gas as profit margins are too low.

A recent Department of Energy report indicates that Marcellus shale, the largest shale formation in the country,will provide only six years of our energy demand instead of the 17 years projected earlier.

Without more accurate estimates of supplies, some question the wisdom of the Department of Energy’s granting eight pending permits to export shale gas this past October. A recent EIA report states that exporting shale gas could increase domestic gas prices 54 percent by 2018.

Given the exclusion of shale gas mining from EPA regulations, current price signals underestimate its true costs.

A European Parliament study addressed the impacts of shale gas and shale oil extraction on the environment and on human health. The study raises the question of whether the benefits of shale extraction using existing technology offset the environmental risks involved. It relied on data from North America because of our extensive experience with fracking.

Marcellus shale is widespread, and its development in New York has raised the possibility that it could degrade the water supply for the city of New York. Large areas of the landscape are consumed to accommodate rig pads, compressors, chemicals, water and containers for waste water and road access.

Air and noise pollution come from combustion engines and truck operations. Water contamination occurs from the chemicals used in the fracking, along with radioactive releases from underground. Earthquakes are linked to the fracking process and the injection of waste water into the ground.

The escape of natural gas during fracking releases global warming gases at levels close to using coal. The European Union report suggests installing a solar power plant on a 3-acre site used for a fracking well would produce electricity for twice as long as the gas. After 20 years, a new solar plant could be installed on the same site.

If shale gas is a bubble, as suggested by Bloomberg and a New York Times article, the promised savings could be short-lived. While green locally, it is not green at the point of extraction.

Drs. Robert and Sonia Vogl are founders and officers of the Illinois Renewable Energy Association (IREA) and coordinate the annual Renewable Energy and Sustainable Lifestyle Fair. E-mail sonia@essex1.com.

From the Feb. 22-28, 2012, issue

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