Shale gas energy challenges

January 15, 2014

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

The arrival of cheap natural gas has adversely affected some plans to expand electrical production from renewable sources and undermines efforts to cut energy consumption in buildings.

The promise of cheap natural gas far into the future appears dubious from a historical perspective. Its prices and availability have varied substantially over the years.

The claim of a 100-year supply of natural gas is dependent on its rate of consumption. Until the 1970s, we were energy independent, but those supplies were consumed to maximize short-term profits while failing to address concerns over conservation, efficiency, renewable energy, energy security and future needs. Is the same process about to be repeated?

At the federal level, a debate has broken out over the extent to which we should be exporting natural gas, as it could increase the cost of both natural gas and electricity while increasing the production of natural gas from fracking.

The U.S. Department of Energy has declared that exporting natural gas is in the public interest, and it is up to project opponents to demonstrate to the agency that it is not. The exports add to the gross domestic product and support our global political interests.

To export natural gas, it is first liquefied to reduce its volume. It is an expensive and energy-intensive process that adds about 15 percent to its price. Shipping costs add to price, depending on the distance it is shipped. Even with the added costs, exporting is profitable.

Seventy percent of the exports would come from new production from fracking, increasing methane and carbon dioxide releases while intensifying adverse environmental and health impacts. The remaining 30 percent of gas would be diverted from existing U.S. consumption.

Using low-priced natural gas has benefited chemical, fertilizer, steel and paper manufacturers and the electric power industry while expanding job opportunities within the country.

Eastern states import natural gas from other countries and would benefit from a regional pipeline system built to serve their energy needs from U.S. supplies. Increased natural gas consumption is integral to New York City’s plans to reduce air pollution from oil heating systems.

A study sponsored by Dow Chemical suggests natural gas prices could rise as much as much 41 percent by 2035 based on prices projected for 2020. Studies by export advocates project 20 percent lower prices by 2035. Unlimited exports are viewed by advocates as providing the greatest economic benefits because of the higher prices available in international markets.

Under some scenarios of a renewable energy future, natural gas serves to supplement the intermittent output of renewable sources until an adequate storage system is fully developed.

Beyond the question of whether it is in our best national economic interest to consume our energy supplies within the United States or ship them to international markets is whether increased consumption of fossil fuels in any form should be dramatically expanded when faced with the anticipated global impacts of climate change.

Perhaps a sign of the future is that a Minnesota judge ruled in favor of the installation of 20 large solar arrays over the installation of new natural gas generators by Xcel Energy.

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-mailsonia@essex1.com.

From the Jan. 15-21, 2014, issue

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