bottleneck analysis

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Shale On You

Berkeley (Doe Library)

The big player in the next decade’s energy markets will be shale gas.

As peak oil is being recognized as real by more and more giant companies – notwithstanding the broad and wide scientific consensus ever since the Hubbert’s curve – and as tensions in the Middle East is growing, the whole industry is searching for instructions from the market’s compass.

Renewable energy could be the right thing. Backed by millions, sustained by governments’ subsidies, acceptable to the many that are growing acquaintance of the need for sustainable energy due to pocket money concerns and climate change. Renewable energy has an already established complex of companies, think-tanks, and educational paths that could easily be integrated with the seasoned oil and gas pool of experts and structures. Engineers and policymakers, scientists and economists, all together to rid the world from polluting hydrocarbons and to finally project the globe in the new millennium.

When I woke up from my dream, I saw the world energy majors in a corner, shivering. The Deepwater Horizon incident of 2010 was just fading away, when on March 11, 2011 the earthquake in Japan severely damaged the nuclear power plant (NPP) in Fukushima. Right after Obama had called for the construction of new NPPs in the U.S. territory. Just as the BP oil spill happened a couple of weeks after “Green” Barack had signed the permission for more offshore exploration projects in the East Coast.

The energy majors were shivering for one main reason (while fearing for the next ominous action by Obama): There was nowhere to go.

The nuclear renaissance had been killed by a Japanese tsunami. All of Europe was renouncing to their nuclear programs and discontent was rising in the U.S. In my short life, I’ve lived through Chernobyl and Fukushima. Slightly older people were born before (or even remember) Three Mile Island. And thanks to the breakup of the Soviet Union – and the IAEA regulations – we spared ourselves a couple more accidents.

Meanwhile in the East, China was going back to coal. Beijing has big reserves and feels no constraints (be it Kyoto or Copenhagen) should hinder their cap-com society’s development while at the summit of their growth curve. Both China and India have serious nuclear and coal programs that will not be stopped by societal protests.

“How far North can we go?” is the question that the governments facing the Arctic are asking exploration companies. The drought is such that, without any respect for the environment, international borders, or economic feasibility, Shell, BP, Rosneft, Chevron, and Statoil are all scrambling for the cold deep waters.

Chevron is even trying biofuels from algae! Shell is undergoing futuristic projects in Qatar. In 2010 Gazprom’s energy-related assets only represented a minority in the whole budget. Canada is squeezing tar sands in order to get some drops of oil from them, in a highly environmentally-hazardous process (which is no surprise in a country where Asbestos is the name of a city).

“Hey, how about… no, nothing. No, it’s a foolish idea. OK, I’ll just drop it on the table, and then you judge it.” These must have been the words of the energy genius that came up with the solution for the next decade (or until someone decides to put a ban on it). Utilizing high-pressure water, chemicals, and machinery in order to break rocks (shales) underground, i.e. “fracking”, to then capture the gas emissions of this process would be met with laughter in a kindergarden classroom. Instead, these giants will pursue this idea and “frack” the land under our feet, in search for an amount of gas that is lower than what is flared after oil extraction. Poisoning water basins with chemicals and air with methane that nature had chosen to keep enclosed within porous rocks.

Shale gas is a growing reality in the U.S. energy industry. Fracking is allowed in 30 states. Europe does not have a regulatory framework for rationing and monitoring this practice. Without a severe regulation, we will walk over land-crumbs in a few decades.

Ah, to the energy wise men that orchestrated this: “Shame – not shale – on you!

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