The word may be on the brink of a new era of cheap natural gas, made possible by hydraulic fracturing and development of a new fuel methane hydrate, according to Charles C. Mann in this month’s issue of The Atlantic Monthly. Methane hydrate is a product of organic decay trapped in ice crystals, and is found in potentially enormous quantities in the ocean’s depths. View the video for a better explanation. Click on What If We Never Run Out of Oil? to read Mann’s article, which I highly recommend.
What Mann reported is interesting and significant, and his prediction may be correct. But then again, maybe not.
“Never run out” means something different to economists from what it means to me and probably to you. In a free-market, capitalistic economy, you never run out of anything. What happens is that the scarce resource becomes increasingly more expensive, people use less of it, and eventually a substitute is found. The question is just what that substitute is—an equivalent resource, a more expensive resource or acceptance of doing without.
I long thought that the rising price of fossil fuels would result in a transition to solar, wind and other renewable sources of energy. Over time, I reasoned, the cost of nonrenewable resources are goes up, while the cost of technology goes down. Sooner or later, I believed, these two lines must cross.
I still believe that this will happen someday. but in the short run, just the opposite is happening. The petroleum industry has found ways to extract fossil fuels that never were dreamed of when King Hubbert made his predictions about peak oil. Methane hydrate may or may not emerge as an important energy source. I wouldn’t bet against it. But even if it doesn’t, hydraulic fracturing has already transformed the world market for natural gas. Melting of the polar ice cap will open the Arctic to oil exploration and development. Someday these sources, too, may peak but not anytime soon.
The question about hydraulic fracturing is how low it will last. Oil wells in Texas and Saudi Arabia produced oil for decades. How long will the hydrofracking wells produce? My guess is that their usefulness will be relatively short-lived, while leaving behind a long-term mess for local communities to clean up.
Experts quoted by Mann say that methane hydrate could provide fuel to keep our industrial civilization going for centuries and perhaps indefinitely. These predictions usually come with a footnote, which says “at current rates of use.” No matter how abundant a resource is, it will be quickly exhausted if you use it up at a steadily increasing rate. I don’t see energy use stabilizing until the world’s population stabilizes, and a majority of the world’s population are not in poverty. What is poverty? At a minimum, it is having enough to sustain life and health and, beyond that, it is whatever people think it is.
Then there is the question of global climate change. Natural gas (methane) is a clean-burning fuel, but in its natural state is a worse greenhouse gas than carbon dioxide. In theory, natural gas can be extracted in such a way that it is not released into the atmosphere. In practice, it might not be.
The more fossil fuels we burn up, the more fragile our civilization becomes. We depend on increasingly complex systems that are increasingly vulnerable to failure. I realize this every time there is a severe ice storm that causes electric power failures here in Rochester. As I sit in the dark, I wonder what I would do if the failure were universal rather than local, and lasted indefinitely rather than a few days or weeks.
Back in 1954, Harrison S. Brown wrote in The Challenge of Man’s Future about how our industrialization was made possible by the availability of coal and oil, and of metal ores that were easy to process. If for some reason industrial civilization should collapse, it would not be possible to rebuild it using the methods by which the original industrial civilization was created. The resources would not be there. That is still true, and the more nonrenewable resources we use up, the more true it becomes.
Natural gas is not a universal fuel. It can be substituted for coal, oil and nuclear power to generate electricity, and it can be substituted for oil for heating buildings. But planes, trains and automobiles can’t run on natural gas. Maybe in the future we will ride in electric cars and electric trains, but we don’t fly in electric airplanes.
The military supremacy of the United States rests on its Navy and Air Force and, while we have a nuclear Navy, the Air Force still runs on aviation fuel. So long as the United States government seeks global military power, the United States will need access to oil. When access to oil is no longer possible, the U.S. government will not wield global military power.
Availability of cheap natural gas has not affected the price of oil. Here are two charts. The first shows world oil prices adjusted for inflation through 2011; the second shows oil prices through 2013 not adjusted for inflation.
I don’t mean to be completely negative about the development of cheaper natural gas. I realize the benefit every time I pay my Rochester Gas and Electric bill. I just want to point out that this does not solve our long-range energy problems.
Matthew Yglesias, whom I slammed for his views on international labor standards, had a sensible post on this subject. Click on Natural resource scarcity is real: Peak oil still matters to read it. And a hat tip to him for the bottom chart.
Tags: Cheap Natural Gas, Fossil Fuels, Hydrofracking, Methane Hydrate, Natural gas, Nonrenewable Energy, Renewable Energy
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