‘Golden Age’ of natural gas depends on protecting environment, IEA says

Natural gas could be entering a golden age – but only if unconventional sources like shale gas and coalbed methane can be extracted in an environmentally acceptable manner, according to a new report from the International Energy Agency (IEA).

The report, ‘Golden Rules for a Golden Age of Gas,’ was released by IEA on May 29.

Producing natural gas from unconventional sources holds vast potential not only in North America but also in other parts of the world, said IEA Executive Director Maria van der Hoeven. “But if the social and environmental impacts are not addressed properly, there is a very real possibility that public opposition to drilling for shale gas and other types of unconventional gas will halt the unconventional gas revolution in its tracks,” van der Hoeven said in a news release.

“The industry must win public confidence by demonstrating exemplary performance; governments must ensure that appropriate policies and regulatory regimes are in place,” the director said.

“Advances in upstream technology have led to a surge in the production of unconventional gas in North America in recent years, holding out the prospect of further increases in production there and the emergence of a large-scale unconventional gas industry in other parts of the world, where sizeable resources are known to exist,” IEA said in the executive summary.

“Yet a bright future for unconventional gas is far from assured: Numerous hurdles need to be overcome, not least the social and environmental concerns associated with its extraction,” IEA said.

Producing unconventional gas is an intensive industrial process, generally imposing a larger environmental footprint than conventional gas extraction, IEA said. More wells are often needed and techniques such as hydraulic fracturing are usually required to boost the flow of gas from the well.

The scale of development can have major implications for local communities, land use and water resources, IEA said in the report. It added that serious hazards, including the potential for air pollution and for contamination of surface and groundwater, must be successfully addressed.

The technology and know-how exist for unconventional gas to be produced without big environmental impacts, the report said. But “a continuous drive from governments and industry” is needed to maintain public confidence, the report said.

“Although there is a range of other factors that will affect the development of unconventional gas resources, varying between different countries, our judgment is that there is a critical link between the way that governments and industry respond to these social and environmental challenges and the prospects for unconventional gas production,” IEA said.

The gas boom in the United States is already helping swing a great deal of power generation from coal to natural gas.

If handled correctly, the natural gas golden age might just be getting started, the IEA said. World production of gas, mostly from shale, could more than triple between 2010 and 2035 to 1.6 trillion cubic meters.

The United States should become a significant player in international gas markets. China could also become as a major producer, IEA said.

At their recent Camp David summit, G8 leaders welcomed and agreed to review this IEA work on potential best practices for natural gas development.

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.