A Great Energy Solution

What is the reaction to a cheap and plentiful source of energy? Is the world raising a cheer, are we celebrating that one of the great inputs into making our lives might be made cheaper and enhance everyone’s prosperity. Strangely enough, no. The source of energy is natural gas, and the process of fracking is a relatively new method to tap into huge new sources of natural gas. If you are unfamiliar with fracking, this is a neat summary from Wikipedia:

Hydraulic fracturing is the widening of fractures in a rock layer caused by the high-pressure injection of chemicals with water. Hydraulic fractures form naturally, as in the case of veins or dikes, and industrial fracturing widens or creates fractures to speed up the migration of gas and petroleum from source rocks to reservoir rocks. This process is used to release petroleum, natural gas (including shale gas, tight gas and coal seam gas), or other substances for extraction, via a technique called induced hydraulic fracturing, often shortened to fracking[a] or hydrofracking.[1]

I thought I would cover fracking as a topic as I received an interesting comment from ‘Andy’ on a recent post on wind-energy, which linked to an article as follows:

A $1.6 billion wind farm – the country’s largest – has been given the go-ahead to be built in Wairarapa.

Genesis Energy’s Castle Hill Wind Farm will dot hillsides throughout northern Wairarapa with up to 286 turbines and provide power for up to 370,000 homes.

It is all very dispiriting, as it means that electricity in New Zealand will, as time progresses, become ever more expensive. Wind-energy is just useless, wasteful and expensive, and we will eventually see this in the cost of our electricity bills, and the closure of energy intensive businesses that can move overseas. In consideration of the size of the population, New Zealand is blessed with commodities, including the possibility of large reserves of oil. However, to add to this mix, there is the possibility of major sources of natural gas becoming available, if only fracking continues to be allowed to be developed in New Zealand.

Up to now, I have been cautious about commenting on this new source of energy, as there have been some controversies over the use of Fracking. In particular, questions have been raised about the possibility for fracking to cause seismic disturbances and groundwater contamination. However, as time has moved forwards, it seems that, though not perfect, fracking is a reasonably safe and cheap way to access energy. However, this portrayal does not match up with that given by the ‘green’ lobby, who would rather see useless windmills built at huge cost to the economy and to individuals when they pay their electric bills.

So what of the potential. Well, surprisingly enough (or perhaps not), it was very hard to find any articles that actually detailed the potential reserves of shale gas in New Zealand, with nearly all of the articles focusing on the controversy surrounding the extraction of the gas. I eventually dug up a very brief article that says the following with regard to reserves:

Amidst opposition from local environmentalists, permits have been approved for hydraulic fracturing on 4,406,400ha of New Zealand land and another 3,065,500ha is up for consideration, Rigzone reports. L&M Energy believes its plays on the South Island may contain more than 5 trillion cubic feet of gas. Could New Zealand join Australia as a potential shale gas supplier to the south east hemisphere?

The really curious thing about my search was how hard it was to find this information, and the lack of discussion of the potential benefits for New Zealand’s economy in general, or the benefits of cheap energy for both individuals and business. Instead, the major focus is on the environmental risks. The chart below shows the most obvious benefits the shale gas revolution has brought to the U.S.

Perhaps it is stating the mindlessly obvious, but when massive new sources of a new commodity become available, it becomes incredibly cheap. In this case, it is energy that is becoming much, much cheaper, and the result is that this is a boon for any economy. Instead of a celebration for the potential for cheap energy, we instead have hand-wringing about the ‘risks’. As such, it is worth looking at the risks, and I will hand over to Matt Ridley for his commentary on a recent (very ‘green’ oriented) UK government report:

It is now official: drilling for shale gas by fracturing rock with water may rattle the odd teacup, but is highly unlikely to cause damaging earthquakes. That much has been obvious to anybody who has followed the development of the shale gas industry in America over the past ten years. More than 25,000 wells drilled have caused a handful of micro-seismic events that can barely be felt.

The two rumbles that resulted from drilling a well near Blackpool last year were tiny. To call a two-magnitude tremor an earthquake is a bit like calling a hazelnut lunch. Such tremors happen naturally more than 15 times a year but go unnoticed and they are a common consequence of many other forms of underground work such as coalmining and geothermal drilling.

The use of the word ‘earthquake’ is one which sounds very scary, but the disturbances caused by Fracking are minimal, and when we compare this to the potential and rarely mentioned benefits….

As for the contamination of groundwater, perhaps the most infamous scare came out of the US:

Yet, a small cabal of special interest groups opposes the resource and, consequently, has sought publicity to spread their dubious beliefs. Case in point: a scene from the upcoming documentary Gasland, which features a man lighting his faucet water on fire and making the ridiculous claim that natural gas drilling is responsible for the incident. The clip, though attention-getting, is wildly inaccurate and irresponsible.

To begin with, the vertical depth separation between drinking water aquifers and reservoir targets for gas production is several thousand feet of impermeable rock. Any interchange between the two, if it were possible, would have happened already in geologic time, measured in tens of millions of years, not in recent history.

The only way that drilling could have caused communication is through the vertical well bore itself which is cemented and cased. Millions of wells have already been drilled throughout the world, of which only a handful have experienced accidental leaks into water aquifers– a percentage smaller than a person’s chances of being struck by lightning in fact. In the rare instances of a leak to the surface, energy companies alert and voluntarily evacuate residents while the safety of the site is evaluated.

This has not prevented the Gasland story from being repeated in New Zealand, as in this story from the New Zealand Listener:

The documentary movie Gasland popularised these concerns with graphic images of residents holding cigarette lighters up to their running taps, causing the water to explode in a ball of flame. Many recounted stories of illness in their households, and sick and dying animals. Some said their water had turned brown and smelt foul, and they were forced to truck in water after their wells were ruined.

Please do not get me wrong. Any commodity extraction process has potential risks, but these risks have to be considered in relation to the benefits. Cheap and plentiful energy is a major benefit, but the risks involved in fracking are vanishingly small. The problem is that, as in this New Zealand Herald article on a government enquiry into fracking, there is a lack of clarity on what rewards and risks are involved (my emphasis added):

In an energy-hungry world, there is a clear case for the practice if it embodies no environmental threat, or risks that can be comfortably contained. Much of the evidence overseas points to this not having been the case when regulation of the exploration industry was weak and fracking was done incorrectly. This is the area where Dr Wright’s investigation should shed most light.

The interesting point is that of ‘no environmental threat’, albeit followed by a less strong position. All resource extraction has potential risks, but the entire world relies upon resource extraction. Whatever the resource, there are risks to the environment. Even the wind-farms given hallowed status by ‘greens’ are responsible for huge numbers of bird deaths, not to mention the poor people who live near them who are driven mad by the noise, or the occasional dangerous collapses of individual turbines, or the concreting over of land etc.

The most worrying aspect however, is that the anti-fracking movement is led by Greens, as well as ‘renewable’ energy lobbyists. Again, I hand over to Matt Ridley:

Most of the opposition, though, has come from those with a vested interest in renewable energy, including the big environmental pressure groups, which are alarmed that the rich subsidies paid to wind, biomass and solar may be under threat if gas gets too cheap and cuts carbon emissions too effectively. Their entire rationale for subsidy, parroted by their dutiful poodle Chris Huhne, when Energy Secretary, is that gas would get more expensive until even wind and solar looked cheap. That was wishful thinking.

Notwithstanding his use of ‘carbon emissions’ when he must surely mean carbon dioxide, he makes a good point. There are now powerful lobby groups that see fracking as a threat to their own industries. Add to this the green lobby view that anything that might improve our lives or any resource extraction is ‘bad’, and we have a toxic mix. It is a toxic mix which seems to be working, as the news about fracking seems to relentlessly focus on risks rather than rewards. This sits in stark contrast to the discussion of wind-energy, which is paraded as a universal positive, without reference to the environmental damage, or without reference to the huge costs that will be borne by all of us.

In short, sure there are some small risks, but what about the huge benefits?

Note: Apologies for a slightly clunky delivery of the post but I am pressed for time, but still wanted to get something out on the subject.

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One response to “A Great Energy Solution

  1. The wind farms in the Wairarapa will not be able to safely dispatch their electricity.
    So won’t the uninsurable wind farms, proposed and consented in the Wairarapa and which are planned to feed their power through the Turitea wind farm into the grid in Manawatu, be a boon to the country’s electricity supply? Well, not quite. The grid in the Manawatu can only cope with 450MW from the currently operating Te Apiti and Tararua wind farms. The line through Turitea will bring a further 1300MW. This means much of this intermittent electricity cannot be dispatched and if it were it would cause substation failures and blackouts. The green euphoria by the oligarchy running NZ will blow up in our faces. Transpower, which manages the grid, has no credible answer to this problem. Link
    Source http://nzwindfarms.wordpress.com/
    The documents in the above link need the widest possible circulation. NZ has been conned.

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