Natural gas--the next fossil fuel shortage?
Oil fueled the 20th century. Coal energized the 19th century. Since oil seems to be peaking, what will be the primary energy source for the 21st century? Natural gas, nuclear energy, and hydrogen are the main contenders. Each has certain advantages and significant problems.
Many conservationists look to wind and solar. But solar and wind together cannot supply the massive amount of energy that humanity already demands. An expanded global population that is becoming more industrialized, especially in China and India, will require even more energy to feed its growing consumption.
Hydrogen is not a source of energy but a carrier. Hydrogen takes considerable energy, including from natural gas, to produce. Nuclear is risky and unpopular after the Chernobyl and Three Mille Island accidents. Some assert that we must return more to coal, the greatest source of air pollution and a primary cause of global warming. Natural gas is the energy source many see to replace peaking oil.
“Peak oil” is the buzz phrase in energy circles these days. It means the time at which our petroleum supply reaches its mid-point. Oil will continue to flow, but it will be harder to extract and more expensive. A growing bipartisan chorus now admits to an imminent peak. It includes energy investment banker Matthew Simmons, oil tycoon T. Boone Pickens in Business Week, Republican Rep. Roscoe Bartlett in four speeches before Congress, and Jan Lundberg, previously publisher of the Lundberg Letter, know as “the bible of the oil industry.” At least a dozen books documenting peak oil have recently been published.
The US Energy Department funded a report released and suppressed this year, the Hirsch Report, entitled “Peaking of World Oil Production: Impacts, Mitigation, and Risk Management.” It admits to peak oil, that “the world has never faced a problem like this,” and recommends “intervention by governments.”
Such “intervention” was practiced on June 23 at a simulation. The National Commission on Energy Policy and Securing America’s Future Energy hosted a simulated oil meltdown attended by prominent current and former government officials, including two former CIA directors, reported by Knight Ridder newspapers.
Peak oil is finally being taken seriously by some oil experts, policy makers, ordinary people, and even the mainstream media. Now we could benefit by educating ourselves about natural gas as potentially the primary energy replacement for oil, while the global gas market is still in its infancy. The demand for natural gas is rising sharply and its market is being globalized to supply that demand.
Like oil, natural gas is a non-renewable fossil fuel extracted from the ground. But since we do not have to pump natural gas, it is easy to take for granted. It arrives silently through pipes to heat over half the homes in the United States and generate over 20% of our electricity. Natural gas is invisible, colorless, and odorless.
Natural gas is used to make plastics, chemicals, pharmaceuticals, fabric for clothing and packaging, including plastic bags. Some 90% of chemical nitrogenous fertilizer used in America is made from natural gas, which has become indispensable to agribusiness. Natural gas is used to refine oil and most hydrogen is made from natural gas. Natural gas may be invisible, but it is essential to industrial society.
Natural gas appears to be a good replacement for oil. It comes out of the ground easily. It burns cleaner than other fossil fuels, though it does release carbon dioxide, the major greenhouse gas that causes global warming. Whereas a typical barrel of crude oil costs around $60 on the world market today and is rising, the energy equivalent of natural gas is less expensive. Delivered from a Middle Eastern country, it would probably cost $20 to $25.
Natural gas is a non-renewable fossil fuel. Its largest reserves are in Qatar, Iran, Russia, Angola, Yemen, and Algeria. These reserves are far from the American market and getting natural gas to the US is difficult. 13 gas-rich nations have formed the Gas Exporting Countries Forum. Still in its infancy, the group met in April and established an office in tiny Qatar. The US currently gets most of its gas from the Gulf States and the Rocky Mountains. But Canada imports two-thirds of its gas to the US, about which Canadians are increasingly unhappy.
Unlike oil, natural gas is difficult to transport over long distances. It requires terminals to receive gas tankers. There are currently only five terminals in the US that receive LNG (liquefied natural gas). Imports to those terminals soared 29 percent last year; experts predict that they will continue to increase rapidly.
Natural gas is explosive. Transport vehicles and terminals can have catastrophic explosions and are vulnerable targets to attacks. People living in towns near where companies want to build terminals tend to oppose them. Resistance has been strong in California and elsewhere to building LNG terminals. The last ones were built in the l960s and l970s, with the exception of the first new one is nearly 30 years finished this year. A small Houston company, Excelerate Energy, built it off the coast of Louisiana, near Cameron.
Three signs of the rising importance of natural gas are a June 15 New York Times article, a June 20 Forbes article on Cheniere Energy and its chairman Charif Souki building three new LNG terminals, and the recent authoritative book “High Noon for Natural Gas: The New Energy Crisis” by Julian Darley, a British researcher and journalist living in Canada (www.globalpublicmedia.com).
“Energy companies want to construct more than 40 LNG terminals at a cost of $500 million to $1 billion each,” according to New York Times reporter Simon Romero. “Natural gas is expected to overtake coal and rival oil as the leading fossil fuel in the world by 2025. The rising consumption of natural gas comes with a significant cost, however. The price of natural gas has doubled in the United States in the last five years,” Romero continues.
“Ninety-nine percent of the natural gas used in the US is extracted in North America,” Richard Heinberg (www.museletter.com) writes in “The Party’s Over: Oil, War, and the Fate of Industrial Societies.” Though currently more plentiful than oil and less polluting, “natural gas can be devilishly difficult and expensive to ship,” according to Romero. The sources of natural gas have tended to be local or regional, rather than global. But as the demand grows, the energy hogs, such as the United States, must look beyond their borders and their neighbors.
Enter Charif Souki, 52, who left his home in Lebanon in 1971 for the US and became an investment banker. For years he had a difficult time raising money for LNG terminals. He has now raised the money necessary to build three terminals on the Gulf of Mexico coast at a cost of $800 million each. Construction in Sabine Pass, La., began in March of this year and is scheduled to be complete for the winter of 2007.
“The energy industry is committing upwards of $50 billion on new, LNG infrastructure projects in Russian, Qatar, and Australia,” Forbes magazine reports. “Shippers have ordered 112 LNG tankers, enough to boost the global fleet 60%. In Washington the Federal Energy Regulatory Commission is grappling with 38-plus new terminal proposals. Only four have been approved so far: Cheniere’s three and one by Sempra Energy.”
The positive spin on natural gas as the preferred replacement for oil given by Forbes and the New York Times is contradicted by Julian Darley’s “High Noon” book. He borrows the title’s image from the cowboy movie where Gary Cooper “plays a man unwilling to run away from a nasty set of problems.” Darley writes that “the United States and Canada are entering a natural gas crisis,” which most people are unaware of or seek to deny.
In “The Long Emergency: Surviving the Converging Catastrophes of the 21st Century,” James Howard Kunstler echoes Darley, “North America faces a chronic and accelerating natural gas shortage that sooner or later will be described as a crisis.” Heinberg agrees in his introduction to Darley’s book, noting that “the overall picture of gas’s future is worrisome.” He notes that the 20th century “has seen numerous oil wars” and “with increasing international trade and diminishing supplies of natural gas, we may begin to see gas wars as well.”
In its rush to replace oil—rather than change our energy usage patterns— the US is poised to invest hundreds of billions of dollars to enter the global LNG market. “Everyone wants natural gas,” the sub-head to the Forbes article notes. “But no one wants an LNG terminal nearby,” it adds, revealing a key problem of the globalization of the natural gas market.
Darley warns that taking this path could compound the predicted disasters that peak oil may soon cause. “The United States will find the world of liquefied natural gas potentially more troubling than that of oil,” Darley contends. “Expansion into LNG (with its main production sources in politically anti-American states) threatens an even greater likelihood of endless war, covert disruption and forced regime change.”
Darley concludes his book with his longest chapter about actions that can be taken to avoid potential problems. He warns against making the same mistakes that America made by becoming addicted to oil and reliant upon imports. He advocates that we develop “energy literacy,” which could lead to humanity reducing its energy use. He suggests that we “counter globalization” and calls for “a post-carbon world” and “global relocalization.” By “relocalization” he means making towns and cities more walkable and self-sufficient.
(Dr. Shepherd Bliss, email@example.com, teaches at the University of Hawai’i at Hilo, writes for the Hawai’i Island Journal, and has contributed to 18 books.)
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