If shale rocks, will renewables roll?
I’ve heard the words ‘shale gas’ and game-changer’ used in the same sentence many times over the past couple of years.
Is shale gas the silver bullet the global energy industry has been waiting for? The Chinese certainly think so, with the country’s biggest refiner Sinopec this week acquiring a chunk of prime Canadian shale land.
Sinopec has bought Calgary-based Daylight Energy specifically to get its hands on - or its feet on top of - 130,000 acres of shale block in Alberta.
Sinopec drilled its first shale well in July and the following month its chairman Fu Chengyu stated that the company’s “future growth will mainly come from unconventional gas”. And yesterday the Chinese government revealed shale gas production targets of 6.5 billion cubic metres by 2015 and 80 billion by 2020.
Will shale gas be the answer to soaring energy costs, high carbon emissions and security of supply concerns? Its potential has long been known – the only problem was having the technology to get to it.
If it is proven to be safe and reliable, then around the world it could cut energy bills, address fuel poverty and make manufacturing more competitive.
But if shale does boom, will renewables bust? Why should investors opt for offshore wind, which has huge start-up costs and intermittency issues, when there is a rich source of fuel underground? Will governments continue to subsidise renewable projects if shale offers more certain returns?
Shale undoubtedly has hurdles to overcome: drilling is expensive and there is a strong environmental case to be argued and won – this week demonstrators took the streets of Sofia to protest about a Bulgarian government drilling deal with Chevron.
But if these issues are addressed it seems shale could be a win-win… unless you’re in the renewables industry.