Sometimes holiday periods can interfere with keeping up with all of the news and opinions issued about an important topic like energy. On December 20. 2010, the National Journal asked 16 experts to provide commentary on the following question Is natural gas the answer? Unfortunately for the United States, there are apparently some influential people who believe that the answer is yes. If read with a proper understanding of the institutional biases of the people who wrote them, the views are not all that surprising, but the scary thing is that some of these views are making their way into the main stream of government policy.

Here is one example quote that gives me grave concerns about the kind of irrational exuberance that often occurs just before a bubble pops:

Does natural gas represent the answer to all questions surrounding America’s energy future? As a rifle-shot reply, probably not. But the very fact that a question like that is being asked in a forum like this suggests the landscape has changed dramatically, and for the better, since the days of antiquity (circa 2007) when everyone was certain we were running out of the stuff.

Thanks to the combination of two proven technologies (hydraulic fracturing and horizontal drilling) and the application of those technologies to tight formations deep underground, those folks look pretty silly today. According to an assessment released last year by the Potential Gas Committee, the United States could have as much as 3.22 quadrillion cubic feet of natural gas potential within its borders – as much natural gas as Saudi Arabia has oil from an energy content perspective. Times two. EIA’s updated 2011 annual energy outlook paints a similar picture. Last year, the AEO suggested a future haul for shale of 347 trillion cubic feet. Twelve months later, that same report updated its shale estimates to 827 trillion cubic feet. But hey, what’s 500 trillion cubic feet among friends?

David Holt
President, Consumer Energy Alliance

I recently sent an email to the Energy Information Agency asking for an explanation of the assumptions and models that they use in developing the Annual Energy Outlook. Here is an excerpt from the reply that I received from a senior energy analyst with the EIA.

Namely, the reference case in our AEO projections is essentially based on current laws, regulations, and policies. That is, our reference case projects what will happen over the next 25 years IF NOTHING CHANGES. We assume that there are no new laws made relating to energy, no new Climate Change legislation, no new carbon controls, no new environmental policies on shale gas exploitation, etc. for the next 25 years. Can you imagine a situation in which Congress makes no new laws for the next 25 years? I can't. Here at EIA, we all know that something is likely to be done with Climate Change and carbon controls. So our reference case is not really a forecast, so to speak. Rather, it’s a projection of what the USA will look like if no new laws and policies are made.

In other words, if you think that 3.22 quadrillion cubic feet is an incomprehensibly large number, you should understand a couple of things. First of all, annual US consumption of natural gas is already running at about 0.023 quadrillion (23 trillion) cubic feet per year. Even if all of the 3.22 quadrillion cubic feet that makes David Holt so giddy were accessible and even if we did NOT increase our rate of consumption, that resource would last only 140 years. What might happen if utilities decide that doubling their gas consumption is the right way to keep the lights on with increased restrictions on coal combustion? What will happen as that 140 years of resources shrinks rapidly with increasing annual consumption? Unrealistic romantics dream of a future powered just by the wind, water, and sun, but no one anywhere has figured out how to make any of those sources perform on command.

As the EIA analyst points out, the 140 year shale gas resource is accessible ONLY if there are NO additional restrictions put on hydraulic fracturing - I find that difficult to imagine given the very real negative impacts that the continuous drilling requires.

In a contrasting story, a group of Chinese scientists and engineers working at number 404 factory in the Gobi Desert announced on Monday, January 3, 2010 that they had proven to themselves that they had mastered used nuclear fuel recycling technology. By investing in continued development of that technology, they expect that they will be able to extract 60 times as much energy out of every kilogram of uranium as they do today.

That announcement was not about some kind of miraculous scientific breakthrough; it was about learning how to do something that many others have known how to do for several decades. The big difference is that the Chinese fully intend to use and improve their techniques to make what some observers have called a 50-70 year supply of uranium last as long as 3000-4200 years. That is an achievement that comes very close to qualifying as a response to a follow to the question that the National Journal asked.

If the answer to the National Journal's question "Is natural gas the answer?" is a resounding No - as it is for me - then the next question that should follow is "Then what is?" My response is that the answer is uranium and thorium, which produce massive quantities of controllable heat that can be used for human needs and wants. The already discovered resource will last for thousands of years (not barely 100) and it will provide that energy without any emissions (not half as many units of CO2 per unit of heat as coal or oil.)