Shale Gas Basins Analyzed by the EIA

Earlier this month, the U.S. Energy Information Administration (EIA) released a major report assessing the potential for shale gas development in 48 basins in 32 countries around the world. (See map.) According to the report, the assessed basins, when added to previously published estimates in the United States, could contain 6,622 trillion cubic feet (Tcf) of gas contained in shale. Until recently, many shale formations were thought to contain natural gas but could not be developed economically. Now, producers in the U.S. and Canada have demonstrated that the application of horizontal drilling and hydraulic fracturing can produce natural gas from shale at acceptable costs, causing countries around the world to wonder what resources these technologies could unlock under their land.

How much is 6,622 Tcf? It is equivalent to 40 percent of previous global estimates of all technically recoverable natural gas, estimates which largely excluded shale gas resources, as their extent had not been well-established. And the figure doesn’t even include the massive shale gas resources that are thought to reside in Russia and the Middle East, where sizable amounts of conventional natural gas will likely delay any investment in unconventional gas for the foreseeable future.

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Shortly before Christmas last year, Spain passed a milestone. The country’s prime minister and king attended a ceremony for the opening of a roughly 400-kilometer high-speed railway line connecting the capital Madrid with the third-largest city of Valencia. That brought Spain’s high-speed network to a total of about 2,000 kilometers, surpassing France’s 1,960 kilometers.

France became Europe’s pioneer of high-speed rail service in 1981 (following Japan, which initiated its Shinkansen trains in 1964 and now has about 2,400 kilometers of track). Spain only entered the high-speed league in 1992, when a line linking Madrid and Sevilla opened. All three countries demonstrate that passenger rail can be a highly attractive and thoroughly competitive transportation option.

France still reigns supreme in Europe by yardsticks other than track length. In 2008, the latest year for which the European Commission offers data, French travelers racked up 52.6 billion passenger kilometers in high-speed rail travel. Second-place Germany had a mere 23.3 billion pkm, followed at a distance by Italy (8.9 billion pkm) and then Spain (5.5 billion pkm).

These figures reflect the fact that France’s high-speed system has been around for a longer time than those in neighboring countries and is thus well established. But France has been able to build up substantial ridership by ensuring that its fast trains (trains à grande vitesse, or TGV) are “TGV pour tous”—that is, affordable for everyone. Thus, discounts are available for the poor, the young, the old, the sick, and large families.

Including all rail trips, fast and slow, France leads the continent with 85 billion passenger kilometers, just slightly more than its neighbor Germany (82 billion passenger km). The United Kingdom and Italy follow at a distance with 52.7 and 49.8 billion pkm, respectively, and Spain with 24 billion pkm. In France, an astounding 62 percent of all train travel took place on high-speed lines in 2008. On the continent as a whole, the average share was one-quarter.

The Figure to the right adjusts rail travel data for the different population sizes of Europe’s five largest countries. Spain still ranks behind France, Germany, and Italy in high-speed travel, but the country’s enormous efforts to expand its tracks (which another Green Economy post will explore) will surely change the picture in years to come. Already, the popular Madrid-to-Barcelona line has drawn many people who formerly traveled by air, and RENFE, Spain’s rail operating agency, expects to quadruple its market share of the Madrid-Valencia distance to 41 percent, again mostly at the expense of airline travel.

To understand why people switch, there is no better way than to experience Spanish rail yourself.  I still recall the pleasant experience of traveling from Sevilla to Cordoba on the AVE (Alta Velocidad Española) train back in 2006. The trains are not just fast, but reliable and comfortable. In today’s world where air travel involves many hours wasted getting to and from airports and waiting at flight gates, and ever-more intrusive security measures, train travel offers an enjoyable alternative.

Spain and its European neighbors remain among the global rail leaders. In 2008, people in the 27 member countries of the European Union traveled 409 billion pkm on all types of intercity and commuter trains. Amazingly, however, that was just slightly more than the rail volume in Japan (405 billion pkm). Given that Japan’s population is just a little over one-quarter that of the EU, that makes the Japanese the world’s rail travel champion. (See Table.)

Passenger Rail Travel and Population Size, 2008

Source: European Commission, Directorate-General for Energy and Transport, EU Energy and Transport in Figures, Statistical Pocketbook 2010 (Luxembourg: Publications Office of the European Union, 2010), p. 106 (for rail statistics); Population Reference Bureau, 2008 World Population Data Sheet (Washington, DC: 2009) (for population data).

The International Renewable Energy Agency (IRENA) is nearly two years old, yet it still faces institutional issues. On October 21, the first Director General of the agency, Hélène Pélosse, quit her position.

After Pélosse's departure, Adnan Amin will lead IRENA until the Agency's First Assembly in April 2011. - Image courtesy of IRENA.

Pélosse, former deputy head of staff in the Office of the French Minister for Ecology, has long worked on climate and energy issues. Before joining IRENA, she took part in international climate negotiations and helped develop the European climate and energy package. (Read Worldwatch’s June 2009 interview with Pélosse.) Now, she leaves IRENA in a storm of publicity. In the French newspaper Le Monde, she declared that the agency’s host country, the United Arab Emirates (UAE), had asked for her resignation.

Yet it started all nicely. IRENA was founded in January 2009 to give renewable energy a voice at the international level. It began as the initiative of a group of European countries, including Germany, Spain, and Denmark, but delegations from 148 countries around the world have since adopted the agency’s work program. IRENA’s key goal, as formulated in its statute, is promoting “the widespread and increased adoption and the sustainable use of all forms of renewable energy.”

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Marina Silva got everyone's attention in Brazil's October 3 presidential election

On October 3, Marina Silva, a long-time environmental champion and winner of multiple international awards including the Goldman Environmental Prize, received over 19 percent of the vote in Brazil’s presidential election, far more than pre-election polls predicted. Ms. Silva, who served as environment minister before resigning in protest of continued encroachment into the Amazon rainforest, is a charismatic figure with a compelling and inspiring life story. But her unexpected success is just the latest example of the unprecedented rise of Green parties around the world.

A recent conference held by the Center for American Progress and Heinrich Boell Stiftung in Washington, D.C. discussed the rise of the German Green Party. Forsa, a respected German pollster, announced on October 6 that, for the first time in German history, the Green Party overtook the Social Democratic Party (SPD) to become the second most popular party. According to Forsa, 24 percent of the German electorate would vote for the Greens and only 23 for the SPD (with the Conservatives [CDU], Left, and Liberals [FDP] at 31, 10, and 5 respectively). This is a dramatic increase from the 2009 federal election, where the Greens received 10.7 percent of the party vote, itself an all-time high.

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Last month, we reported on France’s new climate legislation, the Grenelle de l’Environnement. Today, the focus is on solar power. The French Ministry of Environment has just announced, for the second time this year, that the nation’s feed-in tariffs for solar photovoltaic (PV) will be modified, much to the displeasure of the solar industry.

Sarkozy's government cuts solar FIT by 12% - Flickr Creative Commons / Mike Baker

Feed-in tariffs (FITs) are a financial tool that guarantees producers of renewable energy a specified price for every megawatt-hour of power fed into the grid. They were introduced in France in 2000, and prices during the most recent phase were set by a 2006 resolution.

This year, Sarkozy’s government already has decided to reform the solar FIT twice. First, a resolution was introduced on January 12 establishing new categories and tariffs for three PV applications: built-in rooftop solar panels (58 EUR cents/kilowatt-hour in mainland France except Corsica), rooftop solar panels (42 EUR cents/kWh), and ground-based solar panels (31.4 EUR cents/kWh for those generating less than 250 kilowatt-peak). This new resolution led to a general decrease in tariffs, especially for solar industry professionals, since many of them could no longer benefit from the highest tariff. The government introduced the resolution following a dramatic increase in the number of PV projects and to keep up with decreasing production costs. The FITs were supposed to be enforced until 2012 and then phased out gradually starting in 2013 as the industry gained in competitiveness.

But the government did not settle for these new tariffs and announced on August 23 that a general cut of the tariffs by 12 percent would take effect on September 1. Only individual installations generating less than 3 kWp will still be granted the 58 EUR cents/kWh tariff, in order to “preserve employment growth in this sector,” the Ministry of Environment and the Department of the Treasury said.

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Camille Serre and Alexander Ochs

In Part 1 of this blog, we described the climate and energy measures that France plans to pursue as part of its new environmental law, Grenelle 2. This set of policies suggests that France may in fact be paving the way toward a low-carbon economy. Unfortunately, the picture is tarnished by an ongoing controversy about renewable energy development in the country.

Windmills in French Brittany - Flickr Creative Commons / Nicolas Grout

Grenelle 2 certainly contains some positive measures in the renewables sector. For instance, it sets a goal that 23 percent of France’s energy use must come from a mix of renewable energy sources by 2020—most likely from hydropower (the nation’s largest renewables source so far), wind power, and biomass. The law calls for regional climate and energy mapping to assess climate-related risks within the country as well as to determine domestic energy needs, air pollution, and greenhouse gas emissions. Consequently, adaptation strategies and monitoring instruments will be developed. In addition, local and regional authorities that are responsible for 50,000 inhabitants or more, as well as companies with over 500 employees, will be required to conduct emissions assessments.

The law also promotes electricity produced by renewable sources through the enhancement of various supporting tools. France’s largest utility company, EdF, is already required to purchase electricity produced by certain renewable energy generators. Under Grenelle 2, local governments can also benefit from this purchase guarantee if they produce electricity from renewable sources. Moreover, any individual can now install photovoltaic panels at home and benefit from a “feed-in tariff” that guarantees producers of renewable energy a specified price for every megawatt-hour of power fed into the grid. To improve conditions for renewables, the electricity grid will be strengthened and enhanced in the coming years.

While all of these measures are helpful, particularly for solar technologies, Grenelle 2 imposes several barriers for the expansion of wind power, despite the creation of regional wind energy development schemes.

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Camille Serre and Alexander Ochs

While the United States is unlikely to pass a climate bill in the near future, there may be greater hope from one of the country’s closest allies: France. A few months ago, France passed a major bill that will deeply transform the country’s environmental law, including its approach to climate change. But while the outcomes of the measure are promising, a variety of criticisms remain.

Bike at Le Louvre, Paris. © Camille Serre

After an exhausting legislative process, the “Grenelle de l’Environnement” ended with the adoption of the “Grenelle 2” bill this May. Enacted on July 13, three years after the process was launched by then-newly elected president Nicolas Sarkozy, the new legislation covers environmental topics such as climate and energy, biodiversity protection, public health, sustainable agriculture, waste management, and the governance of sustainable development. In addition to being a comprehensive environmental bill, Grenelle 2 implicitly defines the French sustainable development strategy for years to come.

Grenelle de l’environnement was named after the so-called “negotiations of Grenelle” on wages that took place in 1968, when France was paralyzed by a general strike. Back then, the primary negotiators were the government, unions, and employers. The Grenelle de l’environnement, launched in 2007, extended the consultation to five main stakeholder groups—the State, employers, unions, environmental NGOs, and local governments—to bring it more in line with the participatory nature of sustainable development.

On the climate front, France is likely to meet its current emissions reduction goals.

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A campaign to replace GDP with a more complete measure of well-being as the yardstick of national performance is gaining traction.

For most people alive today, Gross Domestic Product (GDP) is one of those unconsidered parts of our common consciousness that seems immutable. GDP is how countries size themselves up against their peers, how they measure progress.

And yet the U.S. Department of Commerce created GDP as a statistic only in 1942. With the measure’s current ubiquity, it is natural that the Department named the development of GDP and other national income indices as its “achievement of the century.” But the realization that GDP didn’t even exist 70 years ago begs the question of whether it will exist with its current cachet 70 years from now.

In recent years, a growing group of economists, academics, and others has argued that the answer should be “no.” This is not a climate issue, or even an environmental one, per se. If these campaigners get their way, however, there will be dramatic consequences for the climate and energy debate.

If a country’s ultimate responsibility to its citizens is to ensure and increase happiness and well-being, GDP is indeed an incomplete measure of a state’s performance. Variables such as engagement in fulfilling personal activities, social connectedness, political voice, and environmental conditions have been shown to greatly influence well-being but are not accounted for in GDP. Even Simon Kuznets, the eponym of the Kuznets Curve and the Nobel Prize-winning economist who is probably responsible more than anyone for the development of GDP as a statistic, cautioned in his first report to Congress in 1934 that, “…the welfare of a nation can, therefore, scarcely be inferred from a measure of national income…” 

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The U.S. “cash-for-clunkers” program—formally known as the Car Allowance Rebate System (CARS) Program—has apparently been successful far beyond what Washington policy-makers expected.  The $1 billion set aside for the program ran out in a matter of days, leading Congress to vote an additional $2 billion for it. Government data indicate that the average rating for the new car purchases that were stimulated by the program was 25.4 miles per gallon, compared with an average of just 15.8 mpg for the surrendered clunkers.

For a nation that for many years defiantly purchased clunkers … err, SUVs, in the face of worrisome resource and environmental trends, that’s not a mean feat to accomplish.  Still, the 7 million tons of carbon emissions avoided over the next decade by trading in a quarter million gas guzzlers are equal to just 0.04 percent of total U.S. emissions of 16 billion tons from gasoline-powered vehicles over the same period of time.

False God? Image courtesy of billaday

The United States will have to keep working hard to reduce the environmental footprint of its transportation system, catching up to Europe, Japan, and even China in fuel economy.

France, which already has far more efficient vehicles than the United States, in December 2007 adopted an “ecological bonus-malus” program [PDF; in French] for new car purchases to further reduce the carbon footprint of cars. The program offers a bonus of €200–1,000 ($275–1,380) for vehicles emitting a maximum of 130 grams of carbon dioxide (CO₂) per kilometer, and €5,000 for those emitting no more than 60 grams. (More efficient cars emit less CO₂).

But the program also brings in revenue, and provides an incentive not to purchase less efficient cars. Vehicles emitting more than 160 grams of CO₂ are subject to a charge of €200–2,600 ($275–3,580). As a result, the share of newly registered vehicles that emit less than 130 grams per kilometer rose from 31 percent to 44 percent in a single year.

The French experience offers some good lessons for the United States.  Automobile manufacturers would have far greater incentive to meet and surpass corporate average fuel economy (CAFE) standards if car buyers could be persuaded to consistently seek out the most efficient models.  As under the French approach, buying a gas guzzler would attract a hefty fee, while purchasing a top-performing vehicle would be supported either with cash incentives or tax benefits.

Further, instead of only imposing average fuel economy requirements, the government should consider outlawing sales of any vehicle that does not meet a minimal mileage requirement. This floor could then be raised with each passing year.

There is no shortage of effective measures to reduce the climate footprint of vehicles.  Ultimately, however, it’s even more important to work on reducing the heavy reliance on cars and to promote public transit, rail, and walkable communities.