Significant price differences between regional natural gas markets have driven many European countries to increase coal consumption while decreasing use of natural gas (Source: BP).

Coal, natural gas, and oil accounted for 87 percent of global primary energy consumption in 2012 as the growth of worldwide energy use continued to slow due to the economic downturn. The relative weight of these energy sources keeps shifting, although the change was ever so slight. Natural gas increased its share of global primary energy consumption from 23.8 to 23.9 percent during 2012, coal rose from 29.7 to 29.9 percent, and oil fell from 33.4 to 33.1 percent. The International Energy Agency predicts that by 2017 coal will replace oil as the dominant primary energy source worldwide.

The shale revolution in the United States is reshaping global oil and gas markets. The United States produced oil at record levels in 2012 and is expected to overtake Russia as the world’s largest producer of oil and natural gas combined in 2013. Consequently, the country is importing decreasing amounts of these two fossil fuels, while using rising levels of its natural gas for power generation. This has led to price discrepancies between the American and European natural gas markets that in turn have prompted Europeans to increase their use of coal for power generation. Coal consumption, however, was dominated by China, which in 2012 for the first time accounted for more than half of the world’s coal use.

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China, coal, Europe, India, natural gas, oil, Russia, shale gas, United States

“I refuse to condemn your generation and future generations to a planet that’s beyond fixing. And that’s why today I’m announcing a new national climate action plan, and I’m here to enlist your generation’s help in keeping the United States of America a leader, a global leader in the fight against climate change.”

- President Barack Obama, 6/25/2013

President Obama presented his Climate Action Plan at Georgetown University yesterday. (image source:

President Obama presented his Climate Action Plan at Georgetown University yesterday. (image source:

Climate change policy is back on the political agenda.  In a powerful speech at Georgetown University yesterday, President Barack Obama found the right words for the scale and urgency of the climate problem. He announced a Climate Action Plan outlining a wide array of actions his administration will take to reduce harmful greenhouse gas (GHG) emissions, expand renewable energy, increase energy efficiency, and strengthen America’s resilience to climate impacts. Throughout the speech, President Obama struck down critics’ claims, which have been bolstered by wealthy special interest groups, that climate protection poses a threat to the country’s economy. If implemented promptly, the plan can lead to much needed reductions of greenhouse gas emissions and re-engage the United States with other climate leaders in the international community.

However, the plan also reinforces the President’s “all-of-the-above” energy strategy, which is at odds with the necessity for swift and significant emission reductions to avoid catastrophic climate impacts. President Obama yesterday restated his pledge to reduce U.S. GHG emissions by 17 percent below 2005 levels by 2020 – an insufficient target given the urgency of the climate crisis and the scale of the U.S. contribution to global emissions on an absolute, historical, and per capita basis.

Perhaps the most important policy announcement in the President’s climate action plan is a memorandum directing the Environmental Protection Agency to set standards by 2015 to reduce carbon pollution from existing power plants. The U.S. Environmental Protection Agency first proposed carbon standards for new power plants over a year ago that would effectively halt the construction of new coal plants without carbon capture and storage (CCS) technology. Although the shale gas boom has already made it unlikely that new coal plants would be built anyway, the proposed regulation would nevertheless be an important step toward passing carbon standards for existing power plants that could accelerate the phase-out of coal power.

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carbon standard, CCS, Climate Change, Climate Policy, coal, greenhouse gas emissions, Keystone XL, nuclear power, President Obama, renewable energy, shale gas

A video circulated recently in which a Fox Business Network analyst made the laughable assertion that Germany’s success with solar power is due to its abundant solar resources (for those missing the humor here, Germany has about the equivalent solar resource of Alaska). While the gaff elicited plenty of chuckles from around the energy sector, the analyst also made another claim that received less attention, but may be similarly incorrect.

Shale gas operations, such as the one above, are multiplying across the U.S. But will unconventional gas resources produce as much energy as is typically touted? (Source: Flickr user Nexen)

In trying to make the argument that the United States should pursue natural gas as opposed to solar power for electricity generation, the Fox analyst states: “Now people are saying, well, solar may be dead in the water. What’s going to happen with nat. gas? You guys know this very well; we have a hundred years of energy.… Let’s take our focus off of solar, let’s move it to nat. gas, and let’s get this economy going.” (We can, for the sake of argument here, ignore the many other nuances in this debate, such as the fact that the U.S. Southwest has some of the best solar resources in the world, and that natural gas and solar are actually complementary technologies and are in no way mutually exclusive.)

The claim that natural gas resources will provide the United States with 100 years of energy is often thrown around (and not just by a fossil fuel-happy news organization like Fox) thanks to recent technological advancements in hydraulic fracturing and horizontal drilling techniques that sparked the so-called “shale revolution.” Shale gas now accounts for almost 40 percent of U.S. natural gas production and has reversed the trend of declining gas production numbers.

However, the estimated amount of natural gas that is available is not a hard number, and the upswing in gas production may not be as long-term a trend as many people believe. In January 2012, the U.S. Energy Information Administration slashed its estimate of unproven technically recoverable shale gas resources by 42 percent. This new estimate, along with proven shale gas reserves, amounts to 579 trillion cubic feet of available natural gas.

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energy, LNG, natural gas, renewable energy, shale gas, unconventional gas, United States

By Wenna Wang and Haibing Ma

Source: EIA | Distribution of China's shale gas basins.

On June 27th, 5 shares of shale gas reached their daily limits at Shanghai Composite Index, the largest stock market in China, lifting the whole Oil & Gas sector above the otherwise decreasing Chinese stock market. This was stimulated by a signal from the nation’s Ministry of Land and Resources: the second round of shale gas exploration rights is expected to open for bidding in September, and this time it will be open to private investors.

Shale gas, which is natural gas found in hydrocarbon rich shale formations, is one of the most important unconventional sources of natural gas and represents a rapidly expanding trend in onshore gas exploration and production today. The deposits are mainly extracted through hydraulic fracturing and horizontal drilling. Though it is not an ideal alternative to conventional energy sources, shale gas can be a key to energy independence and a lower carbon footprint, since it produces 43 percent and 30 percent less carbon dioxide emissions than coal and oil per thermal unit produced, respectively. However, not everything about shale gas is an improvement, as its extraction process may contaminate ground water and release volatile compounds into the soil, while the use of shale gas will still lead to greenhouse gas (GHG) emissions. The main mining techniques used for extraction, horizontal drilling and hydraulic fracturing, have been linked to various problems like water shortages, groundwater contamination, methane gas seeps, micro-earthquakes and coal fires. Sample surveys show that methane concentrations were 17-times higher on average (19.2 mg/L) in shallow wells located in active drilling and extraction areas than in wells located in non-active areas (1.1 mg/L on average). In addition, there are studies showing properties with shale gas wells were valued down due to the fracturing.

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12th Five-Year Plan, China, Climate Change, energy demand, green house gases, low-carbon, renewable energy, shale gas, sustainable development
U.S. Deputy Secretary of Energy Daniel Poneman promoted international collaboration on shale gas, CCS, and nuclear. Image source:

U.S. Deputy Secretary of Energy Daniel Poneman promoted international collaboration on shale gas, CCS, and nuclear. Image source:

Last month, I attended two events on U.S. international collaboration on energy issues, both of which involved presentations and panel discussions featuring high-level representatives from government, business, academia, and non-governmental organizations. Despite some discussion of renewable energy and climate change, U.S. government and business representatives centered the discussion largely on shale gas, “clean” coal, and nuclear power.

The first event was the third U.S.-India Energy Partnership Summit, co-convened by Yale University and The Energy Resources Institute (TERI) of India. Panelists discussed experiences and opportunities for collaboration on sustainable energy initiatives, from joint research and development of technologies to promoting policies and financial mechanisms that encourage clean energy investment. The Summit was chaired by Rajendra K. Pachauri, President of TERI North America and Chairman of the Intergovernmental Panel on Climate Change (IPCC).

A forum for sustainable energy collaboration between the United States and India is especially important in the context of stagnating international climate negotiations, where the two countries have often assumed adversarial roles. Although the Summit demonstrated the promise of mutual interests, I was disappointed by the focus of several of the high-level speakers on fossil fuels and nuclear energy.

The nature of the energy partnership described by U.S. Deputy Secretary of Energy Daniel Poneman centers largely on “clean coal” technology and shale gas exploration, as well as tighter standards for nuclear energy in India. Dr. Charles Ebinger, a Senior Fellow at the Brookings Institution, reinforced this position by highlighting the central role that the coal industry plays in the Indian economy, including as a large employer. Dr. Ebinger also took a rather pessimistic view of India’s ability to expand the share of renewable energy, claiming that renewable energy could not account for more than 20 to 25 percent of the country’s energy mix by 2030 or even 2040.

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CCS, Europe, India, nuclear power, shale gas, U.S. Department of Energy, United States

Shale gas is a relatively recent topic of discussion in the House of Commons.

The rapid development of shale gas in the U.S. has inspired a good deal of speculation about whether, when and how the so-called shale gas revolution will go global. In a report released earlier this week, the UK House of Commons Energy and Climate Change Committee concludes that while the UK could have significant a shale gas resource, it is unlikely to represent a game changer in the British energy portfolio. Nonetheless, the report finds, shale gas could present a useful additional source of natural gas, and one that can be produced with without major environmental risks if strong regulations are put in place.

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hydraulic fracturing, moratorium, natural gas, shale gas, United Kingdom


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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Argentina, China, EIA, France, Mexico, natural gas, Poland, shale gas, United States