Read Online Snake Oil: How Fracking's False Promise of Plenty Imperils Our Future by Richard Heinberg - Free Book Online Page B
Authors: Richard Heinberg
Ads: Link
decade. The US natural gas market was eventually rebalanced by demand destruction, with reduced consumption leading to stable and affordable prices that would last, again, until the early 2000s. Throughout the late 1980s and the 1990s, cheap oil and stable, affordable gas prices enabled Americans to forget about the need for energy conservation and the development of renewable energy sources, and to concentrate on their favorite pastimes—driving and consuming. Might the fracking boom offer similar relief to the oil and gas price spikes of the 2000s? The industry obviously thought so, and it was determined to make the most of the opportunity.
But there was a more immediate, practical motive for oil and gas companies to ballyhoo fracking’s significance: their need for investment capital. Small operators willing to assume substantial risk by developing marginal resource plays using expensive technology have led the fracking boom from its inception. These companies need investors to believe that fracking is the Next Big Thing. As in every resource boom since the dawn of time, hyperbole has become a tool of survival.
The hurricane of hype began in the shale gas fields of Texas, stirred by the charismatic Aubrey McClendon, then-CEO of Chesapeake Energy. McClendon hammered home the same message on every possible occasion—at investment conferences, in government hearings, and in prominent media interviews. For example, in testimony before the US House Select Committee on Energy Independence and Global Warming on July 30, 2008, McClendon had this to say:
America is at the beginning of a great natural gas boom. This boom can largely solve our present energy crisis. The domestic gas industry through new technology has found enough natural gas right here in America to heat homes, generate electricity, make chemicals, plastics and fertilizers, and most importantly, potentially fuel millions of cars and trucks for decades to come.
Another highly visible shale gas booster was Daniel Yergin, chairman of Cambridge Energy Research Associates, an oil and gas industry consultancy. In an April 2, 2011, article in the Wall Street Journal titled “Stepping on the Gas,” Yergin wrote: “Estimates of the entire natural-gas resource base, taking shale gas into account, are now as high as 2,500 trillion cubic feet, with a further 500 trillion cubic feet in Canada. That amounts to a more than 100-year supply of natural gas.”
A century of natural gas! It was a nice round figure, and big enough to banish any fears of looming scarcity. The number came to be repeated so frequently that even President Barack Obama parroted it unquestioningly, as in this public statement on January 25, 2012: “We have a supply of natural gas that can last America nearly 100 years, and my administration will take every possible action to safely develop this energy.”
But was one hundred years really enough?
Oil billionaire T. Boone Pickens, whose hedge fund had adopted significant positions in the natural gas sector starting in 1997, began running a series of television and print advertisements in 2008 to promote his “Pickens Plan” to “break the stranglehold of imported oil” using domestic natural gas for transportation. In an interview on CNBC in April 2011, he estimated America’s natural gas endowment: “If I announced that we have more oil equivalent than the Saudis do, I would be telling you the truth. . . . I say you’re going to recover 4,000 trillion [cubic feet]. Which is 700 billion barrels.” It turns out that 4,000 trillion cubic feet (tcf) is roughly the equivalent of 160 years of US natural gas production at current rates. 2
A hundred years? 160 years? Why not more? So far, Aubrey McClendon appears to have topped all rivals with his claim, in an article on Chesapeake Energy’s website, that America has two hundred years of natural gas. 3 In his most widely heard prediction about the importance of shale gas, in a CBS News 60
But there was a more immediate, practical motive for oil and gas companies to ballyhoo fracking’s significance: their need for investment capital. Small operators willing to assume substantial risk by developing marginal resource plays using expensive technology have led the fracking boom from its inception. These companies need investors to believe that fracking is the Next Big Thing. As in every resource boom since the dawn of time, hyperbole has become a tool of survival.
The hurricane of hype began in the shale gas fields of Texas, stirred by the charismatic Aubrey McClendon, then-CEO of Chesapeake Energy. McClendon hammered home the same message on every possible occasion—at investment conferences, in government hearings, and in prominent media interviews. For example, in testimony before the US House Select Committee on Energy Independence and Global Warming on July 30, 2008, McClendon had this to say:
America is at the beginning of a great natural gas boom. This boom can largely solve our present energy crisis. The domestic gas industry through new technology has found enough natural gas right here in America to heat homes, generate electricity, make chemicals, plastics and fertilizers, and most importantly, potentially fuel millions of cars and trucks for decades to come.
Another highly visible shale gas booster was Daniel Yergin, chairman of Cambridge Energy Research Associates, an oil and gas industry consultancy. In an April 2, 2011, article in the Wall Street Journal titled “Stepping on the Gas,” Yergin wrote: “Estimates of the entire natural-gas resource base, taking shale gas into account, are now as high as 2,500 trillion cubic feet, with a further 500 trillion cubic feet in Canada. That amounts to a more than 100-year supply of natural gas.”
A century of natural gas! It was a nice round figure, and big enough to banish any fears of looming scarcity. The number came to be repeated so frequently that even President Barack Obama parroted it unquestioningly, as in this public statement on January 25, 2012: “We have a supply of natural gas that can last America nearly 100 years, and my administration will take every possible action to safely develop this energy.”
But was one hundred years really enough?
Oil billionaire T. Boone Pickens, whose hedge fund had adopted significant positions in the natural gas sector starting in 1997, began running a series of television and print advertisements in 2008 to promote his “Pickens Plan” to “break the stranglehold of imported oil” using domestic natural gas for transportation. In an interview on CNBC in April 2011, he estimated America’s natural gas endowment: “If I announced that we have more oil equivalent than the Saudis do, I would be telling you the truth. . . . I say you’re going to recover 4,000 trillion [cubic feet]. Which is 700 billion barrels.” It turns out that 4,000 trillion cubic feet (tcf) is roughly the equivalent of 160 years of US natural gas production at current rates. 2
A hundred years? 160 years? Why not more? So far, Aubrey McClendon appears to have topped all rivals with his claim, in an article on Chesapeake Energy’s website, that America has two hundred years of natural gas. 3 In his most widely heard prediction about the importance of shale gas, in a CBS News 60
Similar Books
