Looking at the latest numbers for US electricity generation, coal is at 37%, while gas is at 28%. This is the lowest share for coal in 35 years! Coal is down 21%, while gas is up 30%. Clearly, as you'd expect when the large quantities of shale gas being produced have pushed US gas hub prices below $2, power generation companies prefer to burn gas because it's cheap.
If you don't believe the EIA, why not look at figures from the Sierra Club, a noted environmental
organisation (no industry shills here). They keep a record of the amount of CO2 emissions that have
been avoided by coal plant closures and cancellations. Since 2000, the share of coal in US electricity
generation has dropped from 52% to 37%. 10% of that gap has been taken up by gas. And, unless you're Howarth or Ingraffea, burning gas produces significantly less CO2 than coal, so we can reduce our greenhouse-gas emissions. The Sierra Club estimate that the net CO2 abatement from this switch from coal to gas has prevented 225 million tons of CO2 per year. This is not small beer we're talking about here!
And what about the influence on renewable energy - surely low gas prices have scuppered investment in the renewable energy we ultimately need? Well, during this shale gas glut, from 2008 to present, wind energy production has doubled and solar power increased 8-fold. Renewable energy is dependent mainly on government subsidies and supportive policies, so as long as these remain available, renewables are relatively protected from the kind of market forces that have seen the switch from coal to gas. If renewables were exposed to market forces, they'd soon struggle regardless of whether gas is $2 or $6.
So what are we doing in the UK? Well, we've announced our new energy policy this week. I don't pretend to be an expert in these more complex legislative things, but the general consensus is that this bill is supportive of nuclear power and wind power. One good thing is that under the proposals it's difficult to see any new coal power being built without carbon capture and storage. However, it seems that the government has significantly underplayed the potential for shale gas in a future energy mix.
Perhaps the most notable example of this was the noises emerging after a weekend meeting between Downing Street and a selection of industry experts, which suggested that shale gas in the UK won't really amount to much. What's really interesting about this meeting is who was there, and more importantly, who wasn't. Who was there? Representatives from Shell and Centrica.
Shell have barely any shale gas interest, but plenty of large conventional gas fields in the Southern North Sea. High gas prices are good for them. Centrica (i.e. British Gas as was) sell us gas to heat our homes. High gas prices are good for them. Meanwhile neither Cuadrilla, Igas, Coastal or Dart Energy were involved. These are the 4 companies buying licenses and looking to drill for shale gas in the UK. Cuadrilla are the only company to have sunk a well into the Bowland shale, which will probably be the most productive UK shale deposit.
So, if you invite 'experts' from two companies with a vested interest in maintaining high gas prices, while ignoring the companies that are actually making assessments on the ground, it's hardly surprising that you'll end up with a rather negative view of the potential for shale gas in the UK. Cuardilla's latest estimates for shale gas are as much as 5.6 trillion cubic meters. Comparing the figures between the Bowland shale and the Barnett, which is the one of the largest producing shale bodies in the US reveals many similarities, which suggests that there may well be a lot more gas under Blackpool than the likes of Shell and Centrica would like. These figures seem extremely positive to me.
| Parameter | Bowland | Barnett | Why important |
| Thickness | 1000m | 300m | The thicker the shale, the more there is |
| TOC (organic content) | 1-5% | 1-6% | High organic content means more gas can be created |
| Fractured carbonate bands | Yes | Yes | Pre-fractured bands help the gas to flow to the well-head economically |
| Vitrinite reflectance | 1-1.6 | 1-1.4 | Vitrinite tracks burial depth. The rocks must be buried and heated to turn organic matter into oil/gas |
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