Skip to main content
The Globe and Mail
Support Quality Journalism.
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
Just$1.99
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to globeandmail.com
Just $1.99 per week for the first 24 weeks
Just $1.99 per week for the first 24 weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(select.open)}function setPanelState(o){dom.root.classList[o?"add":"remove"](select.open),dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); } //

"Drill, baby, drill" has been replaced by "Frack, baby, frack."

That's supposed to be good for the planet, because fracking – the hydraulic fracturing of rock formations such as shale – releases great dollops of gas, whose carbon content is about half of that of oil. So bring it on. Electricity plants, cars, trucks and furnaces fed by gas should bring down carbon-dioxide emissions, preventing humanity from burning alive as global temperatures rise.

Or so we are led to believe.

Story continues below advertisement

The terms "shale gas" and "revolution" are often used in the same sentence and there is no doubt the gas is reshaping the U.S. and global energy markets. In 2000, shale gas provided only 1 per cent of U.S. gas production. A decade later, the figure was close to 20 per cent and some analysts think it will reach 40 per cent to 50 per cent by 2035.

Europe is on the verge of a similar revolution. Britain is writing the regulatory regime that will bring shale gas into its energy mix and when it does, France, under a fracking moratorium, surely won't be far behind. Poland has vast quantities of shale gas, too.

Shale gas producers and lobbyists in North America and Europe tout the economic and environmental benefits of shale gas as if it were the greatest thing since spray cheese. They are not entirely wrong. The U.S. carbon footprint is a little bit smaller than it was a few years ago because coal-burning generating plants are giving way (albeit slowly) to gas burners as the gas glut brings prices down.

Its use in transportation is the next big market. FedEx has said that almost a third of its U.S. long-distance trucking fleet will be powered by compressed or liquefied natural gas within a decade. Fiat, the Italian car maker that controls Chrysler, decided years ago that natural gas-powered vehicles would have a brighter future than electric ones. It was right.

But before we declare the shale gas revolution a net positive for the planet, consider that gas is still a carbon-intensive fuel. If the market works as it normally does, the enormous supplies and falling prices will make the fuel irresistible to the electricity-generation and transportation industries in the regions where shale gas is plentiful.

Conservation would go out the window. So might the use of renewable energy such as wind, solar and biomass power, and emission-free nuclear reactors. At the same time, regions without cheap gas, such as China, will continue to rely on coal. The shale gas surge could easily translate into greater overall carbon emissions in spite of gas's lower carbon content.

The plunge in gas prices, at least in the United States, has been astounding. In May, the producer price index for natural gas had fallen almost 57 per cent between 2007 and 2012. Gas production rose 25 per cent.

Story continues below advertisement

It's an open question whether the price will keep falling, since low hydrocarbon prices typically translate into less drilling. Still, gas is a bargain compared with other hydrocarbons and will find new markets. That's the point: There is so much of it around, it has to be burned. Indeed, domestic U.S. gas consumption increased by 9.4 per cent between 2008 and 2012.

Fuels compete with one another, so it should come as no surprise that the gas glut has translated into lower global coal prices. This is making coal more attractive in countries whose own gas production is nil or small, such as Britain. At last count, Britain produced 40 per cent of its electricity by burning coal, the highest level since 1996. An April report on shale gas by the British House of Commons energy and climate change committee said: "We concluded that although development of shale gas in the U.S. has reduced America's greenhouse [gas] emission this may have been offset by increased use of coal in Europe."

Just as the gas glut in some parts of the world will make coal more attractive in others, it can only make renewable energy less attractive. Renewable energy is already in trouble as austerity-mad governments roll back clean-energy subsidies (in the form of above-market prices paid for supplies) to solar- and wind-generation projects. With shale gas about to hit Europe, their future looks particularly bleak. The Tyndall Centre for Climate Change Research, a research group partnered with some of Britain's top universities, estimated that the arrival of shale gas in Britain could eliminate between £19-billion ($30-billion) and £31-billion of investment in renewable energy.

The dash for gas looks good on paper. But textbook economics – more gas use, more coal use in some areas, less use of renewables – threaten to remove its overall benefits. The British committee acknowledged as much, even as the country tries to mimic the U.S. gas revolution. Perversely, the rise in gas-fired electricity generation, driven by shale gas, "could make it more difficult for the U.K. to meet its climate change obligations," it said.

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow the author of this article:

View more suggestions in Following Read more about following topics and authors
Report an error Editorial code of conduct
Tickers mentioned in this story
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies