Shale Daily / NGI All News Access

Author: U.S. Has Home Team Advantage in Shale Game

Whether one loves or hates hydrocarbon fuels, "they are here to stay," an energy lecturer and author told a Houston audience. "They provide nine out of 10 units of energy, nine out of 10 units of power...That will remain the case for decades to come. Energy transitions happen over decades or centuries, not over years." The transition under way now is to natural gas, particularly that from shale plays, he said.

Robert Bryce -- author of Power Hungry: The Myth of "Green" Energy and the Real Fuels of the Future and a Manhattan Institute fellow -- said the United States is at "the top of the second inning" in the shale gas game.

"The U.S. is playing a home game. We wrote the rules. We invented the equipment and we have a 10-run lead. The U.S. is so far ahead of the rest of the world when it comes to shale that it is remarkable. The rest of the world won't get shale unless or until people in the U.S. who have the expertise say, 'I'll go visit Poland, Argentina or China...'"

One of the largest beneficiaries has been the petrochemical sector, which in the United States is enjoying a price advantage -- based on the cost of natural gas liquids, particularly ethane -- that is second only to petrochemical producers in Qatar, Bryce said.

"The shale revolution is changing the energy picture in ways that we are only now starting to understand," he said. "The fuel of choice now around the world is natural gas."

Bryce said the beat-down that U.S. natural gas prices have gotten from shale production is "perhaps the best possible news for the U.S. economy." He predicted that over the next century, natural gas will continue to take more of the energy stage from coal and oil.

However, Bryce is far less enthusiastic about renewable energy, particularly wind power. During his speech at Bentek Energy LLC's Benposium last week, Bryce lamented the spread of scientific illiteracy and innumeracy, which he says have allowed unjustified support for wind power and corn-derived ethanol.

"Who here is in favor of dirty energy?" he asked the audience. "But 'clean energy' has become a proxy phrase for carbon legislation, for cap-and-trade...for what are now politically unpopular ideas."

Bryce's preference for hydrocarbons and nuclear power is based largely on the large energy density advantage they hold relative to wind power and plant-based fuels.

"Density is green," he said. "It is green whether you're talking about agricultural production, whether you're talking about urban density or population density...or whether you're talking about a gas stripper well...High density of nearly every type is positive for the environment because it allows us the best use of resources."

As an example he cited the South Texas Project (STP), a two-unit nuclear plant with capacity of 2,700 MW. While the plant's entire footprint is 19 square miles by Bryce's calculation, STP's power density is about 56 watts per square meter. "If you wanted to produce that same generation capacity...with wind turbines, you would need a land area of about 900 square miles...The power density of wind turbines is about one watt per square meter," he said.

Turning to corn-derived ethanol, it would take about 21,000 square miles of cornfields to produce 2,700 MW of capacity. It's "biofuel madness," Bryce said. "It's a bad idea because it doesn't matter what plant you use, you are going to get power densities of a fraction of a watt per square meter." He called subsidies for the production/use of corn-based ethanol "the longest running robbery of taxpayers in modern history." As lawmakers in Washington wrangle with the budget deficit, subsidies for ethanol have been nearing the chopping block.

With regard to wind power, density comes into play again when one considers the amount of steel it takes to construct the typical wind turbine: about 200 tons for a unit capable of producing about 4 MW, or about 50 tons per megawatt. Compare that to a typical gas-fueled turbine that produces 43 MW and weighs nine tons, Bryce said, figuring that the wind turbine requires 250 times as much steel on an energy-equivalent basis. "It's a rough calculation..." he allowed. "Assume the ratio is 25 to one; it's still incredibly significant."

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