Last week was a horrible week for all those that care about Belgium’s economy. Ford, Dow, Duferco, they all announced massive layoffs. Especially in the North-Eastern province of Limburg, the closing of the car manufacturing plant of Ford has hit hard. This unfortunate episode is casting serious questions over the attractiveness of Belgium as an industrial country. Ford quoted high energy prices as one of the reasons for shutting down Genk. I have some serious doubts about this. Ford is delocalizing the Genk production to Spain. I service clients in both Belgium and Spain, and at this moment, energy prices in Spain are certainly not lower. On the other hand, it is clear than one of the conditions for supporting your country’s industry is giving it access to affordable energy. Coincidentally, a source of such economic progress might by lying under the feet of Limburg’s worried people. Geologists agree that unconventional gas can be found in the soil of Flanders, certainly in the ex-coalmining province of Limburg, namely coalbed methane and shale gas. Will Limburg go through a shale gas boom like e.g. Pennsylvania in the US? Or will our European cold feet behavior as to shale gas production prevail? In times of economic mayhem, these questions are more urgent than ever. President Obama has been claiming that shale gas production in the US will create 600.000 jobs by the end of the decade. After all the lay-offs of this week, that job-creating potential of gas production cannot easily be denied. And who would mind building up a Dutch or Norwegian style National Ressources Fund of natural gas royalties to support Belgium’s social security system? (Which, it seems inevitable in Belgium, opens up a distribution discussion. The national ressources belong to Flanders, the social security is Belgian …)
When I first saw a map by the U.S. Energy Information Administration (EIA) that showed the presence of shale gas in Belgium, I almost fell off my chair. There is hardly any debate on this topic in my country. My colleague Bart made a rapid media scan that was very telling. It shows the number of articles on shale gas in papers in different countries:
I know that this press scan is a very rudimentary analysis, but it is a powerful illustration of the lack of a debate on shale gas in Belgium. At least France and the UK have one, although it should be said that the articles in the French newspaper were very unipolar against shale gas production. The press in the UK and in Germany struck us for the quality of the information. It was also fairly balanced between pro and contra shale gas production. With shale gas and coalbed methane under our feet, Belgian policymakers, scientists, media and industry representatives should seriously ask themselves why we are not discussing its economic potential and its environmental hazards more actively?
Coalbed methane is gas trapped in coal-seams, shale gas is trapped in deep layers of rocks with low porosity. We’ve always known that the unconventional gas was there, only we didn’t have the technologies for producing it. For shale gas, the breakthrough came when hydralic fracturing (fracking) and horizontal drilling technology was combined. What you basically do, is pump water and chemical additives into the shale rock layer at high pressure. This creates fissures through which the shale gas escapes into the wellhead. This fracking procedure has been the subject of a vehement attack by environmentalists that highlight its environmental hazards. If you read French newspapers, you would probably come to believe that fracking is opening up the doors of environmental hell. However, much of the environmental criticism seems to be based on perception rather than scientific knowledge. In the table below, I attempt to show the two sides of the discussion:
|The most powerful argument against fracking is the danger of seepage of natural gas in drinking water layers. This has been imprinted into the minds of many people by the scene in Josh Stone’s documentary ‘Gasland’ of somebody setting his tap water on fire.||Many specialists claim that this phenomenon is due to ‘natural seepage’. It is well known that in areas with gas reserves, natural concentrations of methane in drinking water occur. US Environmental Protection Agency (EPA) experts have declared that there is no proof of widespread methane seepage due to shale gas production.|
|Environmentalists often cite a report from the University of Cornell that claims that releases into the atmosphere of methane when shale gas is produced make shale gas production a larger contributor to global warming than coal.||Soon after the report came out, the data was seriously questioned. And most experts declared it to be irrelevant, when it became clear that its author ignored methane releases during coal production.|
|In the UK, environmentalists stopped the activities at a shale gas exploration site after they had caused “an earthquake”.||Yes, gas production causes seismic activity, although the level of the tremors is never higher than the tremors caused by a passing train. The UK “quakes” were below that “passing train” level.|
|Fracking fluid contains highly toxic, carcinogenic and even radio-active chemicals.||Industry officials claim that their fluids contain nothing that you wouldn’t find under your sink. A Halliburton official recently drank a glass of his company’s frack fluid at an industry conference.|
|Fracking is rapidly depleting water ressources. Every fracking session is consuming an amount of water equal to 8 Olympic swimming pools.||Some claim that coal production consumes even more water. And the industry is making a serious effort to reduce the water depletion by recycling and reusing the water.|
|Fracking reject, the water, chemicals and subsoil particles that resurface after the frack process, pollute the environment.||Yes, some US shale gas sites caused pollution due to sloppy wastewater storage practices. But on many other sites it has been proven that reject can be stored, evacuated and even recycled in a safe way.|
|Gas production sites are highly disruptive to the pristine character of the countryside.||Yes, the drilling & fracking phase is a nuisance, but it lasts only a few months. After that, the gas production site is not much more than a pipe and a wellhead sticking a few meters out of the ground.|
I am not an expert in environmental science. But reading reports on shale gas makes clear to me that there are two sides to every story. Wherever I go in France I’m confronted with ‘No to shale gas (non au gaz de schiste)’ bumper stickers. On the other side of the discussion, there are the reports from scientific institutes that make clear that shale gas production can be done reasonably safely, if the necessary environmental practices are taken into account. Such reports have been issued by The Royal Society from the UK or the Bundesanstalt für Geowissenschaften und Rohstoffe from Germany, for example. In the US, where all the environmental disaster caused by shale gas extraction is supposed to take place, environmental groups like The US National Wildlife Federation or the Center for Rural Pennsylvania give tips for improving environmental protection standards in shale gas extraction, but they don’t claim that it’s impossbile to do it reasonably safely. And Insurance company Lloyds has declared shale gas production hazards to be insurable. (For those that are looking for more reading, check out Nick Grealy’s “No Hot Air” website over here.)
And on the other side of the “Frack off” opinion of environmentalists, we should also consider the economic benefits, which are very clear if you look at the United States at this moment:
- Shale gas has created many “shaleionaires”, people that became rich after selling the shale gas extraction rights of the land they own. In Europe, as the states and not the individuals are owners of the mineral rights, this wealth can be used to the benefit of the overall population.
- Shale gas production has proven to be a potent creator of employment.
- The price of gas in the US has dropped to 1/3 of the gas price in Europe, creating important competitive advantages for American energy-intensive industries.
- The US has become the largest producer of natural gas of the world, larger than the US and Qatar.
- Because of the cheap gas prices, gas-fired power production has soared in the US, reducing the production of power by coal-fired power stations. This has caused a remarkable drop in carbon dioxide emissions in the US.
- Thanks to this shift to gas-fired power production, the US is now exporting more of its coal, which is benefiting the country’s trade balance. For the further future, exports of gas are also on the radar.
- The US is on the path to energy independence, reducing its dependence on imports of hydrocarbons from the Middle East.
This is my opinion. Yes, shale gas production will cause environmental dammage. Any extraction of natural ressources, or any industrial activity has an impact on the environment. The question is: what is the net cost for the environment of shale gas production? What is causing most harm: producing power from shale gas or from coal? Is shale gas production much more damaging than conventional gas production? And does this net environmental impact outweigh the economic benefits? This last question is not something that can be decided on a scientific basis. Science is to deliver the solid factual basis for running the debate. But balancing ecology and economy will ultimately be a political decision. Which points out the necessity of having a good public debate on the topic of unconventional gas production.
This brings me back to the situation in Belgium. This afternoon, I was reading through some reports of debates in the Flemish parliament on the topic of unconventional gas production. First conclusion: minister Ingrid Lieten is working on it. In the next months or years, it might become clear whether the coalbed methane and shale gas reserves in Belgium can be extracted and if the economics might fit (is the extraction economically feasible?). Second conclusion: many politicians participating in the debate lack basic knowledge. There was a huge mix-up of the topics of coalbed methane, shale gas and carbon sequestration. Third conclusion: the Green Party has most expert knowledge, which it is abusing to dominate the debate. Without any protest, Green party members have repeatedly claimed in the Flemish Parliament that all scientific reports point out that shale gas production cannot be conducted safely, which is manifestly untrue. Especially after last week’s dramatic events in Belgium’s industry, I hope that our politicians seriously consider the economic potential of shale gas production and start up a sincere debate on its opportunities and risks. I recently read a book that was a beautiful illustration of the dilemma that we face in this pro or contra shale gas debate: The End of Country. It was written by Seamus McGraw, a publicist that lives in Pennsylvania and had to take the decision whether to sell the mineral rights of his parents’ property to a shale gas production company. I want to end this blog with the following quote from the book, as looking at the desperate people in Genk immediately made me think about it;
“Such images were imprinted in my DNA. And what little I knew about the oil and gas industry – the catalogue of environmental disasters that spanned the globe, from Valdez, Alaska, to the coast of Australia, did nog reassure me. But on the other hand, all I needed to do was look around at the many formerly thriving farms on and around Elsworth Hill, places that after nearly forty years of bad federal and state farm policies had failed, places where a sense of desperation and loss was as thick as the brambles that covered once carefully tended fields, to see that something needed to change, and perhaps this was that chance. That, too, was imprinted in me. The documents that the woman with the nose ring [representing the gas company] carried in her briefcase could be blueprints for the construction of a new world up there, a world where some people at least no longer had to lie awake at night wondering whether this was the year they would lose everything. There might even be a greater good that could come of it, maybe for the state, or even for the nation at large. There was, after all, a lot of talk in those days about energy independence, and this, I told myself, could be a step in that direction. But it could also be a step backward. Those same papers could be a declaration of war by a new world on an old one, a fading world where the same people would lie awake at night wondering how they could have allowed themselves to stand by while the land, their birthright, was poisoned and maimed. Such things had happened before, and it was always the people on the ground, those who lived in the out-of-the-way places where energy is found, who paid the highest price” (Seamus McGraw, The End of Country. Dispatches from the Frack Zone, Random House, 2011, p. 10&11).
(By the way, Seamus signed the papers, and shale gas is now being produced on his parents’ property.)