Natural Gas and Hard Limits

North American Natural Gas Production as of 2002


"It’s not that hard to predict what will happen in the future (I will die; Fifi, my son Fallon’s stuffed orca, will eventually need restuffing, etc.) but it is very hard to predict with any accuracy when things will happen."

Robert X. Cringely (in a recent blog post)


In 2003, the AUMA held a conference called the Alberta Municipal Energy Efficiency & Greenhouse Gas Conference. I always laughed at the title, because the real reason we were all there was high natural gas prices. "Expensive Natural Gas Conference" would have been more accurate, as prices exploded circa 2000, and suddenly we cared about greenhouse gases.

Conventional natural gas production (ie. the old, easy way to produce gas) in North America has been on the wane for some time now. It has most probably peaked and will continue its decline forever. This fact led many, including myself, to be alarmed at the prospects for natural gas going forward. I asked myself "how will the hundreds of thousands of energy-hungry houses and buildings stay warm in 2030?" I think that everyone should be concerned about the availability of finite resources instead of assuming that someone else will figure it out for us.

Unfortunately for the climate, a resource called shale gas has come into play over the past few years. Apparently there is a lot of it, and it is being brought on stream in large quantities. So the price of natural gas has dipped significantly, and the pundits are starting to talk about gas as a major player in North America for the next long while. While there are many unanswered questions about shale gas (such as how much energy is needed to get it out of the ground and the steep rate of well depletion), it seems that a continent-wide snooze button has been pressed on the subject of heating our homes and fuelling our industry with a depleting, finite resource.

We waste what is cheap, so cheap energy is bad news on many fronts. Interest in green building will decline, investments in renewable energy will be less than they would have been with pricier gas.

It’s frustrating that the apparent near-term abundance of natural gas will keep so many people apathetic about energy. Yet every day we approach the physical limits of growth. It’s not hard to predict that we will hit them. It’s not even hard to predict that we will hit them soon. What is hard is to get people to care when the price signal isn’t there, and when we have just bought ourselves another few years of complacency on the natural gas front.

Of course, peak oil is another story entirely.

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Hey Conrad, funny you should bring this up. I just recently ran across a couple of articles that showed how the world will be changing in the near future. Firstly, there's an article about the Alaska pipeline (the Trans-Alaska Pipeline Systems or TAPS for short). The pipeline has a capacity of 2 million barrels per day but currently has a throughput of only 770,000 barrels per day – or 38.5% of the maximum capacity. The minimum throughput of the pipeline is between 200,000 and 300,000 barrels per day or 10% to 15% of the maximum. I was surprised to see how close the current utilization is to the minimum and to read that it's estimated that the pipeline will be shut down as early as 2020. What's the reason for the low utilization? Declining North Slope production. See the US Department of Energy site here:

The other article that caught my attention was about Aberdeen Scotland. For decades Aberdeen has been an energy hub thanks to North Sea oil and gas production and the article discusses how they are planning to diversify into renewable energy. The reason for the diversification? North Sea oil and gas production is 44% below its peak and dropping. The original article from the Edmonton Journal is here:

Time allows for the economic and physical efficiency of green technologies to improve. Look at solar cells over the past 20 years and you'll see they are more efficient and less expensive. 20 years of cheap gas will give time for improvements in technology that could allow for much more widespread use.

It also will mean many households won't have to spend their last penny to stay warm, and thereby provide an opportunity to invest in energy efficiency.

Every thorn has it's rose?

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