Is Shale Gas Good or Bad? Panelists and the Audience at KPMG Summit are Split

It’s not that we lack controversial sources of energy, from nuclear energy to ethanol, but none of these resources has the potential to become a substantial resource like shale gas has for better and worse. With so much at stake when it comes to how sustainable the future of energy is going to be, it’s no wonder that even at the KPMG summit, shale gas became such a hot topic that the panelists and the crowd seemed to be very passionate about and at the same time split about the answer to the question.

First let’s look at why this question matters at all. According to KPMG’s Energy Survey 2011 there’s a growing interest in shale gas and oil: 44 percent of respondents believe these to be the energy sources that will see the most future investment (the corresponding figure was less than 1 percent in 2010). Shale gas will represent 65 percent of US gas production by the 2030s, up from an estimated 43 percent by 2015 according to the survey.

These figures are somewhat higher than the forecast provided by the U.S. Energy Information Administration (EIA). In EIA’s view, shale gas is expected to grow to nearly half of all natural gas production by 2035, spurred by new technology and a greater push toward more liquids-rich plays due to higher oil prices.

Another EIA’s estimate shows that shares of fossil fuels in global primary energy consumption will fall only slightly from 81 percent in 2010 to 75 percent in 2035, and natural gas is the only fossil fuel to increase its share in the global mix over this period. These estimates mean only one thing - shale gas is becoming a substantial energy resource that its golden years are still ahead. Add to this mix the debate on the environmental impacts of fracking and you get the idea why this energy resource has become such a hot, yet divisive topic.

Although not everyone agrees about it, the assumption used by the panelists was that natural gas is the cleanest fossil fuel. A recent research supports the argument that even shale gas is better than the fossil fuel alternatives, concluding that “shale gas has a GHG footprint that is half and perhaps a third that of coal.” Still, not all the panelists thought it makes it a worthy resource.

The arguments against shale gas in the panel usually focused on its possible negative impact on renewable energy, since this cheap source of energy makes renewables like solar or wind less attractive from an economic point of view. This approach is also backed by a study by MIT researchers published recently (‘The Influence of Shale Gas on U.S. Energy and Environmental Policy’), which shows that the expansion of shale gas can put limits on the expansion of other clean energy sources, because natural gas power plants would tend to be cheaper than wind or solar. The result might be, as one of the panelists put it, that in the long run gas might be the new coal, which means we substitute one problem with another.

Some of the panelists chose the middle road, similar to the one President Obama endorsed in his last State of the Union Address, which is basically that this can be a good energy source that will help us meet the growing demand, if we could only make sure it is sourced responsibly. Dr. Jeanne Ng, Director – Group of Environmental Affairs at CLP Holdings argued that gas is better than coal, yet concerns about risks need to be addressed, adding that she hopes there will be regulation and policy measures to manage it.

Others saw shale gas more positively. Steve Corneli, SVP, Sustainability, Policy and Strategy at NRG Energy made the point that this disruptive technology is good because it replaces coal, but it’s also bad for clean energy. He chose the good over the bad, explaining that in the long run shale gas is good, creating a healthy competition between gas and renewable energy resources like solar. This sort of competition will eventually benefit consumers as prices will go down.

Maybe not surprisingly the panel audience was split almost evenly about this question as well. A poll showed that 47 percent of the audience was favorable toward shale gas, while 53 percent were unfavorable toward it.

The debate will probably keep heating up about shale gas and whether or not it’s a positive or negative development from a sustainable point of view. I do hope that Rio+20 will address this issue as it looks like shale gas is going to stay with us for some time. The least we can do is to figure out if it’s actually possible to maximize shale gas’ positive impacts and reduce its negative ones and if so, how to do it. After all, we really don’t want to build another bridge to nowhere.

Raz Godelnik is the co-founder of Eco-Libris, a green company working to green up the book industry in the digital age. He is an adjunct faculty at the University of Delaware’s Department of Business Administration, CUNY and the New School, teaching courses in green business and new product development.