Conflicting reports on the future of shale gas

The national debate over hydraulic fracturing and the future of shale gas in America's energy future is getting hotter all the time.

The good news: Investigators from well-respected institutions dedicated to ferreting out facts are taking a close look at the shale gas industry.

The bad news: They're drawing completely different conclusions.

In Saturday's New York Times, reporter Ian Urbina -- who has been working on a series of investigative reports on natural gas -- uses insider emails to paint a damning portrait of the shale gas industry as a speculative bubble that is already beginning to let investors down.

“Money is pouring in” from investors even though shale gas is “inherently unprofitable,” an analyst from PNC Wealth Management, an investment company,  wrote to a contractor in a February e-mail. “Reminds you of dot-coms.”

“The word in the world of independents is that the shale plays are just giant Ponzi schemes and the economics just do not work,” an analyst from IHS Drilling Data, an energy research company,  wrote in an e-mail on Aug. 28, 2009.

Today, Urbina has a related story in the paper: A look at internal emails from the federal Energy Information Administration, where some staffers express private skepticism about shale gas even as the EIA takes an optimistic view of the industry in public statements.

Meanwhile, in a story that stands in sharp contrast to Urbina's expose, the Associated Press reports today that wells in the Marcellus are exceeding drillers' wildest expectations:

Drilling companies knew the Marcellus held a lot of gas. They just had to figure out a way to get it out, and they say they’re getting better at it all the time.

The result is that the Marcellus, a rock formation beneath Pennsylvania, New York, West Virginia and Ohio, has turned out to be an even more prolific source of gas than anyone anticipated. Energy firms are boosting their production targets, not only because new wells are coming on line but also because they’re managing to coax more gas from each well.

While the nation's prominent news organizations devote more and more ink to the economic future of shale gas, another fierce debate is playing out in academia over what the gas rush could mean for climate change.

This month, a large interdisciplinary research team from MIT released a major study, titled, succinctly, "The Future Of Natural Gas," which seeks to answer a broad question: "What is the role of natural gas in a carbon-constrained economy?"

Though the study's authors have been criticized for close ties to industry, the report isn't exactly a ringing endorsement of industry claims. The authors conclude that disposal of fracking wastewater is a problem, that substandard well casing can lead to contamination of drinking water by methane, and that more regulation and transparency is needed in the industry. But overall, the study calls the environmental risks presented by hydraulic fracturing "challenging but manageable."

With regard to climate change, though, the MIT report comes down clearly in favor of more natural gas exploration:

In the U.S., a combination of demand reduction and displacement of coal-fired power by gas-fired generation is the lowest- cost way to reduce CO2 emissions by up to 50%. For more stringent CO2 emissions reductions, further de-carbonization of the energy sector will be required; but natural gas provides a cost-effective bridge to such a low-carbon future.

In a nearby ivory tower, another research team is warning that increased natural gas drilling could accelerate climate change dramatically.

In a study published earlier this spring, a team of researchers led by Cornell professor Robert Howarth analyzed the climate costs of natural gas over its entire lifecycle, from extraction to use as fuel, and concluded that natural gas may be on a par with coal for greenhouse gas production.

The MIT study's authors singled out Howarth's study for heavy criticism on several points, saying that Howarth had used the wrong figure for calculating the carbon dioxide equivalent of methane gas, and had failed to account for the increased efficiency of natural-gas-fueled electric plants compared to coal plants.

At the heart of the debate is a simple, but tough-to-answer, question: How quickly do we have to act in order to stave off the worst impacts of climate change?

Compared to carbon dioxide, methane (the main ingredient in natural gas) breaks down fairly quickly in the atmosphere. But while it persists, it is a much more potent greenhouse gas than carbon dioxide. When calculating the climate impacts of methane leaks, Howarth's study used a 20-year timeframe to measure methane impact. The MIT study -- like most government scientific bodies -- uses a 100-year timeframe.

Physicist Joe Romm, who runs a widely read (and extremely data-heavy) climate blog called Climate Progress, thinks Howarth's unconventional 20-year figure is reasonable:

Prof. Howarth, who chairs the International SCOPE Biofuels Project and was Editor-in-Chief of the journal Biogeochemistry from 1983 to 2004, made a compelling case to me:  “If you believe climate change is real and that we are approaching tipping points, then you need to look at a time horizon of a few decades” for assessing impact.

Even setting aside worries about water pollution, the long-term prospects for natural gas are full of uncertainty. Is shale gas abundant and cheap to get at, or a wildly inflated bubble waiting to pop? Will it help the nation along the path to a low-carbon economy, or is it as bad of a polluter as its fellow fossil fuels? Much brainpower is currently being devoted to questions like these, but there are few clear answers to be had.