Articles from 2013
Time to start selling natural gas again
- Written by Nick Grealy
- Published: 20 November 2013
Although it seems there are shale events every other week in the UK, giving rise to the joke that the only people making money in UK shale are conference companies and security firm G4S, there have always been a number of conventional gas conferences, and it was only at last week's EAGC in Brussels that the twain started to meet.
The conventional gas industry in Europe has been of two minds about shale, but last week’s two main themes were about increasing demand for gas in Europe and significantly, how to start selling gas as a product instead of a commodity. Tacked on to the second were genuine concerns that the conventional gas industry was being “tarred with the shale brush” as one speaker put it.
Speakers from the majors such as GDFSuez, E.on, Italy’s ENI and Dutch transporter Gasunie all voiced concerns that public acceptance of shale could affect the entire gas chain of supply, storage, transmission and point of use. The UK’s No Dash for Gas was mentioned as example. This group trumpeted:
The protesters, all from the group No Dash for Gas, had camped up two 80 meter Chimney flues for a week in protest at government plans to build up to 40 new gas power stations and make the UK reliant on gas for the next 30 years.
The group argues that the ‘dash for gas’ which also includes drilling for shale gas will exacerbate climate change, crash the UK’s legal obligations to cut carbon emissions and keep millions stuck in crippling fuel poverty.
No Dash for Gas doesn’t quite understand that closing down a gas-fired plant means the electricity was generated using coal. Their campaign stems not only from their ignorance of some basic energy science, but also from a failure of the industry according to several speakers, many of whom were even more vocal from the sidelines. One criticized conventional gas outreach organisations as spending too much time building consensus among supporters and not enough telling the story.
Few people under 40 remember that there used to be a time when gas and electric utilities had substantial presence on the main streets of Europe, promoting the wonders of gas and power. The idea that people on the high street used to look in awe at wondrous devices like refrigerators, toasters and gas fires seems ridiculous today. We don’t even have the National Gas Museum around anymore, which used to have fine library of images that seem unbelievable today. This was one of the last showrooms, appearing to have a closing down sale:
At least they faded away with dignity, whereas East London’s Electricity Showrooms has morphed into a fate worse than death: a hipster haven:
In the 1920's, the good folk of Shoreditch shopped here for toasters, hoovers and the latest brand of gramophone. These days we offer the good folk of Shoreditch an amazing array of local and world craft beers, a large selection of various spirits, great cocktails, topped off with some Sliders!
How the mighty have fallen. I’m surprised that the un-ironic hipsters of Frack Off haven’t used it as a fundraising venue. It would seem a natural for a Great Gas Gala dance on the grave of fossil fuels, although they would have trouble finding wind power enough for the turntables.
The science fiction writer Arthur C. Clarke famously said the best technology is indistinguishable from magic, and we need to bring back the magic to natural gas. A hundred years ago, even in North America and Europe, the idea that there could be on demand light and heat was a wondrous phenomenon, not the taken for granted commodity it became. Familiarity breeds first content, and then, these days in Europe at least, contempt. The gas industry has a wonderful product. We need to start selling it all over again.
The conventional side needs to contend with the other issue of falling gas demand, being squeezed by coal and renewables in generation, increasing efficiency and export industries that ended up exporting themselves. The solution there is pretty much like the one’s proposed in Houston the week before: Natural gas transportation, small scale LNG and in the US case, a move towards producing liquids from gas. This is the not the gas Hail Mary pass but the Jesus one. Using miniature plants to produce jet fuel from stranded gas wells is the methane version of water into wine, making a valuable product from an otherwise useless product. We don’t yet have the problem of stranded shale gas in Europe, and are unlikely to given pipelines are far closer than in British Columbia or North Dakota, but this new thinking coming out of the shale bounty (although from Russian, South African and British companies) shows how the monetisation of gas may turn full circle yet.
Skanngas presented in Brussels on their small scale LNG projects in not only marine fuel but for industrial use. There aren’t too many industries that manage to live off the grid, but each country has some, for the most part still dependent on oil or coal. Swedish forestry products and Scottish distilleries are some examples, but we could see small scale LNG being an attractive option for completely new industries created off the gas grid.
In the same session, called “Gas is dead. Long Live Gas!” the other new uses were for marine fuel, and thanks to Gazprom Germania, plans for a wider rollout of LNG as trucking fuel as we see in the US.
Gazprom Germania were at pains to point out that even at oil-linked prices, gas as fuel both made sense to their parent and sense to European truckers. They’re absolutely right.
As luck would have it, Alexander Medvedev, the chairman of Gazprom was meant to address the conference, but was otherwise detained. Also otherwise detained, were some Greenpeace protestors who played their version of unfold the banner, this time with holding up placards behind the speakers, protesting Gazprom’s drilling in the Arctic. They were quickly shuffled off, but not before I took the microphone. This is the gist of what I told them:
If you truly are concerned about drilling for gas and oil in the Arctic, why does Greenpeace not support shale oil extraction in Balcombe, where we can find it safely under our feet without pissing off polar bears? The US example, where onshore shale energy means that offshore and Alaskan leasing has withered away, shows that the best energy is local energy. Wind, solar and oil and gas.
Naturally, they didn’t respond, but it’s a question I’ll be asking of the Green Party, Greenpeace and Friends of the Earth at a Spectator Magazine debate in London December 2. If you don’t want to buy tickets to that, you can see me for free with Matt Ridley and Phelim McAleer at the House of Lords November 26.
I’’ll be speaking at another event in Moscow the day after the Spectator event, and perhaps finally will be able to convince Russia they have nothing to fear on shale energy. We’re all in this together. All of us.