Natural Gas

by Veronique de Rugy

The always worth reading Alex Tabarrok posted this interesting chart over at Marginal Revolution.

He writes:

The graph is from Peter Tertzakian who notes:

“To put this in perspective, 1,000 Tcf of natural gas contains the equivalent energy to 166 billion barrels of oil — a staggering amount considering that the discovery of 10 billion barrels of conventional oil these days is a rare occurrence, worthy of many headlines. . . .”

Estimates of recoverable shale gas have doubled in just the past year and shale gas is only part of the supply with the total being 2,552 trillion cubic feet (Tcf) of potential natural gas resources in the U.S. alone. Per unit of electricity, burning natural gas results in significantly fewer carbon dioxide emissions than coal. It is possible, however, that fracking may leak more methane to the atmosphere so the net climate benefit is unclear, at least given current methods of development.

By the way, one of Alex’s commenters explains the difference between “proven” and “technically recoverable.”

Proven means it’s reasonably certain that it is both feasible and economic to recover it given current technology and economic conditions. In other words, at current natural gas prices, it would be worth the cost to recover it.

Technically recoverable means that it’s possible to recover it with existing technology, but without considering costs. In other words, natural gas prices would have to rise or unit costs would have to fall before technically recoverable reserves become “proven.” (Note: This has the practical implication that those supplies by themselves can’t be used to push down natural gas prices.)

I am agnostic (and ignorant) about most energy issues, but from what I have read, sources of energy like nuclear, wind, and solar only flourish in countries where governments intervene on their behalf.

Here is my question: Is natural gas a source of energy that can take off and survive without gigantic government subsidies?


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