Pembina Institute

Quebec shale gas proponents misrepresent Pembina study

Cette article est disponible en français ici.


Several weeks ago the Pembina Institute and the David Suzuki Foundation published my study "Is natural gas a climate change solution for Canada?" Its main conclusion (p.36) was that "adequate climate policies will lead to a level of natural gas production and use that is lower than the business-as-usual level, in the near, medium and long term."

As I noted in the media release on the day the report was published: "Economic modelling consistently shows that efficient policies to reduce greenhouse gas emissions will lead to less natural gas than under business as usual — even in the near term."

We were hoping that our work would help stimulate a well-informed debate about natural gas, based on the best available science and economic analysis. It's therefore very disappointing that two of the most prominent proponents of shale gas development in Quebec have chosen to use our report as part of a misleading public relations exercise.

Stéphane Gosselin, executive director of the Quebec Oil and Gas Association, claims that the report "says that if Canada and the U.S. made major use of natural gas in the future, it would allow them to meet their international greenhouse gas reduction targets for 2020." This statement (in French) can be found in a video on a website financed by the Canadian Association of Petroleum Producers.

Cover of our recent report on natural gas.I did acknowledge, in the introduction to the report (p.5) — before getting to an analysis of the economics — that replacement of coal by natural gas "could potentially make a significant contribution to meeting the near-term national greenhouse gas targets to which both Canada and the U.S. have committed." (Note: "potentially make a significant contribution to meeting," not "meet"). But this statement took no account of the need to reduce greenhouse gas emissions in an economically efficient manner.

Mr. Gosselin remains completely silent on our main conclusion, which is based on the economic modelling studies reviewed later in the report. He fails to mention what that review revealed: "where policies are designed to be consistent with limiting average global warming to 2°C — the objective that governments have unanimously endorsed in the UN climate negotiations — North American or Canadian natural gas consumption is projected either to rise only a little above current levels or to decline." (p.35)

And when Kim Cornelissen of the AQLPA, an environmental NGO, and Lucie Sauvé, professor at the University of Quebec, tried to set the record straight, Mr Gosselin simply repeated his extremely selective portrayal of my report.

"Economic modelling consistently shows that efficient policies to reduce greenhouse gas emissions will lead to less natural gas than under business as usual — even in the near term."Michael Binnion, CEO of Questerre Energy (holder of the largest area of shale gas leases in Quebec), has provided his own account of the report. He goes so far as to claim that "Suzuki and Pembina say natural gas could economically reduce emissions by over 30% in North America."  Our conclusion is the exact opposite: reducing greenhouse gas emissions economically means slower development of natural gas extraction, even when one is seeking only modest emission reductions. But Mr. Binnion, like his colleague, avoids any mention of this main conclusion of my report.

Mr. Binnion incorrectly claims that our reservations about natural gas stem solely from our position that industrialized countries need to reduce their greenhouse gas emissions by 80 per cent (by 2050) to help stabilize the atmospheric concentration at a level allowing us to limit global warming to 2°C. He dismisses these goals as "dreams of perfect" while failing to acknowledge that they have been unanimously endorsed by national governments, after years of scientific studies.

Messrs. Gosselin et Binnion express great satisfaction with the parts of my report where I provide a nuanced assessment of the risks of contamination of drinking water by shale gas operations. But again, they do this selectively, notably omitting any acknowledgement of the industry's disturbing track record in Pennsylvania. In my report (p.17) I quoted at length from a June 2010 statement made by that state's Department of Environmental Protection:

Since January 2010, the department has completed nearly 1,700 inspections of Marcellus Shale drilling sites across the state, finding more than 530 violations that range from poor erosion and sediment controls to administrative violations to spills and leaks from improperly managed or constructed [wastewater] containment pits. [...] During its inspections, the department has identified problems with improperly constructed or maintained drilling waste and flowback containment pits at 29 of the 364 Marcellus Shale wells drilled this year. [...] The department has also responded to spills from a range of sources including leaking fuel storage tanks, unsecured valves on fracwater storage tanks and accidents involving trucks hauling wastewater.

Messrs. Gosselin et Binnion also avoid mentioning another important finding of my report (p.39): "a region targeted for shale gas development will be subject to intense industrialization, with hundreds or thousands of wells drilled annually, a well pad roughly every square mile, considerable additional infrastructure, and the inevitability of accidents." Personally I believe these impacts on the landscape represent the single biggest obstacle to shale gas development in Quebec.

I find it odd, to say the least, that an industry with such a clear need to win public confidence should engage in the kind of cheap public relations that consist of quoting misleadingly from a public report of which the authors are sure to respond. "Shooting oneself in the foot" comes to mind. Please, Messrs. Gosselin and Binnion, could we have a debate based on all the facts — not just the ones that you like?

Pejuang — Oct 20, 2012 - 08:38 PM MT

Amy Myers Jaffe, director of Baker Institute Energy Forum, a polciy think tank at Rice University in Houston. "They are saying to themselves: I am going to produce the gas regardless of what the price is, because I'm making money on the oil and liquids."The article isn't about shale gas. It talks a great deal about gas production coming from drilling for oil. A lot of that gas comes from conventional oil wells, not shale. Yes, these companies can make a lot of money. But that does not mean that the shale gas producers who get a bit of liquids can make it with prices as low as they are. With petroleum selling for $90 a barrel, drillers in places like the Eagle Ford shale or the Bakken can give away their natural gas for nothing and still make 100% annual returns on their drilling dollars. -- ForbesShow me the 10-K forms that tell me that shale gas is profitable. (And when you do make sure that you are not just looking at the production cost, which is a fraction of the total.)Technology development and application are and will remain key elements in maximizing the full value of these large, long-life resources. Here are some examples: Unconventional production from Haynesville increased four-fold in 2010, while production in Fayetteville doubled in 2010. The Barnett Shale, where we currently have gross production of approximately 900 million cubic feet per day of gas, is another good example of value creation through technology. We have been able to maximize long-term ultimate recovery with longer lateral lengths and improved drilling and completion efficiency. And our net unit development cost in this shale play is about $1 per thousand cubic feet equivalent, a 50 percent improvement in the last five years ..." -- ExxonMobileWhat exactly is meant by net unit development cost? What happens when you include all of the other costs? Does this cost include the full depreciation or is Exxon using the overstated reserve estimates and the high EURs that have yet to be seen in the real world?And surely if shale gas were this profitable the pure shale gas players would be swimming in cash. But if that were true why are they swimming in read ink instead and trying to sell themselves off or find new credit lines.

Pierre-Antoine Ferron, Saint-Denis — May 22, 2012 - 08:18 AM MT

I like Lim B's comments because they contain the essence of truth. Regardless of warming, we have to change the way we make and use energy. We have to use in a more efficient way. Hydrocarbons provide unmatched energy density...so lets start and improve on what we have.
Using natural gas for power generation is great, but turbine exhaust contains 13% carbon dioxide. Carbon dioxide separation and recovery from a gas stream is very easy..so is reforming carbon dioxide to syngas and recycle this back to the fuel stream. The are better uses for syngas though.
So technically speaking nearly all technical solutions have been worked out already and to any degree of purity required.
Restucturing of energy use is what is required! Most of the stuff I read on the internet is not of high quality. This is a problem, where for once, its capability and authority would be welcome.
Solving this complex problem probably cannot be achieved by either sector on their own.
We've survived much more complex and dauntig problems in the past...lets get going and stop this nagging.
Thanks for reading this rant and bye for now.

Jim B — Oct 17, 2011 - 07:57 PM MT

Say what you want, shale gas is here to stay. It's causing the US to not be dependent on foreign oil and it's cheap. It's either coal, oil or gas...if you feel they are all evil, it's the lesser of evils.

Green alternative energies are not even close. Many leading experts developing those kinds of technologies even admit they are not close. In the meantime we play with what we have.

EPA hasn't found a single case of fracking causing problems and it won't. This industry is here to stay and will be in Quebec no matter what. It boils down to the fact that Quebec is in $250B in debt and is sinking further. Have you been to a shale gas well after it is drilled? They restore everything and all that is left is a 6X6 well head. This industry has fracked over 50,000 wells and the cases reported are minimal. They have a solid track record. Car companies have recalled tens of millions of cars, so have food processing companies, and even airplanes go down to mechanical problems. All of those problems posed huge risks to people and many have even died, unfortunately. Last I heard we still drive, eat meats and fly. You don't stop or stop going ahead with these things because of a few problems. That exists in every industry.

What does need to be addressed is regulation. Every industry needs it and shale drilling does too. I live in Alberta and have friends that live near fracked sites that have had no problems. Of those 50,000 wells, if we had the kinds of problems people are actually complaining about happening all over and with the frequency they say, then there would be an uprising of millions complaining of serious health problems etc. So many lies have been spread on shale and that's the bottom line.

Here is an article:
http://online.wsj.com/article/SB1000142405297020365880457663739245542465...

Shale gas is absolutely massive and there is no stopping it no matter how much propaganda and lies environmentalists want to spread. The key is regulating heavily and improving the technologies. We're actually seeing more technologies to fracking that eliminate a lot of problems.

50,000 wells fracked and why aren't we hearing about it in other shale plays? These places regulate heavily and that's as much as you can do. For those that don't abide or do poor work by cutting corners, fine them and kick them out. Toyota is one of most respected car companies in the world and recalled millions of cars...I don't see people stop buying their cars. Things will happen but the more regulation in place and making sure we are doing well site tests will help ensure things are on track.

"He dismisses these goals as "dreams of perfect" while failing to acknowledge that they have been unanimously endorsed by national governments, after years of scientific studies." Yeah, because that would make it the first time a government has lied about environmental goals. People went crazy over oil sands here in Alberta and a lot of backlash. Now all I see is Alberta being stupid rich and a lot of people working and making a living for themselves and their families.

Funny how all you people talk about are the mistakes, but never the positives. Go read about what the majority of shale land owners are saying about what it has done to drastically improve their way of life. Even how some US states that were in the red, are now after decades showing a surplus and being able to fund social programs.

I'd love to live in a perfect world without affecting any of this planet, but dream on. You might as well go back to the stone age and stay there. We are an evolving society and human race, and this is what comes with being able to heat our homes and make a living.

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