The Future of Energy and what the Shale Gas revolution means for you

Our team at TomorrowToday Strategic Insights have been watching the developments in the shale gas revolution for a number of years and our earlier predictions of the massive disruptions this energy technology will deliver are becoming increasingly visible. We recently interviewed Lars Tvede, futurist and author of Supertrends – Winning investment strategies for the coming decades and this is what he had to say:

“I think the shale gas revolution will have a bigger impact than is generally reflected in the press. Initially it is primarily happening in the US, where oil production is also rising very quickly. Because of this, North America – USA, Canada and Mexico – are likely to be self sufficient in energy by around 2020. This will most likely mean that USA will partially disengage further militarily from the Middle East at a time where China will be even more dependent on Middle Eastern oil than it is today. As a consequence, perhaps China will feel forced to take a more active political and even military role there in the future. A second effect of the shale gas boom is a reduction in inflationary pressure as well as a reduced risk of big spikes in energy prices. This makes it easier for the world economy to recover from its recent crises. Thirdly, it supports the emerging industrial renaissance in the States, whilst also helping to improve the country’s balance of payments. This renaissance is very important for many reasons. Of course, it creates jobs, but Americans will also be in a better position to innovate if they have their production where their R&D people are. And finally, shale gas is great for the environment since it is much cleaner than the coal that it replaces.”

Lars has also written an excellent blog called “Energy technologies that may change everything” that is an excellent overview of the future of energy and what we can expect.

Welcome to the immediate future of energy: Shale Gas

The Economist believes that “The shale-gas revolution in America has been as sudden and startling as a supertanker performing a handbrake turn” and whilst we’ve been led to believe by the media and environmentalists that we are running out of oil, new estimates are emerging that we may have up to 300 years supply of alternative fossil fuels that are cleaner than traditional oil. As Lars points out:

“Through the last century there have been numerous predictions that we were about to run out of energy reserves. For instance, the US president Warren Harding established a commission to investigate the prospects for American oil and gas production, and after interviewing more than 500 experts, the commission reported that the production of gas had already peaked and that oil production would soon follow. That was in 1922… But how much gas do we have? According to Limits to Growth, we should run out somewhere between 1994 and 2024. So a maximum of 13 years left. This will not happen. The International Energy Agency recently doubled its estimates of how much gas we have so that they now believe that we have enough for – 250 years! Yes, two hundred and fifty. The main reason for that is what goes on in so-called shale gas.

  • The economic pluses for shale gas are obvious:
    • Cheap gas yields cheap electricity, which boosts industry, especially power-hungry sectors such as aluminium, steel and glass.
    • This also buoys petrochemicals firms, which use it to make useful stuff such as plastic.
    • America consumes some 19m barrels of oil a day. Imported oil costs $109 a barrel. Not having to pay Saudi Arabia and Russia for this is a boon.
    • The USA has over 100 years supply of natural gas and by 2020 – USA will be the largest producer of oil and gas. This from a position of being the largest importer will have a dramatic impact on the world’s largest economy.
    • Predictions are being made that as a result of the shale gas revolution, the US will be able to wipe out its budget deficit within the next decade, massively increasing its position to compete globally as cheaper prices are past on to consumers and companies.
    • Personal and corporate taxes could potentially also drop. Without the deficit noose around the neck of the US, we see taxes being reduced as competitive positioning increases.
    • Natural gas emits 45 percent less CO2 per unit of energy produced compared to coal. And though hydraulic fracturing, the technique used to exploit shale gas, requires about 4.5 million gallons of water per well, it is equal to what a 1,000-megawatt coal-fired power plant consumes in just 10 hours.
    • Fracturing, studies show, could contaminate groundwater. This will lead to environmental concerns and the industry will need to safeguard against contaminating underground water sources.
    • The UK is moving quickly – Chancellor George Osborne has recently approved the continuation of fracking in the UK and we expect other European countries to follow suit to ensure that their major industries are able to respond to the competitive low cost energy injection that the US is creating.”

 

And The Ultimate Energy Solution?

Lars believes that Nuclear fusion will provide us with the ultimate in clean and abundant energy:

Because nuclear fusion will be very clean, perhaps cleaner than any other energy technology including gas, windmills and solar panels.  And with it, we will have resources to power the Earth for 150 billion years – 10 times as long as the universe has existed. The implications for our economy, environment and global politics will be massive.

The future for energy looks very bright indeed.

 

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