As U.S. Moves Toward Becoming Natural Gas Exporter, Experts Consider Implications

Jonathan Fink, Gretchen Goldman, Vaughan Turekian (session moderator), Sean J. O'Brien | AAAS/Carla Schaffer

The United States has seen a recent boom in shale gas exploration, made possible by the advent of new technologies such as horizontal drilling and hydraulic fracturing, also known as fracking. That increase in U.S. natural gas production has had far-reaching effects stretching from small American towns to nations on the other side of the globe, said experts at a recent AAAS event in Washington, DC.

"There is no question that the scale of the gas revolution is unprecedented," said Charles Ebinger, senior fellow and director of the energy security initiative at the Brookings Institution.

Ebinger spoke at "Eco-Engineering: How Shale Gas is Shaping Energy Security and Environmental Issues across the World," the fifth annual forum sponsored by Hitachi, Ltd. and co-organized by AAAS and the Brookings Institution. Previous forums have tackled such complex issues as climate change and transportation.

The series of lectures and discussions began with an overview from Ebinger of the global energy situation. Just a few years ago, he noted, experts were predicting that the United States would soon run out of natural gas and within a decade would be importing 40 percent of the nation's natural gas supplies. "Nothing could be further from reality," he said. That past trend has now reversed, and the country is set to become a major natural gas exporter.

The United States, however, is not yet shipping liquid natural gas (LNG). For now, those resources are staying on the North American continent, which has helped to keep energy prices relatively low in the United States and driven a revival in American manufacturing, Ebinger noted.

But shale gas is set to take off in other regions of the world, such as Australia, the Middle East and potentially Russia. The United States has given tentative approval for the development of four LNG export facilities, but Ebinger noted that by 2020 the global competition for natural gas will intensify as major LNG and intercontinental gas supplies enter the market. Nineteen other export facilities have been proposed in the United States, but the coming competition makes it unlikely that all 19 will eventually be built, Ebinger said.

Charles Ebinger | AAAS/Carla Schaffer

One nation that is interested in becoming a customer for American natural gas is Japan. The country imports all of its gas and oil, noted Nobuo Tanaka, global associate for energy security and sustainability at the Institute of Energy Economics, Japan. Because the country is so reliant on imports, electricity in Japan is triple the price in China, making it difficult to compete in manufacturing and other efforts. "The U.S. will start very soon, hopefully, exporting gas," Tanaka said. Japan would be an eager customer.

The coming switchover from the United States being a fossil fuel net importer to exporter could have implications around the world, especially if the U.S. government decides to abandon its traditional role in keeping open oil and gas trade routes such as the Strait of Hormuz leading out of the Persian Gulf, Tanaka said. It is unknown at this point who might take over that role.

The exploitation of shale gas also brings many other concerns, particularly on the environmental and climate levels, noted Michael Levi, director of the Program on Energy Security and Climate Change at the Council on Foreign Relations. "A lot of these deposits are pretty close to urban areas and that makes for a challenging set of environmental problems," Levi said. "On top of that, if you're in a part of Europe that has a lot of zero-carbon energy, then natural gas poses a different sort of climate discussion." Natural gas can help decrease greenhouse gas emissions in regions that are now reliant on coal, but for areas that already use more low-carbon sources for power, shale gas could lead to an increase in greenhouse gas emissions.

In the United States, the advent of shale gas and other unconventional fuels has led to fossil fuel extraction taking place in many locations that have never had to deal with it before, as well as in places far more populous than previous hotspots for oil and gas, noted Gretchen Goldman, an analyst for the Center for Science and Democracy at the Union of Concerned Scientists. That has led to more dialogue and more pushback at the local level, she said.

That local perspective came from Sean J. O'Brien, the state representative for Ohio's 63rd district, an area just north of Youngstown. "You've got to start with the environment," O'Brien said. "How do we minimize risk, and how do we maximize the benefit?" The rules and regulations now vary from state to state and sometimes, as in Pennsylvania, town to town.

The federal government has largely stayed out of regulating these new developments in shale gas, Goldman said. That has left the industry with a patchwork of regulations. The hands-off approach may work well for states such as Texas where the regulation of fossil fuel exploration has a long history, Goldman said, but other states without this history may benefit from more federal guidance on managing the risks associated with oil and gas development.

Nobuo Tanaka and Michael Levi (right) | AAAS/Carla Schaffer

Oil and gas is a new concern for O'Brien's Ohio district, and the industry has brought a lot of money to the area. BP, for example, spent $330 million on lease rights alone. But it's not just these revenues that are having an impact, O'Brien said. The region has now become one of the fastest growing areas of the country as the gas revolution has also brought a return of many manufacturing jobs. But the region has also learned from its past cycles of boom and bust, O'Brien said, and is now being more careful and diversifying its economic interests.

The shale gas boom hasn't been completely rosy, however. Locally, O'Brien noted, people have been dealing with problems caused by fracking. These have included issues such as more trucks being on the roads as well as the burning off of methane produced in the extraction of natural gas, which can emit chemicals that exacerbate respiratory problems such as asthma. In addition, the implications for the climate are often ignored in discussions of the natural gas rise, in part because this can be such a significant economic opportunity, noted Jonathan Fink, vice president for research and strategic partnerships at Portland State University in Oregon. "The short-term economic positives are drowning out the long-term climate negatives," he said. "How do we better integrate those two perspectives?"

The move to natural gas can be seen as an intermediate step on the path from coal, diesel and gas to climate-friendly energy sources such as wind and solar, O'Brien noted. "Using a less destructive fossil fuel is giving us more time without having to rely on pollution-causing agents like diesel and gas," he said. "I think there's an opportunity there."