DOE official: Chinese natural gas could ‘wreak havoc’ on markets

The drilling method that has driven the U.S. boom — hydraulic fracturing, or fracking — uses large amounts of water, making it a necessary input in shale gas recovery.

The practice involves injecting a cocktail of water, sand and chemicals into tight-rock formations to tap hard to reach hydrocarbons buried deep underground.

Kenderdine said the vast shale gas resources discovered during the recent U.S. energy surge already have affected global energy markets.

Backing out of import plans already has exerted downward pressure on prices, Kenderdine said.

And shale finds in Africa, Eastern Europe, China and elsewhere could loosen the grip Russia has on the global natural gas trade, helping to destabilize a government that’s been cool to the U.S. and giving allies more options for trading partners.

“That will affect Russia,” Kenderdine said plainly.

The changing geopolitics of natural gas offered “an enormous opportunity for the world,” Kenderdine said.

The remarks also could point to how President Obama and his Energy Secretary Ernest Moniz are leaning on natural gas in the fight against global climate change.

Both have promoted natural gas as a way to curb greenhouse gas emissions, as natural gas produces roughly half the carbon emissions of coal. It does, however, pump methane into the air, which is a shorter-lived, but more potent, heat-trapping gas.

Still, switching from coal to cheaper natural gas in electricity generation contributed to a drop in U.S. carbon emissions levels to mid-1990s levels last year. Those emissions are trending upward for this year, though, as natural gas prices have risen.

Kenderdine said that “there are a lot of conflicting data on methane out there,” and that the agencies that measure those emissions are currently working out a baseline for measurement.

Kenderdine alluded to the Environmental Protection Agency’s recent downward revision of the amount of methane the agency believed leaks during production. She said those changes, and differences between agencies, are “creating confusion.”

Environmentalists and industry have battled over the prevalence of methane emissions from natural gas.

Green groups have argued that the climate benefits of natural gas are a wash because of methane leaks during natural gas production. Industry, however, said little methane escapes during the process.

“We need a very good baseline for methane emissions from not just from production, but from the entire system,” Kenderdine said.

Tags Ernest Moniz

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