Duke-Dominion promise economic development to eastern NC as natural gas industry and regulators grossly exaggerate the underground gas available
A 600-mile pipeline that would bring fracked natural gas from Pennsylvania to North Carolina is a gamble in multiple ways. As the Federal Energy Regulatory Commission considers the construction application by Dominion Resources and Duke Energy, prominent industry analysts warn that the falling shale gas supply and rising future prices make the ACP a high-risk bet for two key reasons:
UNDERGROUND GAS SUPPLY EXAGGERATED: Canadian shale gas expert David Hughes has shown that, for years, the gas industry and federal regulators have exaggerated – by 50% or more – the amount of underground natural gas that can be produced by fracking (drilling) at shale gas sites.*
Fracked gas wells run dry quickly – up to 82% of the gas is gone in just three years, according to the industry’s own data. Most US shale gas wells are producing less and less already, so the fracking boom relies on drilling more and more wells to keep gas production high. But the billions of investment dollars needed to constantly drill are drying up too, as investors finally get wise.
“If natural gas production declines, as is currently the case, and drilling rates cannot be maintained due to poor economics, fuel prices could skyrocket, putting [electricity customers] at risk of shortages and price spikes,” says Hughes, 32-year veteran of the Geological Survey of Canada and now with the Post Carbon Institute.**
In December, Hughes updated his analysis by reporting that actual shale gas production overall has declined by 4.7% since peaking in February 2016. All shale plays have peaked and older plays, like the Barnett and Haynesville, are down 38% and 52%, respectively. The falling production comes despite innovative efforts to squeeze more gas from the best wells.
Energy specialist Art Berman also questions shale gas supply estimates, as he wrote last year after the Energy Information Agency – despite falling production – greatly increased its forecasts of gas supply:
“The recently released EIA Annual Energy Outlook 2016 sparkles with pixie dust as it forecasts almost unlimited gas supply at low prices out to 2040 and beyond.”
Hughes hoped to explain this gas bubble during 2016 hearings on Duke Energy’s Asheville power plant and the utility’s acquisition of Piedmont Natural Gas. But the Duke-friendly NC Utilities Commission twice refused to allow discussion of the fracked gas supply and price problem, bizarrely claiming it doesn’t impact Duke Energy’s plans to massively expand its burning of fracked gas.
PIPELINE OVERBUILD – TOO MANY STRAWS IN THE MILKSHAKE: With companies looking to build 3,500 miles of new natural gas pipelines across the US – mostly to fuel power plants – even industry leaders warn that production from fracking gas fields cannot keep all the pipelines filled up.
In June 2016, natural gas expert Rusty Braziel compared the fracking boom with the housing crash during the Great Recession. He said too many pipelines are planned for the Marcellus and Utica shale fields the ACP would draw from.
And get this: Braziel assumed the industry’s estimates of underground gas are correct – not grossly exaggerated as explained by Hughes and Berman.
“What we’re seeing is the tail end of a bubble” said Braziel, President of RBN Energy in June 2016.
If Braziel, Hughes and Berman are even close to correct, Duke and Dominion would never risk with their own money on the ACP. But they’re gambling with customers’ money and economic future.
NC JOBS PROMISE WON’T SURVIVE EMPTY PIPELINE: In communities along the proposed route, the ACP is promoted as a driver of economic development. But new jobs and businesses based on the promise of cheap, abundant gas might not survive as fracking production continues to decline, driving prices up.
** Watch a summary by David Hughes on the Myths of US Shale Gas Supplies – at the 34-minute mark of this video.
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