...because the benefits enormously outweigh the costs.
Prolific author Matt Ridley writing at the UK Telegraph enumerates them
1. Cheap and abundant energy should help spur economic growth
Cheap energy is the surest way to encourage economic growth. It was cheap coal that fuelled the Industrial Revolution, enabling British workers with steam-driven machinery to be far more productive than their competitors in Asia and Europe in the 19th century. The discovery, 12 years ago, of how to use pressurised water (with less than 1 per cent kitchen-sink chemicals added), instead of exotic guar gel made from Indian beans, to crack shale and release gas has now unleashed an energy revolution almost as far-reaching as the harnessing of Newcastle’s coal.
2. Environmental Friendly
And if cutting carbon emissions is what floats your boat, you will like shale gas even more. The advent of cheap gas, by displacing coal from electricity generation, has drastically cut America’s carbon dioxide emissions back to levels last seen in the early 1990s; per capita emissions are now lower than in the 1960s.
3. Market driven energy and less baggage on taxpayers compared to political driven alternatives
Britain’s subsidised dash for renewable energy has had no such result: wind power is still making a trivial contribution to total energy use (0.4 per cent) while most renewable energy comes from wood, the highest-carbon fuel of all.
4. Alter geopolitical environment
Best of all, the shale revolution is causing consternation in Moscow and Tehran, which had expected to corner the natural gas market in decades to come. As a sign of the panic it is inducing, a forthcoming Matt Damon anti-fracking film was financed partly by a company owned by the United Arab Emirates government. (The film’s plot had to be rewritten after the authorities absolved a gas company of causing pollution in a well-publicised case in Dimock, Pennsylvania.)
I might add that the Shale gas revolution will likely compel authoritarian resource rich, or might I rather say resource curse, economies to liberalize, knowing that their stranglehold on energy supplies faces stiff competition.
(chart from Danske Bank)
The Shale boom will also put tremendous pressure on the authoritarian regimes' energy based welfare states, which has been the main source of the political existence.
So the shale gas revolution will likely bring on more trade, more reforms and lesser welfare states
5. Safe technology
Exploiting shale gas is safe, according to the Royal Society and the Royal Academy of Engineering. Fracking of one kind or another has been used here for decades; the earthquakes it causes are no worse than a bus going past; it does not use much water compared with other industries; it’s not responsible for flammable tap water; and methane leakage is not as bad as has been claimed. Nor, with a mile of rock between the fractures and the aquifers, does it cause groundwater contamination. Last year there were 125,000 fracs in the United States. According to the Environmental Protection Agency, no frac has ever contaminated groundwater.
The Shale gas boom will initially benefit the US and Canada, but will most likely spillover to the rest of the world.
Shale gas reserves can be found in many countries. The Wall Street Journal notes that
U.S.-government contracted study of 32 countries estimated they held 6.6 quadrillion cubic feet of shale gas, more than 50 years worth of current global consumption. The U.S. held 862 trillion cubic feet, or just 13% of the estimated resourceThe study didn't offer an estimate of either the volume of oil in global shales or the size of massive shale deposits in Russia and the Middle East. Other estimators have suggested this figure could be high, but nonetheless expect there is vast untapped energy in shales world-wide.
Although the boom has several obstacles to overcome mostly in terms of politics: government ownership of mineral rights, environmental concerns and the lack of infrastructure.
For instance, countries like France and Bulgaria has banned hydraulic fracking. China huge shale reserves are situated in arid or heavily populated areas where accessibility to water poses as constraints.
There are also technology constraints or access to technology which so far has limited market participants.
Nevertheless, the shale revolution has been estimated to shift energy consumption and trade patterns globally.
The US may reach self-sufficiency and become an exporter by 2035
Notes the Economist,
the same technology is unlocking shale oil, which along with fuel efficiency measures, could slash America's dependence on oil imports. With all sources of energy taken together (including nuclear, renewables, etc) the country could hit net self-sufficiency by 2035. The rest of the world is set to rely even more heavily on imports, with the exception of Japan and South Korea, which already import all their oil and gas, and the ASEAN region, which will have less of a surplus to export
Recently I pointed out that Asians have began piling on on Shale gas boom through record corporate takeovers of Shale companies
Mr. Ridley is right, countries that turn their backs on cheap energy will lose out