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The move from fossil fuels to renewable energy has been delayed by the shale revolution since the commercial imperative in the marketplace was changed.
Shale gas will continue to have a tremendous impact on the U.S. economy in coming decades and could be a “political game changer,” as it delays the evolution of fossil fuels to renewables, said a Pulitzer Prize-winning energy expert.
“It’s grown so fast and I think it’s already having a big impact,” said The Prize author and Cambridge Energy Research Associates founder Daniel Yergin.
“The impact is not only what it does to the energy balance and not only what it does to the balance of payments, but what it does in job creation and energy development. We have done a study about the job creation potential, and what it drives home is that it’s already having an impact in terms of job creation and competitiveness in the US economy.”
Yergin’s remarks came Oct. 9 during an Atlantic Council of the United States forum in Washington, D.C. In a conversation moderated by Atlantic Council CEO Frederick Kempe, Yergin discussed his national and global energy outlook through 2030.
In his latest book, The Quest: Energy, Security and the Remaking of the Modern World, Yergin explores that very topic while detailing the energy requirements of today’s society. He notes that shale gas has quickly risen from virtual non-existence to today account for more than one-third of the US natural gas supply.
“It’s a remarkable story of innovation. It seemed to burst upon on the scene in 2008, but it had been 25 years in development,” explained Yergin. “It’s really a classic innovation story because there’s one innovator, a man named George P. Mitchell, who drove it and who was very stubborn in talking about it.”
When asked by Kempe if shale gas was delaying the nation’s “inevitable evolution” from fossil fuels to renewables, Yergin said he believed that to be the case. “I think it has changed the timing because it has changed the commercial imperative in the marketplace.”
He also addressed whether natural gas demand might someday outpace supply.
“The perspective at this point is that we do have a surplus market, and we’ve really greatly increased our resources,” he said. “In a sense, it’s the market that constrains it. We are seeing a more rapid switch from coal to natural gas than might have been anticipated even two or three years ago because of the price. Gas becomes the default fuel, along with wind.
“The one area where I would see the greatest risk of volatility — and I actually don’t see this, at least at this point, happening — would be if a significant part of the private automobile market became natural gas fueled. Markets do change, and you could be whipsawed,” he emphasized.