IEA sets out the “Golden Rules” needed
to usher in a Golden Age of Gas
29 May 2012 - Exploiting the world’s vast resources of
unconventional natural gas holds the key to a golden age of gas, but
for that to happen governments, industry and other stakeholders must
work together to address legitimate public concerns about the
associated environmental and social impacts.
A special World Energy Outlook report on
unconventional gas, Golden Rules for a Golden Age of Gas, released today in
London by the International Energy Agency, presents a set of “Golden Rules” to
meet those concerns.
“The technology and the know-how already exist for unconventional gas to be
produced in an environmentally acceptable way,” said IEA Executive Director
Maria van der Hoeven.
“But if the social and environmental
impacts are not addressed properly, there is a very real possibility that public
opposition to drilling for shale gas and other types of unconventional gas will
halt the unconventional gas revolution in its tracks.
The industry must win public confidence by
demonstrating exemplary performance; governments must ensure that appropriate
policies and regulatory regimes are in place.”
The Golden Rules underline the importance of full transparency, measuring and
monitoring of environmental impacts and engagement with local communities;
careful choice of drilling sites and measures to prevent any leaks from wells
into nearby aquifers; rigorous assessment and monitoring of water requirements
and of waste water; measures to target zero venting and minimal flaring of gas;
and improved project planning and regulatory control.
At their recent Camp David summit, G8 leaders welcomed and agreed to review this
IEA work on potential best practices for natural gas development.
“To build on the Golden Rules, we are
establishing a high-level platform so that governments can share insights on the
policy and regulatory action that can accompany an expansion in unconventional
gas production, shale gas in particular,” said Maria van der Hoeven.
“This platform will be open to IEA members
and non-members alike”.
“If this new industry is to prosper, it needs to earn and maintain its social
license to operate,” said IEA Chief Economist Fatih Birol, the report’s chief
“This comes with a financial cost, but in
our estimation the additional costs are likely to be limited.”
Applying the Golden Rules could increase
the cost of a typical shale-gas well by around 7%, but, for a larger development
project with multiple wells, investment in measures to reduce environmental
impacts may in many cases be offset by lower operating costs.
The report argues that there is a critical link between the way governments and
industry respond to these social and environmental challenges and the prospects
for unconventional gas production.
Accordingly, the report sets out two
possible future trajectories for unconventional gas:
In a Golden Rules Case, the application of these rules helps to underpin a brisk
expansion of unconventional gas supply, which has far-reaching consequences:
World production of unconventional gas, primarily shale gas, more than triples
between 2010 and 2035 to 1.6 trillion cubic metres.
The United States becomes a significant
player in international gas markets, and China emerges as a major producer.
New sources of supply help to keep prices down, stimulate investment and job
creation in unconventional resource-rich countries, and generate faster growth
in global gas demand, which rises by more than 50% between 2010 and 2035.
By contrast, in a Low Unconventional Case where no Golden Rules are in place, a
lack of public acceptance means that unconventional gas production rises only
slightly above current levels by 2035.
Among the results:
The competitive position of gas in the global fuel mix deteriorates amidst lower
availability and higher prices, and the share of gas in energy use barely
Energy-related CO2 emissions are higher by
1.3% compared with the Golden Rules Case but, in both cases, emissions are well
above the trajectory required to reach the globally agreed goal of limiting the
temperature rise to 2°C.
New York Times, Editorial, 10 June 2012:
“‘Reports from international agencies
usually make for dull reading. “Golden Rules for a Golden Age of Gas,” from the
Paris-based International Energy Agency, does not.
It should be required reading for
regulators and the industry — and for anyone who cares about energy, the
environment and climate change.”
About the IEA
The International Energy Agency is an autonomous organisation which works to
ensure reliable, affordable and clean energy for its 28 member countries and
Founded in response to the 1973/4 oil
crisis, the IEA’s initial role was to help countries co-ordinate a collective
response to major disruptions in oil supply through the release of emergency oil
stocks to the markets.
While this continues to be a key aspect of
its work, the IEA has evolved and expanded. It is at the heart of global
dialogue on energy, providing reliable and unbiased research, statistics,
analysis and recommendations.