Locomotive Breath

The arrogance of mankind in assuming that it can survive the destruction of the environment is spearheaded by the short-sighted actions of its politicians and businessmen, who don’t much care for a future that will arrive after they are dead and gone. They target those who oppose destructive activity: autocratic regimes like Russia arrest thirty people- mainly Greenpeace activists- and absurdly charge the ‘Arctic 30’ with piracy because they protested oil exploration in the Arctic; supposedly democratic regimes like India and the US will or downplay the environmental impact of human activity- greed, actually- and collaborate with big business to circumvent their own environmental laws. 

It is inevitable that, as natural resources grow more scarce, confrontation between governments and industry on one side and environmentalists (or villagers whose livelihoods or way of life is being destroyed, as in India) will only increase. Shale oil exploration promises to be one of the new flashpoints. 

Environmentalists in the US- where shale oil is seen by many as an economic messiah in an energy guzzling country- are now expressing increasing alarm at the operation called hydraulic fracturing- or fracking. Environment America, a non-profit advocacy group in the US, goes a step further in its just released report; it calls for a complete ban on fracking. 

Fracking involves injection of massive amounts of fresh water- mixed with sand and chemicals- into the earth during the extraction of shale gas. The main problem is that there is massive contamination of ground drinking water as a result, besides air and noise pollution and the release of chemical waste- including, critics say, carcinogenic waste, into the environment. Environmentalists say that there is also fear of earthquakes.

The full impact of fracking- a decade old process- has still to be completely studied, but, says Environment America’s attorney John Rumpler, “Fracking has taken a dirty and destructive toll on our environment. If this dirty drilling continues unchecked, these numbers will only get worse.” The organisation says that people living close to fracking areas are already showing symptoms connected to fracking pollution, thanks to some 280 billion gallons of toxic wastewater that was generated in 2012 alone.

The momentum against fracking is picking up in the US, where federal policy makers are to decide on rules for fracking soon. And, although some countries or local administrations have banned fracking around the world- mainly in Europe, but in Australia, Canada, and Argentina too- there is tremendous pressure to allow fracking even in those nations; the UK overturned its own ban last year. That ban, incidentally, was put in place after two small earthquakes occurred in Lancashire where a company was exploring for shale gas.

The problem is, of course, that businessmen and politicians use terms like sustainable development, energy security and economic security to brush environmental concerns aside or to dilute attempts at regulation. That is rubbish- they are only interested in the electoral or economic pay-outs that come their way. The temperament does not change even after a major disaster like the Deepwater Horizon. Three and a half years later, nothing has changed, except that we now charge- with piracy- those who protest drilling even in the pristine Arctic. As for sustainable development, my understanding of that term would include something that is anathema to big business- an acceptance of lower- even much lower- profits as environmental protection costs increase. That is simply not going to happen. 

I speak mainly of the US here, but other countries- particularly those energy deficient ones in Asia like India- will be even more uncaring when it comes to shale gas deposits and their exploitation. The fight against fracking will be another lost cause; it will go the same way as the Arctic 30 have gone. 

And so goes mankind- like the all-time loser in the impending train wreck of Jethro Tull’s ‘Locomotive Breath,’ it plunges headlong to its death. The shale gas train will just not slow down; there is simply too much money involved for that to happen.

In the end, my cynical advice to shipping today is this: shift enough of your business from crude oil to gas tankers. Forget the fact that you are also in the speeding locomotive. Like everybody else on the train, maximise profit instead of concentrating on stopping the inevitable wreck.

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The shale revolution cometh

Map of 48 major shale gas basins in 32 countries (EIA).

Synchronicity of events often leads to revolutions in business. The recent startling importance of shale gas as an energy source, coming at a time when the Arctic melt has opened up new sea routes between the Pacific and Atlantic- and when global LNG demand is rising- promises to change everything. Geopolitically, environmentally, economically- and for shipping. 

Shale is sedimentary rock within which natural gas can be trapped, and piped or shipped anywhere. Large shale gas deposits exist in the US, China, Poland, Australia, Canada, Russia, France and elsewhere. (Indian estimates of shale gas deposits seem suspiciously high, at anything between 600 and 2000 trillion cubic metres, but decent reserves apparently do exist.) And, although shale gas extraction has been going on for some time, political and environmental developments have pushed the hunt for shale gas right up to the front of the queue. Energy guzzling US, for example, can well become- thanks to its vast reserves- a net exporter of energy in the not too distant future. Even if that does not happen, the US sits on huge reserves that equal 20 years’ worth of consumption- and Obama wants to make the country energy independent. Shale gas made up 23 % of total U.S. natural gas production in 2010 and could constitute 49 % of U.S. total natural gas production in 2035, says the country’s Energy Information Administration (EIA). Shipping may well find in the future that US energy imports simply do not exist, and that gas exports from the US are being discouraged for geopolitical reasons to do with self-sufficiency; shipping’s tankers may have to look for other markets.

Arctic melt- new sea routes (BBC)

Synchronous with the shale gas story is the tale of the melting of the Arctic and the rise, post Fukushima, of LNG demand from Japan. The ‘Ob River’, a 150,000 cubic meter LNG tanker, became the first ship of its type to use the Arctic Sea Route between Europe and Japan last month. Escorted by Russian icebreakers, it made the voyage across the Barents Sea and north of Russia in just under a month. It saved 20 days on the trip- 40 per cent of the distance. Ditto for fuel, obviously. Given these numbers, the number of ships, including LNG ships, sailing across the Northern Routes is set to explode, especially since the Arctic is getting more navigable every year. 

Sure, there are problems with shale. For a start, some studies say that the quantum of reserves are grossly overstated, and that significant amounts of what is actually there is not recoverable, given technological issues and cost. Other concerns are environmental; although natural gas is cleaner than conventional fossil fuels, shale gas extraction often means huge amounts of freshwater use, greenhouse gas emissions, groundwater contamination, hydraulic fracturing and induced seismicity.

But this is what I strongly predict will happen- shale gas exploration will accelerate- even explode- provided deposits are economically exploitable. That is the way all such stories go, so why should it be different now? Maybe technology can mute some concerns, but the world will not have environmental sustainability on top of its agenda this time, either; it never has. Sad but true. Look at the Arctic melt and the environmental time bomb we are sitting on there, energy exploration, mineral reserves, new sea routes and all.  Look at the reasons for the melt in the first place; even those warning signs foreshadowing disaster are ignored today.

That aside, the impact on shipping of this revolution will be huge as energy markets undergo a metamorphosis and as routes through melting ice become commonplace. Within shipping, the pendulum will swing towards the West, which will not only provide newer technologies for gas extraction because of its head-start and expertise, but also produce much of the product. 

And carry it too, probably, if frigid waters are involved. Asian shipowners and crews have traditionally little experience in navigating in ice. Their disarrayed training and employment systems will have to undergo a metamorphosis if they want to cater to new professional demands that will undoubtedly be made of them. 

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