The recent discovery of large amounts of natural gas in layers of a sedimentary rock called shale has created a real shockwave in the natural gas industry — and among those who generate electricity.

In just a few years, estimates of natural gas reserves have skyrocketed, especially in North America, where the estimate jumped by close to 40 per cent. There's enough recoverable gas to meet the needs of Canada and the United States for a century, according to Cambridge Energy Research Associates.

While there is opposition from people concerned about the potential environmental impact of new extraction methods, the discovery and exploitation of shale gas has opened up new horizons for the gas industry, especially in the area of generating electricity, where it would be a substitute for coal.

Cleanest pollutant

"The cheapest way to produce electricity right now is with coal. Even though the generating stations are barely 25 to 28 per cent efficient, it’s still the cheapest method," explains consulting engineer André Goyette of BBA, an engineering consultant based in Mont-Saint-Hilaire, Que. "But, on the other hand, it’s also the dirtiest."

Coal is the fossil fuel that emits the most air pollutants when it burns — nitrogen oxide, sulphur dioxide, mercury, particles, plus large amounts of greenhouse gases (GHGs), including carbon dioxide. But its readily availability and low costs have made it the fuel most commonly used to generate electricity.

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A worker leaves a drill rig in Quebec. Around 10 natural gas wells were drilled this year but many expect that number to rise. ((Jacques Boissino/Canadian Press))

When natural gas burns it produces no ash, practically no sulphur and no toxic metals. Its combustion generates 50 per cent fewer GHG emissions than coal or fuel oil, so it’s a better choice than other fossil fuels for the power industry around the world.

As pressure mounts to shut down coal plants, attention is turning to natural gas as an affordable stepping-stone to cleaner power.

"In the spirit of environmentalism, the first logical transition for a company that uses coal is to switch to natural gas," explains Mr. Goyette.

Not only are gas-fired generating stations less polluting, they are more energy-efficient, which means that they produce more electricity for the same amount of fuel.

"A gas-fired generating station is about 60 per cent energy efficient, as opposed to about 25 per cent for coal, and that means big savings," points out Goyette.

Simple and flexible

There’s a third advantage to natural gas: simplicity.

"The good thing about a gas-fired generating station is that it doesn’t take long to build, a year or two at most, while it takes about 10 years for a nuclear power station," explains Jean-Thomas Bernard, an economics professor at Laval University and an expert on the energy market. "For a big hydropower plant, it takes at least seven or eight years."

Did you know?

Approximately 8 per cent of the electricity in Canada is generated by gas turbine power plants, while 17 per cent comes from coal- or oil-fired generating stations. That’s relatively few compared with the U.S., where 50 per cent of electricity is generated by coal- and oil-fired plants. Alberta, Ontario, Saskatchewan and British Columbia are the biggest producers of electricity using natural gas in Canada.

Gas-fired generating stations can also be practically custom-made to meet particular needs.

"You can choose a wide range of sizes — 10, 20 or even 1,000 megwatts (MW) — without a big impact on costs," adds Bernard.

Another advantage is that gas-fired power plants can be shut down and started up quickly to meet short-term needs or peaks in demand. The other types of power stations commonly in use today aren’t that flexible, except for some hydropower plants with reservoirs.

That flexibility is an asset when it comes to integrating clean energy into power grids, because, of course, the amount of electricity supplied by wind farms or photovoltaic panels depends on the amount of wind and sunshine.  Since a power grid must supply an extremely constant voltage, the industry has to have backup sources to offset the variability of clean power.

From backup to competitor

Natural gas does create one big problem for backers of clean, renewable sources of energy, though. The flexibility of gas-fired generating stations, combined with their lower operating costs compared with other renewables, may put the brakes on the development of other sources of energy, warns Goyette.

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Two workers at an EnCana gas drilling well near Calgary, Alta. Critics say the extraction process creates pollution. ((Todd Korol/Reuters))

"Sometimes people say, ‘I’m going to build a gas-fired generating station to offset the variability of my wind farm,’ and suddenly the load increases and the gas turbine is running more and more often. And then the gas turbine winds up running all the time," explains the electrical transmission expert.

A few years ago, the high costs of natural gas and the lack of transmission infrastructure made gas-fired power plants much less cost-competitive than they are today. The discovery of huge reserves of shale gas has completely changed the picture.

"With the arrival of shale gas, the price of natural gas has dropped quite a bit in North America these past few years. That’s going to lead to a return to building gas-fired generating stations, which could in a way compete with the development of renewable energy," says Bernard.

Shale gas upsets as many people as it delights

Still, there are some significant drawbacks to natural gas that could make it less attractive in the long run. Besides the issues with transporting and storing gas, there are concerns about the processes used to extract shale gas.

The use of huge amounts of fresh water in the extraction process and the danger of leaks and pollution connected with drilling are the main causes of worry.

There is increasing opposition in communities where gas companies are planning to drill. In March, a Quebec report urged a halt to shale gas drilling  until the potential environmental impact has been studied in more depth. In response to the report, Environment Minister Pierre Arcand  announced that any new exploration will only be carried out after public consultations are held.

"We will not make any compromises on health, safety, or respect for the environment," Arcand said.

Despite opposition to the exploitation of shale gas, world energy demand is growing and the gas industry's activity continues to expand along with it.

"While only about 10 gas wells were drilled in Quebec this year, there were over 1,500 in Pennsylvania. That gives you an idea of the scope of the issue," says Bernard.

Net electricity output of gas-fired generating stations, by province, 2005
 P.E.I  0
 Nfld. and Lab.  268 GWh
 N.S.  233 GWh
 N.B.  1,072 GWh
 Quebec  298 GWh
 Ontario  12,509 GWh
 Manitoba  8 GWh
 Saskatchewan  4,211 GWh
 Alberta  10,998 GWh
 B.C.  4,016 GWh
   
 Source: Statistics Canada, Electric Power Generation, Transmission and Distribution, 2005