Emily Bourke
To some, unconventional fuels are revolutionising the global energy market but critics say unconventional fuel will turn green fields into gas fields.
The shale gas industry is already transforming energy production and supply in the United States and there are predictions it could see America energy self-sufficient by the year 2030.
Australia is watching the shale gas boom carefully. Energy giant Santos kicked off Australia's first shale production in October.
But the long term environmental and agricultural impacts are not known and this week in Sydney, energy industry and policy experts from the US and Australia are meeting for an energy security conference hosted by the US Studies Centre.
One of the guests is Karen Harbert the president and chief executive of the US Chamber of Commerce's Institute for 21st Century Energy.
She joined me in the studio a short time ago.
Karen, the shale gas industry has been described as a game changer when it comes to energy security. Can you describe the dimensions of this revolution as it's coined?
KAREN HARBERT: Well, it is unbelievable. It is quite staggering for us in the United States to even talk about energy self-sufficiency because we have for so long you know, been thinking about imports and its happening all across the country. Shale gas just at the beginning of this decade was only 2 per cent of our supply and today it is already 25 per cent and 20 years from now it is going to be 50 per cent so we are talking exponential growth.
EMILY BOURKE: What are the economic benefits with this shift?
KAREN HARBERT: They are multi-dimensional. First I mean there is direct investment and when you take unconventional oil and gas combined, we are talking trillions of dollars of investment that didn't have any home before in the United States.
We're talking about tax revenues both at the federal level and at the state level. We are also talking about royalties so it benefits all levels both federal, state and local communities. I was just in a community in Pennsylvania which was suffering tremendously prior to the discovery of unconventional gas and now they have a new PE program at their school, they have new first responders’ equipment and they have people moving back into the community because there are jobs there.
EMILY BOURKE: The International Energy Agency has forecast that the future growth of shale or oil and gas could see the US energy self-sufficient by 2030 as you've highlighted. What are those projections based on? What is underpinning that prediction?
KAREN HARBERT: Well, the first thing is I think we can all agree that we are certainly going to be lowering our imports for sure and that has been such a big expenditure for the United States sending $400 billion overseas every year just to finance oil imports and we're going to be reducing those imports dramatically.
On the gas side of things, the prospect of us exporting gas is new and so that will have another dimension to it both economically and from an energy security standpoint.
Whether we will surpass Saudi Arabia or not I think depends on policy and that means that the government has to open up more areas for exploration in order for us to be able to realise that. A lot of this revolution, this renaissance is happening on private lands because private citizens of the United States own those mineral rights and so industry can go there. But to go further we are going to have get access to more lands and waters to have more production.
EMILY BOURKE: The United Kingdom has decided to keep its ban on fracking, the process by which you extract the gas and oil. It's not without some environmental concerns. It is believed to have caused two earthquakes in fact in the UK just last year alone. What do you see as being the drawbacks, the environmental concerns? Are they well founded?
KAREN HARBERT: Well, first industry should be held to the highest standards. There is no doubt they have to have a social licence to be able to operate. In the United States we've been very fortunate because they are the innovators of the technology and they have been held to the highest standards and we've had no incidents.
We've explored whether there have been any waste water or water incidents or whether there have been any earthquakes associated with this and so far the conclusions are no. But that doesn't mean we should be complacent with industry. They should be held to the highest levels.
EMILY BOURKE: Are there any drawbacks?
KAREN HARBERT: Well, in this case I think that the major issue that we're going to have with it is where is the market for it number one, and number two have we thought through all of the environmental steps along the way and I think a lot of our regulators are moving through that process and updating regulations that were rooted back in 1990 when we didn't have these issues. And so it is about keeping pace with technology and keeping pace with the resource and the industry and the regulatory agencies themselves are working together and I think that's a good thing.
EMILY BOURKE: What do you see as being the lessons that can be passed on in the Australian context?
KAREN HARBERT: Well, you are a country that is well acquainted with exports and imports. I mean you play a very unique role in the energy landscape and as we look at shale and we look at the opportunities, the one thing that is on the plus side of things is the industries that will be enticed to come back to Australia. It is the industries that are coming back into the United States.
For all intents and purposes, our chemical industry picked up, closed their doors and moved to the Middle East and now they're moving back. And so looking through the entire economic picture of shale I think will be very important in the public debate about it because there are industries that will come back, there are jobs that will be created, there is tax revenue that will be generated. But we also have to do it in such a way that it is not all done in you know, five years and it’s over.
We can't have this boom and bust cycle and that's why I think it has to be done with a great deal of sobriety and very sincere policy efforts at the national level and at the local level as well.
It has the ability to remake our entire geopolitical and economic competitiveness. You know, the rising Asian tiger is going to be very, very competitive. We've got to find ways to stay competitive and I think you certainly realise that we're increasingly realising that energy is that platform. If done right, that will be our comparative competitive advantage going forward.
EMILY BOURKE: There is a political element to this as well given events, the upheaval in the Middle East over the past 12, 18 months.
KAREN HARBERT: That's right and certainly the countries of OPEC (Organization of the Petroleum Exporting Countries) in the Middle East that are resource rich are looking for places to sell their products, right and they're selling them more and more to Asia which makes it that much more important for us to be more self-sufficient going forward because we are going to have look after ourselves more and more.
But also, if we look at exports and for example the United States being able to export gas to Europe, that potentially lessens Europe's dependence on Russia which has a big geopolitical importance to the United States and the Middle East, people being less dependent on some of those molecules out of the Middle East will be very important for keeping a balance in the world markets both from a security standpoint but also from an energy standpoint.
EMILY BOURKE: That is Karen Harbert, the president and chief executive officer of the US Chamber of Commerce's Institute for 21st Century Energy. She's here as a guest of the US Studies Centre at Sydney University.