Does the Shale Gas Revolution Hinder Clean Energy Innovation?

Kazakhstan has pledged to transition to a low-carbon economy by implementing national policies and strategies that promote clean energy innovation. However, Kazakhstan is still falling short of its expected targets for energy transition, and there is a lack of knowledge regarding the country’s challenges and opportunities for clean energy development. Towards this end, the current study identifies and assesses the enablers and barriers related to clean energy innovation in Kazakhstan. Using the combination of SWOT analysis, survey data from 41 experts and the DEMATEL decision support tool, we evaluated the key factors affecting Kazakhstan’s clean energy innovation and their implications for energy transition. Assessment results show that the immature business environment, underpinned by technological, institutional, and socioeconomic factors, is perceived as a high-impact constraint for clean energy innovation and green finance deployment in Kazakhstan. Skilled labour shortages, high reliance on hydrocarbons and low retail energy prices are significant challenges to Kazakhstan’s clean energy innovation. The low-profit margin and high investment risk in clean energy projects are identified as transition barriers in the power and energy-intensive industries. In contrast, Kazakhstan’s endowments of resources critical for developing clean energy technologies (rare earth metals, uranium, gas) and the potential of low-carbon investments (e.g. carbon storage) are perceived as prominent enablers of clean energy innovation. Results are consistent across expert subgroups (academia, industry, NGOs, etc). Findings call for policy support to modern and attractive business environments, capacity, and human capital development. The findings can provide helpful insights for countries in Central Asia and beyond with similar socioeconomic structures that aim for a timely energy transition.

Beyond A single stimulus: How to leverage the federal government to advance clean energy innovation?

There is growing interest in overcoming the barriers to clean energy innovation. The most visible call for accelerating the path from discovery to clean energy products was made at COP 21 in Paris, December 2015. “Mission Innovation” brought a pledge by 20 governments to double clean energy research funding in the next five years, and more than 20 of the world’s wealthiest individuals agreed to invest “patient capital” in the fruits of clean energy research. The investment group Breakthrough Energy Ventures, headed by Bill Gates, has now begun making its plans public, with an announced $1 billion fund with a 20 year duration. Patient capital is surely one part of accelerating clean energy innovation. For example, a recent analysis of investment outcomes in cleantech shows that traditional 10 year venture funds have not made good returns, and this accounts for the lack of enthusiasm by investors in the cleantech sector[1]. By creating a 20 year fund, Breakthrough Energy Ventures is creating an investment vehicle more aligned with the traditional gestation period for bringing clean energy innovations to market. Is access, cost, or structure of the capital the only (or even the main) challenge faced by clean energy start-ups? A 2016 DOE request for information (RFI) entitled, “Supporting Clean Energy Startups: Industry and Investment Partnerships for Scaling Innovation” (DE-FOA-0001669) sought public input on how the U.S. DOE could best facilitate a more efficient clean energy innovation ecosystem in the U.S.[2]. Some of the key findings were reported in the 2017 DOE funding opportunity announcement entitled “Innovative Pathways” (DE-FOA-0001703) [3]. The top three challenges to start-up success, reported by the respondents to the DOE RFI, were: Ability to test, validate, and demonstrate technologiesAccess, cost, and structure of capitalCollaboration with industry partners and customers Challenge #1 and #2 were almost equally cited by respondents, and it is worth noting that the RFI question emphasized non-capital challenges. Thus, it is fair to say concerns about access to capital are at the forefront of what start-ups worry about, but so is the ability to affordably test, validate, and demonstrate new technologies---the top non-capital-related barrier to innovation identified by DOE respondents. The Washington Clean Energy Testbeds were designed to address Challenge #1. Through dozens of interviews in the Seattle and Bay Area, carried out by the author in 2014 and 2015, the Clean Energy Institute identified Challenge #1 as the main barrier to innovation that a university could address to accelerate clean energy innovation. The State of Washington and Washington Research Foundation funded the Testbed Facility in 2015, and we opened the 15,000 ft2 facility in February, 2017. The facilities include state-of-the-art thin film coating and printing for prototyping and manufacturing scale-up of printed solar, batteries, and electronics. Testing of materials and devices are available in the lab, as is a system integration testbed that enables flexible hardware/software integration via real-time digital simulation and power-hardware-in-the-loop capabilities up to 40 kW in scale. All of the facilities leverage activities on campus and allow university staff and students to scale-up. But perhaps of greater importance, the facilities are open access, enabling any innovator to get trained and use the facilities as needed. This make our Testbed Staff expertise available to others, along with the hardware and software tools. The model is much akin to the academic clean room; unique facilities for capital-intensive prototyping and testing that support a community of users from inside and outside the university. In this talk we will discuss the underlying data that drove the conception of the Washington Clean Energy Testbeds, and we will describe the facilities and programs we have built around them. Finally, we will talk about users interest and characteristics to date, and plans for the future. [1] B. Gaddy, V. Sivaram, and F. O’Sullivan, “Venture Capital and Cleantech: The wrong model for clean energy innovation”. MIT Energy Initiative Working Paper, July, 2016 http://energy.mit.edu/publication/venture-capital-cleantech/ (accessed 4/17/17). [2] https://eere-exchange.energy.gov/#FoaId28a462dc-327b-4950-8add-7e34b6fdf5df (accessed 4/17/2017) [3] https://eere-exchange.energy.gov/Default.aspx?Search=innovative%20pathways&SearchType= (accessed 4/17/2017)

Shale gas is unconventional natural gas stored in shale in free or absorbed forms and sometimes in free fluid phase. The exploitation of shale gas has become a promising field of green energy development in China. Although great success has been achieved in shale gas revolution in North America with the technique of hydraulic fracturing, there is only 5%~15% of the stored oil and gas could be exploited, which is still a puzzle for petroleum engineers. Compared with the North America, China's shale gas reservoirs are deep burial, the geologic construction conditions are complicated and natural quality is low, therefore, efficient exploitation is facing more difficulties and challenges. In recent years, aiming at the national major energy strategy and the frontier of technological development, China's academia and industry have carried out the preliminary study on some of the key scientific and technical issues. Around the new issues encountered in the shale gas extraction in Sichuan and Chongqing areas in recent three years, this paper introduces and summarizes the key mechanics problems and challenges that the high efficient shale gas extraction is facing, mainly includes the multifield coupling safe and high quality drilling mechanics, hydraulic fracturing and multi-scale fracture network formation mechanism and multi-scale seepage and desorption mechanism of shale gas, to solve the challenges in deep exploitation below 3500 meters in China, such as geologic sedimentation, different fracture development, increasing overburden pressure, the change of horizontal stress, etc. The deep shale gas exploitation is not only to adapt to the national energy demand, but also has scientific and engineering significance. To realize the efficient exploitation of shale oil and gas, it needs the interdisciplinary collaboration of mechanical engineering, petroleum engineering, geophysics, chemical engineering and environmental engineering to carry out basic theoretical research, physical simulation, numerical simulation and field experiment. It has been recognized that interdisciplinary research is the bridge and the key to breakthrough the technology bottleneck and realize the efficient exploitation of shale gas. It is necessary of the deep collaboration between mechanics, petroleum engineering, earth science and other disciplines to promote the development of shale gas and other unconventional oil and gas resources.

A review of clean energy innovation and technology transfer in China

Innovation is an important part of energy policy, and encouraging clean energy innovation is often an explicit goal of policy makers. For local governments, promoting clean energy innovation is seen not only as a pathway to a cleaner economy but also as a tool for promoting the local economy. But is such optimism warranted? There is a substantial literature examining the relationships between innovation and environmental policy, but few studies focus explicitly on innovation at the state and local level. In this paper, I provide key lessons from research on clean energy innovation, focusing on lessons relevant for state and local governments. I then summarize the results of a recent working paper by Fu et al. (2018) that studied wind energy innovation across individual states in the United States. While state-level policies can promote clean energy innovation, it is overall market size that matters most. Thus, innovation need not occur in those states most actively promoting clean energy. I conclude with lessons for state and local governments drawn from both this work and the broader literature on energy innovation.

The expansion of shale gas production since the mid-2000s which is commonly referred to as “shale gas revolution” has had large impacts on global energy outlook. The impact is particularly substantial when it comes to the oil market because natural gas and oil are substitutes in consumption and complements and rivals in production. This paper investigates the price externality of shale gas revolution on crude oil. Applying a structural vector autoregressive model (VAR) model, the effect of natural gas production on real oil price is identified in particular, and then based on the identification, counterfactuals of oil price without shale gas revolution are constructed. We find that after the expansion of shale gas production, the real West Texas Intermediate (WTI) oil price is depressed by 10.22 USD/barrel on average from 2007 to 2017, and the magnitude seems to increase with time. In addition, the period before shale gas revolution is used as a “thought experiment” for placebo study. The results support the hypothesis that real WTI oil price can be reasonably reproduced by our models, and the estimated gap for oil price during 2007–2017 can be attributed to shale gas revolution. The methodology and framework can be applied to evaluate the economic impacts of other programs or policies.

Shale gas holds great promise for a countrys economic development and energy independence, but also holds potential perils for the natural resources and the communities. Following the shale gas revolution in the US, China is in full swing to deploy its strategic plan for the shale gas. The Ministry of Land and Resources (MLR) has announced the legal status of shale gas as the 172th independent mining resource, and hosted two rounds of bidding for the commercial development of 23 shale gas blocks. The shale gas revolution seems to may happen in China as well. However, some great challenges exist during the shale gas extraction. One is the impact on water resources for shale gas production, unlike the US, water shortage has been a severe problem in China, hindering its economic development. The other one is that shale gas operations may induce environmental problems, such as accidental spills of flowback water, which contains toxic substances. Spills could have long-term cumulative effects on ecosystems, as with oil spills. This paper highlighted water resources challenges and policy vacuum facing in China. Although the U.S. shale gas experience can assist in identifying some potential issues that Chinese regulators and operators may encounter, policy decision on this issue should be based on risk assessment and regulation studies. For China, there is a long way to lay the groundwork for the shale gas revolution.

The article presents a study of the EU energy policy regarding the exploration and production of shale gas and other unconventional fossil fuels using high-volume hydraulic fracturing, which the European Commission has developed since 2011. The author gives answers to the following questions: what are the factors making it inevitable for the EU to work out special energy policy in this sphere, and what is the essence of this policy; what the European Commission considers to be positive results of the EU energy development; what is the energy-related sore point of the EU economy? The European Commission activity for constructing the basis of the EU energy policy in the above-mentioned sphere was provoked and stimulated by the shale gas revolution – spectacular success of the USA and a number of countries, which followed them, in enhancing their national energy security due to the implementation of advanced technologies in shale gas exploration and extraction. In 2012–2013, the European Commission hold an online public consultation “Unconventional Fossil Fuels (e.g. Shale Gas) in Europe” which addressed relevant stakeholders representing oil and gas industry, national and local authorities, environmentalists, geologists, scientists, experts in industrial risks, and was aimed at taking account of their concerns and views on the shale gas production in the EU Member States in its upcoming work. According to the consultation results, a large majority of all respondents share the view that «the EU should take some action: "doing nothing" was the least favored option, ... and… there are important information needs associated with unconventional fossil fuels exploration and extraction, and… potential challenges should be addressed with appropriate measures». In 2014, the European Commission, stimulated by the support of public at large, activated its efforts and presented initiatives laying down the foundations of the EU energy policy in the sphere of shale gas and other unconventional fossil fuels exploration and production in the EU Member States.

Shale oil and gas resources in the worldwide are mainly distributed in the United States, Canada and other countries. Thanks to the continuous progress of shale oil and gas development technology, the upsurge of shale oil development started after the shale gas revolution in the United States. At the same time, the United States has introduced supporting policies and measures related to shale oil development, which have promoted the economic and efficient development of shale oil and gas. Taken as a whole, the successful commercial development of shale gas and oil in the United States is profoundly changing the world’s energy and political landscape, and some of the initiatives of the shale gas revolution have profound implications for China and other countries.

In an era of global uncertainty and challenges, it is important to establish integration between environmental, economic, and technological strategies to achieve sustainable development. In this regard, this study investigates the synergistic roles of artificial intelligence (AI), green economy, clean energy innovation, and green finance in achieving sustainable development. In contrast to conventional methodologies, the present research employs a novel approach: R2 decomposed connectedness and portfolio analysis, using daily data from February 27, 2018, to September 9, 2023. These approaches measure how much of a shock to one variable is explained by shocks to others, thereby identifying the net transmitters and receivers of risks and shocks. The findings reveal an average total connectedness index of 55% among these variables, with significant peaks observed during periods of heightened instability, such as the COVID‐19 pandemic and the Russia‐Ukraine conflict. A decomposition of this connectedness shows that 29% stems from contemporaneous interactions, while 26% is attributable to lagged effects. Investment portfolios incorporating eco‐friendly assets, AI‐focused securities, and clean energy tokens exhibit strong hedging effectiveness, particularly during volatile market conditions. This underscores the capacity of AI, green economic principles, clean energy innovation, and green finance to collectively facilitate sustainable development and mitigate environmental emissions and climate impacts. The study recommends policy and practical implications focusing on green bonds, financial technology (Fintech), and energy transition across various levels.

In the course of the crisis in the Ukraine, most leading politicians in Eastern European countries, such as Poland, the Baltic States and Ukraine itself, identified the high dependency on natural gas imports from Russia as a threat to energy security. Hopes of independence through extraction of domestic shale gas resources, which evolved after the US shale gas revolution and the substantial resource estimations for Polish shale gas (published by the EIA in 2011 and updated 2013), are more topical than ever. However, there are several factors, which dim the hope for repetition of the US “shale gas revolution” in Eastern Europe. First, international companies such as Shell, ExxonMobil or Chevron withdrew from Poland and Ukraine due to poor exploration results. Additionally, because of environmental legislation and population density, the obstacles for commercial shale gas production within Europe, compared to the US, are very high. In this paper, the Global Gas Model (GGM) (Egging, 2013) is used to simulate future patterns of the Eastern European gas supply. Shale gas scenarios show that Poland and the Baltic States would lower their dependency with an annual production of 8 bcm (Poland) and 2 bcm (Baltic States) because of their relatively low natural gas consumption. This means, conversely, that a failing production of shale gas would lead to ongoing dependence on natural gas imports. In Ukraine, however, a potential shale gas production of 5 bcm/a does not have major consequences with respect to an annual consumption of up to 60 bcm. As for LNG scenarios, US LNG exports do barely reach the Eastern European gas market in the Base Case scenario. Only in the projected period between 2035 and 2040 Poland receives 4.9 bcm of US LNG. However, the Polish natural gas market is sensitive to provided subsidies. A 30% subsidy on transportation increases the total amount of exported LNG to Poland up to 8 bcm. In contrast, the Ukrainian and Baltic natural gas market, however, barely react to subsidies from the US. A minimum of 60% is needed to export US natural gas under economically rational conditions to both regions. Modeling results show that the increasing natural gas demand in Ukraine, the Baltic States and Poland is in need of either domestic shale gas production or an increase of pipeline or LNG imports.

Background Starting in January 2010, Shell and PetroChina have been evaluating an area of Joint Cooperation in the Sichuan Basin, China with the goal to explore, appraise, and ultimately develop a Shale Gas opportunity. The area of interest covers some 3500 km2 in largely agricultural, hilly terrain. Since project inception, two vertical and three horizontal wells have been drilled and hydraulically fractured, demonstrating the lateral pervasiveness of the Lower Silurian Longmaxi Formation shale and the flow of gas to surface in each of the wells. An extensive data gathering and evaluation programme has been executed. Core and log data, engineering data and fluid samples have been collected and analysed. Microseismic monitoring of a 9-stage fracturing treatment horizontal well using deep and shallow instrument wells has also been trialled with good results. This programme is the most advanced foreign co-operation shale gas project in China to date. Hydrocarbons stored in ultra-low permeability reservoirs have a high level of strategic significance in China for various reasons:The "shale gas revolution" in North America has greatly influenced the energy balance there;China shale gas resources are estimated by many to be as high or greater than the USA, although uncertainty is very high and there are no shale resources currently under commercial production;China has a growing energy demand overall;Natural gas, a clean fuel, currently comprises a relatively small share of the country's energy mix;China leadership has reportedly targeted shale gas production of 6.5 bcm/yr by 2015 and introduced price incentives to help encourage its rapid development. As a subset of the total China estimated resource base, it has been estimated that the amount of shale gas resource in the Cambrian- and Silurian-age strata within the Sichuan Basin is 1.5 to 2.5 times that of conventional resources (Yongqiang et al., 2012). If correct, this is a very significant potential to be developed. However, there are many challenges for developing hydrocarbons stored in ultra-low permeability reservoirs in general, and Sichuan potential shale resources in particular. First, such low permeability reservoirs will not produce at commercial rates without treatment to create higher-permeability connections to the wellbore. Hydraulic fracturing accomplishes this goal but is expensive and requires technical sophistication to plan and then good expertise to execute effective stimulation. Second, for most resource configurations the reservoir is best developed with long horizontal wells and multiple fracture stages in order to create a large stimulated rock volume around each well. Horizontal wells are more difficult to drill, including steering of the drill bit to stay in the preferred zone. If the resource has high structural complexity, this issue is especially difficult. Third, the small stimulated rock volume around each wellbore (i.e. a relatively small drainage area), plus low matrix porosities (3–10%) combine to give modest ultimate well recoveries compared to conventional projects with similar reservoir pressures. Fourth, the small drainage area leads to a requirement for hundreds of wells which consequently results in a high development cost and more significant "footprint".

Coalbed methane, tight and shale gas are three important unconventional gas resources in China. ‘‘According to data from the Ministry of Land and Resources, at the end of 2013, China had 11, 12 and 25 trillion cubic meters, respectively of remaining technically recoverable resources of coalbed methane, tight gas and shale gas which are still in the early stage of development’’. (Source CNPC and ARA International Limited). China is developing its shale gas exploration and exploitation strategies for economic reasons and social aspects (so-called ‘‘shale gas revolution’’). Huge shale gas reserves provide a reliable source for sustaining China’s economic development and contributing to China’s ‘‘Energiewende’’. Zhao et al. (2015a) analyze the strategic measures and advantages for a safe and vigorous development of shale gas in China and review the developments of hydraulic fracturing technologies in China. Economic exploitation for shale gas is highly dependent on the complexity of the fracture network caused by hydraulic fracturing technology, so it is necessary to accurately assess the effect of the fracture network on gas flow behavior and productivity (Li et al. 2015c). This thematic issue is particularly dedicated to recent researches in unconventional gas resources in China related to the reservoirs indicated in Fig. 1 in order to substitute coal by ‘‘clean’’ gas energy resources as a transitional technology towards renewable energy resources. The thematic issue compiles theoretical, experimental as well as field studies in China. Different reservoir types are under investigation such as tight and shale gas reservoirs as well as coal mines with coalbed methane resources. Fundamental aspects on process understanding in unconventional gas reservoirs as well as the international context of research and technology deployment are discussed in this volume. Tight gas reservoirs have become an important resource for the world’s gas supply. Such reservoirs have very low permeability (usually below 0.1 mD) and show a strong stress sensitivity to fluid transport properties and a considerable productivity decline during the production process due to decreasing reservoir pressure as well as increasing effective stress. In an experimental study by Albrecht and Reitenbach (2015) several measurement series were performed on plugs from the North-German Rotliegend tight gas reservoirs to determine the effects of changing stress and pore pressure conditions on reservoir & Olaf Kolditz olaf.kolditz@ufz.de

In 2011, Poland jumped into the ‘shale gas revolution’ with global energy companies and American geopolitical interests at its side. Poland's northern province of Pomerania, split into hundreds of shale gas exploration concessions, became known as the ‘United States of American Oil Companies’. This paper explores the global-local encounter between global energy companies and the Kashubians, an ethnic-group minority in Pomerania. It takes a multi-scalar approach to introduce the (inter) national discourses legitimating and challenging shale gas exploration as green energy policy. Then, it surveys Kashubians’ local discourses against shale gas exploration in their agrarian movement to protect ancient, ethnic lands, rural environments, agricultural livelihoods and private economic interests. A disconnect is demonstrated between the discourses on the global and local spheres of the debate. I conclude that global-local encounters are violent desecrations of the local when government institutions are too politically involved in the economic benefits of the global encroachment. Due to the failure of local representative democracy, the ‘local’ is forced to seek political networks across the spatial grid that may or may not help gain leverage in their local struggles. Lastly, postsocialist ethnographers are encouraged to link minority voices in Central and Eastern European States to the global debates.