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Nick Grealy, shale-gas missionary

Shale gas has transformed the US energy industry. It is the golden ticket, says Nick Grealy

NICK GREALY has been causing a stir. A former consultant who has spent two decades in the energy sector, he's on a one-man mission to persuade the world of the virtues of shale gas. He does it through a blog called No Hot Air. It's a platform for him, his views and his trumpeting of the unconventional-gas revolution that has swept the US and, believes Grealy, will soon do the same elsewhere – if only people, especially in the UK government, would wake up to reality.

No Hot Air offers a digest of news, but it's the views that bring people back. Grealy and his blog don't take prisoners. His enemies range from ignorant journalists to Ofgem, the UK's energy-markets regulator. Styling himself the "gas guru", Grealy proclaims his message stridently: shale gas is real, and fears of shortages in Europe or anywhere else should now be consigned to the dustbin of history.

Grealy launched No Hot Air in 2008. It now attracts 500 readers a day, many of them spreading the blog's influence. Through it, Grealy has become a media commentator on shale gas, and stories he finds and posts on his site frequently wind up in a new form in the pages of mainstream press – where Grealy doesn't always receive credit as the inspiration. All of this helps reinforce Grealy's view of himself as the unsung hero of the unconventional-gas sector.

"I want to be a bit of a missionary," he says. "I want to have an energy policy that isn't based on fear, but on reality."

His primary target is local. As North Sea gas reserves steadily deplete, UK consumers have experienced rising energy bills, driving the government to put emphasis on heavily subsidised renewable energies, such as wind farms. Grealy is scathing of this strategy and is campaigning to influence it. Warnings by Ofgem that the lights could soon go out in the UK unless radical changes in the energy matrix are made yield special scorn from Grealy. "The history of the UK government is that they don't really understand energy and they're very ill advised by people that are living in the past."

He describes energy prices as "a tax on civilisation" and argues that the companies that supply energy have frightened consumers into paying high prices for gas by exaggerating the rate at which it is running out – and ignoring the new unconventional-energy revolution. It could be one of the biggest consumer cons in history, he says.

To cater for the world's insatiable desire for energy, we must find new and environmentally friendly ways of generating it. Shale gas, says Grealy, is the answer, the "millionaire ticket that can be shared by everybody". More august institutions are starting to agree with him. Europe and Asia, the next potential big markets for unconventional gas, are attracting investors and new drilling activity. Indeed, the US' Energy Information Administration (EIA) reckons that unconventional sources will account for 56% of China's total domestic gas production by 2035.

That's a radical claim, but the transformation of the US' energy sector in the past few years has demolished the arguments of many unconventional-energy pessimists. US shale-gas production began in the 19th century, but it has been commercially successful only in the past decade, during which shale gas reserves doubled. In 2008, shale accounted for 10% of US natural gas production. By 2035, this figure should almost have tripled, believes the EIA (and unconventional supplies already meet about half of supply).

If this gas revolution were to spread to other fast growing nations such as China and India, it would have profound economic and geopolitical consequences, points out Grealy.

But as powerful as this momentum is, opposition to shale gas is mounting. Pollution of local water supplies is a risk, say some environmentalists, who also worry that poisonous toxins are being released during production. Indeed, an environmental commission in Texas has been forced to tighten shale-gas drilling regulations after air pollution and high levels of carcinogenic toxins were found in some Barnett Shale drilling sites. Meanwhile, the proximity of many US shale-gas developments to highly populated areas, although good for the developers, has inflamed the debate.

An easy win for the environment

Grealy, however, says ecological opposition is baseless, especially in light of natural gas's other environmental benefits. "People don't quite understand," he says. "If we can replace coal-fired energy with gas, that's an easy win for the environment." During burning, natural gas releases around 50% less carbon dioxide than coal. In a world that has yet to find an effective strategy to fight greenhouse-gas emissions, shale gas's moment may have arrived.

It's also a potential salve for energy-security worries, a feature of European politics, in particular, during the past decade. If Europe can develop its own shale-gas business, its need to import liquefied natural gas, or more supplies through pipelines from Russia, will be lessened. "Shale gas is too important to be left to energy experts," he says. "Europe's leaders need to understand the potential. If we don't have to import as much gas and oil, it could have a huge knock on effect across the whole economy."

So far, eastern Europe, the region most worried about the security of its energy supplies, looks to have most potential, although analysts warn that development will be hampered by the lack of infrastructure and minimal drilling services in the region. Production will take time. Wood Mackenzie, a consultancy, says European unconventional-gas production will be 53bn cubic metres a year by 2020, equivalent to around a third of the volume Russia exports to the EU.

Yet, as Grealy will argue in a new report – Global shale gas: what now? What next? The imminent global impact of abundant natural gas – to be published in September, the unconventional-energy revolution "will change everything". Those who don't realise this, he says, suffer from a "suddenly out-of-date world view of natural gas as a finite, insecure, dirty and expensive energy source". Drilling over the next few years will tell everyone whether he's right and shale-gas development outside of the US is the millionaire ticket; or whether its promise is nothing more than hot air.

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