Sacramento is working hard to become a recognized leader in cleantech. For years the region has had a Clean Energy Showcase which has attracted upwards of 800 attendees in the last two years. Not bad for a regional event! Our new mayor, Kevin Johnson, is also a clean energy proponent through his “Greenwise” initiative.
Today the mayor sponsored a meeting where Lisa Jackson, Administrator of the U.S. EPA was the speaker. Ms. Jackson is a refreshing speaker and in response to a question from the audience she made two very important comments regarding shale gas. First, she is now being advised there is a 200 year supply of gas from shale oil. This is very significant because it will fundamentally change energy economics in the electric sector and potentially in other areas. Her second key comment was there are no known cases of drinking water contamination from the fracking operations. Other than what I consider to be normal requirements to manage the water used in fracking , if there isn’t really a problem with the fracking operation itself then the potential for shale can be realized.
Why is this important? Gas competes with the variety of wholesale renewable electricity technologies. And with cheap combined cycle plants (super efficient, super reliable, super low emission, much lower carbon output vs coal, reasonable cost) natural gas is a formidable competitor. This will benefit the turbine suppliers (like GE, Siemans), the independent generators (like Calpine, Dynergy), and other firms like Clean Energy Fuels [CLNE] and GreenMan [GMTI.OB]. Coal producers (including all the companies in the Van Eck’s coal ETF KOL), on the other hand, obviously recognize the threat and are advertizing extensively touting the benefits coal.