Pictures: Top Energy Stories of 2011

2. The Shale Gas Rush

Photograph by Wil Andruschak, Orca Graphics

A woman in Alberta, Canada, lights on fire water she said had been contaminated by nearby "fracking" for natural gas; this year saw the first published study confirming a link between the drilling and methane migration into drinking water in some cases. Despite concerns over its impact on water, air, and even its potential to trigger earthquakes, fracking continued to transform the energy picture—particularly in the United States.

High-volume water-pressure fracturing of shale rock was well on track to providing one-third of the natural gas supply in the United States. (See interactive: "Breaking Fuel From the Rock") Prices were at historic lows compared to oil—a boon to consumers.

Natural gas fracking continued in longtime oil and gas states like Texas, Louisiana, and Wyoming, and places that haven't had this kind of energy development in decades, most significantly, Pennsylvania. But as some analysts questioned the economics, some of the rig activity shifted to the Plains states, for more lucrative fracking for oil.

A huge amount of natural gas is embedded in Pennsylvania and neighboring states, in the Marcellus shale formation underlying a swath of the Appalachians, in the midst of the energy-hungry U.S. East Coast. In 2010, producers drilled 1,386 wells in Pennsylvania; during the first nine months of 2011, they'd already drilled 1,600, even though an interstate regulatory authority, the Delaware River Basin Commission, had a moratorium on drilling in the easternmost part of the state.

Meanwhile, residents of Oklahoma worried that a series of earthquakes were connected to fracking or the deep-well injection wastewater disposal connected with fracking. A report by the Oklahoma geological survey saw some connections but reached no firm conclusions.

And in 2011, the shale gas rush went global. An initial U.S. government assessment showed that reserves in shale formations in 32 countries together were six times greater than the supplies in the United States. Fracking began in the United Kingdom, but worries grew when an independent report linked fracking to minor earthquakes in Lancashire. In July, France became the first country to outlaw hydraulic fracturing entirely. In South Africa, energy companies leased rights to a huge field that underlies the Khoisan homeland-an area with unique biodiversity where water is in short supply, and a heated debate over environmental and property rights is under way. Meanwhile, Poland appears poised to be the next frontier for shale gas.

—Mary Anne Mulligan

Published December 1, 2011

3. Oil Market Defies Economic Woes

Photograph from WIN Initiative/Getty Images

Although prices at the gas pump this year did not reach the record-breaking spike of the summer of 2008, the global price of oil, as measured by the Brent benchmark in London, was buoyant, hovering above $100 a barrel throughout most of the year despite the economic turmoil in Europe and the United States.

(Related: "Crude Reality: Gas Prices Rocket Because They Can")

Given that oil is still the world's number one source of energy, the forces driving its price are, unsurprisingly, complex. In many countries-including China, India, and major exporters such as Saudi Arabia-consumption continued to grow quickly, while exports from OPEC countries have remained fairly flat. The Arab Spring revolts—in particular in Libya, which stopped that country's production—pushed prices up. Meanwhile, production of conventional oil has been flat for the past several years, with some saying this is the long-predicted peak of crude oil. To keep the total supply of fuels growing, many countries—principally the U.S. and Canada—have ramped up production of shale oil and tar sands, both expensive sources. The outlook for next year: even higher prices.

—Mason Inman

Published December 1, 2011

4. Solyndra and the Solar Shake-Up

Photograph by Bill O'Leary, Washington Post/Getty Images

When solar panel manufacturer Solyndra filed for bankruptcy, it was no normal business failure. The Federal Bureau of Investigations raided the company's office, and the company's past came under intense scrutiny, because it had received nearly $600 million in loan guarantees from the U.S. government, and some alleged the company got special treatment.

Overall, though, the loan guarantee program fared well, and Solyndra (whose unique cylindrical solar modules are pictured above) was far from the only solar panel company to go under, or otherwise face hard times in 2011. Even as costs fell for silicon wafers-the key building block of most solar panels, though not Solyndra's-the demand for new panels was not as high as expected, in large part because of the worldwide economic slowdown. Companies' margins plummeted, and many didn't make it. Meanwhile, accusations flew of unfair trade practices. Some U.S.solar manufacturers charged that China was dumping panels at a financial loss, and China shot back with a probe of U.S. renewable subsidies. With sales lagging, overall installations may dip in 2012. That would be the first drop in the modern history of the industry.

—Mason Inman

Published December 1, 2011

5. Sunset for U.S. Coal Plants

Photograph by Bill O'Leary, Washington Post/Getty Images

Cyclists in Alexandria, Virginia, like the one pictured above, will be able to breathe easier soon; the coal-fired Potomac River Generating Station (in the background) is slated to close by October 2012. It is just one of dozens of coal plants across the United States that energy companies announced in 2011 that they would be shutting down.

Faced with new, tougher federal clean air regulations that would require expensive retrofits to older facilities, along with the opportunity to switch to cheap natural gas, the U.S. electricity industry is moving in a direction long sought by environmentalists.

Although the trend has only begun, the results are already evident. During the first quarter of 2011, coal's share of electricity generation in the United States was smaller than that of any other Q1 in 30 years, according to the U.S. Energy Information Administration.

But in China and the rest of Asia, demand for coal continues to grow apace, leading the U.S. coal industry to push for ports and other export facilities that will allow them to turn a profit and alter the U.S. trade balance with energy exports. Environmentalists, on the other hand, think growing U.S. coal exports simply kick a dirty fuel next door, where its increased use will have dire consequences for the entire carbon-saturated planet.

—Brian Handwerk

Published December 1, 2011

6. Backing Off Renewable Subsidies

Photograph by Alexandra Beier, Getty Images

Solar installations, like this one in Germany, have continued rising, but renewable energy subsidies have been a casualty of the economic downturn. Many countries that had earlier made big outlays to boost wind and solar did a U-turn this year and slashed these subsidies. Chief among them were the United Kingdom, which drastically cut subsidies for large solar installations, and Spain, which retroactively cut subsidies, leading many investors to sue for compensation.

Meanwhile, U.S. subsidies for ethanol may not last, but so far aid for fossil fuels has persisted in many countries, and globally is far larger than assistance to renewables. The International Energy Agency and U.S. President Barack Obama, among others, have called for slashing subsidies to oil, gas, and coal to discourage use of these dirty fuels and to help renewables compete. (Related: "Take Your Pick from the Energy Subsidies Tree") So far, changes to fossil fuel subsidies have been minor.

—Mason Inman

Published December 1, 2011

7. China’s Power Surge

Photograph by Greg Girard, National Geographic

It was only two years ago that China became the world's largest consumer of energy. The country is poised to lead surging energy demand for decades to come, as study after study showed in 2011.

Fully half of the growth in global energy demand between 2008 and 2035 could come from China and India, according to projections released in September 2011 by the U.S. Energy Information Administration. And the latest outlook from the International Energy Agency predicts China in 2035 will consume nearly 70 percent more energy than the number 2 energy user, the United States, while consuming less than half as much energy per capita.

The effects of China's rapidly growing appetite for energy were felt across international borders in 2011, as China, Thailand, Laos, and Myanmar wrestled over the potential economic opportunity and ecological devastation presented by hydroelectric dams along the Mekong river.

(Related: World Electricity Mix Interactive)

Renewable energy initiatives aside, coal has remained king, making up a generous 70-percent slice of China's total energy pie. The country has shuttered many of its smallest and dirtiest coal plants. But as a World Bank study published this spring noted, the "long remaining lifetime" of existing coal plants means China's electricity generation will likely remain greenhouse-gas-intensive "for a significant period of time."

—Josie Garthwaite

Published December 1, 2011

8. Keystone XL Pipeline

Photograph by Saul Loeb, AFP/Getty Images

The tar sands of landlocked Alberta in Northwest Canada are now a major petroleum-producing region, since the higher oil prices of the past decade have made it economically feasible to spend extra labor and energy to mine and steam the sticky bitumen into usable crude oil. But the focus for Canada's industry in 2011 was the equally sticky problem of getting the oil from its source to global markets. The heavy crude produced by the tar sands requires sophisticated refineries, such as those on the U.S. Gulf Coast, some 1,700 miles (2,736 kilometers) away. At present, all Canadian oil pipelines into the United States end at a main terminal in Cushing, Oklahoma. The proposed Keystone XL pipeline would carry the tar sands oil through the U.S. Midwest to Texas refineries . From there, the tar sands oil could be routed to U.S. markets or shipped overseas to oil-hungry ports in China and elsewhere.

Because production of tar sands oil is carbon-intensive, the project sparked protests by climate activists in the United States and Canada. The Obama administration, under pressure, delayed its decision on whether to allow the project until 2013 to study rerouting the pipeline around Nebraska's Sand Hills, home to the endangered American burying beetle.

Canada is now scrambling to find alternatives to the Keystone XL. Environmental activists and native people now are turning increased attention to a proposed pipeline that the Canadian company Enbridge wants to build from Alberta's tar sands to the port town of Kitimat, British Columbia, for shipment to Asian markets. The pipeline could threaten the lifestyle of the First Nations people living nearby. (More pictures: "Canadian Rain Forest Edges Oil Pipeline")

Enbridge in November became involved in another project in the U.S.: reversing a little-used pipeline from Freeport, Texas, to the Cushing terminal to carry crude south from Cushing to Gulf Coast refineries. At the same time, TransCanada, the company behind the Keystone XL, said it might seek approval to begin construction in early 2012 of the southern portion of the Keystone XL along the same route to help alleviate the oil bottleneck in Cushing.

—Mary Anne Mulligan

Published December 1, 2011

9. Moves to Tap the Arctic

Photograph by Misha Japaridze, AP

Controversial efforts to drill for oil in the Arctic Ocean gathered momentum in 2011, buoyed by concerns about declining oil fields and, paradoxically, tough economic conditions and global warming.

The U.S. Geological Survey estimates that the Arctic holds 90 billion barrels of recoverable oil, 13 percent of the world's undiscovered reserves.

Shell* received conditional approval from the U.S. Interior Department to drill in the Beaufort Sea off the north coast of Alaska, amid mounting pressure on the Obama administration to create more jobs and reduce gasoline prices. The Obama administration also recently proposed two new lease sales in the Beaufort and Chukchi Seas off Alaska's coast. But long-running court challenges to stop the drilling remain, sparked by worries about how oil spills would be managed in the remote area, and the effect on sensitive habitats roamed by polar bears and walruses.

Elsewhere in the Arctic, Exxon Mobil signed an agreement to drill in Russian waters (an existing rig is pictured, above), as polar cap melting opens the sea to exploration and navigation. The Norwegian energy company Statoil announced it had struck a potentially huge field in the Barents Sea off Norway's coast, a development welcomed by a country eager to see new fields replace declining old ones.

—Jeff Smith

*Shell is sponsor of National Geographic's Great Energy Challenge initiative. National Geographic maintains autonomy over content.

Published December 1, 2011

10. Time Running Out on Global Warming

Photograph from Reuters

This was the year that dashed the hopes raised over the seeming slowdown in carbon dioxide emissions, now clearly seen as a brief pause caused by  economic slowdown. Although global economies have not rebounded, fossil fuel emissions have. The World Meteorological Association confirmed late this year that the amount of greenhouse gases in the atmosphere reached a new post-industrial age high in 2010, and the rate of increase has accelerated.

Defying the climate change activists who believe the world should focus on returning the atmospheric CO2 concentration to 350 parts per million, carbon dioxide accumulation crept up 2.3 ppm from 2009 to 2010, and now standing at 389 ppm, a whopping 40 percent higher than it was before coal- and oil-powered industrialization.

Fueled largely by coal, in 2011 China overtook the United States as the world's biggest energy user—one of many reasons that greenhouse gas emissions have broken new records, after a dip in 2009 following the economic crash. (Above, laborers in China look for usable coal at a cinder dump site.)

The International Energy Agency (IEA) concluded that fossil fuel demand is growing so fast that the world now has only about five years to make a dramatic turnaround in policies to keep global warming below 3.6°F (2°C), a threshold many countries have pledged to stay below.

The IEA forecasts that China's energy demand will exceed that of the United States by 68 percent in 25 years, when it projects that China and India together will be responsible for 31 percent of world energy consumption.

In many richer nations, economic woes had governments pulling back on policies to limit the burning of fossil fuel. Spain and the United Kingdom, among others, slashed their subsidies for renewable energy, and investment in wind and solar did not continue to soar as it had before the crash. Nonetheless, in 2011 investment in renewables surpassed that for fossil fuels for the first time.

—Mason Inman

Published December 1, 2011