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Natural Gas from Shale: A Boon or a Danger?

marcellus shaleThe BP oil spill in the Gulf of Mexico has greatly increased public attention to U.S. energy supplies (as well as severely tarnishing the image of BP and, by extension, the entire oil industry). At the same time there has been great movement in the natural gas arena, with promises that gas, widely perceived as more environmentally friendly than oil, may account for a greatly increased share of U.S. energy.

 

Interest in gas is also driven by concerns that the government will be imposing increasingly-strict limits on greenhouse gas emissions (read “carbon emissions). California already has a sweeping environmental law that requires the state to cut its greenhouse gas emissions by about 25% below 2006 levels by 2020, with regulations adopted by 2011 and enforcement of limits and reduction measures to begin by 2012. New York and several other Northeastern states have adopted less severe measures. Gas is widely seen as a way to meet these goals.

 

Increase in supply

The U.S. supply of recoverable natural gas has increased dramatically over the past few years. In June, 2009 the American Gas Association’s Potential Gas Committee’s (PGC’s) biennial assessment of natural gas resources estimated the U.S. total resource base at 1,836 trillion cubic feet (Tcf), with 1,673 Tcf attributable to traditional reservoirs and 163 Tcf in coalbed reservoirs. And, the report continues, “When the PGC’s results are combined with the U.S. Department of Energy's latest available determination of proved gas reserves, 238 Tcf as of year-end 2007, the United States has a total available future supply of 2,074 Tcf, an increase of 542 Tcf over the previous evaluation.”

Much of the increase is due to reevaluation of the amount of gas available in various shale formations around the country. Shale gas now accounts for 616 Tcf (33%) of total potential resources, according to the PGC. And, it should be noted, other areas in the world, including Australia, South Africa and Europe (especially Russia) are showing increasing interest in shale gas. A June 30 Bloomberg News story by Rakteem Katakey reported that India was planning to open shale-gas areas to exploration, although concern about possible effects on groundwater may act to slow the process and exclude some areas from exploration.

A March 11 New York Times article by Mike Soraghan of Greenwire said that Jim Mulva, CEO of ConocoPhillips (speaking at the CERAWeek conference in Houston), called it “nature's gift to the people of the world.”

Shale gas deposits occur in several states, but the largest is the Marcellus shale, located primarily in West Virginia, Pennsylvania and New York. A recent report to the American Petroleum Institute (API) by Timothy J. Considine, Ph.D. of Natural Resource Economics, Inc., “The Economic Impacts of the Marcellus Shale: Implications for New York, Pennsylvania and West Virginia” estimates the formation contains more than 489 Tcf of recoverable gas with a value of roughly $2 trillion.

John Deutch, in a July 16 article in The Wall Street Journal, predicted that the new-found abundance of natural gas would displace coal for electricity generation in the short run and increase the viability of hybrid solar plants. It will also, Deutch predicted, increase natural gas’s attractiveness as a transportation fuel, particularly for local applications like “buses, medium-duty trucks and light-duty vehicles that operate in urban environments close to fueling stations.” Deutch goes on to say that “10% penetration in the next decade or two would displace 1.2 million barrels of oil per day.”

Natural gas as a transportation fuel

Probably the person most publicly pushing natural gas as a transportation fuel is T. Boone Pickens. His Pickens Plan calls for the U.S. to move away from imported oil by using natural gas to replace diesel fuel and gasoline to fuel trucks, buses and fleets, while at the same time greatly increasing the use of wind (and to a lesser extent, solar) to power the electric grid. Pickens estimates his plan can reduce U.S. oil dependence by 30% or more within 10 years.

Environmental concerns

Shale gas is found in beds of impermeable rock; it is recovered by drilling into the formation (often horizontally) and injecting water, chemicals and sand under great pressure; the pressure fractures (fracs) the rock while the sand holds the resulting cracks open so the gas can flow out. The injected water is then produced from the well and either disposed of, used in fracing other wells or put into injection wells. Following an initial surge the gas flow decreases, and the process must be repeated.

But no technology is perfect, and opponents of hydraulic fracing insist it can pollute groundwater with toxic chemicals, cause wells to run dry, and even cause gas to seep into domestic water supplies.

And there have been incidents. A July 20 AP story by Marc Levy and Mary Esch reported a “well blowout in north-central Pennsylvania [in June] spewed natural gas and toxic fracking water out of control for 16 hours. State regulators found EOG Resources Inc. of Houston had failed to install a proper blowout prevention system — taking cost shortcuts. The state fined EOG Resources and a contractor more than $400,000.” And in Dimock, in Northeastern Pennsylvania, the story continues, “state regulators have repeatedly penalized Houston-based Cabot Oil & Gas Corp. for contaminating the drinking water wells of 14 homes with leaking methane and for numerous spills of diesel and chemical drilling additives, including one that contaminated a wetland and killed fish.” According to DeGette and Casey, “Troubling incidents have occurred around the country where people became ill after fracking operations began in their communities. Some chemicals that are known to have been used in fracking include diesel fuel, benzene, industrial solvents and other carcinogens and endocrine disrupters.”

Resistance to shale development has been fueled (pun intended) by the HBO film Gasland, which advocates strongly against shale gas development by hydraulic fracturing. There is some disagreement with the film itself and with film maker Josh Fox’s methods; an article by Andrew Maykuth in The Philadelphia Inquirer for June 23 cites the film’s interview with Pennsylvania Secretary of the Environment John Hanger, who walked out of the interview and later accused Fox of creating a propaganda film that misrepresented the situation.

But there is opposition to fracing in other areas as well. Mike Soraghan’s article reports that legislation (the Frac Act) has been introduced by Rep. Diana DeGette (D-CO) and Sen. Robert Casey (D-PA) “to remove fracturing's exemption from the Safe Drinking Water Act, but neither bill has gotten out of committee.”

On March 18 the EPA announced it would begin a new study to investigate possible adverse impact of fracing on water quality and public health, and is seeking suggestions and comments from the EPA Science Advisory Board (SAB) — an independent, external federal advisory committee, and has been holding a series of hearings in gas shale areas around the country.

The rush to drill wells, the Levy and Esch story adds, has overwhelmed West Virginia officials. And West Virginia and nearby states have had painful experience with the good and bad of resource extraction, including the mountaintop removal method of coal mining. HR 1310, introduced in March of 2009, would close a loophole in the Federal Water Pollution Control Act that allows material removed from mountains during this process to be used to fill nearby valleys and bury streams and rivers.

What’s next?

Natural gas production, especially from shale, has strong partisans arrayed both for it and against it. It is likely that at least a good portion of the resource will be developed — we need the gas and the API has published estimates that the natural gas industry accounts for almost 4 million direct and indirect jobs nationwide created by natural gas production, delivery and usage —

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