July 2011, Vol. 238 No. 7

Editor's Notebook

Editor's Notebook: Absolute Values

As a nation as well as an industry we should be grateful for the apparent wealth of natural gas we are finding throughout the United States. It means a reliable, relatively inexpensive energy source for years to come in addition to badly needed jobs, tax revenues for governmental entities, and increased energy independence.

Some are not so keen to see this as good news. In recent months, media outlets – most notably The New York Times – have raised eyebrows and created doubt about this so-called shale revolution, especially over drilling activities. Enormous stakes are involved as investors are gambling billions of dollars on successfully exploiting these unconventional shale plays.

The Times has raised questions about the environmental and economic risks surrounding natural gas drilling including whether the data and methods being used to estimate reserves are valid.

There is room for some healthy skepticism, because it wasn’t long ago when the industry insisted we had so much natural gas that we could use it to generate electricity and run motor vehicles. A supply shortage soon sent prices skyrocketing and then we heard how “we can’t afford to use this precious fuel for vehicles or power generation.”

But when you read Times headlines such as “Insiders Sound an Alarm Amid a Natural Gas Rush” (June 25, 2011) and “Behind Veneer, Doubt on Future of Natural Gas” (June 26, 2011) backed up the innuendo of anonymous e-mails and documents, it tends to make you think the conclusions of the articles were predetermined. In past months, Times editorials have been characteristically steadfast in their attacks on the oil and gas industry.

One of the biggest questions raised by opponents involves hydrofracking, the process by which natural gas is freed from thick shale rock. The industry has been reluctant to discuss the proprietary chemical formulations it uses in fracking, but some of the public concerns are understandable because this is viewed outside the industry as a new technology that has never been applied to the extent it is now, particularly in urban settings such as Pennsylvania. People are worried that these thousands of wells use huge amounts of water – estimated at 1 million gallons per well – and about how those added chemicals will affect their drinking water supplies.

No one can ever be absolutely certain what the effects of drilling on drinking and wastewater will be to human health and aquatic environment. Indeed, the Pennsylvania Department of Health acknowledges it has been unable to link drilling to any health consequences – because it has no system in place to investigate health concerns arising from gas drilling. Gov. Tom Corbett has assigned a Marcellus commission to study the economic, environmental and public health impacts of natural gas drilling and issue recommendations.
The industry, led by the producer-driven America’s Natural Gas Alliance, is hotly contesting the Times allegations. ANGA is running highly effective TV ads aimed at educating the public on natural gas. In its response it accused the Times of using “out-of-context quotes by people the reporter appears never to have interviewed, quoting unnamed sources with no account of their expertise or potential bias, and disregarding specific and substantive information supplied to the reporter than ran counter to his story line.”

What we have here is the debate of the absolutes – either for it or against it – which seems to be how we conduct ourselves these days.

I’d like to hear the industry say that energy is a business filled with challenges and risks that are difficult to predict but which must be fully understood by those stakeholders and customers who also stand to benefit. Let the industry say that development can be done properly with the appropriate safeguards in place while avoiding some areas that should be left alone for ecological for or whatever reasons are pertinent.

As Bruce Bullock at SMU’s Maguire Energy Institute told me, is it responsible at this point for us (the industry) to say there is a solution to every problem?

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