60 Minutes Takes a Look at Critical 60 Year Old Energy Technology
“It’s an American energy renaissance”
“Shale Gas Drilling: Pros & Cons,” was the title that CBS’s Lesley Stahl went with in her 60 Minutes segment last night on natural gas development in America from shale rock formations that have been around for hundreds of millions of years. Thanks to advancements in horizontal drilling technologies coupled with the 60 year old energy stimulation process called hydraulic fracturing, natural gas is not longer “the ugly stepchild of our national energy debate.”
In a Wilkes Barre Times-Leader story today, under the headline “TV report focuses on gas drilling,” Energy In Depth weighs-in on last night’s CBS segment:
Chris Tucker, of EnergyInDepth.org, an organization that promotes the benefits of natural gas drilling, said the segment was “fairly balanced,” although the show didn’t get everything right.
“I think they did a great job of telling the story of real people, everyday people, all across the country whose lives have changed for the better thanks to the development of this clean, American resource,” Tucker said.
“They didn’t quite get it right when they attempted to venture into the regulatory history of hydraulic fracturing. The reality is that fracturing technology is among the most thoroughly regulated procedures that takes place at the wellsite, which is a big reason why it’s been able to compile such a solid record of safety and performance over the past 60 years of commercial use.”
Here are key experts from the CBS segment:
On America’s Abundance
- What is increasingly evident is that shale gas is overwhelmingly abundant right here in the U.S.A. “In the last few years, we’ve discovered the equivalent of two Saudi Arabias of oil in the form of natural gas in the United States. Not one, but two,” Aubrey McClendon, the CEO of Chesapeake Energy, told “60 Minutes” correspondent Lesley Stahl. “Wait, we have twice as much natural gas in this country, is that what you’re saying, than they have oil in Saudi Arabia?” Stahl asked. “I’m trying to very clearly say exactly that,” he replied.
On the Economic Promise
- Some 10,000 wells will be drilled in northwest Louisiana, in some of the poorest communities in the country, where impoverished farmers are becoming overnight millionaires as they lease their land for drilling. “I never dreamed of money like this,” C.B. Leatherwood told Stahl. ” Leatherwood, a retired oil field worker, got a bundle to drill under his farm: $434,000. His cousin, Mike Smith, also profited: he was paid nearly $2 million.
- They actually call them “shaleionaires,” and they don’t mind putting up with the noisy, smelly drilling when the wells are built because they get a cut of the profits, which could last for years and add up to millions more. Last year, shale drilling generated almost $6 billion in Louisiana in new household earnings. As the rest of the nation plunged into a recession, the region added over 57,000 local jobs, and the Cadillac dealership in town is hopping.
On Hydraulic Fracturing
- The other technology is hydraulic fracturing or “fracking,” where millions of gallons of water, mixed with sand and chemicals, are pumped down the well at enormous pressure. “We break the rock. We fracture the rock. And that stimulates the ability of the gas to flow into the well bore, where we can flow it to the surface and sell it,” Duginski explained to Stahl.
- “But fresh water aquifers are only from the surface to about one thousand feet below the surface of the earth, okay? We are fracking wells at depths of 7, 8, 10, 12 thousand feet. Okay? So there is almost two miles of rock between where we are active and where fresh water is drawn from,” McClendon said.
However, there’s some outstanding facts that didn’t make it into last night’s segment. For instance, Sierra Club’s Michael Brune claims that natural gas production is “under-regulated,” and that “the first thing that the industry should do is disclose what chemicals are being used in fracking.” “The 2005 energy bill completely exempted the natural gas industry and fracking technology from any regulation under the Safe Drinking Water Act. It’s an outrage,” continues Mr. Brune.
But here are several critical facts that CBS viewers, and Mr. Brune, should be aware of:
- FACT: Hydraulic fracturing has never been regulated by the federal government or the EPA or under the Safe Drinking Water Act. This technology, however, is ably and tightly regulated by individual energy-producing states. Far from being “pushed through Congress by Dick Cheney,” the Energy Policy Act of 2005 earned the support of nearly three-quarters of the U.S. Senate (74 “yea” votes), including the top Democrat on the Energy Committee; current Interior secretary Ken Salazar, then a senator from Colorado; and a former junior senator from Illinois named Barack Obama. In the U.S. House, 75 Democrats joined 200 Republicans in supporting the final bill, including the top Democratic members on both the Energy & Commerce and Resources Committees.
- FACT: Natural gas development is regulated under the Clean Water Act, the Clean Air Act, the Safe Drinking Water Act, the Superfund law.
- FACT: Fluids used in the fracturing process – made up of more than 99.5 percent water and sand – are readily available to the public. Pursuant to federal law, these fluids must be available at every wellsite nationwide. Additionally, state regulators list these additives online, including Pennsylvania’s Dept. of Environmental Protection. Further, a host of energy companies and service providers have disclosed these additives (see Halliburton, Range Resources, Chief Oil & Gas, just to name a few).
Experts Fact Check Recent Round of Scurrilous Claims Targeting Fracturing
EID’s Lee Fuller: “Plain Dealer readers should also be aware that earlier this week, a top EPA drinking-water official stated the same thing — suggesting further that states, and not the federal government, are best positioned to regulate this critical technology in a way that balances the imperative of responsible energy exploration with the safeguarding of our environment. … The fluids used in the process are made of 99.5 percent water and sand — with the slight remainder comprised of household materials you’re just as likely to find in the kitchen cupboard and beneath the kitchen sink.” (Cleveland Plain Dealer, 2/20/10)
EID’s Jeff Eshelman: “Pennsylvania saw an increase of nearly 50,000 jobs last year alone thanks to safe, responsible, well-regulated natural gas production in the Marcellus Shale. Unfortunately, when it comes to hydraulic fracturing – the 60-year old energy production technology used in nine out of 10 wells in America – the congressman’s claims are simply unsupported by the facts. Fracturing has never been regulated by the federal government. … Instead, ground water protection has been effectively regulated by the state government. The bipartisan 2005 energy bill – which was supported by then-Sen. Barack Obama – simply clarified Congress’ intent of the Safe Drinking Water Act. So how could something earn an exemption, or a “loophole,” from a law that it was never regulated by?” (The Daily Local, 2/27/10)
LOGA’s Don Briggs: “For decades this process has been effectively regulated by the states. In 2009, the Groundwater Protection Council released a study on the regulation of oil and gas field activities saying, “The regulation of oil and gas field activities, including hydraulic fracturing, is best accomplished at the state level where regional and local conditions are best understood. …” If hydraulic fracturing were to be regulated by the EPA, President Obama could easily shut down the development of the Haynesville Shale, resulting in the loss of thousands of jobs and billions of dollars in investment.” (The Daily Advertiser, 2/21/10)
Okla. Independent Petroleum Assoc.’s Mike Terry: “The major components of hydraulic fracturing fluid are well-known, with water and sand accounting for up to 99 percent of the solution. The remaining additives are the same compounds found in soaps, detergents, cosmetics, medications and chemicals commonly found in households. … Hydraulic fracturing has been used commercially since 1949, and there have been no known cases of drinking water contamination. … Increased regulations will lead to a decrease in competition.” (The Oklahoman, 2/23/10)
Chesapeake’s Aubrey McClendon: “McClendon defended the process, saying that … Chesapeake Energy has employed hydraulic fracturing more than 25,000 times since the company started in 1989, including 1,000 wells drilled inside Fort Worth’s city limits, with no ill effects on groundwater.” (Harvard University Gazette, 2/25/10)
Institute for Energy Research: “Hydraulic fracturing has been in use for more than 60 years and has been deployed more than a million times without contaminating drinking water. This is possible for a few reasons. Energy-producing states heavily regulate the practice, employing teams of qualified professionals that monitor, inspect, and enforce state law to ensure the public’s safety. In addition, the fracturing of these wells occurs 6,000 to 9,000 feet below our feet and thousands of layers of impermeable rock.” (Boston Globe, 2/19/10)
Lenape Resources’ John Holko: “According to Penn State University, more than 48,000 high-wage jobs were created in Pennsylvania in 2009 alone as a direct result of Marcellus exploration. Total economic output tied to this work topped $3.8 billion. And more than $400 million was sent to state and local governments in the form of taxes and revenues — again, just in a single year.” (Times Union, 2/11/10)
Newspapers Speak Out: Waxman’s Latest “Inquiry” on Hydraulic Fracturing Could be a “Witch Hunt”
The Oklahoman: “Yet they seem to have bought into the fear-mongering extant over fracturing. The technique involves injecting water, sand and chemicals into shale formations. This cracks open the shale and facilitates natural gas production. … This could be a responsible, objective examination. Or it could be a witch hunt. The Environmental Protection Agency, which said six years ago that hydraulic fracturing doesn’t threaten the water supply, wants to spend more than $4 million to study fracturing. … If America is to move toward greater energy independence, natural gas is a key component. And hydraulic fracturing is a key method for making that happen.” (Editorial, 2/23/10)
Washington Examiner’s Mark Tapscott: “Already the initial drilling of Marcellus Shale in Pennsylvania is causing an economic boom in small Pennsylvania towns that have been in dire economic straits for decades. Public support for expanding Marcellus Shale exploration and production is growing there, as well as in New York. But that’s exactly why environmentalists and their liberal Democrat allies in Congress, the media, the non-profit advocacy communities, and the universities are targeting hydraulic fracturing for elimination, seeking to turn it into the next hook for nationwide environmental fear-mongering. They claim – with virtually no credible evidence to back it up – that hydraulic fracturing represents a dire threat to the drinking water millions of Americans in places like New York City and Philadelphia must depend upon every day.” (Editorial, 2/20/10)
The Washington Observer-Reporter: “Natural gas drilling in the Marcellus Shale could provide an economic shot in the arm for this region and Pennsylvania as a whole. … Natural gas has potential as an energy source and a jobs-provider, no doubt about it.” (Editorial, 3/2/10)
Washington Post: “The resurgence of gas comes through the discovery of massive deposits in Appalachian shale formations and elsewhere — a reserve that offers the prospect of stable domestic supplies and relatively low prices.” (Editorial, 2/28/10)
Academics Confirm Critical Role that Hydraulic Fracturing Will Play in Long-Term U.S. Energy Security
Univ. of Mich.-Flint Prof. Mark Perry: “Thanks to a breakthrough in drilling technology, involving the use of three-dimensional seismic imaging and hydraulic fracturing of shale rock, huge amounts of natural gas are being produced in New York, Pennsylvania, Texas, Louisiana and other states. Instead of declining, domestic natural gas production is booming to record-high levels. … But these exciting energy developments may not last if natural gas companies are burdened by excessive regulation and heavy taxes. Environmental groups are lobbying Congress to shift regulation of hydraulic fracturing from state governments to the Environmental Protection Agency, claiming that the process poses a risk to groundwater supplies. But the fact is, hydraulic fracturing is done about 1,000 feet below underground aquifers and separated from the water supply by thick rock.” (Investor’s Business Daily, 2/19/10)
Members of Congress, State Legislators Continue to Weigh-In: Fracutring is Safe, Effectively Regulated by States
Congressman John Fleming (LA):
- “He said the extra federal regulation would increase costs, reduce production and eliminate jobs.”Production would essentially grind to a halt, and billions of dollars in federal and state tax revenue would be at risk.” (Alexandria Town Talk, 3/1/10)
- “This action would have a far-reaching negative impact on energy producers and consumers alike, particularly in formations such as the Haynesville Shale in my district which depend on hydraulic fracturing to produce. In 2008, production in the Haynesville Shale pumped $4.5 billion into Louisiana’s economy and created over 32,000 jobs. Adding additional layers of regulations to hydraulic fracturing would not only result in a sharp increase in costs to small and independent producers, it would dramatically decrease output and job creation.” (Bossier Press-Tribune, 2/26/10)
- “If Congress is serious about tackling this country’s energy crisis and ending our dependence on foreign oil then it is crucial they recognize what resources, such as the Haynesville Shale, will play in our long-term economic and national security. More burdensome federal regulation will only serve to hinder production and feed this country’s addiction to foreign energy.” (Bossier Press-Tribune, 2/26/10)
Okla. state Rep. Mike Thompson: “Hydraulic fracturing is a safe and successful drilling method in which water, sand and chemicals are injected at high speeds into a well to fracture rock and free up natural gas. This is a method that has increasingly been used in many shale formations across the country and has led to the discovery of increased levels of domestic natural gas. … The Interstate Oil and Gas Compact Commission conducted a survey that found there were no known cases of groundwater contamination associated with hydraulic fracturing.” (The Oklahoman, 2/27/10)
Rust Belt No More: Shale Gas Exploration Powers Economic Growth in OH, PA
Manufacturing Jobs Coming to Ohio:
- “Pipe Dreams Come True Thanks to Marcellus Shale … After years of incentives, tireless work, political pressure, and labor concessions, what is bringing heavy steel manufacturing back to the Valley is a layer of rock deep beneath our feet. It’s called the Marcellus Shale, named after the town of Marcellus, New York, where there is an exposed outcropping. …This is creating the demand for high-quality steel pipe used to punch through the shale and into the gas deposits that is enticing V&M and TMK IPSCO to build or expand facilities here.” (WYTV-OH, 2/25/10)
- “An oil-and-gas pipe maker says it plans to open a new facility in Brookfield. TMK IPSCO said Tuesday it has signed a lease on a building where it plans to produce up to 100,000 tons of threaded pipe annually. The company said it expects to begin operations in the township in the coming months; up to 120 people could eventually be employed there. President and CEO Vicki Avril says the new facility is in direct response to the growing demand for infrastructure at Marcellus Shale well sites that are located under parts of Ohio and Pennsylvania.” (Tribune Chronicle, 2/23/10)
Tens of Thousands of Jobs Being Created in Pennsylvania:
- “New ventures in natural gas may take Tioga County from ‘rags to riches’ … “I think the fastest growing areas of the county are going to be Mansfield, Wellsboro and Lawrenceville,” he said, adding that he thinks the valley between Mansfield and Covington will “fill in” in the next few years, mainly because of the discovery of gas within the Marcellus Shale. … With that, jobs will come, and plenty of them, he said. Some of those jobs will be filled by local people, while others will move here with their families. … Before the natural gas industry discovered the gas trapped in the shale beneath Tioga County, it was considered to be a “slowly dying” county, Trask said.” (Williamsport Sun-Gazette, 2/18/10)
- “With the expansion, TMK IPSCO plans to take advantage of increased demand for pipe to be used for drilling in the Marcellus Shale formation. … “This is a move we’re taking to be more responsive to our clients who are flocking to Marcellus Shale,” Galitzine said. He said IPSCO has seen increased interest in possible Marcellus-related pipeline orders since 2008, and the company has refitted its lines in Ambridge and Koppel to manufacture 5.5-inch-wide pipe, an ideal width for use in the shale fields. … But the Marcellus field has changed the prospects, Galitzine said, both for IPSCO and its employees. The Brookfield plant is expected to immediately employ 50 people, which will increase to 120 employees.” (Beaver Co. Times, 2/25/10)
- “It’s one business. It’s 50 jobs. And they are almost all going to local people. Those are the pertinent details regarding approval last week by Montoursville Borough Council allowing Sooner Pipe to operate a pipe storage facility on the industrial section of the Williamsport-Lycoming County Airport. … And the best part is that this is probably just the tip of the proverbial gas industry iceberg. As the industry settles into the region, there will be needs for pipe manufacturing, cutting and storage, equipment providers, freight storage and other offshoot businesses and industries. They all will be employing people, often with unique, high-paying skills. Those people will be spending money on food, clothing and shelter. That is the root definition of economic development, private enterprise style. It’s the best kind of economic development.” (Williamsport Sun-Gazette, Editorial, 2/25/10)
- “Fracturing is an old technology already regulated by states. … A July 2009 study by Pennsylvania State University estimates developing the Marcellus shale basin added more than 48,000 jobs in the state last year” (Wall Street Journal, 2/27/10)
State Regulators Speak Out: List of Chemicals “Available on DEP’s Website”
PA DEP Water Management Chief: “Our job is to produce gas and protect the future,” said John Hines, deputy secretary for water management from DEP. He explained the Marcellus shale gas reserve could potentially hold “enough gas to fully supply the nation for 10 or more years.” Hines added producing that gas could create new wealth as well as new jobs, “but not at the sacrifice of our water resources.” … During his testimony, Hines attempted to dispel rumors that certain “secret” chemicals were used in the fracing process. He said that DEP distributed a list to the public of all the chemicals that were used. Hines said the Material Safety Data Sheets were also distributed to local emergency responders. The list is available on DEP’s Web site.” (Clearfield Progress, 2/19/10)
