You say you want a [shale] revolution … Don’t you know it’s gonna be all right

While it was the Beatles that popularized and brought into the mainstream the idea of “a revolution”, there’s a historic revolution taking place today. In a Wall Street Journal op-ed today — under the headline “America Needs the Shale Revolution” — energy expert Robert Bryce writes this about the critical role that environmentally proven hydraulic fracturing continues to play in fueling America’s economy:

Despite the myriad benefits of the low-cost hydrocarbons that are now being produced thanks to hydraulic fracturing, the media, environmental groups and politicians are hyping the possible dangers of the process, which uses high-pressure pumps to force water, sand and chemicals into shale formations. Doing so fractures the formation and allows the extraction of natural gas or petroleum.

Thanks to hydraulic fracturing, U.S. drillers are producing lots of ethane and propane, which are key feedstocks for the petrochemical sector.

The drilling industry itself is creating jobs. Over the past 12 months, some 48,000 people were hired in Pennsylvania by companies working in the Marcellus Shale, a massive deposit that underlies several Eastern states, including Pennsylvania and New York.

While the Pennsylvania economy is getting a much-needed lift from drilling, opposition in New York may mean that the state loses out on jobs and investment. A new study by Tim Considine, an energy economist at the University of Wyoming, estimates that drilling in the Marcellus Shale could add as many as 15,000 new jobs to the New York economy by 2015.

Regardless of what happens in New York, hydraulic fracturing is unlocking huge quantities of oil from shale. In March, domestic crude production was 5.63 million barrels per day, the highest level since 2003.

A vibrant industrial base requires cheap, abundant and reliable sources of energy. The shale revolution now underway is the best news for North American energy since the discovery of the East Texas Field in 1930. We can’t afford to let fear of a proven technology stop the much-needed resurgence of American industry.

Mr. Bryce is absolutely right, and former Pennsylvania Gov. Ed Rendell – for one – agrees (we’d submit that at least 141,000 Pennsylvanians would likely also agree). Here are key experts from Gov. Rendell’s remarks at a recent Manhattan Institute forum on clean-burning, job-creating American natural gas:

If Gov. Cuomo asked me my advice about lifting the moratorium I would tell him the moratorium should be lifted. There’s too much of an upside for New York State and too much of an upside for America.”

“Unemployment rate was 7.5% at a time when national rate is 9.0% and most industrial states are higher than the national average.  PA is the third highest creator in jobs behind Texas and California. These numbers are in a part because of shale drilling.”

And here’s what they’re saying about American oil and natural gas development enabled by tightly-regulated hydraulic fracturing:

  • Fracking sets off boom in gas supplies”: In 2002, the Geological Survey pegged Marcellus to hold 1.9 trillion cubic feet of natural gas. By 2008, researchers raised the estimate to more than 500 trillion cubic feet. American production was flattening, the Energy Information Administration said, and the time for major imports of liquefied natural gas had arrived. … “The whole natural gas world has changed since then,” said Dan Donovan, a spokesman for Dominion Transmission Corp., a Virginia-based natural gas transporter. That’s largely because natural gas producers operating in the Barnett shale formation near Fort Worth, Texas, combined hydraulic fracturing — or “fracking” — with horizontal drilling to stimulate production. (Pittsburgh Tribune-Review, 6/12/11)
  • Congressman tours shale region, touts industry”: The United States could be free of its slightly lessening dependence of foreign oil in a short period of time if drilling is ramped up in known oil reserves and more citizens embraced natural gas as an alternative — or main — fuel source, said Congressman Steve Scalise of Louisiana’s First District during a recent visit to Shreveport. … Hydraulic fracturing…is under attack by “radical groups” and others unfamiliar with the process, Scalise said. “It is a real threat and we’re fighting a lot of factual inaccuracies.”Fracing regulations need to be guided by each state “that knows how to do it and do it well,” Scalise said. Still, EPA officials are trying to “get their nose under the tent but we are prohibiting them from going where they have no authority.”Restricting hydraulic fracturing would have a crippling effect on the nation by putting thousands of people out of work and ensuring the nation would be forever tied to other countries for energy sources. “But you have those who don’t care,” Scalise said of the opponents. “We need to fight their anecdotes and their misuse of the facts. As long as the truth is on your side you can beat these people back.” (Shreveport Times, 6/13/11)
  • South Texas Enjoys Major Boom From Oil Fracking”: Now, the challenge is all the people pouring in. Cotulla, about 90 miles south of San Antonio, and nearby towns are rushing to house hundreds of workers and approve plans for apartment complexes and industrial parks to keep up with the development of the Eagle Ford shale formation, one of the most plentiful new oil fields in the country. After several years of preliminary work, the project is fully under way and sales tax revenues are soaring. … The economic transformation is the result of a new drilling method, hydraulic fracturing, combined with horizontal drilling, that allows companies to extract oil and gas from impermeable layers of shale. … The project already supports 12,600 fulltime jobs, and by 2020 could account for $11.6 billion and nearly 68,000 jobs in a 24-county area, according to study in February by the University of Texas’ Center for Community and Business Research. (Associated Press, 6/12/11)
  • SMU Prof.: What we can learn from Texas’ Barnett Shale”: One recent study prepared for the Fort Worth Chamber of Commerce found that drilling and production activity in the Barnett was supporting, directly and indirectly, more than 110,000 jobs across the region. And a study by this author a few years ago calculated that Barnett wells and related equipment had added $6 billion to the local property tax base. In south Texas, where new oil wells are being drilled in the Eagle Ford shale, the unemployment rate has fallen to half the state average while sales tax receipts have jumped 70 percent. …  In terms of potential output and economic impact, the Barnett and Eagle Ford are dwarfed by the Marcellus Shale formation. Pennsylvania is already benefiting mightily from shale gas production, and several studies have recently documented the huge economic boost to the state in term of jobs, income and tax revenue. Indeed, one study found that nearly 48,000 jobs related to Marcellus Shale activity have been created in Pennsylvania during the last year. By contrast, New York State, with an effective moratorium on shale gas drilling, continues to hemorrhage jobs along its southern tier. (Patriot-News, Prof. Bud Weinstein, 6/10/11)
  • Just the Facts on Hydrofracturing: [Pennsylvania’s Lt. Gov. Jim Cawley recently reiterated the fact that there “has never been a documented case of water being affected by fracking.” What the paper does not mention, likely by design, is that President Obama’s top environmental regulator, EPA’s administrator Lisa Jackson, told Congress just weeks ago: “I’m not aware of any proven case where the fracking process itself has affected water.” Gov. Rendell’s then-PA DEP secretary John Hanger, who founded PennFuture, an active environmental organization in the commonwealth, maintains: “It’s our experience in Pennsylvania that we have not had one case in which the fluids used to break off the gas … have returned to contaminate ground water.” (Doylestown Intelligencer, MSC’s Kathryn Klaber, 6/10/11)
  • Ph.D. in Petroleum Engineering: Move forward with NY shale gas wells?”: This historic and sudden change from shortage and high price to large supply and low price came about by the simple realization that horizontal drilling combined with staged hydraulic fracture stimulation techniques that had been used in the Barnett shale in Texas could also be applied to the Marcellus and many other shale formations. As a result, the combined Marcellus and the Utica could potentially become the largest gas field in the world and together provide multi-generational supplies! The appearance of abundant long-term low priced, domestically sourced, clean burning natural gas supply has changed America’s energy options. … The economic impact of shale gas for the nation and New York is also immense. … The technologies are already well-developed to drill, complete and produce the shale gas resource safely. (Rochester Democrat and Chronicle, Scott Cline, 6/11/11)
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