Fracking: Get the Science Out

Ken Silverstein | May 11, 2011

 

 

Natural gas could win the hunt for market share when it comes firing up electric generators. But is that wise?

 

The sudden change in dynamics comes about because of the newer technologies available to ply shale-gas from a mile beneath the surface. As a result, America's energy portrait has literally changed in the last few years.

 

The main obstacle is the issue of hydraulic fracturing, or fracking. That is the process by which the drillers extract the shale -- by pumping water, sand and a concoction of chemicals deep underground to split the gas from the rocks where it is embedded. But critics say that it does not just pollute the water. It also requires too much water, which is in short supply.  

 

“When it is done right, fracking is environmentally benign,” says Frank Yoho, an executive with Piedmont Natural Gas, in an interview with this writer after the Energy Inc. conference in Charlotte. “It needs to be understood.”

 

Yoho goes on to say that the lack of public awareness falls squarely on the shoulders of the exploration and production sector. It has always considered its drilling techniques to be proprietary. But times are different. The newly accessible shale supplies are a game-changer for the industry as a whole. 

 

The Obama administration would like to see natural gas make headway in electricity markets. That's because it releases half the carbon as coal. At the same time, the White House agrees with Congress that the drilling process could sucker punch the whole shale industry. That's why the administration endorses a voluntary approach to disclosing what fluids are used while fracking.

The ultimate oversight of the fracking practice will have huge implications not just for the industry but for consumers as well. The U.S. Department of Energy is predicting that shale-gas will supply 20 percent of all electricity fuel supplies by 2020.

 “Get the facts and the science on the table,” says Yoho. “When you see the administration making the same statements, industry needs to get on board.” 

 

Some Reluctance

 

To be sure, some kickback is occurring not just from the gas drillers but also from utilities that caution against blind faith.  For their part, producers don’t want to  divulge their trade secrets. They would prefer to use best management techniques, which take into account such things as monitoring and testing protocols as well as the recycling of wastewater. 

 

Utilities, meanwhile, understand the need for a balanced energy portfolio. Jim Rogers, chief executive of Duke Energy, told the Energy Inc. conference that shale-gas “seems too good to be true.” That is, in 2007 the U.S. Energy Information Administration did not list any such gas in its forecast.  And today the picture is much different. 

 

At the same time, he is also concerned about the vast amount of water that is required to frack, calling water the “new oil.” Furthermore, natural gas has methane releases associated with it, which have come under scrutiny lately for creating more of a greenhouse gas effect than coal -- a proposition that the natural gas industry says is untrue and that methane dissipates after 20 years. 

 

“If those risks become prohibitive, then we would rely on liquefied natural gas, which creates a foreign dependency,” Rogers adds, as that gas would be imported from countries such as Russia and Libya. 

 

For its part, Duke relies on natural gas to fuel about 15 percent of its generation. Nuclear and coal provide most of the rest. As part of its agreement with the state of North Carolina, it is shutting down some older coal fired plants and replacing them with modern natural gas combined cycle facilities. 

 

It’s also building a supercritical coal unit in the state, as well as a coal gasification facility in Indiana -- moves that had previously received state regulatory approvals. Reporters, meanwhile, toured a coal facility that has been equipped with scrubbers. That’s something Duke had considered to be more cost effective than closing the unit and replacing it with one that runs on natural gas. 

 

“Today, you can’t build a coal plant,” says Randy Zwirn, chief executive of Siemens Energy, at the Energy Inc. conference. “Nuclear is a challenge. Renewables won’t make up more than 5 percent. By default, natural gas is the best option. The only way to serve the expected growth is to build gas plants,” he adds, which is why the company has built a $350 million gas turbine facility in Charlotte.
 

It’s a well calculated decision by Siemens. But key issues could derail that expectation, namely fracking. That’s why some utilities want to hedge their bets and ensure that their fuel mix is diversified. 

 

 

EnergyBiz Insider has been named Honorable Mention for Best Online Column by Media Industry News, MIN. Ken Silverstein has also been named one of the Top Economics Journalists by Wall Street Economists. 

Follow Ken on www.twitter.com/freehand1200

 

energybizinsider@energycentral.com.