May/June 2011 Clean, Cheap, and Out of Control

Why natural gas could be the fuel of the future, and how the industry could blow it all up.

By Jesse Zwick

Not all members of the natural gas industry are oblivious to this reality. “Scott Anderson likes to say industry is shooting itself in the foot, and quite frankly I agree with him,” says Mark Boling, executive vice president and general counsel of Southwestern Energy, a large independent natural gas producer. Far too many in the industry, however, have stood firm in their opposition to tighter regulations, even as some putative environmentalists continue to seek draconian regulation that would shut the industry down altogether. Thus it is important for all sides to get the facts about fracking straight and to put them in context, in order to establish the regulatory regime we need to avoid a far dirtier and more dangerous energy future.

Hydraulic fracturing first got under way in 1949, when engineers from the Halliburton Oil Well Cementing Co. experimented with a new drilling technique that involved pumping gasoline, napalm, crude oil, and sand into a deep oil well at high pressure in order to stimulate increased production. The experiment proved a big success and helped increase the amount of recoverable oil and gas reserves in North America by as much as a third. Natural gas, however, was still widely considered a declining fuel source and a bit player in the domestic energy game until the 1980s, when a Texas wildcatter named George Mitchell figured out how to extract it from shale rock formations previously considered impenetrable.

Mitchell began his experiments in the Barnett Shale formation near Fort Worth, Texas; after much trial and error, his engineers discovered that fracturing shale rock with a mixture of water, sand, and assorted chemicals allowed natural gas locked inside the rock formation to escape. Previously, it was thought that water would cause the clay in the shale to swell, locking in the gas for good, but instead it caused the shale to shatter like glass. His fracking technology was later combined with horizontal drilling techniques that radically altered the amount of gas that could be recovered from a single well. Suddenly, large shale formations in Texas, Louisiana, and Arkansas— previously untouchable—were up for grabs, as was the vast amount of gas trapped in the Marcellus Shale.

Spanning large swaths of New York, Pennsylvania, Ohio, and West Virginia, the Marcellus formation contains approximately 500 trillion cubic feet of natural gas, enough to supply all U.S. needs for nearly two decades. While it’s unlikely that the industry will be able to recover even half of the estimated supply, the newfound abundance is enough to lower natural gas prices dramatically and fundamentally change the economics of clean energy in the U.S. for the better, potentially displacing as much as a third of all coal-fired power generation.

Yet this abundance of gas in the Marcellus Shale also happens to be located where a lot of people live, and unlike in Oklahoma or Wyoming, few of them have any experience of living amid gas wells. “We’re in a part of the world where we’re trying to apply a process we’ve carried out with great success, but we’re trying to explain it to folks with no background and no cultural awareness of what we do or how we do it,” laments Chris Tucker, a spokesman for Energy In Depth, a natural gas and oil trade organization.

That’s true, but it still doesn’t contradict the very real need to close the myriad of regulatory loopholes the gas industry has managed to secure for itself over the years. For example, in 2005, thanks to heavy lobbying by Halliburton (one of the three largest providers of fracturing services), plus the help of a few well-placed friends of the industry, such as Dick Cheney, Sen. James Inhofe of Oklahoma, and Rep. Joe Barton of Texas (and BP apology fame), Congress passed a provision that effectively exempts fracking from any regulation by the Environmental Protection Agency (EPA) under the Safe Drinking Water Act.

With what came to be known as the “Halliburton loophole” in place, natural gas production took off, including in places where it had never been seen before. The backlash among environmentalists was fierce, however, and all the more since the players involved in creating the loophole had already been widely demonized by progressives on other grounds. In 2009, that distrust found expression in congressional legislation that sought to re-empower the EPA and force the natural gas industry to provide detailed disclosure of the chemicals used in the fracturing process. Predictably, the bill, introduced by Rep. Diana DeGette of Colorado and Sen. Bob Casey of Pennsylvania, immediately faced heavy opposition from the industry, which argued that the current state-level regulations for natural gas drilling were sufficient. What really killed the bill, however, was an ironic twist in the politics of global warming. In order to coax the oil and gas industry along on an overarching climate bill, the Democratic leadership agreed to put off its push to regulate fracking. After the climate bill stalled in the Senate, the natural gas industry was left retaining its loophole.

Since then, the political battles over natural gas have fanned out, flaring up as skirmishes in state legislatures and local permitting fights across the Marcellus, with both sides claiming bad faith. “I think right from the playbook, page one [of environmentalists] is to find any areas where the perception might be played up that big companies might be hiding something, then go to the communities and scare the hell out of them,” says industry spokesman Tucker. “Then you’ve got a good bumper sticker.… And if they can weave a narrative that hydraulic fracturing is new, that it was invented by Dick Cheney, that Halliburton is involved—the ‘H word’—all the better.”

But the current approach taken by the natural gas industry—that drilling is sufficiently regulated and its detractors deluded—is also wrongheaded. It not only ignores the real threats to groundwater and other environmental risks of gas production, it also fuels the very perception that the natural gas industry claims to seek to avoid: that it is hiding something.

Industry executives are fond of declaring that there have been no confirmed incidents of groundwater contamination from hydraulic fracturing. Yet their argument is largely a matter of semantics. It’s true that fracking—understood as the moment at which a water-sand-chemical mixture is pumped into a shale formation at high pressure—occurs deep underground. Often as much as 8,000 feet of sediment separates the fractures created in the shale and the freshwater aquifers above, and there is not much chance of the water flowing upward. Yet there are other ways that the process of fracking and other aspects of gas drilling can lead to water contamination.

Jesse Zwick is a writer living in Washington, DC.