Tag Archives: Natural Gas

Natural Gas and the State of the Union

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In his latest State of the Union address, President Obama announced that:

We have a supply of natural gas that can last America nearly 100 years… The development of natural gas will create jobs and power trucks and factories that are cleaner and cheaper, proving that we don’t have to choose between our environment and our economy. And, by the way, it was public research dollars — over the course of 30 years — that helped develop the technologies to extract all this natural gas out of shale rock, reminding us that government support is critical in helping businesses get new energy ideas off the ground… Our experience with shale gas, our experience with natural gas, shows us that the payoffs on these public investments don’t always come right away. Some technologies don’t pan out; some companies fail. But I will not walk away from the promise of clean energy.

In addition to upsetting those concerned about the dangers of hydraulic fracturing, this part of his speech has also provoked criticism for “exaggerating” the role of the federal government in fostering the emergence of the natural gas boom.

For instance, a US News and World Report article entitled “Obama Exaggerates Role of Federal Government in Natural Gas Boom“ by Daniel Kish, senior vice president for policy at the Institute for Energy Research, asserts:

The president’s claim that the federal government helped create the hydraulic fracturing boom is specious at best.

However, even a cursory look at the historical record reveals that the government’s role in oil and gas technologies generally and hydraulic fracturing related technologies specifically is far more involved and complex than acknowledged by Kish’s article. For instance, despite his claims to the contrary, the government played an important role at many points in the last 30 years, including in the case of Mitchell Energy. According to one recent article:

Mitchell Energy’s first horizontal well was subsidized by the federal government, according to former geologist and Vice President for Mitchell. “They did a hell of a lot of work,” said Steward, “and I can’t give them enough credit for that. DOE started it, and other people took the ball and ran with it. You cannot diminish DOE’s involvement.”

Rather than an isolated example, this vignette is indicative of the substantial role played by the government in a variety of oil and gas technologies, many related to hydraulic fracturing as it is now practiced. For instance, during the 1970s the Department of Energy invested more than $92 million in research related to the extraction of natural gas from shale reservoirs.

This is not to say that private organizations have not played an important role as well. My point is not to declare a winner between government agencies and private industry, but simply to note that any thoughtful consideration of the record will show that both private organizations and government agencies were significantly involved in the process over a large period of time. In actor-network terms, innovation implicates heterogeneous social and material actors, and is likely to result in hybrid forms of organizing. As a result, framing the problem up as either private innovation or government support are likely to be dead on arrival as a practical matter.

Further, on top of its direct involvement in technology research (such as through the Department of Energy), a reasonable accounting of the government’s role would also consider the role of tax incentives (without which operators such as Mitchell would have been unlikely to have drilled wells), the role of favorable regulations such as the Energy Policy Act of 2005 (without which operators would not be exempt from the liabilities of hydraulic fracturing), and the important role played by agencies such as the EIA and USGS in quantifying available reserves (without which operators would have difficulty raising the capital necessary for drilling).

In short, consistent with President Obama’s claims, and contrary to the assertions of US News and World Report, it is difficult to conceive of the oil and gas industry as we now know it without significant support and involvement by the US government.

Hydraulic Fracturing and Marcellus Shale

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Yesterday, hydraulic fracturing and Marcellus shale were front page news — both locally and nationally.

The top story in the Centre Daily Times was “Forest Leases Under Fire.” Already, the Commonwealth of Pennsylvania has issued leases to gas companies for nearly half of its 1.5 million acres of state forest. At issue are concerns that current Governor Tom Corbett will over turn a moratorium enacted by outgoing Governor Ed Rendell. According to a study by the Department of Conservation and Natural Resources (DCNR) there remain ”zero state forest land acres suitable for gas leasing involving surface disturbance.”

In an interesting twist, the article reported that further development would threaten the sustainability certification of Pennsylvania’s forests. In particular, the Forest Stewardship Council (FSC) has certified that the Commonwealth’s state forest operations are sustainable, based on factors including a 2 percent rate of conversion of forests over any five-year span. However, even without further leasing, several state forests are projected to lose more than 2% of their acreage to conversion by 2020, jeopardizing their certification. Some 35 wood-industry related companies have attained FSC certification for adopting sustainable practices in Pennsylvania, which they use as a selling point for their products. They stand to forfeit their certification if their harvests come from forests deemed to be losing acreage unsustainably. An expansion of drilling in state forests — as Corbett has suggested — would exacerbate the problem.

In another front page story, the New York Times continued its Drilling Down series which examines the risks of natural-gas drilling and efforts to regulate this rapidly growing industry. The latest installment announced “Wastewater Recycling No Cure-All in Gas Process.” Lately, the oil and gas industry has been touting innovations in wastewater recycling. But apparently the rhetoric and reality don’t match up. In Pennsylvania, for example, natural gas companies recycled less than half of the wastewater they produced during the 18 months that ended in December, according to state records.

According to Brent Halldorson, chief operating officer of Aqua-Pure/Fountain Quail Water Management, a drilling wastewater recycling company: “No one wants to admit it, but at some point, even with reuse of this water, you have to confront the disposal question.” He added that the wastewater contains barium, strontium and radioactive elements that need to be removed.

Data posted by the commonwealth on Tuesday, show that operators produced more than 680 million gallons of wastewater in the year and a half that ended in December 2010. Of this amount, well operators reported recycling at least 320 million gallons. At least 260 million gallons of wastewater were sent to plants that discharge their treated waste into rivers. Another 50 million gallons or more of wastewater is unaccounted for, according to state records.

US Energy Flow

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While I’m on the subject of flow charts, I thought this visual from the Lawrence Livermore National Laboratory brings into relief the changes we are facing in terms of energy supply.

First, there is the sheer inefficiency of the overall system — of 105,000 petajoules (PJ) of energy consumed, some 57,943 PJ are wasted. Second, despite all the debate about nuclear, wind and solar, together they amount for very little of our energy supply. It is a world of coal, natural gas and oil. According to the analysis:

The national energy balance sheet reveals a number of pertinent facts. First, coal-fired power plants generate almost half of our electricity and are responsible for nearly 2 billion metric tons of greenhouse gas emissions per year—equivalent to the emissions of the entire transportation industry. Greenhouse gas emissions from coal, and to a lesser extent natural gas and oil, explain why the electric power industry is the single largest contributor to U.S. greenhouse gas emissions. Second, although there has been explosive growth in solar, wind and biomass power in recent years, renewable generation still provides a small amount of our generating capacity. Third, the current electricity system, from generation to end-user, wastes vast sums of energy; for example, a light bulb receives less than half of the energy contained in a piece of coal. Finally, the U.S. transportation sector is almost wholly reliant on oil, more than half of which is imported.

United State Energy Flow (Petajoules, 2007)
United State Energy Flow (Petajoules, 2007)

From GHG Volumes to GWP Weights

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The Montreal Protocol entered force in 1989 and was initially designed to phase out ozone depleting CFCs. It was later amended to also phase out the use of HCFCs.

More recently there have been renewed discussion about amending the Montreal Protocol to reduce the use of HFCs, a class of high global warming potential (GWP) gases. According to the EPA, “the global warming potentials of HFCs range from 140 (HFC-152a) to 11,700 (HFC-23).” In particular, Canada, Mexico and the United States recently proposed a phasedown (as opposed to a phaseout) to 15% of baseline. So far, 91 countries have indicated their support for such an amendment. (See also: Recent International Developments in Saving the Ozone Layer)

In light of these discussion, I thought it might be worth re-considering the somewhat dated World GHG Emission Flow Chart below (which is based on data from 2000). Instead of depicting volumes of emissions on the right-hand side, if the chart were re-configured to weight emissions by GWP, things would look a lot different. In particular, CO2′s share would fall dramatically, while the share for CH4 (i.e., methane, a.k.a. natural gas), HFCs, PFCs and SF6 would all grow significantly.

World GHG Emissions Flow Chart
World GHG Emissions Flow Chart

Mapping Gas

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National Geographic recently published a Special Report on “The Great Shale Gas Rush.”

Although I’ve not made my way through the entire package of articles yet, one of the accompanying infographics maps the gas boom. Of note, this is one of the first maps of the Marcellus Shale and hydraulic fracturing I’ve seen that shows the extent of drilling on Federal and State lands. It also includes shale wells for the period January 2007 to October 2010.

Marcellus Shale Map

Graham Spanier, Gasland and the FRAC Act

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Last night I went to see GASLAND at the State Theatre (movie trailer below). As I was headed in for the 9:30pm showing, Penn State President Graham Spanier was headed out from the 7:00pm showing. I bring this up primarily in the interest of turning what is otherwise a bit of trivia into possible common knowledge. Now, we all know, that we all know, that President Spanier has seen the movie and therefore has some responsibility — as do the rest of us — for responding to the issues and challenges it raises. Knowledge is like that. Once you know something, you cannot go back.

The movie is excellent — provocative, heart wrenching, inspiring. And I heartily recommend that anyone living in the NY/NJ/PA watershed see the film. The film starts innocently enough. One day Josh Fox, the film’s director, gets a contract in the mail, offering him some $100,000 for the mineral rights to his 19 acres of property in Northeastern Pennsylvania. He wonders what exactly is involved in drilling for natural gas and so he sets off to Dimock, where a number of wells had recently been completed. From there his journey takes him all across America — West Virginia, New York, Wyoming, Colorado, Texas, etc.

Along the way he discovers that drilling leaves behind a wake of water and health problems. Some of the most poignant moments in the movie are scenes in which tap water is set on fire and others where water turned into plastic when heated because of the glycol ethers that have contaminated it.

If Gasland has a primary message it is that we need to repeal the “Haliburton Loophole” in the Energy Policy Act of 2005 (EPACT 05). This loophole effectively exempted natural gas drilling from the Clean Air Act, the Clean Water Act, the Safe Drinking Water Act and the Superfund Act. In the Q&A session afterwards, Josh Fox stressed that it is only because of these four exemptions that hydraulic fracturing is economically viable. Reinstate these regulations and there is a good chance “fracking” will go away, or at least be reigned in significantly.

The first step in this direction is the so-called FRAC Act (H.R. 2766: Fracturing Responsibility and Awareness of Chemicals Act; S. 1215: Fracturing Responsibility and Awareness of Chemicals Act), which aims to repel the exemptions from the Safe Drinking Water Act. But of course, that still leaves fracking exempt from the Clean Air Act, the Clean Water Act and the Superfund Act.

In addition to these obvious fixes, I found myself wondering why so few people seem to have made a connection between drilling and the Emergency Planning and Community Right-to-Know Act (EPCRA). Of course at the federal level, fracking is exempt — because it is not among the industries regulated by the act. However, considering that natural gas wells use between 30,000 and 80,000 pounds of hazardous and/or toxic chemicals (based on the best estimates I can find), it seems that communities have the right to know this information. It would be easy for one of our congressional leaders to author legislation extending the EPCRA to cover oil and natural gas industries.

But even without such an extension, as best I can tell, natural gas drilling is NOT exempt from the Pennsylvania Worker and Community Right to Know Act (Act 159 of 1984). And considering the quantities of chemicals used, is probably also liable for reporting under the OSHA Hazard Communication Standard and the Pennsylvania Hazardous Material Emergency Planning and Response Act (Act 165 of 1990). And even though the Department of Environmental Protection claims the industry is bound by the Right to Know Act, I was unable to find satisfactory information on this issue. In fact, it appears they are not complying with this regulation.

So, today I contacted Pennsylvania’s Department of Labor & Industry and filed a formal request for clarification on their interpretation of this matter. I also contacted several attorneys asking for their interpretation of whether these statutes might hold jurisdiction over the use of chemicals by natural gas drillers in Pennsylvania. Of course, it is entirely possible I have missed a loophole somewhere. Stay tuned…

Renewable Energy Projects

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Last week I stumbled across this interesting dashboard of renewable energy projects in the PJM queue. Wind projects are by far the biggest category with nearly 42 GW of capacity planned. By comparison just 1.5 GW of PV solar is planned. And nearly 31 GW of nonrenewables are planned.

PJM Proposed Generation
PJM Proposed Generation

Separate from these planned capacity additions, PJM already has 165 GW of generation capacity available. Coal, natural gas and nuclear power are the three largest sources, whereas wind is a minuscule 2.3 GW of the current capacity.