Ken Silverstein | Sep 16, 2012

The regulations to oversee shale gas extraction are part of the national presidential debate, but they are creating an even bigger uproar in New York State. After a prolonged moratorium on drilling there, the state was rumored to begin allowing limited exploration. But it debunked that thinking and will now wait, again.

Industry says that thousands of jobs are at stake while environmentalists are responding that local drinking water supplies are at risk. Who’s right? New York Governor Andrew Cuomo says that he has decided to postpone a decision until the state’s Department of Environmental Conservation has fully reviewed the matter to determine if high-volume “fracking” can be done in a safe manner.

Environmentalists immediately proclaimed that the ultimate decision must be based exclusively on science. But oil and gas representatives say that they have been waiting patiently for a resolution and that further delays will come with a severe economic price that includes lost job opportunities.

“We’ve watched as other states safely developed their natural resources and lowered their unemployment rates while delivering clean energy,” says Brad Gill, executive director of the Independent Oil & Gas Association of New York. “Now it’s New York’s turn.”

Hydraulic fracturing, or fracking, is the method by which natural gas producers extract the shale gas from the rocks where it is embedded, which is also deep underground. Drillers use a concoction of water, sand and chemicals to achieve their aims.

Producers are saying that the process is safe and they are pointing to a Yale University study indicating that as long as current production rates are constant, shale gas development would add $100 billion a year to the national economy. The same analysis says that environmental mishaps could be limited and mitigated. 

Opponents say that fracking is destroying drinking water supplies while also allowing dirty water to escape into watersheds. Nationally, there is a move afoot to require the disclosure of the chemicals used to drill. But in New York, the quest in certain corners is to ban the practice altogether.

Citing Studies

By 2035, natural gas, generally, will make up about 45 percent of the utility generation market, says the Energy Information Administration. Nowhere is drilling process more contentious than in the Marcellus Shale. As much as 500 trillion cubic feet of natural gas is estimated in the area, which stretches from New York and Pennsylvania and into Maryland, Virginia, West Virginia and Ohio.


In the case of New York, Cuomo signed an executive order about two years ago to halt fracking. The state has been in the process of lifting that moratorium and some had expected drilling to proceed in 2013, although the governor is now saying that he won’t pressure the agency and that he wants to assure that the process is totally safe. Acrimony, meanwhile, is raging in Pennsylvania, prompting major litigation there as well as regulatory investigations.

“It’s absolutely imperative that a complete, science-based -- and unhurried -- assessment of the risks associated with fracking be performed before any decisions about moving forward take place,” says Kate Sinding, senior attorney for the Natural Resources Defense Council, in a blog that refers to New York's situation.  

Such skeptics are pointing to Pavillion, Wyoming, where EPA has been examining whether the fracking process polluted drinking water there: Regulators, in fact, have discovered “synethetic chemicals” associated with drilling, which have contaminated the ground water. The samples, furthermore, don’t meet the Safe Drinking Water Act standard.

The cause: EPA has said that the Pavillion wells were too shallow, or about a quarter of the distance of most such development. If drilling is closer to the surface, it then increases the likelihood that chemicals would escape and that the drinking water would be tainted.

If it is done right, proponents of these drilling techniques are insisting it is completely benign. Beyond the Yale study, they are citing the affirmative conclusions in other analyses, such as those from the University of Texas and Stanford University.

“When we go out there and do a site, we cordoned off the whole area,” says Scott Rotruck, vice president of Chesapeake Energy. “Nothing gets out.” The process is taking place a mile-and-a-half below the earth’s surface, he adds, noting that current methods typically capture 20 percent of the available shale-gas. “So, the opportunity for innovation is limitless,” if only they are allowed to drill.

Communities are rightly concerned, necessitating an inclusive resolution. If shale  developers are open and implement best industry practices, they could start placating some civic organizations while also improving their local economies.


EnergyBiz Insider has been awarded the Gold for Original Web Commentary presented by the American Society of Business Press Editors. The column is also the Winner of the 2011 Online Column category awarded by Media Industry News, MIN. Ken Silverstein has been named one of the Top Economics Journalists by Wall Street Economists.

Twitter: @Ken_Silverstein

energybizinsider@energycentral.com

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