Sorting out the economic potential and environmental consequences of natural gas

Beneath the earth’s surface lies a potential fuel source of immense economic and political power. But this resource is not in the oil fields of Saudi Arabia and few members of OPEC claim it, but here in the U.S. increasingly in states like North Dakota and Pennsylvania, the search for shale gas has brought a promise not just of an economic boom, but possibly of a worldwide game changer in energy.

President Barack Obama has emphasized such a search with his comprehensive energy plan during his 2012 State of the Union address based on “all the above” referring to an inclusion of both renewable and non-renewable energy sources.

According to Politifact, America’s reserves could last up to 61 years based on current consumption rates, and point to natural gas as a possible “bridge fuel,” or an alternative source used to ease the transition between fossil fuels and renewable sources like wind energy.

CNN’s Fareed Zakaria said the potential beginning of the “golden age of gas” is here in America. In addition to the U.S., he said shale deposits are in mostly stable democracies including Canada, Poland, Australia, France and Israel.

“So far, gas has been supplied by a handful of regimes—Russia, Iran, Venezuela—many of them nasty and illegitimate, thriving on global instability, which actually helps their bottom line since instability equals higher oil and gas prices,” Zakaria said.

This future did not seem so clear a few decades ago, but a new technology know as hydraulic fracturing (or fracking) has made this “boom” a reality. The process uses high-pressured water mixed with a variety of chemicals and sand to crack the rock below. This process—while previously used for extracting other types of materials—was, as Slate reported, retooled in the late 1970s to break through shale rock. According to the U.S. Energy Information Administration (EIA), shale rock contains trapped natural gas, which until recently was not worth the cost of extraction.

The EIA projects domestic natural gas production to increase 44 percent by 2040, a potentially staggering increase since in 2011, the EIA found the U.S. produced about 95 percent of all domestically consumed natural gas. This dramatic increase will make America the world’s largest gas producer surpassing Russia by 2015. The EIA said in 2011, natural gas was the most produced fuel, surpassing coal for the first time in the U.S.

According to a report by America’s Natural Gas Alliance, an industry group, in 2010 the natural gas industry supported 600,000 jobs and is projected to provide 870,000 in 2015 and over 1.6 million by 2035. That amounts to a contribution of $76 billion to the GDP in 2010, which will swell to $118 billion in 2015 and will triple to $231 billion in 2035. If these projections hold true, the U.S. could gain a major boost from increasing shale exploration.

But critics of shale gas raise concerns over possible environmental impact to either slow down or stop the rush of exploration.

One of the main concerns is the release of methane gas, which as The Washington Post found, is a highly potent greenhouse gas. The New York Times reported that companies like Shell are already taking steps to reduce leaks and drill in a more responsible manner. Michael Levi, an energy expert at the Council on Foreign Relations, told the Times “there are cost-effective ways to reduce methane leaks.”

One of the largest critiques of both fracking and shale gas is the 2010 documentary, Gasland by Josh Fox. The film reaches its highlights with images of so-called firewater. Fox literally lit water on fire from various faucets around the country during his quest. Water contamination from the drilling and fracking process, he said, made this possible. A Greenwire fact-checking investigation published by The New York Times found that some families’ claims about water contamination were legitimate, but not necessarily linked to fracking. Mark Boling, executive vice president and general counsel for Southwestern Energy Co, explained during a presentation to the Heritage Foundation in 2010 that contamination might have been caused by poor well construction.

“We have analyzed every case that has been reported with respect to gas migration; we have found that absolutely none of that has to do with the actual hydraulic fracturing,” he said. “It has to do, usually, with problems from shallower formations that haven't been properly cemented...The gas is allowed to migrate out and that is a problem.”

EPA researchers found fracking may have contaminated water in Pavillion, Wyo. in December 2011. It marked the first time the federal government found a possible link between hydraulic fracturing and tainted water. Many, including Wyoming’s governor criticized the agency’s findings and an independent review is ongoing. Congress previously asked the EPA to conduct a national study on the possible link to water quality, which will be released sometime in 2014.

The exploration for shale gas could be a major boom for the U.S., and could possibly change energy politics as Zakaria and others have pointed out. Critics of hydraulic fracturing have continued to note environmental concerns, which may not be resolved until the EPA and other agencies complete their studies.