Tuesday, December 22, 2009

[Top 10] #10: The Fight over Fracking

In September 2009, a fish kill in Dunkard Creek, along the Pennsylvania/West Virginia border set off an important battle in the shale gas world. A spill from a nearby Cabot Oil & Gas well was blamed for the kill, but over time the reasons appeared to be more complex. That realization was too late because the first report set off alarm bells for environmentalists and nature lovers across the region and the country. The culprit became hydraulic fracturing, the technique used to extract gas from underground shale formations (as well as other reservoirs). The press and bloggers jumped all over the issue and it resurrected the discussion of why fracking is excluded from the Safe Drinking Water Act.

The environmental issue is far larger in the Marcellus Shale than the Haynesville Shale, but it is one that gets a great deal of media attention and could be a regulatory headache for natural gas going forward. News that anti-fracking legislation could kill Exxon’s $41 billion acquisition of XTO made lots of news last week.

There are some whispers that some of the opposition might be funded by coal interests. If so, that would be hugely hypocritical given that industry’s environmental record, but since coal is fighting for its life, it would not be surprising. Whom or whatever is behind the opposition, the public concern is real and it is one that the natural gas industry needs to face head-on. States in the Northeast have to be careful too. They should realize that in the Marcellus Shale they possess a goose with the potential to lay golden eggs. State leaders will have to balance environmental concerns with economic prosperity. It will be interesting to see how New York and Pennsylvania handle this delicate balance in 2010.

The Sierra Club has to walk that same delicate line, as highlighted by a recent article in the Wall Street Journal.  The national organization is advocating natural gas as a way to wean the country off coal, which it views as far more harmful, but the local groups in the Northeast are organizing against fracking. 

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