Thursday, January 14, 2010

Elephant in the Room

Environmental issues elbowed their way to the front of the line in the shale gas world in 2009 and it doesn't look like they are going away.  Nor should they.  I have followed the shale gas industry closely since early 2008 and I am a big supporter.  I see a bright future for natural gas, but I am also a realist.  Natural gas has always played second fiddle to other fuels in this country, but if it is going to be a big time player in the 21st century, it has to adopt a 21st century mindset.  And that means RESPONSIBILITY at all levels.

An article in the Fort Worth Weekly, Greening the Gas Field?, got me thinking about how natural gas fits in with the energy future of this nation.  I think it's a better fuel than oil or coal, but that's just the start.  One has to think holistically about gas, from cradle to grave.  I want to see it grow to be a big domestic industry that generates jobs and investment throughout the "value chain."  With shale formations in many parts of the country, it is an industry that can have a widespread positive economic impact to the country.  But before this can happen, the industry needs to address its impacts at every level. 

One of the biggest impacts is environmental.  The banner issue for environmentalists has been the battle over the use of hydraulic fracturing in gas drilling.  Unfortunately, that argument has been beset with much hyperbole and hysteria that tends to muddy the base set of facts.  But it is true is that there is much room for improvement in the handling of water and chemicals in the drilling process.

The gas industry has made some environmental strides.  Horizontal drilling allows for multiple wells from a single pad, for instance, causing less land disruption.  The article notes other advances, such as the use of closed loop water systems for fracking, the use of natural gas rather than diesel to power drilling rigs and the gradual substitution of less harmful chemicals in frac fluid.  Many of the advances, such as piping out drilling fluids rather than trucking them, have economic as well as environmental benefits.  The article, however, is full of other issues that show the gas industry still has a long way to go.

Unfortunately, Industry isn't going to adopt "green" procedures without a strong economic incentive or a forceful hand from government urging it in the right direction.  But the gas industry has used technology and innovation to create the shale gas boom from nothing in just a few years.  Applying just a portion of that same innovation and effort will allow the industry to make strides to truly lessen the environmental impact of natural gas drilling, production and transportation.  Gas production companies have to recognize the tangible and intangible benefits of these advances.

Now that big time gas drilling has moved from the swamps of Louisiana, the scrub land of Texas and remote western mountains to pristine regions in view of major east coast metropolitan areas, the gas industry needs to clean up its image.  As the gas industry tries to take center stage in Washington D.C., it needs to demonstrate responsibility and be able to tout truly "green" credentials.

PS - Ironically, as I hit the "publish" button an email pops up announcing a new magazine called the Greening of Oil.

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