Fracking Friction Intensifies as Studies Continue

The Obama administration has stepped into the controversy over the use of hydraulic fracturing creating a committee to recommend "best practices for safe, responsible development of America's onshore natural gas resources."

Fracking, as it's more commonly known, is a process used to stimulate oil and gas wells. It involves injecting fluid (mainly water with sand and chemicals mixed in) into the ground to break up the dense rocks trapping reserves of oil and gas.

Energy companies say fracking has opened up vast new domestic energy supplies that could reduce US dependence on foreign imports. But environmentalists, along with some residents living near the drill sites, argue the process could contaminate water supplies.

There's support for both sides of the argument, and there's conflicting evidence about the merits of the practice. Most studies send mixed signals, including research by four Duke University scientists published last week in the Proceedings of the National Academy of Sciences.

The scientists linked fracking to increased levels of methane in adjacent drinking water wells. However, they found no evidence that potentially toxic chemicals used in the process is infiltrating drinking water. Like many of the earlier reports, this one is likely to create more questions than answers, and trigger demands for even more research.

No matter how you feel about fracking, one thing is clear. The newly formed panel has a difficult road ahead, one that's riddled with questions about energy, drilling practices, and the political views of its participants.

US Energy Secretary Chu said the panel's immediate objective is to recommend steps that will make fracking safer -- and to do it within 90 days. Within six months, the committee will draft consensus recommendations on appropriate safety and environmental guidelines for state and federal regulators.

John Deutch, a professor at the Massachusetts Institute of Technology and former director of the Central Intelligence Agency, will chair the seven-member panel. The other members are:

1. Stephen Holditch, energy consultant and head of the Department of Petroleum Engineering at Texas A&M University
2. Fred Krupp, president of the nonprofit Environmental Defense Fund
3. Kathleen McGinty, former secretary of the Pennsylvania Department of Environmental Protection
4. Susan Tierney, managing principal at the Analysis Group, which does economic and strategic consulting
5. Daniel Yergin, chairman of IHS Cambridge Energy Research Associates
6. Mark Zoback, a geophysics professor at Stanford University

Chu described the group as a "diverse, respected group of experts" capable of ensuring that the nation's vast natural gas resources will generate jobs and new sources of energy without harming the environment.

But environmental activists like the Environmental Working Group claim it's "dominated by oil and gas industry professionals" and noticeably excludes "citizens from communities concerned about the damage to health, water, and private property" posed by natural gas drilling and fracking.

The US Environmental Protection Agency is also studying fracking. But that report is only expected to be issued next year.

In the meantime, the New York State Department of Environmental Conservation could issue findings of its own. New York lies on top of a portion of the Marcellus Shale, a vast geological formation that stretches south from New York through Pennsylvania and West Virginia. Some studies estimate recoverable reserves in the Marcellus at more than 489 trillion cubic feet (TCF), which would place the Marcellus second only to the South Pars field in Qatar and Iran.

But fracking is the key to recovery it, industry analysts say. New York State has imposed a moratorium on gas drilling permits until July 1 in order to get more research on potential environmental hazards. Gas drilling is a controversial issue in the Empire State, which drawn protests by environmental activists at the state capital in Albany.

In response, the Independent Oil & Gas Association (IOGA) of New York, an industry trade group, recently urged NYS Governor Andrew Cuomo and members of the NYS Legislature to speed the environmental study and order an expedited review of gas drilling permits. "Nearly three years has gone by since the state essentially halted the permitting of natural gas drilling in the Southern Tier," Brad Gill, executive director of the IOGA, stated in a letter to Cuomo.

"During that time, we have watched people, jobs, businesses, and opportunity flee our state for Pennsylvania, Ohio, and West Virginia, where the economies are rebounding strongly as a result of increased natural gas development."

Economic Impact of Developing  the Marcellus Shale
Assumptions:	2011		2015		2020
Wells Drilled	Number of Wells
	2,436		2,970		3,216
Natural Gas Output	Million cubic feet per day
	2,178		6,015		9,519
State & Local Taxes	Millions of 2010 dollars
	$1,063		$1,530		$1,814
Federal  Taxes	Millions of 2010 dollars
	$1,355		$1,858		$,2128
Employment	Number of Jobs
	118,078		158,408		184,007
			Source: API

The American Petroleum Institute has come up with three development scenarios for the Marcellus: high, low, and moderate. Assuming moderate development, Marcellus gas production could reach 9.5 billion cubic feet per day in 2020. It could generate more than $16 billion in economic output, almost $4 billion in additional tax revenue, and more than 180,000 jobs in multiple states.

Whatever the outcome of the various studies, it's not likely to end the friction over fracking that's developed between the environmental and business communities. At issue are jobs, economic recovery, as well as health, safety, and the state of the environment. They're all hot issues -- and possibly too hot to coexist.