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Shale Gas Has Challenges, But Study Group Holds Out Hope

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Shale natural gas has environmental challenges, but holds the brightest possibilities for America's energy future, said the chair of a national advisory group on the resource.

"Over the long term it has the potential to displace liquid fuels in the United States," said John Deutch, who is heading a shale gas subcommittee of the DOE's energy advisory board. "It is the best piece of news about energy in the last 50 years."

Deutch, a former CIA director and a professor of chemistry at MIT, noted that water resource availability and concerns about the chemical make up of fluids used in the extraction of shale gas require close attention.

He called for a national group to investigate and announce best practices. He said that no one on his group thought the environmental problems warranted a national moratorium of shale gas production. He made his comments after the release of interim report.

Shale gas consists of methane trapped in small fissures thousands of feet below the earth's surface. This gas is extracted by a method called hydrofracturing. In this process a deep well is drilled vertically below grade, and then is diverted horizontally along the source of the gas. A solution (typically 99% water and 1% chemicals)is injected into the shale geological structure to widen the fractures and to induce the methane to return to the pipe; other chemicals assist in the separation of the methane from the water before it is piped to the armket.

Although the technique has been used for decades, it became more prevalent in the last six or seven years, when natural gas prices soared as high as $14 per million BTU's. (They are hovering around $4 a BTU now.)

But with its expansion came various problems and controversies. First, large amounts of water are required, and sometimes this must be trucked to the well site. This not only competes with other uses for water, but also has created traffic problems in certain places.

There is also a serious concern about the effect of the process on well water. Although the methane extraction occurs thousands of feet below the water table, the pipes do pass through that potable water. Lawsuits and regulatory conflicts are growing in the sector.

Further, the treatment of the chemical-laden water after it has been used poses its own problems. At times it is dumped into nearby streams, and regulatory agencies and public water treatment plants are reporting increases in toxic chemicals in the water. Many are calling for greater disclosure of the chemicals in the process and tighter regulations of them.

Because of these issues President Obama asked Energy Secretary Steven Chu to appoint a shale subcommittee to make recommendations about the environmental regulation of shale gas production. They published an interim report in August, and the final report is due November 18.

Deutch said that new technology is making the extraction of shale less expensive and safer. He mentioned the are microseismic measurement techniques that more precisely measure where the natural gas is so that less water is used in the process. He also said the industry can now put as many as one dozen wells from one pad, which decreases truck traffic by 60%.

However he did say the industry should make much more information available to society. The group, he said, was struck by the number of anecdotal statements used to advance or defend various arguments about the process.

He called for a successful protocol of oversight and regulation and that each basin needed to have a driller that is using the most advanced air quality protection regimes.

Water quality is complicated because it can be regulated at so many levels, be it the county or local water authority level, the state or interstate compact level or by the Federal government. He said a comprehensive view of water quality regulation and protection should be established. However, in noting a tension between EPA and local regulators, Deutch said he would "go more with state regulators rather than national because of the different geologies" of producing regions.

As for the question of water table protection, producers need to maintain better logs about the casements surrounding the pipes as they traverse through the water tables and that regulators need better data more rapidly.

Some producers have claimed a trade secrets exemption when refusing to disclose their hyrdofracturing chemical mixtures. Deutch said there may be cases where a corporation has a secret molecule that would warrant this trade secrets exemption, but that would be a very rare case.

Regarding the structure of the industry, Deutch said the top 12 companies accounted for 89% of the proeduction, but there are many suppliers of pipes and other goods and services.