Market volatility, troubling economic news from abroad and signs of an economic downturn at home as the U.S. trade war with China continues.
Natural gas extracted from deep shale deposits has been hailed as the key to America’s energy future. Compared to alternatives, natural gas is cleaner and is said to produce fewer greenhouse gases. It is also forecasted to be available at affordable prices, but some say as production rises, extraction costs will go up as well putting a squeeze on profitability. In addition, many argue short and long term environmental risks have yet to be adequately addressed by regulators or the industry: Opportunities and unanswered question about this country’s natural gas boom.
- Ian Urbina National reporter, The New York Times.
- Tony Ingraffea Dwight C. Baum Professor of Engineering Weiss Presidential Teaching Fellow Cornell University
- Seamus McGraw Writer and author of "The End of Country"
- John Hanger Former Secretary of the Pennsylvania Department of Environmental Protection.
MS. DIANE REHMThanks for joining us. I'm Diane Rehm. The recent enthusiasm of extracting natural gas from shale has been compared to the gold rush of the 1800s. But it's not just a question of finding it. It's a question of extracting it, at what cost and to whom. Joining me to talk about some of the market and environmental questions related to the rush for natural gas, Ian Urbina. He's a reporter for The New York Times.
MS. DIANE REHMSeamus McGraw, he's a writer and author of a book titled "The End of Country." From a studio at Cornell University, Tony Ingraffea, he's a professor of engineering. And by phone from Harrisburg, John Hanger, he's former secretary of Pennsylvania Department of Environmental Protection. And I would very much like to note, we were hoping that the associations representing the natural gas industry, such as America's Natural Gas Alliance, would be on this program.
MS. DIANE REHMThey were invited, but they declined. And, of course, I'll invite you to join us, 800-433-8850. Send us your email to firstname.lastname@example.org. Join us on Facebook or Twitter. Good morning to all of you.
MR. IAN URBINAGood morning.
MR. SEAMUS MCGRAWGood morning.
PROF. TONY INGRAFFEAGood morning.
REHMIan, if I could start with you, in your lead stories that ran Sunday and yesterday in The New York Times, you write about concerns that companies have been overstating the amount of gas they can economically produce in a given year. Talk about that concern and why it should be of concern to everyone.
URBINASo the stories looked at what seems to be a bit of a disconnect between the rhetoric surrounding -- the public rhetoric surrounding natural gas and the more private discussion occurring within the industry and among some federal regulators about natural gas. There's a lot of excitement about natural gas for environmental reasons because it's abundant. And, indeed, nothing we saw can test how much gas there is under the ground.
URBINAWhat was striking was that we had a collection of emails, many of them from within the oil and gas industry, and then in yesterday's story, many others from within the Energy Information Administration, which is the federal oversight administration, in which you have industry and regulators talking about whether the gas can be affordably pulled out of the ground and whether there may be a bit of an overstatement occurring about that process and how to get a more candid discussion of that.
URBINAAnd so, I think, it's relevant to the rest of us because, number one, there's a broad embrace of natural gas occurring in the country. And it seems that full and candid discussion of all the factors that play into the long-term viability of this energy source, including the business factors, is key. What companies can do it best? Are they big? Are they small? How much can they make? Is it a lot or is it little?
URBINAWhat does the sell price of gas need to be for companies to do well? How will investors, lenders, landowners profit in actual terms or not if they get behind the industry?
REHMAnd, Ian, what about varying factors across the country? Are there cost differentials in Texas, say, from those in Pennsylvania in the Marcellus Shale?
URBINAThere are. It's a good question. There's a lot of variability shale plate to shale plate, so shale formation to shale formation. So what the Barnett looks like -- the Barnett Shale is a shale formation in Texas, and it's one of the earliest ones to be drilled. The economics of the Barnett Shale are different and so is the geology than the economics of the Marcellus Shale. Lots of factors come into play from the type of rock to the distance of transport.
URBINAMarcellus has the big advantage of being very close to market. And so that shale formation, the producers have to transport the gas smaller distances to get to consumers. And that means their cost structure is better. And the other point I'll add is Marcellus drilling started much later than Barnett drilling did. And, therefore, technology is more advanced, and sophistication of how to get the gas out of the ground is further along.
REHMIan Urbina, he's a reporter for The New York Times. Seamus McGraw, this Marcellus Shale is an area of the country you know very well. You've written about it in your book, "The End of Country." In fact, your mother was one of the first to receive a leasing offer. Tell us what happened.
MCGRAWWell, it kind of came out of the blue. My mother had -- my mother is a widow, living alone on what had been the farm that had been sort of the touchstone for the whole family. And as I say in the book, the first time I heard about this, I couldn't have told you the difference between Marcellus Shale and Cassius Clay. I'd never heard anything about it. And she was approached by a young woman with a nose ring who was going from farm to farm up there, offering leases.
MCGRAWNobody really had any idea what was going on. My mother picked up the phone to me and to my sister and said, see what you can find out, and we started to kind of explore, started to kind of look around. In the end, we ultimately made the decision that we made for a number of reasons. But it was not an easy decision.
MCGRAWThis is -- as I've said, Diane, it is a development that offers a great deal of promise, that throws a lifeline to a lot of people, including a lot of the farmers. And when I was a kid, you could drive the four miles from Route 6 to our farm and see 18 farms. There are two left now. And those farms were disappearing, and they were disappearing, to a very great extent, because of energy costs. That was one of the things that was driving the farms under.
MCGRAWAnd, now, a lifeline, to some degree, has been thrown, but not without a cost. There is real risk associated with this. The question, really, comes down to managing that risk. Can we do it? And, more importantly, do we have the character to do it? And that's what I really try to explore in my book.
REHMSeamus McGraw, he's writer and author of the book titled, "The End of Country." Do join us, 800-433-8850. Tony Ingraffea, you have been studying this shale fracking, as it were, for quite some time. Tell us about what you see as the benefits and the risks.
INGRAFFEAThe potential benefits include the increase in the natural gas supply available onshore to the U.S., potential benefits to individual landowners and businessmen associated with all of the contracting necessary to extract the natural gas. The potential downsides -- I should say real downsides, also -- since they're occurring in all the shale gas explorations and developments going on -- include risks to the environment and to human health and loss of property values.
INGRAFFEATo extract gas from a shale formation is a substantially different process with much more risk associated with it than what is called conventional gas and oil development, which has been happening in many of the same areas for many decades. And each of those risks, as Seamus just pointed out, would best be quantified before proceeding.
INGRAFFEAAnd that quantification, unfortunately, is now going on in real time by experiment rather than by study, scientific study and technological developments that should have proceeded the development as it's happening, in many cases, at full scale.
REHMAnd what kinds of risks are you talking about?
INGRAFFEAThere are three levels that I refer to in risk. One is the -- the one that, unfortunately, is associated with the moniker given to this development, which is called fracking, and that's a risk that occurs many thousands of feet underground and is relatively low probability. And that's a risk of the gas, the fracking chemicals and other materials that have been safely stored in that shale for hundreds of millions of years finding their way upwards into groundwater.
INGRAFFEASo that's a relatively low risk to human health and the environment. The next higher risk is what happens during the drilling process, on the way down to that formation. And there you have problems of well failure, either by casing or cement failure, which could lead to migration of methane or other materials, again, into groundwater. And the highest risk of all is everything that happens on the surface.
INGRAFFEAThis is a highly intense industrial practice, which needs to be happening over a relatively large area because the shale is over that area. And you have to develop all of it in order to meet the aforementioned ideas of getting nearly 25 years of supply of natural gas just out of the Marcellus alone. So when is that...
REHMTony Ingraffea, he is professor of engineering at Cornell University. When we come back after a short break, we'll hear from John Hanger, former secretary of Pennsylvania's Department of Environmental Protection.
REHMAnd welcome back. We're talking about gas extraction, which is happening all over the country, the process known as fracking, which was certainly led to a number of individual landowners receiving money for leasing of their property to the gas companies. It's resulted in some profit to those landowners. We're talking about both the economic and the environmental aspects of fracking.
REHMAnd let's now bring in John Hanger, former secretary of the Pennsylvania Department of Environmental Protection. John, you heard Tony Ingraffea talking about the three risks that he sees as most prominent. To what extent did the Pennsylvania Department of Environmental Protection take into account the possibility of those kinds of problems before entering into agreements with these companies?
MR. JOHN HANGERWell, the first thing is that Pennsylvania government enter into agreements with the companies other than on the state forest, where we have leased some state forest landowners, now a moratorium on further leasing for gas drawing of the state forest. Pennsylvania did a number of things when I became secretary of the department.
MR. JOHN HANGERJust September of 2008, we moved four regulatory packages, one strengthening the rules on water withdrawal, one, strengthening the rules on water disposal. And I'm glad to say today that there is less, probably, wastewater going into rivers and streams, and before the first Marcellus Oil was drilled in Pennsylvania.
MR. JOHN HANGERThe third thing we did, we put in place 150-foot buffer requirement from all development, not just drilling, for our high quality streams, which is a quarter of all of our streams. And the fourth thing we did is we greatly strengthened our drilling standards for casing, cementing and the process of actually building a gas valve. I also want to say, Diane, that shale gas, that all provides 25 percent of all of the gas in the United States.
MR. JOHN HANGERI heat at home with gas. I bought a wind power for electricity. I buy heat at home with gas as 51 percent of the people in the United States do. Consumers have saved about a $1,000 in lower gas bills and lower electric bills because we make a lot of electricity from gas as a result of this extraordinary new, actual, real production. It's not a (word?). It's not Enron. It's real production that has changed the economics of gas.
MR. JOHN HANGERIt has lowered the gas price from $13 per thousand cubic feet in 2008 to now around $4 per thousand cubic feet. So that shale gas has saved consumers a lot of money. And it has actually caused old coal-fire power plants -- that are literally, according to EPA, killing, each year, 17,000 families -- to increasingly be retired by their owners because gas is available, and it's low cost.
REHMJohn, I'd be interested in knowing how many different hydrofracking sites there are in Pennsylvania.
HANGERWell, again, hydrofracking is -- it's been going on around the country for decades.
REHMNo, in Pennsylvania, I'm asking -- yeah.
HANGERIn terms of the Marcellus site, if you're asking how many...
HANGER...the shale sites...
HANGERWell, we now have over 3,000 gas wells -- Marcellus gas wells drilled in Pennsylvania.
REHMAnd can you tell me, number one, how these sites are monitored, how many investigators you have monitoring these sites?
HANGERRight. And, in fact, that's the next thing Pennsylvania did and probably, actually, the only state to do it. We more than doubled the oil and gas staff. I ordered, with Gov. Rendell's blessing, hiring in 2009 and 2010. We went from 88 people who'd full-time worked on oil and gas, with other people working part-time to 202 people working full-time on oil on gas, more than double the staffing. And that's a very important thing.
HANGERThe inspections need to occur, and then the inspectors need to be told to enforce the law. And in 2010, Pennsylvania wrote 1200 violations to this industry. Nearly all of those violations were not appealed by the industry, which is a good thing. They corrected the violations. They responded to the violations in an appropriate manner. So enforcement and staffing is critical to making sure that this industry is strongly regulated.
REHMAll right. And coming back to you, Tony Ingraffea, do you see this kind of monitoring as sufficient for the amount of fracking that's going on around the country?
INGRAFFEANo, I don't. You can double the staff, but you need to know what staff you need. You can double a small number and still have an insufficient staff -- and just speaking of the Marcellus, for example, in Pennsylvania. But we're talking about shale gas development not only around the country but also around the world. And we are talking about a situation where a typical well might, in its lifetime, produce millions of dollars worth of natural gas.
INGRAFFEAAnd Secretary Hanger himself has been quoted as saying that the fines that are imposed for regulations -- violation of regulations are much too low.
INGRAFFEAWhen a company can produce millions of dollars in one well but commit a very serious environmental regulation in fraction, and be fined only a few thousand dollars, there's hardly an incentive to keep up with regulations, especially when you have a very large number of operators -- over 70 in Pennsylvania -- some of whom do not have the technical staff or the financial backing to pay the extra amount of money necessary to keep up with regulations.
REHMWhat about that, Ian Urbina? Did -- were you looking at the kind of monitoring that's going on in these hydrofracking sites around the country?
URBINAWe looked at Pennsylvania and a very specific issue in Pennsylvania with regard to monitoring. We were interested, in general, to look places that people that we thought the -- there wasn't enough attention. And there had long been discussion and knowledge that there was a certain amount of radioactivity -- naturally occurring radioactivity coming up in the wastewater of these wells.
URBINABut there was not a handle on how much, at what levels, what type, and what was done with that wastewater after it left the well. And so that's specifically what we looked at. And to make a long story short, what we found was that there wasn't sufficient oversight of that component and tracking of that water, which was, at that time, being run through facilities that were unable, for the most part, of removing the radioactivity before the remains were discharged into rivers.
URBINAAnd so the piece essentially concluded that there needed to be more oversight and ongoing testing if that water was going to be handled in that way.
HANGERDiane, the (unintelligible)...
REHMSeamus McGraw, you said you finally concluded that you would lease your mother's property. You tell a story about the amount of money paid.
MCGRAWMm hmm. In the situation, what had happened was the land man, a very straightforward guy, a guy who looked at me at one point and, you know, concerns about just pouring money into places where there hasn't been any for a long time, and, actually, at one point said to me, I'm killing this country. And what he meant wasn't the risks of -- the environmental risks themselves.
MCGRAWWhat he was talking about was the idea of the stress that that kind of money coming into a community that hasn't had it in a very long time can create. He -- but what had happened was he had -- we had settled on an offer. We had put a number of environmental protection...
REHMHow many acres?
MCGRAWIt's 100 acres...
MCGRAW...in Northern Wyoming County. Literally, the back of our property is the Susquehanna County line in Northeastern Pennsylvania in the -- what is, at least according to Ian's story on Sunday, those are the most productive areas of the Marcellus and (word?). We had settled on $2,000 an acre. And the land man came in to my mother's dining room. She made him a cup of coffee with the china cups that she puts out for special occasions.
MCGRAWHe offered a -- he said I've got all your addenda, but I've got an addition. It's $2,500 an acre. Without lifting a finger, my mother had made twice the per capita mean income for the county that she lived in, doing nothing. And to this day, we can't figure out exactly why, except that it may have had something to do with -- Chesapeake was the company we signed with -- trying to ascertain their position, make their position dominant in the play and do it by slathering money.
REHMNow, have you had...
HANGERDiane, could I just go back to the radiation point?
REHM...any complaints about the kind of leasing that has been done?
MCGRAWHave I heard complaints about it?
REHMNo. Have you had complaints?
MCGRAWNo. Have I had complaints? Do I complain? No. There -- if you -- let me put it to you this way. You know somebody is trying to sell you something, and the -- my family, the people in -- that we know and live with, they're not fools. They know somebody was trying to sell them something. But they also knew that what they -- what was trying to be sold had a real value.
MCGRAWTony, earlier in the conversation, mentioned that there were four risks that he identified from the -- are three risks that he identified from the Marcellus. There is a fourth, I think, that we don't talk about as much, and that is doing nothing, doing absolutely nothing. We have a serious energy problem in this country. Everything in this country, in one way or another, dovetails with energy, and doing nothing is not an option.
REHMTony Ingraffea, Ian Urbina talked earlier about the kinds of infractions that the fracking companies are committing and the kind of oversight that, perhaps, is not being applied. Is the Marcellus Shale -- because, apparently, they're using more advanced techniques, is the Marcellus Shale at lower risk than some of the other sites across the country?
INGRAFFEANo. I would say that any shale gas development creates higher risk than previous so-called conventional developments which many states have seen for many, many decades, simply because the volumes of fracking fluid necessary are 10 to 100 times higher than those previously needed and, second, that the intensity of the industrial development, because these wells are so large, brings with it -- attend an additional risk, and third, that wells need to be everywhere.
INGRAFFEAThe shale gas development is such that the gas is everywhere in the shale, not uniformly distributed. Some wells are much better than others, as we're finding out. But because the gas is everywhere, the ideal thing for the industry to do is to drill everywhere.
INGRAFFEASo that means that the risks are going to go up because you have a larger number of wells -- of larger wells with larger volumes, material that needs to be created, injected, recovered, stored, transported and, ultimately, hopefully, safely disposed of. All of those things increase risk compared to what we've had in the past.
REHMTony Ingraffea, he is professor of engineering at Cornell University. And you're listening to "The Diane Rehm Show." We're going to open the phones now, 800-433-8850. Let's go first to Orlando, Fla. Good morning, Jared. You're on the air.
JAREDHi. I work as a mud engineer. And I kind of disagree with how the fracking works, as far as it not having an effect, because what you just mentioned is that, you know, they have to do more and more wells. So, now, it's a big habit to do these super pads where the wells are only on -- at surface, about eight feet apart, and then down at the bottom, they're a couple of thousand feet apart.
JAREDBut we've seen, on a completely normal occurrence, where they'll frack a well simultaneously next to us while we're drilling a well, and we'll start losing all of our mud, or our drilling fluid. And it happens over and over. And, usually, everyone on site will agree that it can't happen, but the offices typically don't agree with that.
JAREDAnd, I guess, the whole point of my conversation is to say I think there's a lot of variables that happen that no one really can explain 'cause I usually think of the fracking as if you get a chip on your windshield and those cracks can go any way, any length, and you just don't really know. It's completely unpredictable.
REHMIan, can you speak to that?
URBINAWell, I think the sentiment he made is one that I hear over and over again from guys like this who are on the frontlines and petroleum geologists, who, you know, are willing to talk with anonymity because they could get fired otherwise, and that is that there's a lot of sophistication in this type of drilling. And there have been amazing advancements in the technology.
URBINAAnd Seamus is quite right that, you know, we have to discuss this in the realm of limited options. We have to do something. But, at the same time, there needs to be a more candid discussion of the unpredictability of this type of drilling, like the gentleman was saying, what occurs below ground, where these fractures go, how far they reach, what impact they can have.
URBINAAnd also, just from a regulatory perspective, the best practices of an industry, about how wells are designed, is one thing. Whether there's -- there are the resources to enforce those best practices and the manpower is another.
REHMJohn Hanger, can you speak to that unpredictability?
HANGERCertainly. But first, I have to point out that Pennsylvania has, in fact, tested all of its waters in response to The New York Times story, and, not surprisingly, there is no radiation contamination in Pennsylvania's waters. It's all at background levels, so the response...
REHMWhat does, at background levels, mean?
HANGERIt means -- there's a -- when you walk outside, you're going to encounter some radiation.
HANGERThere's a naturally occurring amount. There's no such thing as a zero-radiation environment, at least not naturally. But all of the waters in Pennsylvania have been tested by the Department of Environmental Protection, by the drinking water companies, both in-stream testing and drinking water testing at the tap. And all the water has no radiation in it. It meets the Safe Drinking Water Act.
HANGERI wish The New York Times would put that on the front page on a Sunday.
REHMAll right. Do you want to respond, Ian?
URBINAYeah, I mean, those tests are great news. And that was -- ultimately, the point of the first round of stories was to compel the state to begin testing. I think the key, though, is ongoing testing and….
HANGERIan, there's a great...
REHMExcuse me, John. Hold on.
URBINAI think, as long as water is being handled the way it was, there needs to be continual testing. Water levels vary in rivers, and it needs to be an ongoing process.
REHMIan Urbina, he is a reporter for The New York Times. Short break. Right back.
REHMAnd let's go right back to the phones to Flower Mound, Texas. Good morning, Jim. You're on the air.
JIMOh, hi, Diane. I live in Flower Mound, Texas, some affluent suburb outside of Dallas, population about 80,000 people. An average house sells for around $3- to $500,000, house farm -- I mean, horse farms. It's just beautiful. The oil company came in, told us, you know, how small an impact the drilling would have and that they would take care of it, keep it all, you know, very low impact. But what has happened is -- excuse me. I'm very uptight.
JIMBut they -- just on the opposite, the truck traffic which goes 24 hours a day is a huge pollution. There's all kinds of pipes and drillings and mud, you know, leaking out into these pools that then fill up with rainwater and go into our drinking water. They've had a high impact. All the laws in Texas are from the '40s and for -- basically, in West Texas, where the population is zero. And they don't really have -- it's not keeping up with what's going on in the reality of the drilling.
REHMTony Ingraffea. Tony...
REHM...are you there? Can you...
INGRAFFEAYes, I am. I was just listening to what Jim had to say, and...
REHMOkay. Can you respond?
INGRAFFEAYes. What Jim did is amplified what I said before about the surface impacts and the risks of surface impact. To put a gas development of this type using high-volume, slick-water, hydraulic fracturing, multi-well pads inside a residential area is lunacy. And Jim is experiencing that as well as lots of other people in and around Dallas. And people are beginning to experience it around Pennsylvania, which is at the very early part.
INGRAFFEAThat's -- remember, Dallas -- the Barnett has 13,000 wells over the last 15 years. Pennsylvania has 3,000 wells over the last four years, but is slated to see something like 100,000 wells or more. So the kinds of incidents in impact that Jim just described is inevitable when we go to areas with higher -- larger density of population.
REHMBut, Tony, on the other hand, as Seamus has talked about, these individuals have entered the end of these agreements voluntarily. They've received generous amounts of money. Shouldn't that be enough?
INGRAFFEAIt might be enough for those who have, but not everyone has. We have situations in some states -- for example, in my state, New York -- called compulsory integration, where it could be that the vast majority of the people living in an area that has been targeted for gas development by one company don't have the option of saying no. So their neighbors are gaining wealth at the risk of the health of other neighbors.
INGRAFFEAAnd that's something that we have to come to grips with.
REHMWhat do you think about that, Ian? I know that you'll be talking, as time goes on, to some of those who have leased their property. But what about this New York law of compulsory integration?
URBINAI don't know a lot about it, so I'm going to duck that question. I haven't researched it closely. I can say something about well density. I think that's a really important issue, and it relates to leases. And, I think, it's especially important from an economic perspective as well on the heels of these recent stories. If, over the long run, these wells produce -- and when I say long run, I mean decades.
URBINAThese wells produce a lot less gas than was initially predicted. Then they're going to need to be refracked, and/or new additional wells will have to be dropped in place. And that means more wells. And, again, the discussion about what that looks like 10, 20, 30 years down the road and whether regulations have been written to plan for that, is something that needs to occur now.
REHMJohn Hanger, is Pennsylvania likely to adopt similar compulsory integration laws?
HANGERProbably not here. I think, rightly or wrongly, that issue has been made radioactive. That's the only thing that's radioactive in Pennsylvania is probably that pooling law. And, again, there's upsides to that law -- good things about having such a law, and there are some downsides. Those who...
HANGER…value property rights above everything are opposed to it. Those who are actually interested in spacing out and limiting the surface impacts ought to be for such a rule and for such a law because it can, in fact, make sure that these -- the development, the surface is at much less (word?) than it otherwise may -- otherwise be. I think it's also important...
REHMJohn Hanger, you spoke earlier about radiation. There are other concerns beyond radiation. Are there not the kinds of other chemicals going into the fracking, which...
HANGERYes, let's talk about that.
REHMSure, which these companies have not voluntarily disclosed. Isn't that correct?
HANGERSome have voluntarily disclosed. Most have not. The Pennsylvania law, now, actually requires disclosure. I ordered that the information to be put up on the website as early as 2008, that we had -- and now the law actually requires it, effective as of February of 2011. There are risks associated with drilling. It needs to be strongly regulated and, in my view, fairly taxed, reasonably taxed. Pennsylvania, right now, does not have a drilling tax.
HANGERIt should have a drilling tax. But it also implicates -- and I was the chair of the Pennsylvania coal mine safety board -- that if we say no to gas -- as I think -- understand Ingraffea wants us to do with shale gas, which is 25 percent of the nation's natural gas supply. We aren't saying yes to more coal and more oil, both of which are many times worse for the environment. And in case of oil, comes disproportionately from overseas.
REHMOn the other hand, there are alternative resources of energy, for example...
HANGERLet me stress that, please.
REHM...wind and solar.
HANGERThere are alternative sources. And as you know, I'm a huge proponent of wind and solar. Pennsylvania has 16 operating wind farms, four under construction. We rank second in the nation in solar jobs with over 6,000 solar facilities operating today or under construction. I personally have put a great deal of my professional life into promoting renewable energy.
HANGERIt provides roughly 11 percent of our total energy right now, renewable, including corn ethanol and large hydro, which a lot of environmentalists have problems with. We were doing very well. And by 2020, a decade from now, if renewable energy is providing 20 percent of our total energy, that means 80 percent is going to come from coal, oil, gas or nuclear. I live in the Three Mile Island evacuation area.
HANGERNow, all of these sources of energy have risks associated with them. But when I look at it, it's clear in terms of the economic benefits, the national security and the public health benefits. Natural gas is a better choice than coal or oil...
REHMAll right. Okay.
HANGERAnd one can argue about nuclear.
REHMAll right. Here's an email from Julia, who says, "I understand that in West Virginia, the gas companies and gas investors own the rights to the gas under the ground. The rights to the gas may be under your property, in which case they can come in and begin fracking on your property without your permission or paying you. What do your guests say about this?" Tony Ingraffea, have you seen this?
INGRAFFEAYes. But I would like to respond since Secretary Hanger mentioned my name explicitly and misrepresented my position. So I need to clarify.
INGRAFFEAThe choice of what to do from a national strategic energy perspective is different than the choice of what to do from a corporate business plan perspective. So he is correct in saying that natural gas has to play a role over the next generation in our national energy strategy. But it is incorrect to say without constraint, and that constraint is the biggest question of all, which we haven't discussed yet, and that is global climate change.
INGRAFFEASecretary Hanger knows full well, and I'm sure he agrees, that is the single most environmental and human health risk facing the world today. And, unfortunately, natural gas is a fossil fuel. And, unfortunately, it is not a perfectly clean fossil fuel. The result of burning natural gas produces carbon dioxide, but the process of getting it out of the ground, processing it, transporting it and storing it releases methane.
INGRAFFEAAnd as he well knows, the industry needs to clean up its act with respect to purposeful and accidental venting of methane during those processes. And until they do so, large-scale development of shale gas is a risk, an unacceptable risk, to global climate change.
REHMAll right. Here's an email from Catherine in Bethesda, Md. She says, "Please tell me about activities in the Bakken Formation in North Dakota, specifically with respect to monitoring the environmental impacts of oil and gas extraction. We've received an offer to lease our mineral rights there. We've been trying to research the environmental issues.
REHM"However, we've been taken aback by what appears to be almost an absence of watchdog activities by both government and nongovernment entities. For example, we gather the EPA no longer monitors air quality in Williston, N.D., which is almost in the middle of the Bakken." Tony, can you comment?
INGRAFFEAWell, I can comment on the problem of the everyday citizen. Whether he or she wants to lease or not, being able to get valid, accurate, scientific-based information concerning the development, whether it's in the Bakken or the Barnett or the Marcellus, that's a problem. And it's a problem that our legislators, our universities and the gas and oil industry itself have responsibility to fix.
INGRAFFEASo advertisements on TV, which require millions of dollars of investment on the part of the gas industry, is not a good way to inform the public. A good way to inform the public is by providing the public with valid, scientifically based information. And, unfortunately, when such information becomes available, the immediate knee-jerk response on the part of the industry is to say, it's wrong.
INGRAFFEAIn other words, it's okay to do science as long as the answer is what they want.
MCGRAWI think that the issue is that -- there's no question that there needs to be substantial oversight. I wanted to go back to something that Tony had mentioned before. And it really comes down to this. We do have -- there is a much larger than necessary carbon footprint to shale gas drilling.
MCGRAWIt strikes me as being terribly ironic that this fuel that we keep touting as being a cleaner burning alternative to coal and a safer alternative in terms of politics to oil is not widely used -- in fact, in the Marcellus, hardly used at all -- to develop the shale gas. It seems to me that if the industry -- and I know they've talked about it -- wanted to turn around and make that point better than the ads on television, they could do it by shifting the focus to that and using the natural gas to get the natural gas and using that to make their point.
REHMSeamus McGraw, he is writer and author of "The End of Country." And you're listening to "The Diane Rehm Show." Let's go now to Delphi Falls, N.Y. Good morning, Velda. (sp?) Let's see. Velda, are you there? Sorry. This phone is -- can you open line five, please? All right. I'm sorry. That's not working right now.
REHMWhat's the future of fracking as you have done your research? And is it going to expand? Is it going to have greater regulation? Is it going to have less regulation and big profits for everyone?
MCGRAWHmm. It's a tough question to predict the future. If I had to guess, I would say, I think, fracking will continue and expand. It's a vital technology that the majority of the industry uses, and it's everywhere. I think that regulation, whether it will increase, is a debate being decided in the next two years. You know, right now, the EPA is doing this national study. There's a lot of activity on the Hill with people of different leanings.
MCGRAWSome argue that this should be left to the states. Others argue that the federal government should take a bigger role. And that debate is ongoing. I think that whether it's regulated more will probably be decided by whether the federal regulators get more involved. On the state level, I think, there'll be ebbs and flows, depending on the administration in office, in terms of regulation.
MCGRAWBut on the federal level, I think there'll be new laws in the next couple of years.
REHMJohn Hanger, do you think that the regulation belongs to the states or to the federal government? John Hanger, do we have you? Sorry. We've lost him. Tony Ingraffea, where do you see it going?
INGRAFFEAAs far as regulations are concerned, there are three elements to that. One, you have to have the correct regulations. Two, they should be uniformly applied. And, three, they have to be strictly enforced. So you can have regulations that are enforced and are uniform, i.e. federal regulations. But if they're not the right ones, there's no good being done.
INGRAFFEASo we're still in the process of developing the correct regulations because, as I said before, this process of high-volume slick-water, hydraulic fracturing in shale is a process and evolution. Uniformity requires that, across states, we have the same correct regulations because I live 50 miles in Pennsylvania. If New York has very strict and correct regulations and Pennsylvania does not, I'm downstream. I have my health and debt in jeopardy.
INGRAFFEASo whether we have a federal set of regulations or a uniform set of state regulations is irrelevant to me as long as they're uniform and as long as all of the technology -- everything -- is correctly addressed and there are proper and very stiff penalties for violations.
REHMTony Ingraffea, he's professor of engineering at Cornell University. Ian Urbina, reporter for The New York Times. Seamus McGraw, he is author of "The End of Country." And John Hanger, former secretary of the Pennsylvania Department of Environmental Protection, thank you all so much. Thanks for listening. I'm Diane Rehm.
INGRAFFEAThank you, Diane.
ANNOUNCER"The Diane Rehm Show" is produced by Sandra Pinkard, Nancy Robertson, Susan Nabors, Denise Couture, Monique Nazareth and Sarah Ashworth. The engineer is Erin Stamper. Dorie Anisman answers the phones. Visit drshow.org for audio archives, transcripts, podcasts and CD sales. Call 202-885-1200 for more information.
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