Energy Issues

 Vol. 233 No. 9

A couple of months ago, I wrote about the ban placed on fracturing in Vermont. It was ludicrous. It was hilarious. It was misguided, based on faulty information. But, I do believe that those who supported and pushed the ban did so out of honest belief.

Not so for the latest group of New York lunatics. Here is the deal. A group of chefs and food enthusiasts, who oppose fracturing and gas development in the Marcellus because, they claim, it puts their upstate New York source of vegetables and meats in danger, held an anti-fracturing fundraising dinner at the Brooklyn Winery in late July. Calling themselves Chefs for the Marcellus, the cooks provided their guests, who paid $125 each, with treats such as eggplant-stuffed okra, smoked lamb belly with fermented tofu and whipped ricotta jewel on toast, in addition to New York-sourced wines and beers. Sounds pretty nice, eh? But you may have figured out the irony here. Many, if not most, of the dishes were cooked over natural gas, some of which, undoubtedly, came from the Marcellus. That is in addition to the electricity from New York’s gas-fired generators that kept the food chilled and the attendees comfortably air conditioned.

If a group of goofballs in New York is getting kudos for lunacy, other groups get unwarranted criticism, while doing large amounts of good. One of those other groups is the Federal government and, specifically, the U.S. Department of Energy. If you like the shale boom, thanks go, in part, to the Federal government. In a report issued in May by the Breakthrough Institute, entitled “Where the Shale Gas Revolution Came From: Government’s Role in the Development of Hydraulic Fracturing in Shale” (http://thebreakthrough.org/energy.shtml), the government’s role in developing shale gas is detailed. “In summary, federal investments and involvement in the development of shale gas extraction technologies spanned three decades and were comprised of:

• The Eastern Gas Shales Project, a series of public-private shale drilling demonstration projects in the 1970s;
• Collaboration with the Gas Research Institute (GRI), an industry research consortium that received partial funding and R&D oversight from the Federal Energy Regulatory Committee (FERC);
• Early shale fracturing and directional drilling technologies developed by the Energy Research & Development Administration (ERDA, later the Department of Energy), the Bureau of Mines, and the Morgantown Energy Research Center (later the National Energy Technology Laboratory);
• The Section 29 production tax credit for unconventional gas, in effect from 1980 to 2002;
• Public subsidization and cost-sharing for demonstration projects, including the first successful multi-fracture horizontal drilling play in Wayne County, W. Va., in 1986, and Mitchell Energy’s first horizontal well in the Texas Barnett shale in 1991;
• 3D microseismic imaging, a geologic mapping technology developed for applications in coal mines by Sandia National Laboratories, but an essential shale gas technology.

These federal investments, coordinated in close concert with gas industry representatives, were predicated upon a single mission: the commercialization of shale gas extraction technology.”

This is what Dan Steward, former Mitchell Energy vice president, had to say about the government’s involvement in shale gas development: “In the ‘70s, we started running out of gas, and that’s when the DOE started looking for more. The DOE’s Eastern Gas Shales Project determined there was a hell of a lot of gas in shales.” When Mitchell had secured the position it wanted in the Barnett shale, it called in DOE and GRI, because the company lacked a shale development technology knowledge base. The rest is history. “DOE started it, and other people took the ball and ran with it. You cannot diminish DOE’s involvement,” said Steward.

Terry Engelder, a Penn State University professor, seconded Steward’s comments. “The Eastern Gas Shales Project helped expand the limits of gas shales production and increased understanding of the production mechanisms. It is one of the great examples of value-added work led by the DOE, ” he said.

Alex Crawley, former Associate Director for Research at the National Petroleum Technology Office, also waded in on the subject. “After the ERDA was formed, the emphasis was on ‘what can we do to help energy production in this country’ during the embargo. All that technology coming together (with government input)—massive hydraulic fracturing, diamond-studded drill bits, 3D seismic imaging, directional drilling—it wasn’t until the 1980s that it became economical enough to repeat. Before that, they were drilling through shale to get to sandstone reservoirs.”

“As far as shale is concerned, I don’t know that industry would have ever taken a look at it without the federal program, because it did not look like it had the porosity to be reachable. Government’s not going to step in and develop anything all the way through, but working with industry, you have a different set of eyes. If you keep an open mind, the government can become a real catalyst,” Crawley said.

So there you have it. Does government do everything right? No, not even close. Some things they get very right, like helping industry develop an abundant national resource at a time when it was, and remains, critically needed.