Will Washington politics kill the US energy revival and shale gas revolution?
New Jersey is emerging as the surprise new battlefield in the debate over shale gas and fracking.

Shale gas rig by Shutterstock.com

Article Highlights

  • New Jersey is home to the worlds’ largest industrial gas company, Linde, which little more than a decade ago was facing a bleak future.

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  • The economic benefits from the increased supply of shale gas in the Northeast are tangible and growing.

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  • The shale gas revolution and the energy and economic boom that it has sparked could easily be derailed.

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Although there is no gas yet being mined in the state, it’s been one of the major beneficiaries from the economic revival that has rippled across the country.

New Jersey is home to the worlds’ largest industrial gas company, Linde, which little more than a decade ago was facing a bleak future. It supplies carbon dioxide and nitrogen to companies that are developing shale through waterless hydraulic fracturing. Since the fracking technique was perfected, Linde has added hundreds of new jobs and now employs more than 1,000 people. This is just one story among many around the country, as once moribund industrial manufacturing, petrochemical and steel companies have experienced a business resurgence. That’s all happened under the radar—one of the many unexpected benefits as the combination of fracking and horizontal drilling has freed up formerly untapped gas deposits.

Linde’s success—and a surprise finding that New Jersey may have reserves of its own—has suddenly brought the fracking controversy front and center in the state. It has had a ban on fracking, instituted years ago, but it expired in January. There was no push to reenact it because there was no gas to be mined in the state; or at least that’s what was thought. It turns out that a shale gas formation extends from Trenton to the northern reaches of the state—enough, experts now say, to supply New Jersey households with five years of energy.

The Newark Formation as it’s known is relatively small compared to the vast Marcellus reserves in neighboring Pennsylvania and New York. But its discovery raises the possibility of a new flash point in the ongoing ‘war over fracking’. Opponents are pulling out all stops, deriding the economic gains and hyping the alleged dangers even as new independent studies suggest that fracking, while not without environmental challenges, is no more problematic than traditional mining, and its record is improving dramatically.

The economic benefits from the increased supply of shale gas in the Northeast are tangible and growing. Home and industrial energy costs are at an all time low. But while Pennsylvania has embraced its reserves, adding an estimated 250,000 shale related jobs in recent years, New York is entering its sixth year of a fracking moratorium. Although the science community has urged that the moratorium be lifted, Governor Cuomo now finds himself trying to deal with a radioactive issue driven by dedicated ideologues. With the 2016 presidential election in his sites, the Governor now says he will make a ‘final’ determination by the 2014 election—the latest dubious promise after a string of missed deadlines.

The debate over shale gas has intensified in recent weeks in the wake of the release of activist filmmaker Josh Fox’s latest anti-shale gas ‘docu-prop,’ Gasland II. Like the original Gasland film, it revolves around iconic images of homeowners setting ablaze or otherwise getting sick from hydrocarbon-tainted tapwater—brazenly implying that it’s caused by methane and other chemicals leaked as the result of hydraulic fracturing.

What Fox does not tell you is that methane leaks naturally at the locations where he filmed. Pictures of flaming faucets and springs caused by leaking methane have been around for decades, well before fracking arrived on the scene—one of dozens of factual missteps in Fox’s films. In fact, as NPR has reported, the Pennsylvania Department of Environmental Protections explicitly investigated and rejected Fox’s allegation, reprised in Gasland II, that flaming water in Dimock, Pennsylvania, was the result of fracked wells.

Among his other claims, Fox contends, erroneously, that the oil and gas industry is exempt from the federal clean air and clean water acts (the so-called Halliburton Loophole, a charge found to be fallacious). Many of Fox’s more outlandish allegations are addressed in FrackNation, a documentary directed by Phelim McAleer, who raised money for the film through crowd sourcing fundraising site Kickstarter.

“Flammable water is a great story.” McAleer has said. “Flammable water caused by an evil oil company—an even better story. But when you examine it, it’s just not true. I think there are journalists that are ideologically inclined to disbelieving everything an oil company says. So mix in the desire to tell a great story with the desire to believe environmentalists always tell the truth and journalism has not come out well in the fracking movement.”

DOE finds fracking innocent

Within days of the July airing of Gasland II on HBO, the Department of Energy released a landmark federal study on hydraulic fracturing that eviscerates a central premise of Fox’s movie and the anti-fracking movement. In the first independent assessment of whether shale gas drilling poses a toxic threat to groundwater, DOE researchers monitored wells in western Pennsylvania for a full year. They tagged fracking chemicals with unique markers and found that none migrated from gas bores or man-made fractures into water supplies.

“This is good news,” said Duke University scientist Robert Jackson, who was not involved with the study. Aquifers are usually found at depths of less than 500 feet. The researchers found no evidence of fracking fluids at 5,000 feet or less, indicating the fracking process comes with a huge safety cushion, at least in Pennsylvania.

Anti-shale gas campaigners have built their case around allegations that the mix of chemicals used in the fracking process—almost all water (90 percent) and sand (9.5%)—is a toxic time bomb ready to blow and pollute water supplies across the nation. Jackson, respected for his independence, has overseen numerous studies at fracking sites around the country, and has yet to find any evidence of contamination by fracking fluids.

The study also disposed of another oft expressed fear pushed by Fox and radical environmental justice groups: seismic monitoring determined that fractures subject to earthquakes got nowhere near aquifers or the surface, as they had claimed was likely.

While such reassuring findings are unlikely to quell protests, more responsible environmentalists, such as Scott Anderson, a drilling expert with the Environmental Defense Fund, found the study reassuring. “Very few people think that fracking at significant depths routinely leads to water contamination,” Anderson told the Associated Press.

In the wake of report’s release and in a rebuff of protestors, Energy Secretary Ernest Moniz reaffirmed the Obama administration’s long-stated position that hydraulic fracturing is safe as practiced.

“I still have not seen any evidence of fracking per se contaminating ground water,” Moniz told reporters at a breakfast briefing. He reaffirmed the White House position that natural gas offers a “bridge to a low carbon future,” as it releases about one-third to one-half as much carbon dioxide as fossil fuels.

The latest study raises questions about why the Environmental Protection Agency has been involved in testing that is more effective when conducted by state authorities who are far more familiar with the geological characteristics of the formations in their states . Over the past 15 months, the EPA has:

-Closed an investigation into groundwater pollution in Dimock, Pa., saying the level of contamination was below federal safety triggers;

-Abandoned its assertion that a driller in Parker County, Texas was responsible for methane gas bubbling up in residents’ faucets

-Terminated its Pavillion, Wyoming, fracking pollution investigation turning future monitoring over to the state.

-Sharply revised downward a 2010 estimate showing that leaking gas from wells and pipelines was contributing to climate change, crediting better pollution controls by industry

Administration plans to regulate fracking in flux

The string of EPA missteps—the agency has consistently overhyped the danger of shale gas extraction, only to retreat as more solid evidence emerged—raises questions about whether the federal government should assume more oversight of fracking nationwide—the position pushed by Fox and activists, and possibly under consideration by the administration.

The EPA has said it will release a study next year on fracking and groundwater, raising speculation that the government will use it as a pretext for imposing national guidelines. It’s unclear how EPA’s decisions to abandon fracking and groundwater investigations in Wyoming, Texas and Pennsylvania will weigh on the agency’s broader probe.

The industry has long contended, and recent EPA blunders seem to support, that states are in a far better position than the federal government to oversee regionally idiosyncratic fracking operations.

“We should be encouraging production… not stifling it,” said Representative Doc Hastings, a Washington Republican and chairman of the House Natural Resources Committee in hearings last week on one of several bills aimed at ensuring that oversight of oil and gas fracking would be left to the states.

This particular bill—Protecting States’ Rights to Promote American Energy Security Act (H.R. 2728)—and others are likely to come up for a full House vote when Congress returns from its recess in September.

Regardless of the vote, the Senate is unlikely to follow the House lead on this, which may leave resolution in the hands of administration officials. Signals are mixed. Moniz told Platt’s Energy Week in June that “in the end there has to be a very, very strong state role there” to oversee the shale and oil gas boom.

The wild card may be the Interior’s Bureau of Land Management. When she assumed her new post last spring, Interior Secretary Sally Jewell indicated that she had no desire to press for additional federal oversight of fracking. “One thing that’s clear to me from my own experiences is that one size doesn’t fit all,” Jewell said.

But shortly thereafter, the Interior rolled out an ambitious new plan to expand fracking oversight on federal lands. The Administration would require companies to more fully disclose chemicals used in drilling, have a water-management plan for fluids that flow back to the surface and take steps to assure wellbore integrity and prevent toxic fluids from leaking into groundwater.

Each of these issues is addressed by state regulations, which are targeted to the unique geology of individual formations, leaving in doubt whether this is a step forward or backward. Meanwhile, environmental groups blasted Interior’s proposal for being weak and supposedly leaving too much control in state hands.

Senator Ron Wyden (D-OR), the chairman of the Energy and Natural Resources Committee, and an occasional critic of the oil and gas industry, has begun floating a proposal that would put the federal government’s nose under the regulation tent. In a recent speech at a Bipartisan Policy Center event, he suggested maintaining states jurisdiction over “below-ground” gas and oil production while giving the federal government more of a role overseeing “above-ground” activity and creating uniform rules on spill reporting and chemical-disclosure requirements.

According to industry officials—and many independent experts as well—state laws have evolved over the years to respond to the unique legal structure and doctrines, environmental conditions, geology, topography, climate and community sensitivities specific to each state. In many cases, in response to local conditions, state regs are actually tighter than proposed federal rules.

In the end, as Bryan Walsh at Time, has noted, the issue boils down to “trust.” Can the public rely on the states and the federal government to properly oversee a technology about which many remain suspicious?

But trust goes both ways. Considering how politicized this issue has become, can the public be sure that Washington will resist the pressures and environmental interest group lobbying that often drives policy into an ideological ditch? If not, the shale gas revolution and the energy and economic boom that it has sparked could easily be derailed.

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