Natural Gas: Different Hats


Instructions:

This week we must put on different hats.  Our aim is to avoiding writing answers as if we are staking a position on shale!  Our goal is to demonstrate an ability to describe different perspectives on a controversial new capability in global energy markets.  Your work will be judged on your ability to frame the potential risks and rewards of unconventional natural gas production. 

Describe the Dynamics behind the “shale gas boom”

What convergence of technological capabilities have made shale extraction possible.  Describe the business dynamics

Horizontal drilling and hydraulic fracturing technologies were combined to form what we know as fracking. Halliburton was the founder of the combination of technologies so the natural gas boom is indeed led by the industry’s “big oil” companies. In addition, the poor economic conditions of rural America are making farmers and other land owners more willing to lease the natural gas under their land for a portion of the significant profits the company gets. When someone comes knocking with a big royalty check and the promise of “It’s safe”, it is hard to turn it down if your family is struggling to get by.

Expected Rewards

Write from three perspectives– Business, Government Official, and Optimistic Citizen
Based on all of the previous material, but especially the materials from Weeks 3, 4, and 6, describe the broad benefits expected from cheaper natural gas in America. Be sure to include a wide range of benefits – both directly for energy but also for manufacturing, industry and residual economic benefits – as well as geopolitical and policy rewards.

  • Business

    As a CEO of a large company, I am concerned with making the most profit for the least amount of investment. If my industry is in any way tied to energy, then I am looking at the fracking boom as a way to decrease my initial investments and vastly increase my profits. With natural gas being cheap and bountiful, it is an easy investment to justify. Even if my company is in no way tied to energy, if it is headquartered in any area benefiting from the shale boom, my company also benefits due to an increased number of jobs with higher wages which gives me more customers for my product/service.

    If I am the leader of an energy company, then it would behoove me to lobby politicians, foreign governments, and the regulatory commissions responsible for oversight of my industry in an effort to reduce regulations, restrictions, fines, penalties, etc. and thus increase my profits. 

  • Government Official

    As a government official, I am always concerned with re-election. Moreover, I am also concerned with the geopolitical impacts of the fracking boom. If I am a Democratic Congresswoman in a liberal district, I know that my bread is buttered by the environmental lobby. I am more likely to impose stronger regulations on the industry to meet environmental and constituents’ concerns. However, if I reside in a competitive district, I need to balance environmental concerns with the gas industry’s concerns. If I cozy up too much to environmentalists, I run the risk of losing the general election due to a strong right wing competitor backed by the energy industry. If I swing too far towards the industry, then my constituents might not elect me if I am opposed in a primary challenge.

    Now, I put on the hat of a Republican Congresswoman in a conservative district highly dependent on the energy industry for jobs, I am more likely to listen to the energy industry’s lobby and not really concerned with the environmental impacts of fracking. I am a staunch opponent of regulatory action that could compromise profits of the industry. If I am from a more competitive district, then I cannot openly support every action the industry takes but must call for a balanced approach of safety and profits, similar to the Democrat in a competitive district.

    No matter my party affiliation, politics ends at the borders edge. I am highly concerned about America’s reliance on foreign oil and I am aware that fracking for natural gas would reduce our dependence on OPEC. Since we began importing energy commodities, such as oil, there has been a saying in politics: “We must reduce our dependency on foreign oil” and every politician will say this. Therefore, even the possibility of natural gas reducing foreign oil imports is good politics and I would be a fool to oppose that without compelling and significant evidence that fracking is too harmful to justify the benefits.


  • Optimistic Citizen

    While sitting in my run down house in the poor section of town, I hear a knock on my door. When I answer the door, there is a man in a business suit offering me a royalty check for over $400,000 or even more. How do I say no to my kid’s education fund, my retirement fund, my “fix up my house” fund, and never having to worry about bills again?

    As a citizen with no financial interest, the energy company runs ads repeating the political line “We must reduce our dependency on foreign oil”. If the energy company finds natural gas in my town, they will need to hire workers, providing a potential job for me and improving my property value.

    Even if there is no shale oil or natural gas under my town, I am still optimistic because natural gas is so cheap and is cleaner than coal, as well as leaving the country more economically secure than importing foreign oil.

Anticipating Risks

Write from the perspective of a concerned Government Official and Citizen Activist
Based on all of the previous material, but especially the materials from Weeks 3, 4, and 5. Describe the range of risks associated with shale natural gas production (production, surface water, ground water, gas, et al).  Describe the potential risks in politics, local town economics, et al.  Go beyond just energy issues.

  • Government Official

    As a regulator employed by the federal or state government, I am concerned with what I have seen. The potential for fracking fluid to contaminate the nation’s ground and surface water puts people at an unnecessary risk. I am also, most likely, over worked and under paid so my inspections might not be as thorough as they probably should be, but I won’t say anything because I have 400 more wells to inspect by Monday.

    I am the Mayor of my town with a significant financial interest in natural gas. Not only does it allow for a cheap way to heat my constituents’ homes (unless I’m in Texas, no heat required), it also could provide for numerous new jobs which would stimulate the local economy. However, I also have seen people light their water on fire and I am highly concerned, because if I am the mayor who allows the energy industry to pollute the waters of my town, I will never be re-elected. Because of that fact, I will push for stronger regulations that protect my townspeople while still ensuring a non-hostile, but profitable, work environment exists in my town.

    As the Leader of the Free World, I am concerned about every aspect of fracking and how it will affect the American people. They should feel safe about their drinking water while also feeling financially secure in their ability to get a job and pay their bills. It is as though I am walking a tightrope, attempting to balance environmental concerns against energy independence. I am attempting to ensure that all regulatory commissions have the resources they need to properly oversee the energy industry. I am also highly eager to spend the increased tax money for federal programs that help the citizens I serve. I am also aware that the increase in GDP caused by the shale boom is likely to assist me in my re-election campaign.

  • Citizen Activist

    As an environmental activist, I am vehemently against fracking for natural gas. The energy industry will say that the Environmental Protection Agency have conducted studies that found fracking is safe. Due to the study conducted in 2004, President Bush, Vice President Dick Chaney, formerly CEO of Halliburton, and Congress justified exempting hydraulic fracturing from the Safe Drinking Water Act. More appalling, legislation was passed to exempt fracking from enforcement under the Clean Air Act and the Clean Water Act. The vast differences in independent studies and industry funded studies makes me suspicious of what the industry is actually doing, what chemicals they are actually using, and if their propaganda is even remotely true.

    When people can set their drinking water on fire, something needs to be done to change the way these companies conduct business. They should be regulated like hawks because, even amongst industry professionals, no one can give a consistent percentage of chemicals used along with their mostly “freshwater and sand” pie chart. If the amount of fluid used is five million gallons, then at 0.5% chemical concentrations equates to 25,000 gallons of various chemicals, including many that are toxic. If the chemical additives are at 2%, like Exxon-Mobil senior scientist Jack Neal claims, then it is even worse, a staggering one hundred thousand gallons of chemicals are being pumped into the ground. Then, they can’t even agree on how much fracking fluid they can actually recover. I’ve seen estimates of 15% – 50%, and 10% to 90%. By my account, that is a HUGE range that makes the estimate completely and utterly useless. Anywhere from 10% to 80% of the fluids used during fracking that they pump down thousands of feet into the ground are left there to slowly make their way through rock layers for decades to come. Eventually they will reach the aquifers they claim to protect with their cemented steel casing “that never blows out under high pressures”. Since it isn’t under the ocean, CEO of Chesapeake Energy Aubrey Kerr McClendon claims that if anything goes wrong, we can just go fix it. The irony, of course, being that it is still thousands of feet under the surface of the Earth.

Community Perspectives

 

Write from perspective of a Citizen that Supports Shale Natgas and from perspective of one that Opposes development
One of the major dynamics of the shale debate centers on communities most impacted by production. First describe how communities across America are different today versus 1950s and 1960s. (e.g. more rural-suburban-urban? Demographic make-up; lifestyles)   One can expect that all communities close to the shale boom have residents who are for and against expansion.  Describe a scenario where community ‘NIMBY’ problems become central to America’s energy policy debate.  Would you imagine the issues get resolved at local, state or national level? 

  • Citizen that Supports

    Natural gas is a cheap form of electricity, it keeps my bills low and my family fed. Due to the shale natural gas boom, I know of three people on my street who now have a job and 5 others who never have to work again because of the royalty checks. How can I possibly be opposed to anything that boosts the economy and helps out the average joe like me?

    This is usually the first impression many people have over the development of natural gas and it was the same attitude people had towards oil/natural gas in the 50’s and 60’s. Now, as more Americans live closer together, what one person does affects the entire town.  

  • Citizen that Opposes

    Ever since they started drilling for natural gas, my water supply has become contaminated to the point where I can’t wash my dishes, clothes, or myself without being exposed to toxic chemicals. I don’t feel safe raising my children in an environment where they can be poisoned from playing in the local lake. They are destroying our town and our way of life because no one knew the consequences of accepting the energy companies into their towns.

    A divide forms when the economic impacts clash with environmental concerns, especially when those environmental concerns impact the health of the people and their children for miles around. It isn’t an isolated issue anymore with more than 30 states either drilling or exploring for shale gas. Those who held this view in the 60’s were seen as hippies, despite the fact that many of their concerns are still valid, and have not been sufficiently addressed today. A similar campaign to paint supporters of environmental issues as “out of touch,” or flat out liars is underway today by many lobbyists for the energy industry.

    Not in my backyard still applies in the Unites States at a local level because no one cares what the next town over is doing. However, when their town is the one effected, it becomes a huge issue for them. With many towns like these springing up across America, the energy industry fears a full on revolt by local and state governments. It is hard to convince the voters of the need for fracking after fracking has poisoned the very water they used to drink. With water becoming a more scarce commodity, this brings “Not in my backyard” to the national political stage when one state’s policies are effecting multiple other states downriver. If the Mississippi or Colorado rivers were to become exposed to fracking fluid, it would cause mass destruction on every aspect of American life and would lead to mass opposition against the energy companies.

Additional Thoughts 

How do you see natural gas impacting other energy sources – oil, coal and renewables? What issues have we not covered that you feel are important when thinking about the future of natural gas?

I see natural gas having a large impact on coal, but a small impact on oil consumption simply due to the fact that we don’t have widespread natural gas fueling stations or the cars that would use them across America. It does, however, directly compete with coal as both are used to generate electricity. They say that natural gas is cleaner than coal, but I don’t hold that view. Coal releases more carbon dioxide but methane is a much stronger greenhouse gas. I fear that with the poor natural gas infrastructure there will be more methane released into the atmosphere, which will make our current problem with CO2 look like child’s play. This is a major issue I believe that we haven’t covered this week. Leaky pipes are the number one cause of natural gas not being “cleaner” than coal for the environment. Carbon dioxide gets the spotlight because, at the moment, it is a huge problem at concentrations of 397.64 ppm compared with methane at 1.8 ppm. (Concentration amounts from NOAA). According to many of my professors at the University of Houston, and even Ilissa Ocko, climate scientist at the Environmental Defense Fund, the best way to slow down climate change is to limit methane emissions. “Since the Industrial Revolution, methane in the atmosphere has increased by a whopping 150 percent. While in the same period, CO2 levels have gone up 40 percent,” Ocko states. Furthermore, “[r]educing warming caused by methane during our lifetime will also reduce the likelihood of extreme weather events and species extinctions — and, a slower rate also provides more time for societies and ecosystems to adapt to changes.”

These are assignments that I have turned in for my TECH 4310 Future of Energy and Environment class, these are my own thoughts and you may not take them without citing them. I will not post them all, but a majority of them.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s