Fadel Gheit

Tue, 2014-04-22 12:30Sharon Kelly
Sharon Kelly's picture

Very Little Cheap Natural Gas in New York Marcellus Shale, New Report Concludes

For years, the shale industry has touted the economic benefits it can provide. An overflowing supply of domestic natural gas will help keep heating and electric bills low for American consumers, they argue, while drilling jobs and astounding royalty windfalls for landowners will reinvigorate local economies. These tantalizing promises have caught the attention of politicians in Washington, D.C. who argue that the rewards of relying on shale gas outweigh the risks, especially because harm can be minimized by the industry or by regulators.

But across the U.S., communities where drilling has taken place have found that the process brings along higher costs than advertised. Even when properly done, drilling carries with it major impacts — including air pollution, truck traffic, and plunging property values — and when drillers make mistakes, water contamination has left residents without drinking water or cleaning up from disastrous well blow-outs.

And as the shale drilling boom moves into its 12th year, the most crucial benefit claimed by drillers — cheap and abundant domestic fuel supplies — has come increasingly into question. The gas is there, no doubt, but most of it costs more to get it out than the gas is worth.

A new report from New York state, where a de facto shale drilling moratorium has persisted since 2008, concludes that unless natural gas prices double, much of the shale gas in the state cannot be profitably accessed by oil and gas companies.

Thu, 2013-11-07 09:00Sharon Kelly
Sharon Kelly's picture

Could California's Shale Oil Boom Be Just a Mirage?

Since the shale rush took off starting in 2005 in Texas, drillers have sprinted from one state to the next, chasing the promise of cheaper, easier, more productive wells. This land rush was fueled by a wild spike in natural gas prices that helped make shale gas drilling attractive even though the costs of fracking were high.

As the selling price of natural gas sank from its historic highs in 2008, much of the luster wore off entire regions that had initially captivated investors, like Louisiana’s Haynesville shale or Arkansas’s Fayetteville, now in decline.

But unlike natural gas prices, oil prices remain high to this day, and investors and policymakers alike remain dazzled by the heady promise of oil from shale rock. Oil and gas companies have wrung significant amounts of black gold from shale oil plays like Texas’s Eagle Ford and North Dakota’s Bakken.

Shale oil, they say, is the next big thing.

“After years of talking about it, we’re finally poised to control our own energy future,” President Obama said in his most recent State of the Union address. “We produce more oil at home than we have in 15 years.”

But once again, the reality may be nothing like the hype. Consider California.

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