Economist Defends Method Used to Extract Natural Gas

Pittsburgh Post-Gazette
22 July 2010
By Elwin Green,

Get John Felmy started on the subject of hydraulic fracturing, the process by which a mixture of water, sand and chemicals is blasted into rock formations to create fractures that release natural gas, and he responds with something that one does not typically associate with economists: passion.

In a phone interview, the chief economist for the American Petroleum Institute, a Washington, D.C.-based trade association for oil and natural gas producers, said claims that hydraulic fracturing may be responsible for consequences ranging from fish kills to explosions are "complete nonsense."

"The fracturing process in itself has never been found to have contaminated a water supply in over a million wells that have been fractured over the last six years," he said, speaking with rapid-fire intensity.

That intensity reflects the intensity of the attention that hydraulic fracturing has received recently. Sen. Bob Casey, D-Pa., has introduced legislation to regulate the practice, the House Subcommittee on Energy and Environment is examining it, and the Environmental Protection Agency has scheduled a public meeting this evening in Canonsburg about it, the third of four such forums being conducted as part of a study to be concluded in September.

Meanwhile, a new study has upped the estimate of jobs to be created by development in the Marcellus Shale, a geologic formation underlying much of Pennsylvania, and a new program to train workers has received nearly $5 million from the U.S. Department of Labor.

Mr. Casey joined with U.S. Representatives Diana DeGette, D-Colo., Maurice Hinchey, D-N.Y., and Jared Polis, D-Colo., last month to introduce the Fracturing Responsibility and Awareness of Chemicals (FRAC) Act.

The senator said the act would repeal a provision of the 2005 energy bill that exempted hydraulic fracturing from the Safe Drinking Water Act. It would also require natural gas producers to publicly disclose the chemicals used in hydraulic fracturing.

Mr. Felmy said those chemicals are already disclosed in data sheets available at each well site, and that many companies also list them online; and that the FRAC Act threatens to slow down or even stop natural gas production in the Marcellus Shale.

"It is unbelievable to me" that a Pennsylvania senator would propose it, he said.

The House Subcommittee, chaired by Henry A. Waxman, D-Calif., sent a letter Monday to 10 energy producers, asking them to list all of the oil and gas wells for which they performed hydraulic fracturing, the total volumes of flowback and produced water recovered by state and year, and their company policies regarding on-site storage of flowback and produced water, among other information.

EQT Corp., headquartered Downtown, received the letter, and spokesman Kevin West said the company was in the process of gathering information to meet the requested Aug. 6 deadline.

"We think that any study that's based on the relevant facts and science will lead to the same conclusion that previous studies come to," Mr. West said, "which is that there is no negative impact on water resources from the use of hydraulic fracturing."

Mr. Felmy said state regulators are providing sufficient oversight of Marcellus Shale development, and fining or otherwise restraining companies when their practices have produced harmful results.

But he also argued that some complaints made by residents near drilling sites of such things as odors or bad-tasting water have nothing to do with gas wells.

"It could have already been there," he said. "In many cases ... it was already naturally occurring."

For many, the most important aspect of Marcellus Shale development has been job creation. A new program, Marcellus Shalenet, announced Wednesday that it has received nearly $5 million in federal funds to offer training for local workers through a consortium led by Westmoreland County Community College and the Pennsylvania College of Technology.

Also Wednesday, the American Petroleum Institute released a new study asserting that the development of Marcellus Shale gas could create 100,000 jobs by 2020 under a "low development" scenario and more than 280,000 under a "high development" scenario.

With those economic stakes, Mr. Felmy said, "Every day that we don't move forward on these things is a day that a poor Pennsylvanian doesn't have a job, and that's wrong."

Elwin Green: egreen@post-gazette.com or 412-263-1969.