In his speech to the State Chamber of Oklahoma on Thursday, National Association of Manufacturers’ President John Engler discussed jobs creation through energy, infrastructure and exports. On the energy front, he discussed the astonishing expansion of domestic natural gas production (and potential production), thanks to technological advances in hydrofracturing.

Following are his prepared remarks from that section:

In Oklahoma, a proud tradition of supporting energy has helped keep your unemployment 3 percentage points below the national average.

You’re one of the states benefiting from development of shale gas, in this case the Woodford Shale. In Texas, there’s the Barnett Shale; in Arkansas, the Fayetteville Shale; in Louisiana the Haynesville Shale. Since 2000, gas from shale has grown from less than 1 percent of the nation’s production to about 10 percent.

Perhaps the most promising development is the Marcellus Shale underneath Pennsylvania and New York and West Virginia. Analysts say the Marcellus alone has enough gas to meet the nation’s needs for at least 14 years.

These natural gas deposits are close to northeastern population and manufacturing centers – they could be a real boon to consumers and industry in the area. But environmental groups have stirred up opposition, for example, in New York State, where there’s a pitched battle going on over natural gas drilling.

Opponents play on people’s fears of a technology that’s actually been in use for decades –- hydrofracturing. Thanks to massive R&D by energy companies, the technology has been improved, made even safer, and combined with horizontal drilling to open these shale deposits.

Oklahoma’s unemployment rate in October was 7 percent.

When Daniel Yergin writes about historic development in energy production, one pays attention. In today’s Wall Street Journal, joined by his colleague Robert Ineson, Yergin examines the rise of natural gas production in the United States made possible by technological advances that open up vast shale deposits to exploitation. From “America’s Natural Gas Revolution“:

The biggest energy innovation of the decade is natural gas—more specifically what is called “unconventional” natural gas. Some call it a revolution.

Yet the natural gas revolution has unfolded with no great fanfare, no grand opening ceremony, no ribbon cutting. It just crept up. In 1990, unconventional gas—from shales, coal-bed methane and so-called “tight” formations—was about 10% of total U.S. production. Today it is around 40%, and growing fast, with shale gas by far the biggest part.

The potential of this “shale gale” only really became clear around 2007. In Washington, D.C., the discovery has come later—only in the last few months.

Making this development possible has been hydrofracturing, or fraccing, the technique of injecting pressurized liquids into the strata to fracture the shale and free the gas. (See Shopfloor.org’s previous posts on the topic.) The potential of this gas development is especially important economically to northeastern states — and industry — because the Marcellus Shale is close to markets in New York, Pennsylvania and other heavy energy consuming areas.

Earlier in the decade, natural gas prices soared as demand grew, spiking as Hurricane Katrina disrupted supplies. Price and price volatility were big factors in driving natural-gas consuming industries like fertilizer and chemical manufacturing overseas, but now…well, there’s reason for optimism.

Except, as the authors note:

[Industrial] users and the utilities with their long investment horizons—both of which have been whipsawed by recurrent cycles of shortage and surplus in natural gas over several decades—are inherently skeptical and will require further confirmation of a sustained shale gale before committing.

Skepticism also arises because of the growing environmentalist/NIMBY alliance dedicated to regulating hydrofraccing into submission, with the activist journalism outfit, ProPublica.org, serving as the movement’s house organ. States now regulate this aspect of drilling, and the regulators stand by the quality and safety of their oversight. (See the Interstate Oil and Gas Compact Commission for details.)

But federal regulation is always superior to state regulation, right? That at least is the theory of sponsors of bills – H.R. 2766 and S.1215 — to bring hydrofraccing under the Clean Water Act authority, even though as Yergin and Ineson note, shale strata lie much, much deeper than watersheds. Today, the predictable New York Times adds its support for the bills in an editorial, “The Halliburton Loophole.”

State regulation is not a “loophole,” and even invoking the bugaboo of Halliburton does not make it one.

History tells us the real goal, at least for the environmentalists, behind legislation to impose a Clean Water Act regime over hydrofracturing is project-halting litigation. So you can understand industry’s skepticism.

More…

• Houston Chronicle, “Louisiana shale could change fate of U.S. energy supply“
• Houston Chronicle, “Shale gas is producing jobs, stimulating the economy“
• Natural gas producers group, EnergyInDepth

Following up on yesterday’s Senate EPW hearing on energy policy and the states, where North Dakota Gov. John Hoeven called for a comprehensive national energy strategy (see post), the good people at Energy in Depth pass on an exchange the governor had with Sen. Jim Inhofe (R-OK):

Key Excerpts From Yesterday’s U.S. Senate Environment and Public Works Hearing
Dialogue starts at 101:50.
Click HERE to view.

U.S. Sen. Jim Inhofe (R-OK):  “Governor Hoeven, the thing I was going to bring up is there’s a lot of discussion, when you talk about your offset capabilities there, and what you’re doing, that’s great. We’re doing somewhat the same thing, although most of ours is marginal production. But there is a, I’d suggest to you, the use of hydraulic fracturing is necessary in your state to be able to explore, to retrieve all these oil capabilities.”

Gov. John Hoeven (R-ND):  “It’s absolutely vital. You know, you mention some of these new formations. They are not, uh, the oil isn’t connected. You’ve got to go underground. And you’re talking two miles underground. And make a fracture in order to get the oil to flow. That’s vitally important.”

U.S. Sen. Jim Inhofe (R-OK):  “I wanted to get that into the record, because there are some efforts to do away with hydraulic fracturing, and it would be devastating.”

Just so. Energy in Depth has been a strong voice defending hydrofracturing technology, in which pressurized water is pumped in subterranean strata to make the oil or natural gas accessible via drilling. Without hydrofrac, development of the Bakken Formation oil as well as our vast natural gas resources in Texas (Barnett Shale) and Pennsylvania/New York/Ohio (Marcellus Shale) would be prohibitively expensive.

The activist group, ProPublica, has been leading a bizarre campaign against the widely accepted technology, and by offering its agenda-driven reporting for free has been successful in getting newspapers to publish the articles. Apparently if it’s gratis, editing is optional.

This is a telling observation from an Energy in Depth rebuttal, which explains why we refer to ProPublica as an activist outlet, not a journalistic venture, “Separating Fiction from Invention in ProPublica’s Latest Anti-HF Attack Piece“:

Earlier this week, ProPublica author Abrahm Lustgarten released the latest installment in his series of advocacy pieces attacking the commonly used energy technology known as hydraulic fracturing. Instead of simply running on the ProPublica blog and website, however, the article was co-published with Politico and appeared in the paper’s news section (a letter to the editor from Energy In Depth policy director Lee Fuller will appear in the paper this Tuesday).

It wasn’t the first time that a mainstream news outlet provided ProPublica with a platform for this kind of product - although, for papers such as the Pittsburgh Post-Gazette, the determination has been made that ProPublica articles, when run, are more appropriately filed on its “opinion/perspectives” page than as part of its straight-news reporting.

Prior to its release, Energy In Depth spoke at length with Mr. Lustgarten about the direction of the (presumably already written) piece and the myriad mistakes he was making in issuing a blanket indictment of recent government and third-party reports finding that EPA regulation of hydraulic fracturing would cost Americans jobs, revenues and future security.  

Regrettably, none of those explanations made it into his final piece.

 And regrettably, ProPublica appears to be a model for future journalistic ventures.

As previously noted, this blogger once worked for Gov. John Hoeven. But it’s been eight years now.

Looks like shale is where the action is these days, at least when it comes to oil and natural gas development. We’ve previously mentioned development of the Barnett Shale formation in Texas, the Bakken in North Dakota and the Marcellus formation in Pennsylvania and New York, and now add to the list the Haynesville Formation.

From Dow-Jones, an article that focuses on Chesapeake Energy’s activities:

Chesapeake has been a particularly active acquirer of land in the Haynesville play. Like other shale reservoirs, Haynesville requires more costly and technologically advanced drilling techniques to extract gas embedded deep in rock formations, but high natural gas prices have made such endeavors profitable.

 

According to the most optimistic estimates, Haynesville could produce up to 245 trillion cubic feet equivalent of natural gas, enough to supply the entire U.S. for a decade.

High energy prices and new technological developments in horizontal drilling and hydrofracturing have made these kind of developments profitable. To be sure, there are obstacles to overcome. From the Shreveport Times.

BATON ROUGE — Producing natural gas from the Haynesville Shale is not as simple as drilling a hole in the ground,  says Don Briggs, head of the Louisiana Oil and Gas Association.

Unlike most places, the gas is not trapped in reservoirs. It’s in small vertical fissures in the horizontal bands of shale that have to be fractured by intense water pressure pumped 12,000 feet underground.

When the gas is in a pool big enough to remove, “we do not have today the infrastructure in north Louisiana to take that gas out” because of an insufficient pipeline system to handle it, Briggs told the Baton Rouge Press Club on Monday. Roads in the largely rural area also are a problem.

“Water is a big concern right now,” he said, because aquifers in northwest Louisiana are insufficient to supply the millions of gallons of water needed for the fracturing process. “They may have to transport water long distances.

The Times also has a location map on the drilling, very interesting.

In addition to the technical problems, there will also be the political challenges, that is, opposition from constituencies who do not acknowledge the energy needs of a modern, prosperous, free society.

Featured on the front page of CNN.com, “North Dakota’s real-life Jed Clampett“:

STANLEY, North Dakota (CNN) – Herb Geving unleashes a broad smile in his 11,000-square-foot mansion. The former cattleman, farmer and owner of a North Dakota garbage business is now retired, able to count the dollar signs brought in by three oil wells.

“Oil,” he says, “it’s amazing. You don’t have to work at all. You just walk to the mailbox and there it is.”

The 74-year-old grandfather receives whopping checks at the end of every month for the oil. He’ll never forget the time the first check came in January.

“Thousands, I guess you’d call it,” he says.

Geving chuckles when asked if it was for $2,000.

Was it closer to $10,000?

“You can keep going up and up and up,” he says from his home, decked out with a massive fire pit in the living room, semi-circular leather couch and bright orange shag carpet.

That’s the setup to report on energy development surrounding the Bakken Formation, an oil-bearing shale formation now profitable because of horizontal drilling, hydrofracking and the high price of oil. The U.S. Geological Survey estimates 3 to 4.3 billion barrels of recoverable oil given current technology.

But what about the environmental damage, the frightened animals, the threatened biospherical emanations?

Well, the mountain lions seem OK: “North Dakota cougar quota increased.”

Ah, sure, you say, but that’s out there in the hinterlands. A little energy development’s OK when it’s so sparsely populated, and besides, it’s not pristine like the pristine ANWR, pristinely speaking. (Someone must say that.)

From the Wall Street Journal, August 2, “How Texas Struck It Rich Beneath Suburbia” by Texas Railroad Commissioner Elizabeth Ames Jones, writing about the 7,500 natural gas wells tapping the Barnett Shale formation, some deep in the heart of the city of Fort Worth:

What I’ve seen is that while Congress balks at drilling in the Arctic National Wildlife Refuge in Alaska out of fear of disturbing a few caribou, we’ve moved ahead to safely tap into an energy reserve located underneath suburban homes. And there is no better example of how Texas gets the balance right between energy and the environment than the development of the Barnett Shale.

By the way, CNN reports its Bakken Formation story and worldwide oil prices fall. Coincidence?

As the Congressional debate between supply and no-more-supply continues this week, we highlight the benefits of energy development.

From Marketplace Morning, “Energizing Fort Worth charities“:

Kate Archer Kent: In the heart of Fort Worth, energy company money is funding the construction of an enormous steel skeleton. This isn’t another headquarters for big oil. It’s the Fort Worth museum of Science and History, getting a $75 million makeover.

The construction activity above ground mirrors what’s going on a mile-and-a-half below. The same firms that are helping refurbish the museum are drilling into the Barnett Shale, one of the nation’s largest natural gas fields.

Pittsburgh Tribune-Review, “Natural gas in Marcellus Shale can create revenue, jobs“:

Higher gas prices coupled with the abundant natural gas reserves trapped in Marcellus Shale underneath Western Pennsylvania have been good for those who own the rights to the gas, the drillers and gas companies, and job-seekers, say industry experts.

“It is the last great natural gas play in the United States,” said Kent F. Moors, director the Energy, Policy and Research Group at Duquesne University in Pittsburgh.

For the moment.  And from the Canadian Great Plains, a report from the Neue Zuricher Zeitung, the big Swiss paper, “Goldgräberstimmung in Kanadas Westen,” i.e., “Gold Rush Mood in Canada’s West”:

The economic balance is shifting west in Canada. Following in the path of the energy province, Alberta, now Saskatchewan is experiencing a boom. The province is Canada’s grain bin but is now profiting more and more from production of oil, uranium and potash.

Included is a discussion of the Bakken formation and horizontal drilling. Here’s a nice headline: “Rising standard of living.”