January 30, 2015
Russell Gold is the senior energy reporter for The Wall Street Journal, and author of "The Boom: How Fracking Ignited the American Energy Revolution and Changed the World.” He was one of the first to report on the technique of fracking for oil and gas. He’s travelled from Texas to North Dakota to Pennsylvania, following the rise of the industry. We caught up with Gold at the Marcellus-Utica Midstream Conference at the David L. Lawrence Convention Center in Pittsburgh. Sitting near a large panel of windows overlooking bridges crossing the Allegheny River in Pittsburgh, Gold talked about his book and how fracking has changed the energy landscape.
Below are some of the highlights of Gold's comments from that converastion.
I think actually it is. We use lots of energy, more per capita than anywhere else in the world. And what we've done is imported all of the energy and exported all of the problems associated with energy production. And so now we're producing so much more oil and natural gas here in the United States and and we're really confronting, well what does it mean to produce oil and natural gas? How do you build a well so that you can have confidence it's not going to leak. If we're going to use the energy let's have a conversation about how to do it right, how to do it well.
Well I'm not sure if they're enough, but they're certainly a start. I went back and read a 2008 article that I wrote last time I was here in Pittsburgh, about this new discovery called the Marcellus Shale. And it's really kind of stunning that in less than seven years we went from writing this, "well there seems to be this new gas discovery here," to the Marcellus is now the largest gas producing region in the world. That's incredibly quickly. We drilled first and then started to ask questions about, "Well, are we leaking methane? And how can we build wells right? and what about these earthquakes?" So there are all sorts of issues that have been associated with shale drilling. I haven't seen anything that to me indicates that it can't be done safely. That doesn't necessarily mean that it is being done safely. But with the proper regulation I think this could be a good source of fuel.
It's not quite a bust yet, but we seem to be getting there. The oil and gas boom is over. I mean this period from 2008 to 2013, it was just growing year after year. But the legacy of the boom is going to be with us for generations. There's so much natural gas now, that we don't really frankly know what to do with it. There's so much oil, I spent a large portion of 2014 tracking the rise of crude by rail, oil moving by trains. We're sitting here watching one go right by as we speak. Once again the industry, the same thing happened with crude by rail as happened with shale. That you had the industry confronting a problem. In one case it's how to get oil and gas out of the rock, and in another case it's how to get it from the middle of North Dakota to coastal refineries, and coming up with these incredible solutions, but then all of the sudden realizing there are some problems associated with them, too.
I think the biggest fiction is that if you frack you're going to end up with water that you're going to light on fire. A lot of people feel that fracking is sort of this incredibly environmentally destructive behavior. You know, in my travels, it's not necessarily that way. Those are the exceptions rather than the rule. And I don't want to make light of it; I certainly would not want to be living in a house where all of a sudden you lose your water well. But fracking can be done safely, with the proper approach.
There are many different places. You look at a company like Southwestern Energy, which is very active in Arkansas, and has recently become more active in the Marcellus. They have a whole division associated with figuring out how to do—how to recycle water, to lower their footprint. If you go to Fort Worth, the Barnett Shale, where they've been fracking for well over a decade now, going back to the early 2000s. And they develop approached which minimize the impact on neighborhoods. Or even if you go down to a place like Argentina, which is beginning to develop some of their oil resources with fracking, they take a completely different approach there. There you cannot get a license to begin fracking until you sit down and prove to the government that you're going to do it in a way that's environmentally benign, and that you've thought through all of the potential downsides of it.
It's certainly a choice that different areas can make. What I find somewhat troubling is that a place, a state like New York, can ban fracking, but at the same time New York state is using so much more natural gas today than it did 10 or 15 years ago—shutting down coal plants, the air is so much cleaner in New York City than it's been in a generation. So I think they, New York, needs to grapple with that. Why is it that they get to have some of the benefits of gas production and inexpensive gas, but not put up with the costs associated with producing it. When I traveled to Nigeria for The Wall Street Journal several years ago, that was a real eye opening experience to see what happened in the Niger Delta to the communities. The environmental impact there is extraordinary. I think what people need to think about is if we're going to use this energy, there are going to be impacts.
So we can, I guess, make a couple choices. We can either choose not to use this energy [fracked natural gas and oil], which is an incredibly difficult choice. Modern society is built on industry and energy consumption. Or we can figure out, well, how do we use it right? How do we transition to a more renewable future? I think that's the direction we're heading. I just saw data that Texas, not exactly the--you know, a very industrialized state—11 percent of its electricity last year was from the wind. That's pretty remarkable numbers. I mean it's not exactly where Denmark is right now, which is up to 30 percent. I mean, as you grow renewables, and there are definitely costs with that, having this cheaper source, natural gas, makes a lot of sense. I certainly don't want to make the argument which is that we should then burn coal, which is very inexpensive. You have to balance the cost with the environmental impact. And I think natural gas is a good balance of those.