For better or worse, previously unknown reserves and a new ability to access them is transforming North American energy policy.
Since the late 1990s, American landscapes have become dotted with a small forest of shale gas wells -- 13,000 new ones a year, or about 35 a day, according to the American Petroleum Institute. In the past decade, this steady stream of development has become a gusher as nearly half the country has staked claim to these energy riches. In 2000, the USA had 342,000 natural gas wells. By 2010, more than 510,000 were in place -- a 49% jump -- according to the U.S. Energy Information Administration.
Twenty states have shale gas wells, so-named because they tap rock layers that harbor the gas in shale formations (with names such as Marcellus, Utica, Barnett). The bulk of the drilling has come since 2006, according to the EIA. Wherever drilling happens, life changes. - USA Today
In a Pennsylvania town called Titusville, home to 5,600 people and Walmart Supercenter #5360, an entrepreneur named Edwin L. Drake once dug a hole that changed the world. The year was 1859. Thanks to recent innovations, kerosene could be extracted from petroleum and distilled. But where would we get petroleum? Historically it had been collected from shallow pools where it bubbled naturally to the surface. Hearing rumors that salt miners in Titusville were complaining of oil spoiling their digs, Drake set out for the town, where he paid laborer to dig. His laborers started out with a metal pipe that they hammered into the ground by hand. At 39 feet, they hit bedrock, so they procured a steam engine to drive a larger hammer. Deeper and deeper they drilled, but for months nothing happened. Drake was nearly bankrupted, but he pressed on. And one day they struck oil. Drake Well was the first profitable oil well in America, bestowing a fortune on the world's first oil millionaire, and kicked off a worldwide search for petroleum.
That's value added.
The PBS documentary Extreme Oil tells the story of a town near Titusville, where another well struck oil. Unlike Drake's Well, it petered out in months rather than years. The boom and bust was epic. "A parcel of land that had sold for $2 million in 1865 was auctioned off for $4.37 soon after," the documentary stated.
On a Sunday in early summer of 1892, heavy rain washed out a dam on Oil Creek, flooding Titusville and causing a leak in the petroleum tanks of nearby Oil City. Petroleum floated on top of Oil Creek in a visible slick. Suddenly an explosion rocked the scene. A second and a third followed, engulfing the town in flames, sending its residents fleeing into the countryside, killing 60 people, and injuring hundreds. It was devastation the likes of which the locals had never seen.
There have been many catastrophic petroleum disasters over the years. The Exxon Valdez oil spill and the Deepwater Horizon disaster are perhaps the best remembered at present. But without petroleum modern life as we know it would be impossible. Our wealth, our numbers, and perhaps even our lifespans would be radically diminished. If oil disappeared tomorrow, catastrophe would ensue.
Many climate scientists say that if we continue to use fossil fuels at our current pace catastrophe will ensue, especially if the developing world continues to raise its living standards and consume energy like Westerners. The risk of climate change is a giant x factor in every proposed energy policy.
This American Life recently broadcast a story about the most monumental energy discovery in Pennsylvania since Drake's Well. A Penn State professor discovered that "his state is sitting atop a massive reserve of natural gas - enough to revolutionize how America gets its energy," the show reported. It then related the story of another Pennsylvania professor, Dan Volz, who "does a different calculation and reaches a troubling conclusion: that getting natural gas out of the ground poses a risk to public health." Is it possible to have a Drake Well, a fantastically valuable energy source that could change the world, without guaranteeing a modern analog to the Oil City explosion? Are we smart enough, or careful enough, to have one without the other?
Either way, we're going to keep pulling newly available natural gas resources out of the ground, or so nearly everyone in the industry presumes. For example, during an Aspen Ideas Festival panel Wednesday, a filmmaker doing an industry sponsored project on energy, an oil company executive, an academic expert on energy issues, and a policy wonk urging radical conservation efforts and a transition to renewable energy all agreed: even if the U.S. is to move away from fossil fuels, greater reliance on natural gas reserves is necessary in the short to medium term.
The oil executive, Russ Ford of Shell Oil Company, a sponsor of the event, says recent discoveries of natural gas in North America and newly available ways of getting it out of the ground are among the most pivotal events he's witnessed during four decades in the energy business. "It's disruptive," he said. "But it can be done in a responsible manner." He urged that well construction, fracking, and methods of minimizing leaks from wells be carefully regulated by Congress.
For now, France is not going to tap its newly available reserves, largely due to environmental concerns. And several environmental groups are calling on American policymakers to follow their lead.
Since that won't happen maybe we'll export our supply? "This U.S. president or the next will have to make a tricky decision, and its consequences may only become clear years from now: How much U.S. gas should be sold to other countries if it means boosting prices for consumers at home?" Reuters reports.
If natural gas reserves keeps energy cheaper than we expected for, say, the next decade, will that postpone much needed action on climate change? (Is carbon sequestration technology our only hope?) Or will it prevent large scale suffering that would result from increasing energy shortages?
I am anything but an energy expert. So I want to hazard only this modest claim: for a subject that is inevitably going to affect the lives of every last American and countless people around the globe, our natural gas reserves and the policy that surrounds them doesn't get much attention. Yet the obstacles to a public meaningfully informed on these issues is incredibly high.
Drake Well stopped producing oil in 1861.
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