‘Blanket’ Environmental Fears Won’t Slow Shale Industry As Houston Conference Gears Up

March 3, 2010 - PRLog -- Despite the launch of an environmental safety investigation by the U.S. House Energy and Commerce Committee into the impact of the hydraulic fracturing technique, many analysts doubt that the probe will hinder the rapid development of shale drilling.

In addition to the investigation, the State of New York recently imposed a moratorium on drilling at the immense Marcellus shale gas deposit on which it sits until it is satisfied that doing so will not negatively affect water resources.

In response to the ruling, Gerry Goobie, a partner with Calgary energy consultants Purvin and Gertz Inc. stated: "You cannot make a blanket statement and say this is a problem everywhere. It’s a couple of localized areas where there could be issues."

"The expectation in the U.S. is that the development of shale gas will be a big supply source for existing markets and growing markets in the U.S. If that doesn’t get developed, then gas will have to come from outside. Some of that will be East Coast Canada, (liquefied natural gas) and Western Canada and the Gulf Coast."

Tom Medvedic, senior vice-president for corporate development at Calfrac, one of the Canadian-based companies being approached for documentation by the committee pointed out that the fracturing process has been in operation for decades.

“And, in that context, we certainly haven't been presented with any challenges like are now being projected.”

The American Petroleum Institute released a statement taking up the same line, stating: “Hydraulic fracturing is a safe technology critical to developing the nation's vast natural gas reserves. It has been used for more than 60 years in more than one million U.S. wells without a single confirmed instance of groundwater contamination.”

While the environmental controversy may potentially delay development of the Marcellus reservoir, the popularity of the shale gas movement across North America and the rest of the world shows little sign of losing momentum.

Last summer, the Potential Gas Committee (PGC), an assembly of academic and industry experts connected with the Colorado School of Mines, saw the shale resurgence as reason to revise its estimate for total potential U.S. natural gas resources by upwards of 39 per cent to 1,836.4 trillion cubic feet (Tcf) from 1,320.9 Tcf in 2006, the highest evaluation in the PGC’s history.

Amongst the major energy players, Exxon’s acquisition of XTO Energy at the end of 2009 provided access to XTO’s unconventional resource base, including the equivalent of 45 Tcf in shale gas, tight gas, coal bed methane and shale oil. Mitsui E&P USA has also announced a collaborative venture with Anadarko Petroleum that will make it a partner in Anadarko’s Marcellus shale assets.

This week, Oslo-listed shares in energy producer Questerre Energy Corp (QEC.OL) surged 35 per cent to a 20-month high after the Canadian firm announced positive test results from a well on its Utica shales in the St. Lawrence lowlands of Quebec. Meanwhile, Shell Oil Co. have vowed not to end its shale project in Rio Blanco County despite being forced to retreat from plans to acquire water rights in the Yampa River in Colorado.

John Hattenberger, president and managing director of Gazprom Marketing & Trading USA, told Energy Risk that operators had good reason to remain optimistic.

“People are concerned that water used during the extraction process could somehow contaminate drinking water. But we haven’t seen any proof of that and I think the industry will figure out a way to ensure that doesn’t happen.”

Matters of maximizing production potential of shale gas projects and improving efficiencies through enhanced drilling and completions techniques will all be discussed at the Shale Gas Drilling and Completions conference, which will take place at the Omni Houston Hotel at Westside, Houston, Texas, on May 26–27. For more information and booking forms, visit www.sgdchouston.com, email enquire@iqpc.com, or call 1-800-882-8684.

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