Monday, September 28, 2009

Burgh Energy Report

The environmental safety of drilling for natural gas in shale is in the news again. Digging a bit more on the subject yielded this article about water contamination, which links to "The Shale Series" at National Public Radio. The first story highlights the importance of the shale gas discovery and its impact on the industry. Water fracturing, which is the source of the environmental concern, is instrumental in making these reserves commercially viable. So, there is a lot riding on keeping local watershed free of contamination.

The second report looks at the interest of big oil, namely Exxon, in the Marcellus Shale play. Small businesses dominate the natural gas industry, but shale drilling could change that. To date, major global energy companies are watching from the sidelines. That the drilling in the Marcellus the attention of the likes of Exxon indicates how operations could quickly scale and transform the regional economy. Shale gas is still in the process of developing into an important component of the country's energy portfolio.

Related to the latent energy boom in Southwestern PA is the disorganized political efforts of the natural gas lobby:

Soon after Waxman-Markey passed, leaders of the natural gas industry met at an annual conference in Denver — where former Sen. Tim Wirth chewed them out.

Wirth used to represent Colorado and has long been an advocate of natural gas. Since 1998, he has been president of the United Nations Foundation, a nonprofit organization that works on climate change.

Wirth told the industry leaders that on Waxman-Markey, they blew it. "Every industry was deeply engaged, except one: Yours," he said. "The natural gas industry, the industry with the most to gain and the most to offer, was not at the bargaining table."

It's an especially harsh verdict because the Waxman-Markey bill was drafted only after high-profile negotiations with proponents of coal, nuclear, oil, wind, solar and other energy sources.

I suspect the natural gas industry will get its act together. Even if it doesn't, Exxon could step in and throw its considerable weight around Washington, DC. Much of what I have read on the subject indicates that a policy shift is already occurring and is the harbinger of bigger things to come. The signals coming out of Pittsburgh are unequivocal. Energy will dominate the local economic landscape.

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