Archive for the ‘Pennsylvania Natural Gas Drilling’ Category

December 14, 2010 – John Hellmann is a professor of materials science and engineering and associate dean for education, College of Earth and Mineral Sciences.

• Part 1
• Part 2

Originally Posted At: PSU.edu

MSC President Underscores Industry’s Commitment to ‘Getting it Right’: “Game-changer” and “revolution” are two words being thrown around to describe the Marcellus shale, a natural gas industry spokeswoman said. And, the potential impact that shale drilling can have — on the economy, on communities, on the environment — just underscores the importance for the industry to get it right, especially with the entire world watching. That was the message of Kathryn Klaber, president of the Marcellus Shale Coalition. … Klaber added that there are no second chances for getting it right. “The way I see it, we’ve got on opportunity to get this historic opportunity right,” Klaber said, “and I can really, very confidently speak for the industry as to how the folks that are in this industry every day are committed to doing that.” (Blairsville Dispatch, 12/10/10)

Gov. Tom Ridge: The Natural Gas Industry is Committed to Getting ‘It Right’: Former Gov. Tom Ridge talked about how he is working to guide development of the Marcellus shale play in Pennsylvania. … He focused his comments on the Marcellus shale play and the principles the Coalition has adopted. “We work hard every single day to make sure we’re doing this in a way I would insist on had I been governor,” Ridge said. “We only get one chance to do it right. At the end of the day, we have an extraordinary opportunity to build more miles of rail lines, have more Pennsylvanians employed and invest in Pennsylvania.” (Wellsboro Gazette, 12/8/10)

Marcellus Pioneer Range Resources Projects 1,000 Pa. Jobs: “Range Resources Corp. could employ 1,000 workers in Western Pennsylvania five to eight years from now, an executive said Wednesday as the natural gas producer marked the start of construction on its new Appalachian offices. The Fort Worth-based company has 300 employees now in the region and 400 across Pennsylvania. All but about 20 are from Pennsylvania, West Virginia and Ohio, Ray N. Walker Jr., senior vice president of Marcellus operations, said at the building site in the Southpointe II complex in Cecil in Washington County. … “Brick and mortar is one of the most visible signs of the hiring and the permanent commitment that (gas production) companies are making in Pennsylvania,” said Kathryn Klaber, president of the Marcellus Shale Coalition. (Tribune-Review, 12/9/10)

PA Workforce Development Official: ‘[Natural] Gas Related Industry is Our Big Gold Rush for Pennsylvania’: “[Richard Stetz, CareerLink regional manager] said mainly because of the natural gas drilling industry, the area has “lots to look forward to. More so than other parts of the country.” “Gas related industry is our big gold rush for Pennsylvania and don’t forget oil, which they say is under the shale,” he said, adding, “usually this is a slow period for us, but we are as busy as ever. Now all you see are triaxle trucks so things are booming.” (Williamsport Sun-Gazette, 12/11/13)

Gov. Ridge: ‘U.S. Security in Natural Gas’: “What we have is natural gas,” Ridge said. “It’s here, it’s secure.” Now retired from public life, at least temporarily, Ridge has his own company and is a strategic adviser to the Marcellus Shale Coalition, which oversees natural gas exploration and production in the deep reserves beneath the Pennsylvania soil and neighboring areas of the Northeast. Shale gas has pushed the United States into uncharted territories for finding and using the domestic fuel and helping wean the nation off imported oil, he said. “I think it’s time we put America at the head of the global energy parade,” Ridge said. “That’s our mission; that’s not a mirage.” … Natural gas also has a clean energy component for powering electrical generation plants: it has half the carbon emissions of coal and basically zero particle emissions, Ridge said. (The Oklahoman, 12/10/10)

MD State Senator Says Marcellus Production Key to ‘Making us Energy-Independent’: “Western Maryland’s role as the state’s energy frontier doesn’t bother state Sen. George C. Edwards, a Republican who represents Garrett and Allegany counties. He says the income and jobs from each energy project are badly needed in communities where unemployment is higher than average. “We’re the only place in the state that has energy, except for wind,” Edwards said. “This country should be energy-independent. We ought to be part of making us energy-independent.” (Balitmore Sun, 12/13/10)

Marcellus Providing an Opportunity for Region to be ‘a Leader in Energy Development’: “Ms. Klaber [of the Marcellus Shale Coalition] showed a map of Marcellus wells by Pennsylvania county and discussed the current and future economic impact of shale development. “There’s a lot of opportunity for this part of the country to be a leader in energy development,” she said. (Post-Gazette, 12/9/10)

Economic Development Group Says Marcellus is Sending Rail Industry Booming: “Four new sand silos have gone up on Growth Resources of Wellsboro property in Delmar Township, reported organization Secretary Mary Worthington, and four more will be going up in 2011, all due to the natural gas industry, she said. “Wellsboro and Corning Railroad is busy,” she added. (Williamsport Sun-Gazette, 12/11/13)

Responsible U.S. Shale Gas Production Soars, Driving Down Energy Prices for Struggling Consumers

‘Happy Holidays,’ PA Consumers: Marcellus Production, Natural Gas Helping to Keep Home-Heating Costs Down: “Even though natural gas drilling is up, the prices for residential customers are down, according to UGI Utilities Inc. representative Andrew Rohrer. “On the natural gas utilities side, those meters are humming with this cold weather, but the good news is it won’t cost as much. Gas prices have come down by about 10 percent for the average residential customer, which is great news heading into the heating season. So happy holidays,” he added. (Williamsport Sun-Gazette, 12/11/13)

U.S. Dept. of Energy: ‘Natural Gas Production May Rise to Record in 2010’: “U.S. natural gas production this year may reach an all-time high as drilling for the heating and power-plant fuel increased. Gas output will average a record 62.09 billion cubic feet a day this year, Energy Department production data show. (Bloomberg, 12/7/10)

‘North America: The New Energy Kingdom’: “With rising production from shale fields, the U.S. surpassed Russia last year to become the world’s largest supplier of natural gas. Shale now accounts for 10 per cent of the country’s natural gas production – up from 2 per cent in 1990. … For natural gas, the U.S. has the four largest fields in the world: the Haynesville field in Louisiana (with production up by 77 per cent in 2009); the Fayetteville field in Arkansas and the Marcellus field in Pennsylvania (both with production up by 50 per cent); and the Barnett field in Texas and Oklahoma (with production up by double-digit increases). The EIA reports that proven U.S. reserves of natural gas increased last year by 11 per cent to 284 trillion cubic feet – the highest level since 1971. (Globe and Mail, 12/9/10)

On Hydraulic Fracturing’s Record of Environmental Safety

MSC President Reinforces PADEP Facts Regarding Fracturing’s Clear Environmental Safety Record: “What gets a lot of attention is the hydraulic fracturing process. Well, the regulators and others who study this very carefully (say) that is not the biggest risk. It’s very difficult, and in fact, has never been shown that from 8,000-feet down a process is contaminating drinking water,” Klaber said. “We’re focused on where the real challenges are, which is making sure you don’t have any spills, and there’s no surface interactions with the compounds we use.” (Blairsville Dispatch, 12/10/10)

University of Houston Prof. and Petroleum Engineer PhD: ‘The Industry has an Impeccable Safety Record’: “Hydraulic fracturing is an absolutely necessary process for removing natural gas from the ground and cultivating this very attractive and environmentally friendly form of energy,” said Dr. Economides. … As recently as November 2010, the Pennsylvania Department of Environmental Protection released a report showing that there have been no documented incidents of groundwater contamination as a result of hydraulic fracturing. (Release, 12/9/10)

This updated publication addresses the rapidly changing topic of water withdrawals for Marcellus shale gas drilling in Pennsylvania.

Penn State Cooperative Extension has released an updated version of a publication that addresses the rapidly changing topic of water withdrawals for Marcellus Shale gas drilling.

Originally published in September 2009, “Water Withdrawals for Development of Marcellus Shale Gas in Pennsylvania” reflects the latest Marcellus-related regulatory changes enacted by the Susquehanna River Basin Commission, the Delaware River Basin Commission and the Pennsylvania Department of Environmental Protection.

Water is a critical component in the process of extracting natural gas from the Marcellus Shale formation. Public policies for managing and protecting water resources are common concerns of Pennsylvania residents, according to a water-policy expert in Penn State’s College of Agricultural Sciences.

“Development of the Marcellus Shale could have major economic and environmental effects for Pennsylvanians and residents of neighboring states,” said Charles Abdalla, professor of agricultural and environmental economics. “Individuals, businesses and communities will be affected well into the future as this energy resource is fully developed.

“Citizens need to become aware of their stake in water-resource issues and policies and effectively participate in public policy-making,” he said. “Public policies for water management and protection will be improved if the affected parties — which include almost everyone — are well-informed about likely impacts and take advantage of opportunities to participate in decisions.”

Seeking to engage residents, landowners, federal and state agency personnel, environmental organizations, economic development groups and others, the publication discusses the fast-evolving issues and public policies related to water resources and Marcellus Shale gas exploration.

While adequate supplies of water are one of several essential inputs needed to extract gas from the shale, wastewater is an output from the process that must be treated or disposed of properly.

“Through this publication, we hope to increase the public’s understanding of water use and management related to Marcellus Shale gas development and help people understand how and where they can offer input into public decisions about water use and wastewater treatment,” said Abdalla, the publication’s lead author.

“Now is the time for people to learn about and help shape public policies that will guide development of the Marcellus Shale,” he said. “These policies will play a large part in determining the economic well-being and quality of life for residents of the commonwealth for a long time — perhaps generations — to come.”

Funding for the updated publication comes from the Pennsylvania Water Center at Penn State. To obtain a free copy, contact the Penn State College of Agricultural Sciences Publication Distribution Center, The Pennsylvania State University, 112 Agricultural Administration Building, University Park, PA 16802-2602; telephone: 814-865-6713; fax: 814-863-5560; e-mail: AgPubsDist@psu.edu.

This publication also is available online athttp://extension.psu.edu/water/resources/publications/consumption-and-usage/marcelluswater.pdf/view.

The publication is the latest in a series initiated by Penn State’s College of Agricultural Sciences and Penn State Cooperative Extension to address issues related to Marcellus Shale gas exploration and development. Other publications in the series, along with related webinars, presentations and events, can be viewed at http://extension.psu.edu/naturalgas.

from Chuck Gill, Penn State Ag Sciences News

Originally Published at: PSU.edu

Some PA Residents to See Nearly 11 Percent Drop in Gas Bill Immediately; Even More Domestic Supplies on the Way

• Philadelphians to save more than $22.6 million over next three months alone
• UGI customers to experience between 8.1 and 10.7 percent reduction in monthly bill
• Rates more than 13 percent lower than a year ago

PGW announces cuts in gas rates
Philadelphia Inquirer
Andrew Maykuth
November 29, 2010

Just in time for the winter heating season, Philadelphia Gas Works announced Monday it will decrease natural gas rates for the next three months, saving the average residential heating customer about $14.69 per month.

The municipal gas utility will lower its residential gas-supply charge from $1.60 per hundred cubic feet to $1.50 on Wednesday. The charge for commercial and institutional customers will also be reduced.

The supply charge is adjusted quarterly to reflect changes in the wholesale market price of natural gas, which is depressed because of the recession and abundant supplies from new resources such as shale-gas.

Based upon current market projections, the company anticipates that its rates should remain stable through the spring.

UGI cuts natural gas rate by 8.1 percent
Reading Eagle
Dan Kelly
November 30, 2010

Citing falling market prices and a growing supply, UGI Gas Utilities said Tuesday that it will decrease the rate it charges for natural gas by 8.1 percent beginning today.

UGI provides natural gas to 82,000 customers in the greater Reading area.

In addition, the utility owns UGI Central Penn Gas, which has several hundred customers in Hamburg and Shoemakersville, and in Centre, Perry, Tilden and Windsor townships. The rate for those customers will drop by 10.7 percent beginning today.

The average monthly bill for a UGI customer will drop to $103.60 from $112.76, officials said.

Central Penn monthly bills will drop to $83.01 from $92.92, they said.

Since 2008, UGI customers’ rates have fallen 30 percent and Central Penn customers’ bills have dropped 35 percent, company spokesman Joseph Swope said.

“We’re only starting to see the impact of the Marcellus shale gas supply,” Swope said. …”For the first time in a long time we have this huge supply of gas sitting here locally and better yet, it’s hurricane proof.”

By 2018, Swope said, the Marcellus shale will be producing 4.6 billion cubic feet per day, or 40 percent of all natural gas currently used in the Northeast.

U.S. proved natural gas, crude oil reserves soar – EIA
Reuters
Selam Gebrekidan and Joshua Schneyer
Nov 30, 2010

U.S. natural gas reserves increased by the most in history last year, and crude reserves also rose, as companies drilled frantically into shale rock formations with new technology, the Energy Information Administration said in an annual report on Tuesday.

U.S. net proved natural gas reserves rose 11 percent, or 28.8 trillion cubic feet (tcf), in 2009 to total 284 tcf, underscoring the dramatic impact that new gas pumped from shale rock formations is having on world energy supply.

“These increases demonstrate the possibility of an expanding role for domestic natural gas and crude oil in meeting both current and projected U.S. energy demands,” EIA researchers said in their report.

Proved reserves — which now stand at the equivalent of 12 years of gas consumption and 3.3 years of oil demand — represent energy supplies that are extensively charted out and could be tapped under current market conditions. Total recoverable reserves, however, can be far higher.

WPSU Radio. Former Governor Tom Ridge has joined The Marcellus Shale Coalition as a “strategic adviser.” WPSU’s Patty Satalia talks with the ex-governor about what the role entails, what he’ll do to ensure that Marcellus Shale is “developed responsibly,” and about his views on a severance tax for the industry.

Seismic surveying plays an important role in natural gas development. This article will help to have a better understanding of the need for seismic testing.

An important part of natural gas development is seismic surveying.  Seismic surveys provide the data that geologists use to model the Earth’s subsurface conditions as deep as two miles or greater.  In Pennsylvania, geologists are using these surveys to characterize or “map” the Marcellus and other shale targets.

Seismic testing does not specifically tell geologists whether or not there is gas present but does help identify the better areas for potential well sites. The data also provide a picture of what to expect when companies decide to drill such as whether there are faults or other geohazards present, so these can be avoided during drilling.  It also tells them the angle they need to be drilling the horizontal lateral for maximum effectiveness during the process.

There are two kinds of seismic surveys—2-D and 3-D. Two-dimensional seismic surveys use variable signal frequencies to “shake” the ground. Vibroseis or “thumper” vehicles send seismic pulses into the ground that are reflected off the various geologic layers and features.  2-D surveying is mainly done along public roadways with permits from PennDOT or the appropriate township.  The trucks run in a series of 3 or sometimes four with the related ground crews for cabling and traffic control.  Vibrations are not normally detected 30 feet away from the truck when it is working.

3-D surveys typically employ charges set off in shallow borings to produce seismic reflections. Collected by an array of geophones, these reflections are modeled to form an image of the subsurface.  There is very little surface disruption, and companies are willing to work with landowners.  The explosive charges used for 3-D are generally small (approx. 2 lbs. of dynamite) and placed 20 feet in the ground.  ATVs are often used in setting up for 3-D surveying, and in remote areas, helicopters may be used to transport the cables and equipment needed.

Companies doing seismic normally are under contract to one or more energy companies to conduct the study.  It is very expensive and is a multi-million dollar effort for a most 3-D shoots.  This is not a random activity.  Seismic companies sometimes will do the studies independent of an energy company with the hope of selling the very valuable information on the open market to one or more companies.  Energy companies will sometimes pay for seismic, then decide against an area, and later sell the seismic information to another energy company with a different point of view on the potential geology.  Because the information has cost to derive and value to sell, it is not given freely to landowners even if their land was included.  It would be very difficult to understand except to a trained geologist.  It is not placed in the public domain due to the companies having paid for the information.

So why all the seismic activity in PA?  Energy companies with large Marcellus acreage are looking at the best places to exploit the shale and retrieve the natural gas at the lowest cost to produce.  They are looking for shale thickness, geologic faulting, and confining layers of other types of rock as well.  And they are also looking for other shale targets.  Much has been spoken about the Marcellus because that is what is driving the economics and what will get the infrastructure built in many parts of PA.  But there are other shales and the Trenton Black River formation in areas.  Although they might not have been commercially viable in the past, they could become so with new pipelines, compressor stations, and water facilities built nearby based on Marcellus economics.  The confining layers are important for drillers to know because that is what contains the frac energy during that part of the process.  Faulting is generally seen as a negative because it could allow the frac energy to be lost without breaking the target shale rock.  Seismic can also potentially discover PA geology to allow deep well injection of the waste water and several companies are intensely working on this issue, some are even now leasing acreage they feel is promising.

Do seismic companies need landowner permission to conduct seismic testing?  Companies leasing the gas rights may have the right to do the seismic testing as part of a signed lease agreement. It is advisable to consult an attorney to learn what is and what is not covered in a lease. If it is not covered, there are pros and cons for allowing the testing.  Leasing rates are in the $5/acre range in PA.  An attorney that has been working on much of this advises the use of addendums to protect your unique interests and also suggests a limit on the time to conduct the study vs. open ended agreements.  Many existing leases already allow seismic testing.  If you don’t allow seismic, it creates a hole in the map.  Companies don’t like holes and won’t likely be back to fill them at a later date due to the cost.  If the hole is small enough it doesn’t really matter because the map will still give an overall picture with enough data for a company to make a decision on where or where not to drill and where to place the well pad.  If you do allow the seismic, your parcel will have data on it for future consideration.  If your goal is a gas well, you probably want to be in the seismic shoot.  But what if they do the seismic and they find geologic conditions, i.e. major faulting, which is problematic for drilling?  They will likely not be interested in continuing work in your area and move on to other more promising areas.  The value of your lease could diminish greatly or drop to zero but this is more likely an issue for larger parcels vs. smaller ones.  If they do the seismic, especially 3-D, and come back to you for leasing, it is likely you are in an area with a higher probability of commercial success.  Your opportunity to negotiate better lease terms and value could potentially rise.  Always remember that although millions of acres have been leased, not all will be drilled on.  Seismic will determine largely in the end, where much of the drilling activity will occur.

Written by Tom Murphy, Penn State Marcellus Center for Outreach and Research

Originally Posted At: PSU.edu

Philadelphia Inquirer
Sat, Nov. 20, 2010
 
The editorial “Buying good publicity” (Saturday) states that, “The greatest safety concerns from Marcellus Shale drilling stem from the impact on drinking water by the use of a water-and-chemical mix to break through to gas formations thousands of feet underground.” However, your readers should understand that fracturing fluids are 99.5 percent water and sand, with a fraction of additives used to reduce friction in the well bore and to kill bacteria (all components are listed on the state Department of Environmental Protection’s website). These fluids have never impacted groundwater, a fact that has been confirmed by DEP Secretary John Hanger.
 
The shale-gas industry – which, according to experts at Penn State, will have helped create 88,000 jobs in the commonwealth by year’s end – is committed to responsibly ensuring that we maximize the economic, energy security, and environmental benefits of the Marcellus Shale for all Pennsylvanians. We are devoted to getting this opportunity right. Our industry is taking commonsense steps to ensure that groundwater is protected and that responsible Marcellus development will continue to help put tens of thousands of Pennsylvanians to work. At the same time, our industry’s work is generating much-needed revenues for our cash-strapped state government, as well as for local municipalities, while also directing our nation on a path toward a more secure, cleaner energy future.
 
Kathryn Z. Klaber
President & Executive Director
Marcellus Shale Coalition
Canonsburg

Read this editorial on the Philadelphia Inquirer website: http://www.philly.com/philly/opinion/20101120_Letters__Maximizing_the_benefits_of_natural_gas_for_all_Pa_.html

http://thedailyreview.com/opinion/the-gas-boom-be-smart-about-what-you-see-hear-1.1066190

The gas boom: Be smart about what you see, hear
Towanda Daily Review, Editorial
Published: November 19, 2010

• “If you want a relatively quick overview of the natural gas phenomenon, watch the 60 Minutes program. And by way of contrast, see “Gasland” and learn for yourself the difference between a responsible report and a hatchet job.”

• “The gas industry has brought about an economic boom that likely will continue to be a transformational force in this region. In a word, it’s called progress. As the effects of the phenomenon spread, our lives, for the most part, are improved. The future looks brighter.”

Bradford County and the surrounding region once again are being exposed to the glare of national publicity. The current version deals with the natural gas boom in the Marcellus Shale.

Two recent events are notable: The showing of the controversial documentary “Gasland” at the Keystone Theatre in Towanda earlier this month, and the airing Sunday night of CBS’ “60 minutes” segment of the pros and cons of the current gas boom. Both looked at drilling nationwide and both also zeroed in on the water contamination problems in Dimock, the small community in nearby Susquehanna County.

“Gasland,” aired some time back on HBO, drew quite a crowd at the Keystone, just about filling the downstairs portion of the main theater – about 250 people in all.

As most know by now, the film is critical of the gas drilling industry. Dimock is a microcosm for filmmaker Josh Fox, a Pennsylvania native. The state Department of Environmental Protection declared that Cabot Oil and Gas was responsible for polluting the domestic water supplies for a dozen or more households in Dimock. Cabot, while disputing the DEP, is providing the property owners with fresh water supplies.

The two presentations are notable for vastly different reasons. One show, “Gasland,” was a long, muck-raking polemic, peppered with sensationalism, emotionalism, and distortions. The other was a much shorter, balanced and informative news report that recognized the economic value of the gas boom while responsibly acknowledging there are risks and problems.

“Gasland,” despite its shortcomings, is an artistic achievement. It is a well-paced, absorbing film. Too bad the science, the facts, are presented so manipulatively. Such an effort serves only to rile people based on misleading information and makes gathering support for any needed corrective action more difficult.

And, amazingly, here’s the bottom line, in Josh Fox’ own words during a PBS interview: Referring to Dimock in highly exaggerated terms, such as a “disaster area” with a “total loss of normal life,” he then conceded, “Who knows if they (residents) are right. I don’t. It’s all speculation.”

Speculation, indeed, to the superlative degree in this film.

By contrast, the “60 Minutes” presentation features Aubrey McClendon, the CEO, chairman and cofounder of Chesapeake Energy, the most active driller of new wells in the nation, and the largest leaseholder of gas-drilling rights in Bradford County. McClendon, named by Forbes Magazine as one of America’s top-performing executives, is an articulate, convincing advocate for the natural gas industry.

The program contrasts the opposition to gas drilling embodied by Dimock with the excitement about gas drilling found in communities built above the Haynesville Shale in the Northwest corner of Louisiana. There, newfound “Shaleionaires” celebrate the economic vitality the industry has created in their communities.

If you want a relatively quick overview of the natural gas phenomenon, watch the 60 Minutes program. And by way of contrast, see “Gasland” and learn for yourself the difference between a responsible report and a hatchet job.

And, to underscore that “60 minutes” does not have a monopoly on responsible video presentations about this controversial topic, consider another documentary called “Haynesville,” by filmmaker Gregory Kallenberg.

The “60 Minutes” program can be found here.

Much about the two documentaries can be found by researching the titles in the Web.

As we said on this page recently, the gas industry has brought about an economic boom that likely will continue to be a transformational force in this region.

In a word, it’s called progress. As the effects of the phenomenon spread, our lives, for the most part, are improved. The future looks brighter. Don’t take someone else’s word for it. Evaluate the pros and cons. Figure it out for yourselves.

In the final analysis, embrace the change, take control, ensure proper regulation and the means to pay for it, and see to it that if anyone is harmed, they are made whole. But, most of all, celebrate the new opportunities, promote orderly growth, and reap the rewards.

NOTE: Click HERE to view this editorial online and HERE to view the document “Debunking GasLand.”

http://www.reuters.com/article/idUSTRE6AG5VR20101117

U.S. can slash carbon emissions with natgas: report
Wed, Nov 17 2010
By Timothy Gardner

WASHINGTON (Reuters) – The shale gas boom could help the United States reduce greenhouse gas emissions even if Congress does not pass broad climate legislation, according to a Deutsche Bank report.

U.S. natural gas prices have fallen sharply over the last two years as supplies expanded due to the unexpectedly swift development of technologies to tap the fuel in shale formations a mile or more underground.

Lower natural gas costs have also already helped raise the proportion of U.S. electricity generated from the fuel to 23 percent from 20 percent two years ago.

As coal costs rise, the percentage for natural gas in power generation could rise to 35 percent by 2030, according to the Deutsche Bank report released on Wednesday.

The report assumes that environmental problems associated with hydraulic fracturing or “fracking” of shale gas are minimized as the technologies mature.

With Republicans taking control of the House of Representatives early next year, expectations that Congress will pass broad measures on renewable energy and climate are low.

But progress on emissions can still be made because natural gas releases about half as much of the greenhouse gas carbon dioxide as coal does.

“The role natural gas can play is so significant, it can form a type of a potentially bipartisan area of agreement,” on cutting emissions, Mark Fulton, Deutsche Bank’s global head of climate change investment research, told reporters in a teleconference.

The report said broader use of natural gas, and renewable energy like wind and solar power, could slash coal use. The efforts would cut emissions from power generation by 44 percent by 2030, it said.

Looming Environmental Protection Agency rules on mercury, particulates, and other emissions from coal-fired power plants could help reduce electricity generated from coal from about 47 percent now to about 22 percent by 2030, the report said.

That’s because scrubbers and other technologies that would have to be added to coal-fired power plants could push up the cost of power from that energy source.

A Bernstein Research note earlier this year also concluded that the EPA rules on air toxics would lead old coal plants into early retirements.

“The economics of this are compelling,” said Fulton. “This really is just pure economics, the industry will want to do this because it is cheaper.” The report assumed natural gas prices would average about $6 per mmBtu, about $2 higher than current prices.

Existing U.S. natural gas plants also have extra capacity. Two-thirds of the extra natural gas generation will come from existing plants near existing power lines, the report said.

Not everyone is happy about the gas boom. Environmentalists have complained that fracking, in which companies blast a mix of water, sand and chemicals underground to break open fissures in the shale rock, pollutes water supplies.

The report downplayed the risks and said with best practices, like recycling water used in the process, the environmental issues can be managed.

http://www.reuters.com/article/idUSTRE6AG5VR20101117

U.S. can slash carbon emissions with natgas: report
Wed, Nov 17 2010
By Timothy Gardner

WASHINGTON (Reuters) – The shale gas boom could help the United States reduce greenhouse gas emissions even if Congress does not pass broad climate legislation, according to a Deutsche Bank report.

U.S. natural gas prices have fallen sharply over the last two years as supplies expanded due to the unexpectedly swift development of technologies to tap the fuel in shale formations a mile or more underground.

Lower natural gas costs have also already helped raise the proportion of U.S. electricity generated from the fuel to 23 percent from 20 percent two years ago.

As coal costs rise, the percentage for natural gas in power generation could rise to 35 percent by 2030, according to the Deutsche Bank report released on Wednesday.

The report assumes that environmental problems associated with hydraulic fracturing or “fracking” of shale gas are minimized as the technologies mature.

With Republicans taking control of the House of Representatives early next year, expectations that Congress will pass broad measures on renewable energy and climate are low.

But progress on emissions can still be made because natural gas releases about half as much of the greenhouse gas carbon dioxide as coal does.

“The role natural gas can play is so significant, it can form a type of a potentially bipartisan area of agreement,” on cutting emissions, Mark Fulton, Deutsche Bank’s global head of climate change investment research, told reporters in a teleconference.

The report said broader use of natural gas, and renewable energy like wind and solar power, could slash coal use. The efforts would cut emissions from power generation by 44 percent by 2030, it said.

Looming Environmental Protection Agency rules on mercury, particulates, and other emissions from coal-fired power plants could help reduce electricity generated from coal from about 47 percent now to about 22 percent by 2030, the report said.

That’s because scrubbers and other technologies that would have to be added to coal-fired power plants could push up the cost of power from that energy source.

A Bernstein Research note earlier this year also concluded that the EPA rules on air toxics would lead old coal plants into early retirements.

“The economics of this are compelling,” said Fulton. “This really is just pure economics, the industry will want to do this because it is cheaper.” The report assumed natural gas prices would average about $6 per mmBtu, about $2 higher than current prices.

Existing U.S. natural gas plants also have extra capacity. Two-thirds of the extra natural gas generation will come from existing plants near existing power lines, the report said.

Not everyone is happy about the gas boom. Environmentalists have complained that fracking, in which companies blast a mix of water, sand and chemicals underground to break open fissures in the shale rock, pollutes water supplies.

The report downplayed the risks and said with best practices, like recycling water used in the process, the environmental issues can be managed.

Originally Posted at: Reuters.com