It's now been more than two months since Transocean's
For that reason, I paid attention when HBO recently aired GasLand, a film by rookie Pennsylvania documentarian Josh Fox. The flick, which is still showing on the network, aims to demonstrate the danger that lurks in drilling for natural gas in shale formations.
As you know, shale gas is a relatively new phenomenon, found in a number of locations including the huge Marcellus Shale, which lies beneath several Northeastern states. Shale gas has radically altered our notion about the amount of the hydrocarbon available to us. It's extracted by companies like Chesapeake
The fracturing -- or fracking, as it's commonly called -- involves blasting the rock with millions of gallons of water containing sand and chemicals. Once the rock is shattered, the gas is free to migrate. Therein lies the problem. Critics maintain that the water table can be poisoned in the process. Indeed, a House committee recently reported that BJ Services -- now part of Baker Hughes
Fox's film, which captured a prize at the Sundance Film Festival, shows purported victims of production by Cabot Oil & Gas
I'm a proponent of the notion that natural gas has a tremendous future in our country and worldwide, not to mention in your portfolio, so I wore my "skeptical hat" while watching GasLand. The film did a good job highlighting potential issues with the extraction process. However, my sentiments about shale gas's prominent future in our energy mix remain unchanged.
I'd quickly point to Rice University's Amy Myers Jaffe, who published a superb article in a May Wall Street Journal entitled "Shale Gas Will Rock the World." As she noted, however: "When it comes to environmental risks, critics do have a point: ...If a well casing fails, they argue, drilling fluids can seep into aquifers." But she also says, "They're overplaying the danger of such a failure."
I agree with her. I'm not going to pretend that there aren't problems with the process, and I recognize that energy companies have a responsibility not to cut corners on safety for profit. Hopefully the spill in the Gulf has reinforced drillers' commitments to responsible exploration and production. It would be a shame if the shale industry got derailed by some poor-quality operators.