Tuesday, 14 September 2010

Wall Street Journal - Drilling focus wides - EPA to look at impact of heavy water use to extract gas- Points to BioLargo Technology Oportunity


SEPTEMBER 14, 2010

Drilling Focus Widens
EPA to Look at Impact of Heavy Water Use
to Extract Gas


BINGHAMTON, N.Y.—Environmental Protection Agency officials said Monday that they plan to widen their investigation into a natural-gas drilling technique that the energy industry says is critical to tapping huge new supplies of natural gas.

Mark Ovaska

A protest in Binghamton, N.Y., against hydraulic fracturing, ahead of an EPA hearing on the water-intensive natural-gas drilling technique.

They spoke at a public hearing here that attracted hundreds of people on the controversy over whether the technique—called hydraulic fracturing, or "fracking"—poses a risk to drinking water.

The American Petroleum Institute, an energy-industry trade group, says that, with the help of fracturing, the Marcellus Shale formation, which extends from Ohio and West Virginia into southern New York, could produce as much as 18 billion cubic feet of natural gas a day and support as many as 280,000 jobs. The process involves pumping large amounts of water laden with sand and chemicals deep underground to release natural gas trapped inside rock.

EPA officials said at the hearing that they intend to look beyond whether the chemicals used in fracturing pose a threat to water quality and evaluate the impact of the heavy volume of water the process requires. They said they also want to study the way gas wells are constructed and the risks that wells could leak gas or chemicals into underground water.

Robert Puls, the EPA's technical lead on the hydraulic-fracturing study, said that with companies drilling as many as 16 wells from a single well pad, "that's 80 million gallons of water. Where is that water coming from? Is it competing with other uses, in particular drinking water?"

Congress has ordered the EPA to study the impact of fracturing, but the industry has pressed the agency to keep its focus on whether the process puts drinking water at risk. The industry says natural-gas wells drilled into rock thousands of feet below the surface pose no threat to public health, and that there have been no cases of water contamination linked directly to fracturing. Regulators in some states have reported cases of drinking-water supplies contaminated by gas wells, but it isn't clear fracturing played a part.

Environmental groups, meanwhile, are pushing for a broader study that also looks at whether hydraulic fracturing uses too much water, and whether it could damage poorly constructed wells, causing contamination that way. EPA officials' comments Monday suggested they are moving in that direction.

In a statement Monday, the API sought to play down the water demands of gas drilling. If all the wells planned for New York state are drilled, they could use as much as 28 million gallons a day, the group said. By comparison, it said, golf courses in the state use more than double the water–or a seasonal average of 58 million gallons a day.

Monday's hearing highlighted the divisions the drilling controversy has created in rural communities in southern New York and northeastern Pennsylvania that sit atop Marcellus Shale fields. Many landowners and small farmers say gas drilling would be an economic lifeline. Opponents say it could imperil the watershed that supplies drinking water for millions of people along the East Coast.

"There's a big difference between a 100,000-gallon hydrofracturing and a three-million to five-million gallon hydrofrack," said Neil Woodworth, executive director of the Adirondack Mountain Club. He warned that the Northeast probably lacks the capacity to clean up the chemical-laden hydrofracturing fluids.

"Water in New York State is the most precious resource we have and we can't afford to contaminate it," he said.

But the industry's promise of jobs—and big payments for gas leases—appeal to many people in southern New York, where jobs are in short supply. "Rich people do not want gas drilling or any economic development in their backyard," said Douglas Lee, a resident who spoke at the hearing. "They have no concern about how our people make a living. Our communities are poor. We have a high unemployment. Our young people are forced to move away to find work."

—Ben Casselman contributed to this article.
Write to Siobhan Hughes at siobhan.hughes@dowjones.com

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