Sunday, 13 March 2011

Wall Street Journal Reports - Pressure Rises on Shale Gas- Points to BioLargo Opportunity

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Concerned about environmental damage, a pair of Canadian provinces have stepped up scrutiny of two unconventional means of extracting fossil fuels from the ground.

Quebec halted shale-gas extraction, while Alberta ordered tests on the environmental effects of the country's vast and growing production from its oil-sands deposits.

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Quebec halted shale-gas extraction pending study of its environmental effects. Above, provincial residents in September said no to shale gas.

The two sources of fuel have become increasingly important to the U.S., especially with crude-oil prices rising amid turmoil in the Mideast. Crude oil closed at US$104.38 a barrel, up 64 cents, Wednesday on the New York Mercantile Exchange.

Oil-sands production is expected to contribute an average of 68 billion Canadian dollars (US$70 billion) a year to the country's economy over the next quarter-century, according to the Canadian Energy Research Institute, a nonprofit research group. That would be about 5% of the country's current gross domestic product. The country's entire industry, including oil and natural gas, contributes about 6% of GDP, according to the government.

Quebec's government late Tuesday issued its first environmental assessment of shale-gas development there. The government didn't cite specific findings but concluded more studies were needed and halted further exploration in the province, except for drilling that might help the assessment. It was unclear how long such a study might take, but industry analysts said it could be at least a year.

Shale-gas deposits are pockets of natural gas trapped in pores of sedimentary rock called shale. To get at the gas, drillers use a process known as hydraulic fracturing—or fracking—in which water, sand and chemicals are injected into the ground to force gas out. Some of the mixture is pumped back out and discarded, usually in deep wells; used in other fracturing jobs; or treated before it is reintroduced to water sources.

Shale gas has been a boon for U.S. consumers, helping to drive down prices for natural gas, which is mostly used for heating and generating electricity. But regulators recently have raised concerns over possible gas contamination of water sources and the cleanliness of treated drilling wastewater.

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Pennsylvania has become a center of the shale-gas boom in the U.S. The Environmental Protection Agency this month asked Pennsylvania regulators to step up testing of treated drilling wastewater. The state has said the treated water met or exceeded federal standards. The EPA is studying the environmental impact of fracturing more generally.

John Dunn, a Houston-based energy analyst for consulting firm Wood Mackenzie said the immature state of the shale-gas industry in Quebec, which hasn't yet moved from shale-gas exploration to production, makes the government's move insignificant in terms of broader supply and demand. But it "could potentially add weight to the bigger-picture" concerns over fracturing in the U.S., he said.

The energy industry defends the process. Mike Dawson, president of the Canadian Society for Unconventional Gas, said the public overestimates the dangers of fracturing and that the procedure has been used safely for decades on hundreds of thousands of wells. "If the well is constructed properly, then you probably won't have any issues with the fracturing process," said Mr. Dawson, whose group represents shale-gas producers.

Shale-gas exploration has grown rapidly in Canada, as well as south of the border, with energy producers drawn to Quebec's deposits clustered around the St. Lawrence River and Gulf of St. Lawrence.

The move represents a setback for some of the small players that have staked out the region. Shares in Questerre Energy Corp., a small producer based in Calgary, Alberta, fell 25% Wednesday on the Toronto Stock Exchange. The company said the halt wouldn't slow its development because Questerre plans to continue drilling and fracturing as part of the Quebec government's assessment.


Meanwhile in Alberta, a scientific panel commissioned by the government there said Wednesday that previously published research showing water pollution from the oil-sands industry is inconclusive and that more study is needed.

Canada's oil sands are essentially thick mixtures of sand and thick, sulfurous oil. Separating out the oil and thinning it down for export by pipeline is costly and energy intensive. But the size of Canada's reserves and the high price of oil in recent years have triggered a development boom. Canada exports more oil to the U.S. than any other country—about 1.9 million barrels of oil a day. More than half of that oil—used in a variety of products, including fuel and plastics—comes from oil sands.

Canada's oil sands have been a major source of revenue for Alberta and the country as a whole, and provincial and federal officials have said they will work with the industry to address any environmental issues that arise.

The Alberta panel was created last fall after research by a prominent water scientist suggested that air pollution from the oil-sands industry was settling onto the ground and draining into the nearby Athabasca River. The panel said those claims were inconclusive but said the research had shown evidence of increasing concentrations of mercury in animals living near the river and of arsenic in the sediments in Lake Athabasca, which needs further study.

Alberta Environment Minister Rob Rennersaid the panel's work would be incorporated a government review of the province's monitoring system, which is expected to be complete in June. He defended oil-sands production, saying its impact on water and air quality is "minimal" and "far below the limits as far as recognized standards for air and water."

Write to Chip Cummins at and Edward Welsch at

Friday, 11 March 2011

Bloomberg- Businessweek- Fracking, The Great Shale Gas Rush- Points to BioLargo Technology Opportunity

Natural gas derived from the process is lifting the economy, but it's environmentally risky

The Pennsylvania homes of Karl Wasner and Arline LaTourette both sit atop the Marcellus Shale, a geologic formation that stretches from Tennessee to New York and holds vast deposits of natural gas. They also sit on opposite sides of a national debate over hydraulic fracturing, or fracking. That's the process that makes it economical for energy companies to tunnel 5,000 feet below ground and remove the gas—but also poses environmental risks.

Wasner settled 14 years ago in Milanville, in the state's northeast corner, and will leave if drilling companies set up derricks nearby. He already moved away for six weeks last year while an exploratory well was drilled nearby. The noise, muddy water pouring from his taps, and chemicals that turned up in a neighbor's well drove him off, he says. "I moved to a beautiful rural residential area," says Wasner, "not an industrial park."

LaTourette, whose roots in the area go back five generations, is banking on the drilling. Her family has leased almost 700 acres of farmland to Hess (HES) and other companies to tap into the Marcellus Shale. She won't say what she's getting, but signing bonuses can range from $2,000 to $5,000 an acre, and royalty payments are about 20 percent of the value of the gas produced.

President Barack Obama enthusiastically backs gas drilling, and these days 90 percent of it is done by fracking, which involves forcing below ground chemically treated water under high pressure to smash through layers of rock, thus freeing the gas to flow upward. Along with wind, solar, and nuclear power, natural gas is crucial to Obama's goal of producing 80 percent of electricity from clean energy sources by 2035. But the drilling is taking place with minimal oversight from the U.S. Environmental Protection Agency. State and regional authorities are trying to write their own rules—and having trouble keeping up.

Now, reports of contaminated water and alleged disposal of carcinogens in rivers have caught state and federal regulators, and even environmental watchdogs, off guard. Sometimes the fracking mix includes diesel fuel. Between 2005 and 2009, drillers injected 32 million gallons of fluids containing diesel into wells in 19 states, an investigation by Representative Henry A. Waxman (D-Calif.) concludes. Just as it recovers its footing from the 2010 Gulf of Mexico oil spill, the Administration faces a new threat, again involving a risky drilling technology and charges of lax regulation. Obama is "evaluating the need for new safeguards for drilling," says White House spokesman Clark W. Stevens. "It's likely that the science is going to say we need to regulate fracking," says Tyson Slocum, director of the energy program for Public Citizen, a liberal advocacy group. "But Obama's political team is going to say don't regulate, and I think the political team will win."

The Marcellus Shale may contain 490 trillion cubic feet of gas—enough to heat U.S. homes and power electric plants for two decades, says Terry Engelder, professor of geosciences at Pennsylvania State University. That makes it the world's second-largest gas field behind South Pars, shared by Iran and Qatar. The shale gas rush is creating thousands of jobs and reviving the economy in states such as Wyoming, Texas, and Louisiana. In Pennsylvania, where 2,516 wells have been drilled in the last three years, $389 million in tax revenue and 44,000 jobs came from gas drilling in 2009, according to a Penn State report. Perhaps best of all, natural gas emits half the carbon emissions of oil.

While there have been no documented cases of fracking fluids flowing underground into drinking water, there have been spills above ground. Fracking produces millions of gallons of wastewater; some of it containing benzene has spilled from holding tanks. The wastewater can overwhelm treatment plants not equipped to handle high levels of contaminants. A Feb. 26 New York Timesarticle, using documents from the EPA and state regulators, described how radioactive wastewater is being discharged into river basins. Sierra Club Deputy Executive Director Bruce Hamilton says Obama "has been sold a bill of goods." But even the Sierra Club has struggled with fracking. Last year it overruled New York and Pennsylvania chapters calling for a national fracking ban; now it's reconsidering that decision, Hamilton says.

The Delaware River Basin Commission, which manages the watershed that supplies drinking water to 15 million people in New York, Pennsylvania, New Jersey, and Delaware, has put gas development on hold while it drafts rules. Wasner and LaTourette were among scores of people to comment at a Feb. 22 hearing in Honesdale, Pa., on a commission proposal to regulate the drilling. New York also has fracking on hold while it develops a drilling playbook. The Marcellus Shale runs beneath the watershed that supplies just over 1 billion gallons of water a day to New York City, the U.S.'s largest unfiltered water system.

The White House has sent mixed signals. "It's not necessarily federal regulation that will be needed," EPA Administrator Lisa P. Jackson told a Feb. 3 Senate hearing, noting that many communities and states already monitor parts of the process. Energy Secretary Steven Chu seems to differ. In a 2010 speech, he said fracking can be "polluting" and that rules were inevitable. "We continue to believe that state regulatory agencies have the appropriate expertise" to oversee gas production, says Dan Whitten, a spokesman for America's Natural Gas Alliance.

Even if the EPA stepped in, its authority would be limited. A clause in a 2005 energy law—dubbed the "Halliburton (HAL) loophole" for the company that helped pioneer fracking and is a supplier of fracking fluids—exempts fracking from parts of the Safe Drinking Water Act. Representative Maurice Hinchey (D-N.Y.) says Dick Cheney, once head of Halliburton, pushed for the exemption when he was Vice-President. Hinchey's evidence is circumstantial: Fracking was endorsed in Cheney's 2001 energy task force report, which led to the 2005 law and, according to Waxman, did not reflect the EPA's initial concerns about water pollution. Cheney declined to comment. Halliburton referred a request for comment to its website, which doesn't discuss fracking's risks.

So far, the EPA has begun a study of fracking's effect on drinking water. In February the agency said final results will come in 2014, two years after its initial target—and the 2012 elections. Its emphasis is "politics first and regulation second," says Kevin Book, managing director at ClearView Energy Partners, a Washington policy group. "It's impossible to miss the jobs power of fracking in the Marcellus."

The bottom line: The Obama Administration may need to rethink its hands-off policy on fracking, despite the national job and energy benefits.

Efstathiou is a reporter for Bloomberg News. Chipman is a reporter for Bloomberg News.

Saturday, 5 March 2011

EPA Chief Grilled on Safety of Hydraulic Facturing - Points to BioLargo Opportunity

  • The Wall Street Journal

March 3, 2011

By Ryan Tracy

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WASHINGTON—The U.S. Environmental Protection Agency, as part of its review of a natural-gas drilling procedure, is looking at the radioactivity of wastewater used in the process.

Environmental Protection Agency Administrator Lisa Jackson, speaking at a congressional hearing Thursday, defended her agency's efforts to study the safety of natural-gas drilling and left the door open to further regulatory action on the issue. The process, known as hydraulic fracturing, is used to extract hard-to-reach natural-gas pockets in the ground.

Ms. Jackson suggested that if public water-treatment plants couldn't adequately treat wastewater from hydraulic fracturing to safe levels—a central concern of critics of extraction method—EPA could impose standards on drillers who send the waste to the plants.

"EPA can at any time set additional standards for what we call pretreatment, for waste that may go to a treatment plant," Ms. Jackson said.

Hydraulic fracturing involves injecting a mixture of water, sand, and chemicals underground at high pressures to release natural gas from shale deposits. In recent years, new technology has unlocked shale gas that was not previously accessible, leading to a boom of new wells across the country.

Critics say environmental regulators and the industry have failed to ensure the practice is safe, particularly with respect to fracturing fluid contaminating drinking water.

"What we see here are deliberate attempts to shield from the public additional concerns expressed by EPA scientists," said Rep. Maurice Hinchey (D., N.Y.) said at a congressional hearing on EPA's budget.

Ms. Jackson pushed back. "We have used a transparent, consensus-based process to scope the study," she told lawmakers at the hearing. "We don't want to stifle science."

She said EPA intends to study the issue and take action to enforce the law if it has evidence of violations and if states, which she called the "primary" enforcers, do not act.

Mr. Hinchey pressed Ms. Jackson on whether the national study should be the EPA's only effort to study the risks of hydraulic fracturing.

"I will not say the national study should be the only study," Ms. Jackson said. But she said the process to develop the current study had been "transparent" and "rigorous."

"I would want my science adviser to understand what additional work is happening so that we're not being redundant," Ms. Jackson said of other studies.

The growing pressure to do more on hydraulic fracturing comes as the EPA faces opposition for a raft of other regulatory initiatives related to industrial pollution, greenhouse gases, coal mining, and other sectors.

Some lawmakers at the hearing Thursday defended natural-gas drillers.

"There's never been a connection proven, in spite of frequent revisiting of the hydraulic-fracturing issue, between the diminution of water quality and modern hydraulic-fracturing techniques," said Rep. Cynthia Lummis (R., Wyo.), echoing the statement of industry supporters.

Ms. Jackson said many of the "issues" identified by Mr. Hinchey stemmed from the agency's regional office in Philadelphia and that she would be travelling there Friday to discuss them.

"There is no 'look the other way' stand-down" on concerns about natural-gas drilling, she said. "We intend to do our jobs."

Write to Ryan Tracy at

Thursday, 3 March 2011

New York Times "Green" Blog - Highlights the Pressure for Answers on Fracking- Points to BioLargo Opportunity

MARCH 2, 2011, 8:27 PM

Pressure Grows for Answers on Fracking

Congressional Democrats are demanding answers from the Environmental Protection Agency about the safety of hydraulic fracturing, a form of natural gas drilling also known as fracking, after revelations that wastewater from such drilling, which contains radioactive material, is regularly dumped into rivers and streams without proper treatment.

The dumping of the contaminated water was detailed in an investigative series on natural gas drilling by Ian Urbina of The New York Times that began on Sunday.

“The natural gas industry has repeatedly claimed that fracking can be done safely,” Representative Edward J. Markey of Massachusetts, the ranking member of the House Natural Resources Committee, said in a statement. “We now know we need a full investigation into exactly how fracking is done and what it does to our drinking water and our environment.”

“Americans should not have to consume radioactive materials from their drinking water as a byproduct of natural gas production,” he said.

Mr. Markey requested internal documents from the E.P.A. regarding studies of wastewater treatment plants and their ability to process contaminated water from gas wells.

He further demanded that Lisa Jackson, the E.P.A. administrator, explain what steps the agency was taking to test sources of drinking water downstream from treatment plants for signs of contamination.

Joining Mr. Markey’s plea for information from the agency were several House Democrats from New York, who additionally requested hearings on the matter by Republican-led Congressional committees that oversee drilling.

“If federal and state regulations have not kept pace with this growing industry, we need to know before it creates a public health concern,” read a letter to committee leaders signed by Representatives Carolyn Maloney, Maurice Hinchey and Jerrold Nadler.

Meanwhile, environmental regulators in Pennsylvania, where natural gas production has grown rapidly in recent years, are facing their own calls for increased scrutiny of radioactive material in drilling wastewater.

“No threat to Pennsylvania drinking water should be taken lightly; especially one involving radioactive material,” Senator Bob Casey, Democrat of Pennsylvania, said in a statement. “Alarming information has been raised that must be fully investigated.”

In a letter to the Pennsylvania Department of Environmental Protection and to the E.P.A., Mr. Casey noted that little testing for radioactivity in drilling waste had been conducted in the last five years, a period when gas drilling activity increased sharply.

“These waters should be tested as soon as possible, continuing on a regular basis with full disclosure to the public,” he wrote.

Responding to concerns over possible contamination, the Pittsburgh Water and Sewer Authority said it would begin testing for radiation at its public drinking water intakes for the first time as a precautionary measure, according to the Pittsburgh Post-Gazette.