The S.E.C. has asked oil and gas companies for details about a controversial natural gas drilling method. Growing concerns over fracking and the role of natural gas in the U.S. economy.

Guests

  • Kevin Book managing director of research, ClearView Energy Partners.
  • Ian Urbina investigative reporter, The New York Times.
  • Joseph Romm senior fellow, the Center for American Progess; he runs the blog ClimateProgress.org; former acting assistant secretary of Energy under President Clinton.
  • Deborah Solomon reporter, The Wall Street Journal.

Transcript

  • 10:06:55

    MS. DIANE REHMThanks for joining us. I'm Diane Rehm. Natural gas companies are under growing pressure to disclose more information about fracking. The gas extraction method has become controversial for a number of reasons. We'll talk about the SEC's new interest in the issue and what increased scrutiny of the industry could mean.

  • 10:07:24

    MS. DIANE REHMJoining me here in the studio, Joseph Romm of the Center American Progress, Deborah Solomon of The Wall Street Journal, Kevin Book of ClearView Energy Partners and Ian Urbina of The New York Times. Do join us. Call us on 800-433-8850. Send us your email to drshow@wamu.org. Feel free to join us on Facebook or Twitter.

  • 10:08:05

    MS. DIANE REHMAnd, full disclosure here, as I've said many times on this program, our family owns property in Marcellus Shale in Pennsylvania. And, of course, we are following this story very carefully. Ian, if I could start with you, for those who might be new to the issue, explain this process of hydraulic fracturing.

  • 10:08:40

    MR. IAN URBINASo hydraulic fracturing, often known as fracking, is a drilling technique, a stimulation technique, a way to get the gas flowing. It's been around for a long time, but it's really advanced in the past 10 years. It involves injecting very large amounts of water deep underground at very high pressure. The water tends to be mixed with sand and chemicals.

  • 10:09:11

    MR. IAN URBINAAnd the point of it is to break up shale formations -- or if it's used on shale -- so as to release gas that's trapped there. And after the fracturing, after the fracking, the gas then flows upwards and is obtained that way.

  • 10:09:33

    REHMAnd is there any estimate as to how much gas we're talking about that could be, for example, in that Marcellus Shale or in Arkansas or elsewhere?

  • 10:09:48

    URBINAYeah, I mean, there are a lot of estimates. In the Marcellus Shale, there's a recent estimate that just came out from federal geologists, the U.S. Geological Survey, which puts the number at 84 trillion cubic feet. It's a lot of gas. It's a real boom for the U.S. It's domestic. It's accessible now through the technology. And it's a chance for us to wean ourselves off of foreign dependence for energy.

  • 10:10:19

    URBINAThere are a lot of questions, however, about how the estimates are calculated. There are two types of estimates. There is how much gas is under the ground. That's usually called a resource estimate. And there is how much gas can affordably and profitably be pulled from the ground, and that's a reserve estimate.

  • 10:10:39

    URBINAAnd with every week, the discussion about these estimates becomes more refined and more careful, and is very important for the energy future of the country.

  • 10:10:52

    REHMIan Urbina of The New York Times. Turning to you, Deborah Solomon, what kind of information is the Securities and Exchange Commission looking for, seeking, asking for?

  • 10:11:09

    MS. DEBORAH SOLOMONWell, they're looking for a few types of information. What I had written about last week was that they are looking for information about the actual fracking process and the impact that it may have on the environment, which is sort of interesting for a disclosure agency that's more known for protecting investors and going after, you know, insider trading and white-collar crime.

  • 10:11:26

    REHMSo how come?

  • 10:11:28

    SOLOMONWell, it's interesting. You know, the SEC is not blind to the interests here. They hear these folks in Congress that are very interested in what's going on. You know, they represent -- they -- you know, they're from Pennsylvania, Ohio, New York, places where this is a big issue. And there's been a lot of concern about fracking, as Ian mentioned.

  • 10:11:46

    SOLOMONBut also, you know, they're worried -- they have in mind two recent, natural, you know, two recent disasters involving energy companies. One was the BP oil spill on the Gulf. And one was not here, but was in Japan, the, you know, Fukushima Daiichi nuclear plant. Those were big problems for the companies that are still continuing.

  • 10:12:08

    SOLOMONAnd for the shareholders in those companies, you know, you could question whether the risks were adequately known or not. But the SEC has that in mind. And what they want to get at is, what are the liabilities of these companies that are engaging in this process? But their questions also go a little bit beyond that. And there are some concerns from some folks I've talked to about kind of environmental activism here.

  • 10:12:32

    SOLOMONI mean, they ask a lot of questions about water usage and what are they doing to minimize water usage, what are they doing to minimize environmental impact? So there are a lot of questions about, you know, what exactly is the SEC trying to learn.

  • 10:12:42

    REHMAnd they're also asking about disclosure of specific chemicals.

  • 10:12:49

    SOLOMONRight, I mean, and I should mention this is the disclosure division, the corporation finance division of the SEC, which is separate from the enforcement division. They are asking about, what chemicals are you injecting into the ground, which is interesting because, right now, there is no, you know, federal requirement that you disclose this information.

  • 10:13:07

    REHMAnd what difference could it make to the SEC about what is being injected?

  • 10:13:15

    SOLOMONWell, that's a good question. I mean, some are wondering, why does the SEC want to know? But the answer I've gotten is that if the companies are using chemicals that are potentially toxic, that it could create a risk to the companies if something goes wrong, if a drill is not -- if a well is not drilled properly, if there's a spill involving a truck that's carrying one of these chemicals.

  • 10:13:37

    SOLOMONThere could be problems for the companies because if -- you know, if they spill large quantities of, you know, a known carcinogen or something that's toxic, I mean -- and it's a unclear exactly, you know, which companies are using what chemicals. But they want to know if there is -- if there are toxic chemicals. Perhaps you need to disclose that to your investors.

  • 10:13:57

    REHMDeborah Solomon of The Wall Street Journal. Turning to you, Kevin Book, how significant do you see the SEC's involvement in this whole process?

  • 10:14:10

    MR. KEVIN BOOKWell, Diane, it has a couple of facets that are interesting. First, the Congress did not ever actually pass a disclosure requirement. It was something that had been discussed during the last Congress, and then it faltered and failed, along with a lot of other energy legislation. And it seems, at least at the surface, that the executive branch is exploring every means possible to try to do this de facto.

  • 10:14:30

    MR. KEVIN BOOKOne way, through EPA disclosure requests, as associated with the Shell study that's underway, the Bureau of Land Management in the Interior Department is likely to request similar information for fracking on federal lands. And the SEC is yet another way to get at the information, all of which, if I were a lawmaker who like fracking, would make me want to get this in law as soon as possible and try to slow down all the red tape.

  • 10:14:53

    MR. KEVIN BOOKBut there is effectively a couple of things that are, I think, also going on here. I mean, at some level, the question of what technology you use and whether or not it's safe is vitally important to investors in securities. And unappreciated risks or underappreciated risks do have importance in all forms of financial transactions. You need to get them out there.

  • 10:15:15

    MR. KEVIN BOOKThey need to be clear. For the industry, it's an opportunity in some cases to be able to show that there aren't as many risks as some might fear.

  • 10:15:24

    REHMDo you believe at this point that there are no risks?

  • 10:15:30

    BOOKNo. There's no such thing as an energy technology with no risks. The trade-offs, though, do seem to -- generally, if you look at every innovation, whether it's nuclear power or ethanol, for that matter, that's brought us more energy, which our industrial economy feeds on, it always turns out to be less good than the optimists think it will be, but less bad than the pessimists fear. And almost all of them tend up to be north of neutral, but south of awesome.

  • 10:15:54

    BOOKSo if you think about where we are, the risks are exceedingly low. The number of reported incidents have almost all been above ground. And above-ground incidents can be handled through water management practices, through water treatment standards and through proper enforcement of regulations by overseeing the companies doing the work.

  • 10:16:12

    REHMAnd how does the industry feel about disclosure of chemicals going into -- combined with the water that's being drilled down?

  • 10:16:23

    BOOKWell, it depends on who you ask, Diane. A lot of the operators, the companies that have leases on the land, are relatively indifferent. The way they see it, the disclosure merely takes the burden of explaining what they're doing away from them and allows them to get on with what they're trying to do. The companies, though, that are responsible for doing the fracking, the services companies that do a lot of the work for the operators, some have proprietary technologies and formulations they fear could be reverse-engineered.

  • 10:16:48

    BOOKOthers worry that introducing chemicals, simply by disclosing them publicly, opens them up to liability even without justification. They won't say this necessarily, publicly, but it's a reasonable assumption. In a litigious context, knowing what's out there and being able to sue for it first and find out whether it's true later is a risk some of them don't want to face.

  • 10:17:07

    REHMKevin Book of ClearView Energy Partners. And, Joe Romm, why do you believe it's important for disclosure?

  • 10:17:20

    MR. JOSEPH ROMMWell, I actually think Kevin's, you know, analogy to corn ethanol is an important one. I think if you asked most people who are concerned about the environment today, was corn ethanol worth it? They would say no, that the benefits were limited and the costs were high. And France itself has banned fracking. So it's obviously of great concern to people around the world.

  • 10:17:40

    MR. JOSEPH ROMMI think the bottom line is, you know, people need to remember we need to get off of fossil fuels. That is job one. The International Energy Agency just did a major scenario in which natural gas takes over. And they found the planet would still warm 6 degrees Fahrenheit, and that, for instance, would turn the Southwest into a drought. I think there are a lot of costs that – of fracking that need to be factored in, including this tremendous amount of water use.

  • 10:18:06

    MR. JOSEPH ROMMThe Texas Water Development Board estimates the total amount of water used for fracking statewide in 2010 was 13.5 billion gallons. Here is the driest state in the country suffering a brutal, brutal drought, and they are tapping aquifers to frac natural gas.

  • 10:18:27

    REHMJoseph Romm, he is senior fellow at the Center for American Progress. We'll take a short break. When we come back, we'll talk further, take your calls, your email. I look forward to hearing from you.

  • 10:20:03

    REHMAnd welcome back. We're talking about hydraulic fracturing -- or fracking, as it's known -- spots where it's going on all over the country, most particularly, rich area is seen in the Marcellus Shale, which runs from New York State, all the way down to Virginia and perhaps even beyond. And, again, full disclosure, our family does own property in that Pennsylvania part of the shale.

  • 10:20:42

    REHMYou, Kevin Book, wanted to respond to Joseph Romm's concern about the amount of water being used in fracking. He's talking about use of water coming from aquifers in, particularly, dry states.

  • 10:21:06

    BOOKYou know, Diane, it's important to manage water properly. And if you look at how Pennsylvania -- for example, the Susquehanna River Basin Commission has very carefully identified the areas and the stream levels that have to be preserved. I think, you know, Joe mentioned ethanol as a bad thing. And I -- there's a lot of mixed reviews on it.

  • 10:21:22

    BOOKThe important thing to remember is that, in 2008, it preserved our way of life when the world was fundamentally scarce gasoline. Fracking offers the same kind of mixed bag. And we have to be realistic about the risks and manage them properly. This natural gas resource is tremendous.

  • 10:21:35

    BOOKThe potential for freedom, economic growth and all the things that Ian mentioned are all available to us, provided that we work properly with the resources that are otherwise affected.

  • 10:21:45

    REHMIsn't the problem, however, Ian Urbina, that all of this began without any management from the federal government?

  • 10:21:58

    URBINAI think I would nuance that a little bit and just say that I do think the fracking boom, the natural gas drilling boom accelerated beyond the regulatory capacity, in some places more than others. There has always been regulation on the state level that varies state to state, and in some places that regulation works very well. In other places, it's weak, in -- especially in certain areas that we've talked about.

  • 10:22:30

    URBINAPennsylvania had some real lapses, for example. With regard to the federal oversight, this is -- we are at a turning point right now. And I think that the federal government is playing a bit of catch up in trying to figure out how much they can and want to get involved in the overall regulation of it. And part of that is going to be decided, I think, by this national study that the EPA is doing.

  • 10:22:58

    URBINAAnd there are, even within the federal government, very different leanings about that very matter between different agencies. So I think you're right. I think that the federal oversight of it is something that's still being battled right now.

  • 10:23:15

    REHMAnd, Deborah Solomon, exactly what is the EPA examining?

  • 10:23:21

    SOLOMONWell, they are looking at whether fracking contaminates the water, the impact on water -- I shouldn't say contaminate 'cause they're looking at, also, water usage, everything related to water as far as hydraulic fracturing goes. And you just saw the Department of Energy just had its own subcommittee advisory panel that reported back, and it was a bipartisan group headed by John Deutch, a former official.

  • 10:23:44

    SOLOMONAnd, basically, what they said is that, you know, you can't deny that there are risks associated with this technology. However, there are also benefits. And they clearly champion, you know, natural gas as a way to help the U.S. curb its, you know, use of foreign oil. But -- and called for more, you know, more oversight.

  • 10:24:04

    SOLOMONThey didn't specify whether it should be state or federal, but did say that there needed to be more study done on water, in particular whether methane is leaking into water, but also talked about air emissions and that there needs to be new rules on air emissions, and just generally said that there should be disclosure of these chemicals, that companies should be required to disclose what they are putting into the fluid.

  • 10:24:27

    REHMBut, now, what about the property rights issue? As far as the companies themselves are concerned, should they be allowed to keep the chemical nature of what goes into this hydraulic fracturing process secret? Ian.

  • 10:24:51

    URBINAYou know, I personally think the disclosure issue is not one of the most important issues, and I feel like it's become a issue that the environmentalists have seized on. And it was important at the outset because there was very little disclosure going on, and it made it difficult for regulators to track impact because they didn't know what they were tracking specifically.

  • 10:25:16

    URBINAAnd -- but I think that, thanks perhaps to the push that was started, you know, two years ago, there's more and more disclosure. And so I think that's going to become less and less the most important issue in terms of regulation. I do think air emissions is going to be a big issue going forward. I also do think that things beyond the environmental consequences of this drilling boom are going to become more important.

  • 10:25:45

    REHMSuch as?

  • 10:25:46

    URBINASuch as, you know, how these companies disclose what they do and their cost structure and their predictions about how wells perform over decades. And I think that's going to be a big issue. I think the legal fights over zoning and land use, that, on a local level, is going to be a very big issue. And you can expect litigation on that.

  • 10:26:14

    URBINAI think the insurance implications, companies that are trying to assess risks, but they have a limited ability to do so because they're not sure who's doing what and exactly how, I think the insurance industry is going to start wanting more information on that. And these are all non-environmental or not strictly environmental. And so I think these fronts are probably going to be areas that we're going to see a lot more discussion about in the months forward.

  • 10:26:42

    REHMKevin Book, don't individual families sign leases to the gas companies, allowing them to come into or onto the property? And to what extent does that sign away not only the rights for the gas companies to begin the drilling or the fracturing, but also use of the land?

  • 10:27:16

    BOOKDiane, it depends on the contracts that are signed. A lot of the families that you're talking about, depending on when they signed, may have taken substantial signing bonuses and received rents for months, or even years, before drilling began. And many of them are entitled to fairly significant royalties. Not every contractor is fair, and not everyone was fairly represented in the contracting process.

  • 10:27:36

    BOOKAnd that's part of the nature of any land-grab, whether metaphorical or real. The issue, though, as you go forward, is that this is a minimally invasive practice if you look at how drilling has been conducted in the past. A single drill pad can be the source of as many as 10 horizontal wells, and that means that you have relatively little surface hole interference.

  • 10:27:56

    BOOKIf you have proper water management practices, you don't necessarily have to worry about big trucks trundling in the middle of the night and keeping you up. I mean, there's a lot of external disturbances that can be avoided. And part of the way that you can do it is -- again, if you only have to drill one major hole and build one big rig and you can start all the other wells from there, it can be both profitable and relatively quiet for a lot of these landowners.

  • 10:28:18

    REHMHere's an email from Sarah. She's in Port Matilda, Pa. She says, "I live in Central Pennsylvania, where our quality of life is rapidly declining due to the massive influx of the natural gas industry, its truck traffic and industrial activity. Yesterday, our local newspaper, The Centre Daily Times, reported this, and here's what it reported.

  • 10:28:52

    REHM"'The natural gas industry in Pennsylvania accrued more than 2,000 contamination-related violations between 2008 and 2010.' This industry is so new regulators are barely able to keep pace. What is the rush when safe drinking water cannot easily be replaced?" Joe Romm.

  • 10:29:22

    ROMMYou know, I think the concerns are very legitimate. There was a study in May from Duke that found systematic evidence for methane contamination of drinking water associated with shale gas extraction. The industry response was, well, it's based on limited data, and there was no baselines. Well, that's because the industry doesn't reveal the data that it has on methane leakage.

  • 10:29:41

    ROMMAnd, you know, I think, you know, this notion that we can trust the industry and that it's going to just adopt best practices by itself has been proven false in other areas, like the BP oil spill. I really think that, for instance, it is very important to get baseline of what is the water quality in a region before the industry goes in, so that when you then later find high levels of methane, they can't go back and say, well, there were high levels of methane beforehand.

  • 10:30:09

    ROMMYou just didn't know about it. I think this notion that the industry shouldn't disclose is absurd. There were people who we found out were using diesel fuel as part of their fracking fluids, and the Department of Energy even called for a ban on using diesel fuel in fracking. So I think public disclosure is incredibly important. After all, some people are getting rich from these wells.

  • 10:30:32

    ROMMBut the potential contamination goes far beyond some homeowner's individual property to their neighbors who may not be making any money at all and may have signed nothing.

  • 10:30:42

    REHMIan Urbina, how involved is the industry in lobbying to keep any regulations at bay?

  • 10:30:52

    URBINAHmm. That's a good question. I wish I had studied it more. I know they're involved significantly, as is their right and is the norm in D.C., but -- maybe Deborah has looked at this closer. But I haven't tracked, you know, whether their investment in that has significantly increased in the last year. If I had to guess, I would say it has because a lot is on the line right now.

  • 10:31:19

    URBINAThe EPA is poised to pass new restrictions that may drastically affect the power industry and electricity production and may take offline a lot of coal plants. That's an opportunity for the natural gas industry. The -- you know, the EPA's study on the potential risks to drinking water of fracking may also affect the natural gas industry. So I would guess, in the last year, it's been stepped up, but I don't know.

  • 10:31:49

    REHMAnd when is that EPA report due out?

  • 10:31:54

    URBINAPreliminary results are next year, and then there'll be, you know, further results after that.

  • 10:32:00

    REHMDeborah, the lobbying issue.

  • 10:32:03

    SOLOMONI don't have the numbers off the top of my head, but it has increased. And, you know, obviously, there are a lot of folks in Congress that -- on both sides of the issue that are interested in this. And there's huge money at stake here. So, yes, I mean, there is a lot of lobbying going on.

  • 10:32:15

    SOLOMONThere's a lot of public campaigns, ad campaigns you see from, you know, both sides -- the environmental side and from the industry side -- not specifically related to fracturing, I think, but just sort of about, you know, how companies are trying to take care of the air and take care of the water.

  • 10:32:30

    SOLOMONAnd you're seeing a lot of companies, saying, hey, we're voluntarily disclosing chemicals, which they're doing through this frackfocus.org, a website where -- some states are requiring it, but some companies are just voluntarily doing it themselves. And they're trying, you know, saying to Congress, look, we're being good stewards, so we need to -- you know, we need to hold off on federal regulation here.

  • 10:32:49

    SOLOMONWe don't need to be told to do it because we're doing it on our own, which is always one of the ways that industry tries to forestall any kind of rule.

  • 10:32:56

    REHMDeborah Solomon of The Wall Street Journal. You're listening to "The Diane Rehm Show." Let's open the phones, 800-433-8850. Send us your email to drshow.@wamu.org. Let's go first to Elkhart, Ind. Good morning, Randy.

  • 10:33:22

    RANDYGood morning. One of your panelists mentioned diesel fuel. Now, a gallon of diesel fuel will render undrinkable a million gallons or more of water. And these companies have said they were -- their fracking fluid was 98 percent water. That means 2 percent of other things. And if even half of that was diesel fuel, because it was considered to be the main component, then if you're using 100,000 gallons of water, which is a low estimate, you're talking 1,000 gallons of diesel fuel or a billion gallons of water for each well.

  • 10:34:13

    REHMAll right, sir. Thanks for your call. What do we know about how many of these companies used diesel fuel?

  • 10:34:27

    URBINAWell, used, past tense. We know a lot more thanks to a report from Congressman Waxman. Most of the industry says that they are no longer using it, and so it's -- they've been largely weaned from it. But whether that's the case and -- it's still not clear.

  • 10:34:50

    REHMKevin Book.

  • 10:34:52

    BOOKThe statistic that the caller mentioned is -- I think deserves a little clarification. About 99.5 percent of the mixture is sand and water. And what you have in there, in the cases where the companies are complying with their guidance to not use diesel is -- a lot of it is particularly much like soap. It's surfactants and biocides and things that you actually have in the house.

  • 10:35:13

    BOOKIt's a very small proportion of chemicals, in any case, that would fall into some of the more toxic categories. So the notion that you have 1,000 gallons for every well, I think was in the assertion, is extremely high. It's nowhere near that risky.

  • 10:35:25

    REHMJoe Romm.

  • 10:35:27

    ROMMWell, when you see the published list, there are a lot of chemicals in there. And, you know, as you know, we don't study the toxicity of a lot of chemicals combined. You know, we'll usually look at what's one little chemical doing and, well, the toxicity is low. But what happens when you throw in a hundred and mix it and stick it in the water and then people drink it over time? You know, people have no idea.

  • 10:35:52

    ROMMI think, you know, this notion, again, that the industry can be relied on -- I think the diesel fuel is a good example. Until someone started looking at it, they would have kept doing it if people -- if the Congress hadn't studied it and started pointing out what an outrage it was.

  • 10:36:09

    REHMAll right. Let's go to Takoma Park, Md. Good morning, Heather.

  • 10:36:16

    DEL. HEATHER MIZEURGood morning, Diane. Thanks for having me on the show.

  • 10:36:17

    REHMSure.

  • 10:36:18

    MIZEURI'm Delegate Heather Mizeur from the Maryland General Assembly and was the chief sponsor of legislation this last session that proposed taking a pause on doing this kind of drilling in Maryland. We had five permits pending, and we were looking to our neighbors to the north and all around us and seeing their experience. And knowing that second chances are expensive, we didn't want to have the same regrets in Maryland.

  • 10:36:41

    MIZEURAnd so, while we weren't able to push the bill through before our session adjourned, our governor did use the legislation as a roadmap for an executive order that puts a pause on doing any of these drilling in Maryland until we do a comprehensive three-year review of many of the issues that your guests today are highlighting as concerns about this practice for environmental and health safety standards in Maryland.

  • 10:37:04

    REHMNow, does that mean that there will be a three-year pause on fracking in Maryland?

  • 10:37:15

    MIZEURThree years at the latest. We, of course, as a commission -- I'm one of the 14 commissioners -- we could determine in advance of that that we've got the gold standard in place to make sure that we don't have these regrets in Maryland before we move. And so we could decide that sooner than three years, but it might take us as many as three years to get the answers to the many, many questions that remain on how to do this right.

  • 10:37:38

    REHMAll right, Heather. Thank you so much for your call. Short break. Right back.

  • 10:40:03

    REHMAnd welcome back. We'll go back to the phones now, 800-433-8850. Let's go to Sterling, Va. Good morning, Paul.

  • 10:40:17

    PAULHi, Diane. Thanks for taking my call.

  • 10:40:18

    REHMPaul, are you on a speaker phone?

  • 10:40:22

    PAULNo. I'm on my mobile phone.

  • 10:40:24

    REHMOkay.

  • 10:40:26

    PAULI grew up in Pennsylvania. My parents still live there, and -- in Lycoming County. And my father, you know, as I was growing up, took me to this natural landmark, a lookout on top of the mountain near where we lived. And I went there all my life, and I've been taking my son there, who's 7. And this last Fourth of July, I went to take him up to the lookout area, and I was disturbed to find that most of the top of the mountain had been clear-cut.

  • 10:40:52

    PAULYou know, drilling (sounds like) tabs had been set up, and the company said you surf the public right-of-ways on the state land to go to this natural area. And I'm just wondering how these companies can do that without following due process.

  • 10:41:07

    REHMDue process, Kevin Book.

  • 10:41:10

    BOOKIt's not clear to me that I can speak to the situation 'cause I don't know what happened there. But I would say that the companies, generally speaking, working with private land owners, are working with their land. When they're on federal land, they're following federal rules. When using federal roads, they're following the federal rules there, too.

  • 10:41:26

    REHMJoe Romm.

  • 10:41:27

    ROMMWell, I must say I like the Maryland approach of this pause. I don't understand what the rush is, you know. This is really kind of a bubble. It's only going to last 20 or 30 years. And if this is not the future -- the future is we're going to get off of fossil fuels.

  • 10:41:41

    ROMMWe're going to have a renewable energy economy. So it makes no sense to rush into this and to set -- you know, destroy the land and poison the water before we figure out how to do it right.

  • 10:41:51

    REHMKevin.

  • 10:41:51

    BOOKI just argued that the -- if you look at Europe as an example, they use natural gas to back all of their intermittent renewables. The pathway to that renewable future Joe was talking about starts with the fossil energy we have now. And the most prudent form of conservation is to not throw out stuff that's worth something. There's a lot of room to introduce natural gas gradually and also green degeneration and transportation fleets.

  • 10:42:13

    REHMBut why has France banned fracking?

  • 10:42:18

    BOOKEighty percent nuclear power generation. Which would you prefer?

  • 10:42:22

    REHMIs that the answer you would give, Ian, from what you know?

  • 10:42:27

    URBINAI think Kevin is right, that France has embraced nuclear and that's why they're able to make that decision. I don't think that it's fair to set up the dichotomy between -- you know, you go nuclear, or you go natural gas. I think that -- as Joe was saying, I do think that there needs to be a lot more study and oversight of how to proceed effectively.

  • 10:42:52

    URBINAI don't think that the industry will necessarily, on its own accord, do that and embrace these best practices. And so I think that the level of discussion that's occurring now is probably the exactly -- you know, the exact right way forward.

  • 10:43:11

    REHMCan you tell us, Kevin, how many new fracking ventures are taking place not only in this Marcellus Shale but across the country? That number is increasing pretty rapidly, isn't it?

  • 10:43:30

    BOOKIf you look at permits given, you're talking, in the Marcellus alone, about 1,500 to 2,000 a year. And on a national basis, since fracking has been used in about 95 percent of shale wells, you're talking about 4- or 5,000 potential a year, yes.

  • 10:43:43

    REHMSo to slow that down would be rather difficult?

  • 10:43:49

    BOOKWell, the question of whether you slow it down isn't necessarily to stop gas production. It's to shift that production somewhere else or to shift the way in which it's done. Either you're using imported gas from another country, you're drilling deep water or deep wells in the Gulf of Mexico, drilling conventional wells in places people haven't wanted them drilled in the Rockies, or bringing it in from Alaska on a pipeline that's expensive to build.

  • 10:44:10

    BOOKThere's -- this is one of the more immediate and cheaper options. No one thought it was going to be cheaper when they first started developing the horizontal drilling and fracking technologies for this kind of commercial volume. But it's turned out to be much cheaper, and it seems, perhaps, wasteful to not explore the way to try to get the most of it now.

  • 10:44:28

    REHMHere's a posting on Facebook from John, who says, "I hope your inquiry into fracking discusses the need for jobs and energy, as well as protecting the environment. All three needs must be balanced if they are to be met." Joe.

  • 10:44:51

    ROMMWell, I'm a big fan of creating jobs. My goal is to create sustainable jobs. You know, this is just going to be a 20- or 30-year bubble. There's just no question about it. I don't see what the rush is. The future is, again, by -- is getting off of fossil fuels. Energy efficiency, clean energy, solar, wind renewables -- that generates a tremendous amount of jobs. It's been the fastest-growing sector in the last two years in the energy sector.

  • 10:45:16

    ROMMSo I think that we need a vision of a sustainable future. I'm not against natural gas at all. In fact, I've been a big supporter of it on my blog, Climate Progress. But again, what's the rush? We need to get baselines. We need to get full disclosure, and we need to get some regulations in place.

  • 10:45:32

    REHMDeborah.

  • 10:45:33

    SOLOMONWell, I mean, you know, the -- nobody's going to leave jobs on the table. It's a -- you know, a 20- or 30-year bubble, but no -- whether or not that's -- that show -- you know, right now with unemployment rates so high, you're not going to see states and the federal government doing anything that's really going to choke off job creation.

  • 10:45:49

    SOLOMONI mean, that said, you know, people, both, you know, in Washington, you know, the Obama administration is wrestling with this issue right now. You know, how -- you know, how do you -- what is the trade-off here? How much can you allow the industry to do before it actually does choke off jobs?

  • 10:46:03

    SOLOMONAnd, you know, whether it's right or wrong, you know, if you have the potential to create jobs, you're not going to let that go for something that, if managed right, is, you know, not going to be that -- you know, that dangerous.

  • 10:46:16

    REHMHere is an email, which says, "I think fracking should be permitted if the chemicals, however proprietary, are known to regulators. If those who want to go to the effort in expensive extracting gas from the Marcellus Shale actually believe there's such low probability of migrating to water-bearing strata, then they should agree to pay for any subsequent water supply contamination as the ones making the profit."

  • 10:46:55

    REHMThat goes to the insurance question, doesn't it?

  • 10:46:59

    URBINAIt does. I do think the only ability to accurately assess risk and the finances of risk come through for more disclosure. And I think that means environmental disclosure, but also other types of disclosure, like how these wells perform. I do think that the price issue. It's a dry one, but it's one that also needs more sophisticated discussion. So natural gas is indeed cheap right now, and that's great. And that's one of its attractions.

  • 10:47:32

    URBINAIt's also so cheap that a lot of companies are drilling for oil out of shale because they can't sustain -- they can't make enough money to justify drilling for shale gas. And I think it begs the question of, how high does the price of gas need to go up before drilling for it makes financial sense? And if the price of gas goes up, what are the consequences for downstream electricity users?

  • 10:48:02

    URBINAIf the price of gas needs to double before companies can make money, then will the price of electricity that draws from that gas also need to double? I don't know the answer. But these are the kinds of discussions that are beyond the environmental questions that I think to be -- need to be more closely addressed and aren't right now.

  • 10:48:23

    REHMJoe.

  • 10:48:24

    ROMMYeah, and I think another -- this well productivity issue is also key, I think, because if the wells are left productive, if they run out, if they need more re-injection -- more fluids injected, you know, then it means the total environmental harm and the total water damage is considerably higher than people thought.

  • 10:48:43

    ROMMWe just hear over and over again from industry that every regulation is going to cost jobs, and it's never proven to be the case. The thing is, with water, once it's contaminated, you can't uncontaminate it.

  • 10:48:54

    REHMHow do you speak to that, Kevin?

  • 10:48:57

    BOOKWell, I think, first of all, the idea that the contamination is happening again as a result of fracking is probably one of the ones that needs to be discussed more. A lot of the problems are above ground, and they involve water management practices that can be dealt with particulate standards, that can be dealt with filtration. The question of oil and gas being separate also deserves some discussion. They're not.

  • 10:49:18

    BOOKHydrocarbons coexist underground in formations. And companies that can produce oil and get gas for free -- if you want to flip what Ian had said around -- are technically bringing a good to market that they otherwise wouldn't. And so there's benefit from producing oil from shale. I think the big question that Joe brought up, and one that's well-deserved, is to understand well productivity in these formations.

  • 10:49:38

    BOOKIn the Barnett, there is, in fact, a really good data series, and it shows that productivity has been greater than expected in general. But well productivity has been across the board. In the Marcellus, right now, there's still a lot of learning going on. The reservoir has been characterized, but well performance is still very variable.

  • 10:49:55

    BOOKIt may be a little while before we really know exactly how productive and how enduring this production is. But as we get more information about it, it'll become more clear. And it'll be just like any other oil and gas find.

  • 10:50:06

    REHMHere is something from one of our listeners. "It seems to me," says Lynn in Grand Rapids, Mich., "that there are way too many cases when tampering with geology, whether it's fracking, mining or drilling for some other reason, where water tables and wonderful drinking water is poisoned and turned toxic. The way to reduce our dependence on foreign oil is to stop depending on fossil fuels and turn to renewable energy sources."

  • 10:50:50

    REHMHow concerned are you, Joe, about the water in the areas where this kind of drilling is taking place?

  • 10:51:01

    ROMMWell, I think people should be very concerned, in part, 'cause we don't really have data. And nobody has been going out and getting water quality data beforehand, so you can clearly state what happened before and after. I -- certainly, if I were in the area, I would be very concerned. I mean, Kevin says that the answer is particulate standards, which is regulations by the federal government, and filtration, which is dumping the problem on the wastewater industry.

  • 10:51:25

    ROMMAnd if you know the wastewater utility industry, they're not loaded with money. And they don't know how to filter a lot of these chemicals out that, again, would require the federal government to intervene and set standards and generate money to help wastewater utilities upgrade in order to filter out some of these chemicals.

  • 10:51:42

    REHMThere's another question that was raised last week during the earthquake that went along the East Coast, Ian. I had a geologist in here the next day who indicated that there might be some connection between this earthquake and those that are happening in other parts of the country where fracking is taking place. What have you found in your own reporting?

  • 10:52:14

    URBINAHonestly, I haven't looked at the earthquake issue very much, so it's not a terrain I would stray into very far. My impression -- and Deborah and Kevin and Joe may have more inside on this -- is that there is evidence that connects the large amounts of water being injected in the ground to earthquakes. Not necessarily the fracking process itself, but nonetheless, it's a semantic difference.

  • 10:52:40

    URBINAAnd putting large amounts of water under the ground is part of the overall drilling process, and there do seem to be ties between the earthquakes and that process, that overall process. Whether fracking or the drilling process generally had anything to do with this recent earthquake, I have no idea whatsoever.

  • 10:52:59

    REHMJoe.

  • 10:53:00

    ROMMYeah, I think there's -- I mean, people can Google fracking, earthquakes, and they will find a lot, including some studies. I raised this issue when I testified in front of the DOE panel that John Deutch chaired, and he said this was a very legitimate concern. The National Academy of Sciences is, I believe, studying it.

  • 10:53:16

    ROMMAnd it is something that we need to consider because, again, you list all of the impacts, potential impacts of fracking from water contamination, air contamination, greenhouse gasses, but earthquakes is certainly one of them.

  • 10:53:29

    REHMJoseph Romm of the Center for American Progress. And you're listening to "The Diane Rehm Show." Kevin, you want to add to that.

  • 10:53:39

    BOOKWell, I think that it -- while it's important to talk about risks in their potential form, the link between vaccines and autism, for example, has been repudiated by science, and the study has been rescinded essentially. But there are still people afraid to vaccinate their kids. It's important to discuss risks with at least some grounding in hard science. Induced seismicity from injection wells in Arkansas has been documented.

  • 10:54:01

    BOOKAny time you inject high-pressure fluids into the ground, particularly in the active seismic zones, you're going to get effects. But linking the earthquake activity in the East Coast is very premature. And it seems a bit dangerous to start trying to raise the stakes and talk about how many different things could go wrong with fracking without any honest discussion of how many things can go right with this much natural gas and the opportunity to grow our economy.

  • 10:54:24

    REHMBut if you've seen this happen in Arkansas...

  • 10:54:29

    BOOKFrom injection wells.

  • 10:54:31

    REHM...from injection wells, and you've seen reports of it from Oklahoma, same thing, I understand why people might begin to draw linkage between what happens -- what happened here on the East Coast and the injection of fluids.

  • 10:54:56

    BOOKThe linkage is absolutely important, and it's not one to be dismissed. But the point is that water management practices take a lot of different forms. Not injecting water into active fault zones seems like an easy thing to do. It doesn't mean you throw out the entire process. There are also some very self-interested parties who want to scare people away from fracking.

  • 10:55:15

    BOOKRussia, for example, was one of the first -- their state media service is one of the first stories I saw on the wire making the very weak link between the East Coast earthquake and hydraulic fracturing. Why would they not want hydraulic fracturing? Because they have a virtual monopoly on westbound gas into Europe, and fracking and pulling would dismantle that. There's a lot of money at stake here.

  • 10:55:34

    BOOKThere's a lot of very passionate views. I just think it's important to have all of these discussions grounded in science.

  • 10:55:40

    REHMDeborah.

  • 10:55:41

    SOLOMONWell, I mean, I come at this relatively from a new perspective. I haven't been writing about this for very long. I've recently come into it. And you sort of look at it, and you think, you're drilling into the ground. Of course, there's going to be risks. Of course, there's going to be potential to, you know, disrupt the sort of natural flow of thing. But -- so isn't this kind of the reason why you have regulation, I mean, sensible regulation, you know?

  • 10:56:05

    SOLOMONSo the question here is whether we're going to get the balance right. Are we going to tip too far and let the industry, you know, sort of do what it need -- what it wants to do without enough oversight? Or is the federal government going to come in and kind of you know, put a chokehold here? You know, history shows that, very rarely, do you get it exactly right. Maybe this will be an exception.

  • 10:56:23

    SOLOMONBut they're really -- you can't, you know, sort of dismiss the fact that what you are doing is essentially messing with the environment. And the way to do that is to have good processes in place and to make sure that the government is looking out, you know, for, you know, consumers and Americans if -- you know, if the industry is not going to do it in the best way possible.

  • 10:56:43

    REHMIs your investigative reporting on this issue continuing, Ian?

  • 10:56:50

    URBINAIt is, yeah. And I think Deborah makes a point that's spot-on in nuance. I do think that the problem, thus far in the discussion, has been that anytime you raise questions about potential risks, you're accused of being against fracking or natural gas. And it shuts down the discussion. And, I think, that's been the biggest hindrance to, actually, a candid and clear analysis of regulation and risks.

  • 10:57:19

    REHMIan Urbina of The New York Times, Deborah Solomon of The Wall Street Journal, Joseph Romm of the Center for American Progress, Kevin Book of ClearView Energy Partners. More to be said on this as time goes on. Thanks for listening. I'm Diane Rehm.

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