Wednesday, June 20, 2012

New York State Seems to be Adopting the Right Approach to Fracking for Natural Gas

Allow It, Go Slow and Be Very, Very Careful

As has been noted many times in this space and elsewhere, economics is complicated and different people have different views because there are always pluses and minuses to each issue.  Such is the case with extracting natural gas from rock formations by the process of injecting water, sand and chemicals into deep gas wells, the process known as fracking.

Development of natural gas resources has the potential to deliver large quantities of relatively clean burning energy from within the nation, providing economic development and reducing dependence on foreign energy sources.  But it also has the potential to devastate the environment, including critical drinking water supplies.  New York state seems to recognize this, so the state is developing a policy of allowing some drilling, but only in limited areas and with strong regulations.

The plan, described by a senior official at the State Department of Environmental Conservation and others with knowledge of the administration’s strategy, would limit drilling to the deepest areas of the Marcellus Shale rock formation, at least for the next several years, in an effort to reduce the risk of groundwater contamination.

Even within that southwest New York region — primarilyBroome, Chemung, Chenango, Steuben and Tioga Counties — drilling would be permitted only in towns that agree to it, and would be banned in Catskill Park, aquifers and nationally designated historic districts.

The plan would seem to satisfy no one, which probably means it is a good plan.  Those who support unlimited gas wells with no controls are going to be highly miffed that their freedom to pollute other people’s land and water is limited.  Those who support no development are going to be highly miffed that their freedom to deny important energy production to other people is limited.

But an important thing to remember here is that just because the gas is not developed today does not mean it is going to go away.  In fact given the glut of natural gas in the market today it makes economic and business sense to wait for higher prices and better returns in the future.

Also, there will be a time when technology and sanity allow development with little or no adverse environmental impact.  This is not a “use it or lose it” situation.  Those who want to have oil drilling in places like the Alaska National Wildlife Refuge would do well to remember that.

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