A new EPA report revealed that methane gas released from hydraulic fracturing (fracking) is actually 20 times lower than previously expected so E&P players are no doubt chomping on the bit to drill baby drill in. This has me thinking demand for cleaner fracking technologies, including water filtration opportunities, could soon see increased interest in New York’s Marcellus Shale region.
As I mentioned in my recent note titled “Is this defense bellwether working on the Holy Grail for fracking?”, fracking fluid is roughly 99.51% water and sand, but the .49% additives are the ones environmentalists are shouting from the rooftops to control. Why? Those against fracking believe the .49% additives pose a serious threat to both water and air quality once flowback water comes back up the well and seeps into water supplies near active wells. The new EPA report makes it sound like those fears shouldn’t be as intense as previously thought. Whether that really lowers any public fears is really up for debate but what should be taken away as major positive is that advances happening in rare earth material utilization (i.e. graphene), filtration technologies (desal) and breakthroughs in laser applications which do NOT require much water, may collectively further alleviate some concerns related to fracking.
I’m in no way saying all concerns regarding fracking should be dismissed. I still have legitimate earthquake fears associated with fracking. However, I’m somewhat more encouraged that lower levels of toxic gas from fracking are now being suggested. From that report and that report alone on the relationship between fracking and methane gas release, the EPA may further bolster its positive endorsement of fracking as a means to extract gas around the country. If that happens and I do say “IF”, it is my view this more favorable view of fracking could also sway New York Governor Andrew Cuomo’s decision to lift the moratorium on drilling for natural gas in the Empire State (Note: In February, Cuomo again delayed a decision on fracking in favor of more testing to determine public hazards).
Of course I need to confess loudly that I would have much preferred to see an EPA report supported by “independent” field tests of emissions for increased credibility. With that said, the robust revision of “20 times” lower methane was bound to turn many heads and grab global attention. I’m all for conspiracy theories but saying 20 times lower methane from previous estimates was rather shocking. Therefore I’m less inclined to say that number was “fudged”. For the sake of stirring debate though, even if that number was exaggerated to the upside and the real actual number was closer to just 10 times lower, I do believe it would still be a victory for next generation energy technologies associated with fracking.
So could the new report cause the New York Governor to finally make a decision in favor of fracking? Well we still have a long way to go in 2013 so hopefully this uncertainty whether or not to allow fracking here in New Yorkdoes not extend into 2014, an election year. The state is split pretty evenly on fracking but as the broader country looks to tap the Department of Energy’s (DOE) anointed “bridge fuel” for all its worth, Cuomo’s decision actually does have national implications considering he may want to throw his hat into the 2016 U.S. Presidential race.
With delays in rebuilding various areas of New Yorkpost Superstorm Sandy, Cuomo may have to make a decision on fracking much sooner than later. So yes, I’m expecting the recent EPA report on methane gas from fracking to be something the state of New York is examining very closely, especially with such revenue and job growth opportunity on the table. Companies like Halliburton and Schlumberger are surely sitting on the edge of their seats too waiting for New York’s decision on fracking. This means start-ups focused on cleaner methods to extract gas from the ground and purify water may become valued much more richly in the very near future and fortunes could be made and lost in less than a New York minute. Stay tuned!