By most estimates, natural gas is likely to become the dominant power generation fuel in the U.S. within perhaps a decade. The rapid growth in natural gas supplies follows advanced drilling techniques that can economically tap large shale gas reserves located deep beneath Earth’s crust. Unfortunately, it only takes one outlaw drilling company to frack it up for the rest of us.

To release natural gas trapped within the pore spaces of shale requires cracking the rock open. Horizontal drilling techniques allow a single well to perpendicularly intersect and travel through a shale formation. Hydraulic fracturing or “fracking” uses high-pressure water to induce further cracking of the shale around the bore hole, further increasing gas recovery. Sand and proprietary chemicals are also pumped into the pressurized well to prop open the minute shale fractures, allowing the gas to be captured, once the pressure on the well is relieved.

Enormous Gas Reserves

The Marcellus shale deposits—a mile beneath the Appalachian Basin, extending from southern New York through Pennsylvania, western Maryland, West Virginia, and eastern Ohio—now account for about one-third of U.S. natural gas reserves (2,552 Tcf). At the current rate of natural gas consumption (22.8 Tcf per year, 2009), that’s about 110 years of reserves. More good news: Geologists are predicting that larger shale gas formations below Marcellus may yield even greater quantities of gas in the future.

The number of wells and the rate of gas extraction are also growing exponentially. Gas wells tapping the Marcellus, producing 200 million cubic feet a day (cfd) in July 2008, were producing 1.4 billion cfd in July 2010. The number of shale gas wells drilled in Pennsylvania, for example, grew from only 27 in 2007 to 1,386 in 2010, according to the Pennsylvania Department of Environmental Protection.

Growing Opposition

Extracting shale gas is not without controversy—some appropriate, some misplaced. Opponents to fracking point to the large amount of water required and charge that proprietary chemicals have contaminated groundwater supplies. However, during testimony before the U.S. House Oversight Committee in late May, Environmental Protection Agency (EPA) Administrator Lisa Jackson responded to questions about the safety of fracking by saying, “I’m not aware of any proven case where the fracking process itself has affected water.” A study by Duke University researchers released in May also found “no confirmed cases of an underground source of drinking water contaminated as a result of a hydraulic fracturing operation.”

However, there have been many cases of operators violating state and federal laws with accidental tainted water releases, all preventable. There have also been several reports that drillers have used diesel fuel for fracking, in violation of state and federal laws. Those cases are under active investigation.

Money Talks

The Energy Policy Act of 2005 exempted fracking from EPA regulations under the Safe Drinking Water Act, shifting the regulatory heavy lifting to individual states. Even so, the EPA and the Department of Energy are now actively studying their regulatory options, such as the Clean Water Act and the Resource Conservation and Recovery Act (regarding disposal of solid and hazardous wastes).

Meanwhile, several states are actively developing fracking regulations. On July 8, the New York Department of Environmental Conservation released a draft report with what appear to be very reasonable permit conditions for gas drilling in the Marcellus; rules are due out later this year.

The Manhattan Institute for Policy Research predicts $11.4 billion in economic stimulus and up to 18,000 new jobs by 2020 if fracking is allowed in the Empire State. Pennsylvania remains pro-fracking for economic recovery reasons: The gas industry supports more than 140,000 jobs (expected to rise to 211,000 by 2020) that pay a third more than the state’s average income. The gas industry is also expected to generate nearly $2 billion in tax revenue per year by 2020 for Pennsylvania. Next door, the New Jersey House and Senate in July overwhelmingly voted to ban fracking, a largely symbolic move, as New Jersey has no significant shale deposits. At press time, Governor Chris Christie had not said if he would sign or veto the bill.

A rejuvenated gas industry is benefiting all economic sectors, including power, and is putting billions of dollars into state coffers. But that doesn’t make the gas industry invulnerable. The public’s mental picture of fracking resembles the image of Texas wildcatters a century ago, when oil profits trumped the environment.

Now is the time for the gas industry to speak with a unified voice: Step forward with strong, voluntary, self-policing standards and commensurate penalties for operators that fail to meet minimum siting and environmental standards. Failing that, the sure alternative will be new layers of state and federal red tape that will slow production and drive up end-user prices.

Dr. Robert Peltier, PE is POWER’s editor-in-chief.