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Weighing Benefits and Pitfalls of Increased Oil and Gas Production in the U.S.

August 10, 2012 at 12:00 AM EST
Two years ago, the U.S imported two-thirds of its oil. Now, imports are less than half of U.S. oil needs. Jeffrey Brown talks to National Resources Defense Council's Kate Sinding and the Manhattan Institute's Robert Bryce about increased domestic energy production and whether economic benefits outweigh environmental concerns.
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TRANSCRIPT

JEFFREY BROWN: And we turn to the ups and downs of an energy boom, wrapping up our series that’s looked at how new production is fueling rapid changes across the country.

In our series this week, we have seen how homegrown energy output is forging ahead, offering opportunities and posing problems at the same time. In North Dakota, new technology has led to a boom in oil production.

LANCE LANGFORD, Statoil: We are going to be here for many, many years. And once we are finished drilling these wells, these wells will produce for 30 to 40 years.

JEFFREY BROWN: Drilling means jobs in towns like Williston, but it also leaves the locals to deal with growing pains.

WOMAN: We are frustrated with lack of services. We are frustrated with traffic. We are frustrated with driving. We are not alone. And I don’t care whether you have been here a long or a short time.

JEFFREY BROWN: In Colorado, one source of tension is between competing fossil fuels, as natural gas vies with the state’s plentiful coal supply as a cleaner-burning option for power plants. The gas boom may also slow any shift to renewable energy, such as wind or solar power.

DAN ARVIZU, National Renewable Energy Laboratory: The bar just got a bit higher for the entrance of some of these new and alternative technologies into the energy mix.

JEFFREY BROWN: Sprouting gas wells pose a challenge over the use of public lands as well.

In Utah, environmentalists and energy firms have collaborated on ways to allow for drilling while protecting natural areas.

U.S. Interior Secretary Ken Salazar welcomes the effort.

INTERIOR SECRETARY KEN SALAZAR: It is my view that protecting the environment and developing oil and gas are not mutually exclusive. Those who say they are, are providing us a false choice.

JEFFREY BROWN: That may be, but as new technology allows for ever more extraction of fuels, the right balance and best approaches are far from settled.

And we pick up on some of the questions raised by the energy boom now with Kate Sinding, deputy director with the National Resources Defense Council. Her work includes promoting smart growth and monitoring environmental and health impacts of natural gas drilling in New York State.

And Robert Bryce, a senior fellow at the Manhattan Institute who’s written widely on energy matters, including his recent book, “Power Hungry: The Myth of Green Energy.”

Kate Sinding, I will start with you. A boom in new production, overturning a lot of old assumptions about energy in this country. Give us an overview first. What do you see happening?

KATE SINDING, National Resources Defense Council: Well, what we see happening is that the way that natural gas is being developed in this country is totally unacceptable.

You have got an industry that’s running roughshod over communities. They think that they’re entitled to operate under a different set of rules than those that apply to everybody else. And the result is a pattern of negative impacts to water, to air, to health, and to our communities.

It’s not something that should be happening in America in 2012. And, moreover, it’s not a model of development that’s sustainable either from an economic standpoint or for the planet.

JEFFREY BROWN: All right, Robert Bryce, same question. General overview first, and then we will walk through some of these issues.

ROBERT BRYCE, The Manhattan Institute: Sure.

Well, I watched your reports earlier this week, and I agree with what Interior Secretary Salazar said in one of your reports. He said that the development of natural gas is one of the greatest opportunities for economic security, national security, and environmental security.

This is — the development of the shale revolution, which we’re in the midst of now, is the single most important energy development on the global energy scene since the discovery of the east Texas field in the 1930s. For the U.S., this is unqualified good news.

Now, are there local impacts and are there fence line issues for neighbors and are there concerns? Of course, there are. And those won’t go away, because we’re seeing a lot of drilling in areas that haven’t had it before.

JEFFREY BROWN: Well, so, Kate Sinding, let’s go to a very specific issue, of course, at the heart of the new technology that allows a lot of this new production is fracking.

So, Kate Sinding, talk to us a little bit about that. The obvious plus is, you get more, but at what cost is the issue.

KATE SINDING: Right. Yes.

Fracking — it’s been the development of fracking combined in the case of many of these resources with horizontal drilling that allows for them to develop resources where they previously hadn’t thought that they economically could do so.

And what those two technologies involved mean together is significant amounts of water usage, significant generation of waste waters, generation of air pollution, lots of traditional pollution.

The significant amounts of water involved in fracking translate into hundreds of truck — truck trips for every well pad. Those, in turn, turn into not only air quality impacts, but impacts to quality of life, the kinds of things that we saw in a clip from one of the segments earlier this week.

We’re grappling with some really serious issues now, issues that the industry itself is acknowledging present real problems, wastewater being a key example.

The water that — wastewater that is generated through the extraction of gas using the fracking process is heavily contaminated, both with chemicals that are used as part of the fracking process itself, as well as with naturally occurring contaminants that include heavy metals, volatile — volatile organic compounds, very high levels of salt, and in some instances radioactivity.

And millions of gallons of that wastewater are generated per well pad. So, what to do with that wastewater, how to safely dispose of it in a way that doesn’t present risks to the communities not only where drilling is occurring, but where the wastewater ends up being transported, is a very vexing issue. And it highlights…

JEFFREY BROWN: Let me…

KATE SINDING: Go ahead.

JEFFREY BROWN: Well, I just wanted to — I just wanted to bring Robert Bryce in on this, because I’m wondering, is it a question of acknowledging all the kinds of questions that we just heard and the concerns, but, in the balance, that’s OK? Or is — or do you question some of the science behind fracking and other technology?

ROBERT BRYCE: Well, look, this is a technology that is not new. It’s been used over a million times over the last six decades.

The points that Ms. Sinding makes, I agree with some of them. But there are three interrelated points if we look at this in the big picture in terms of public relations. One is that we’re talking about water, which is an emotional issue for everyone. They don’t — no one wants contaminated water.

Second, the oil and gas industry has a lower favorability rating than Congress. This is according to a recent Gallup poll. So beating up on the oil and gas industry for the environmental groups is extremely easy. And, finally, the environmental groups have a very simple message, which is, basically, big oil wants to pollute your water.

And so the drilling industry’s only response is, well, no, we don’t. But when you look at the overall balance — and I’m not dismissing the fence line issues that are involved here, the truck traffic, et cetera, but this is an incredible benefit to the U.S. economy.

If you look at the period from — in the 19 — in the — from 2003 through 2008, natural gas prices averaged over $7. Today, they’re under $3. That results in a savings to the U.S. economy of $263 million a day. That’s $96 billion a year. This is incredibly good news for the U.S. economy at a critical time for — when a lot of people are out of work.

JEFFREY BROWN: Well, so this goes to that balance question.

And, Kate Sinding, we heard — in our setup, we heard Ken Salazar say that it’s a false choice to pick between protecting the environment and developing more oil and gas.

KATE SINDING: Well, I would say it’s a false choice between protecting the environment and economic development and energy security.

Where we need to be investing, where we need to be creating new policies and new laws is in the area of facilitating the rapid development of energy efficiency and renewables. Obviously, we’re in favor of economic development for this country and economic security, and energy security.

But we need to be focusing not on yet another fossil fuel, one that, although it may be cleaner-burning than coal or oil, will not help us solve the climate crisis.

In fact, numerous recent studies show that if we end up with decades of dependence on gas, rather than investments in renewables and energy efficiency, we’re going to be further set back in our effort to deal with the climate crisis.

So that’s where we need to be focusing our policies and our investments. And energy efficiency, renewables, those are good, clean jobs, sustainable jobs, and the kind of economic development that the country should be looking for.

JEFFREY BROWN: And it sounds like you are fearing what we heard in one of the reports, that the boom as is now undermines those kinds of investments.

Robert Bryce, what about that? Is that — is that a possibility here, or is that actually happening?

ROBERT BRYCE: Well, look, no one’s opposed to energy efficiency. That’s a — there’s been bipartisan agreement on it, on increases in energy efficiency for decades.

And our economy has grown to be one of the most energy-efficient economies in the world. We have made great strides there. Renewables, I’m all for renewables. I have solar panels on the roof of my house. They simply cannot provide the vast scale of energy that is demanded here in the United States or around the world.

Natural gas continues to be vilified as a fossil fuel. Look at what the International Energy Agency said in May. This is the IEA, based in Paris.

They said that, since 2006, the U.S. has reduced its CO2 emissions by 430 million tons. It’s more than any other country on the planet.

And this is not a perfect solution in terms of reducing CO2, but why did the IEA point out — point to the U.S.? Because low-cost natural gas is displacing coal. This is a great story.

Are there costs? Of course there are. There’s no such thing as a free lunch when it comes to energy or anything else.

JEFFREY BROWN: Kate Sinding, just in our last minute, do you want to answer him, respond to that?

KATE SINDING: Yes, sure.

I mean, I saw a study just a couple of days ago earlier this week that suggests that the decrease in CO2 emissions in this country are not so much a function of gas displacing coal, as it is a function of the economic downturn. And there’s no question that these new shale plates are diverting investments from renewables and efficiency improvements, which we — there is still enormous untapped potential there.

So that’s — again, that’s where we have got to be focused. Nobody is saying we can turn the lights off tomorrow. Nobody is denying that this is a country with enormous energy needs. But we have got to refocus our policies now to getting renewables up to scale as quickly as we possibly can, and not get lost in a hole that natural gas threatens.

JEFFREY BROWN: OK, and a brief last word from you, Mr. Bryce. How do you want to end this discussion?

ROBERT BRYCE: Sure.

Well, I will just point to a recent study by IHS, which said that the shale revolution, shale development, unconventional natural gas, will support 1.5 million jobs in the U.S. by 2015. These are jobs that are desperately needed. Do we need to protect the environment? Of course, but the natural gas revolution, the tight oil revolution, unqualified good news for the U.S. economy.

JEFFREY BROWN: Robert Bryce, Kate Sinding, thank you both very much.

ROBERT BRYCE: Thank you.

KATE SINDING: Thank you.

JUDY WOODRUFF: And you can watch our complete energy series, read a detailed report on fracking, and find a link to Prairie Public’s extended look at the oil boom in North Dakota on our Web page.