Energy Conference Focuses On Shale Gas Hot-Button Issues

SOCORRO, N.M. January 10, 2012 – As oil companies deploy hundreds of wells in northeast Pennsylvania to tap into the lucrative “shale gas” deposits, many are weighing the environmental impacts, the economic outlook and the regulatory climate related to the latest bonanza in domestic natural gas production.

Now, the New Mexico Center for Energy Policy – a research wing of New Mexico Tech – is taking the lead in framing the debate on these hot-button issues. The Center and the Economic Development Corporation of Lea County (N.M.) are hosting a conference on these controversial and lucrative shale gas deposits that dot North America.

“Shale Gas and Conventional Gas: From Pennsylvania to New Mexico” is a two-day conference that features experts from the industry, government, independent researchers and state officials from Pennsylvania and New Mexico. The event is Thursday and Friday, Jan. 12 and 13, at the Lea County Event Center in Hobbs, N.M. The Center for Energy Policy also is located in Hobbs.

The presence of large deposits of shale gas in the U.S. has led to the rise of debate about the environmental impact of production, with conflicting reports about the impact of production and use of shale gas.

Canada has taken the lead in production of shale gas, with production in Alberta proving to be lucrative. Shale gas production in the United States is expanding quickly in Pennsylvania, but has been met with resistance from environmentalists and regulatory agencies.

“Shale gas is a very important topic nationally and internationally as we tap into the shale gas resources, which will create vast amount of energy for the United States,” said Dr. Van Romero, Vice President of Research at New Mexico Tech. “This conference brings together experts to discuss the finer points of technological advancements, production and potential risks involved.”

Shale gas production has benefited from the advancement of horizontal drilling and hydraulic fracturing, or fracking, which has become a controversial method of extracting natural gas from shale formations.

The opening panel event will feature experts discussing both horizontal drilling and the process and consequences of fracking – which involves injecting water into shale formations to push oil toward production wells.

Conference organizer Dr. Daniel Fine – director of the N.M. Center for Energy Policy – said Pennsylvania is on the vanguard of the current bonanza in shale gas production.

“Technical innovations from 1992 to the present have allowed us to develop the capability of extracting gas from these hard rock formations,” Fine said. “Hydro-fracturing and horizontal drilling represent a whole new evolution.”

“Fracking is controversial and it’s important to have a good scientific basis to understand it,” Romero said. “The fear is that fracking will contaminate groundwater as we liberate natural gas from deep under the surface. We need to do a good job from a scientific and engineering basis as we proceed with development of these formations.”

Fine said that just 10 years ago federal experts predicted a natural gas shortage in the United States. Now, with new the new technology, the United States has such a glut in natural gas that prices have plummeted.

One of the largest deposits of shale gas – the Marcellus shale – rests under Pennsylvania. According to a National Geographic report, Marcellus shale holds between 50 trillion cubic feet (TCF) and 500 TCF of natural gas. At the low end, that represents twice the natural gas in Alaska’s Prudhoe Bay. Given high estimates, the Marcellus reserves would be the second largest in the world. Other large deposits are known to exist in Illinois, Texas and Wyoming.

Bradford County in northeast Pennsylvania issued permits for more than 300 new wells in 2011 alone, Fine said. Several officials from Bradford County – and neighboring counties in Pennsylvania – will be speaking and attending the conference.

Fine said an ongoing and heated debate in Pennsylvania the state legislatures proposal to institute a severance tax on natural gas. A key point of the debate is how the state and the counties will share the revenue.

“Lea County (New Mexico) is a model on how to manage natural resources,” Fine said. “For three generations, Lea County has developed a model on how to manage natural gas and oil production and how to use the revenues for local economic development.”

The conference’s opening session features a panel discussion covering the basics of shale gas. Ron Broadhead, senior petroleum geologist at the Bureau and the state’s leading expert on oil-and-gas recovery, will lead the discussion. Broadhead and two industry leaders will explain the technologies needed to recover shale gas, prospects for recovery in the continental United States and potential strategies for production.

The Thursday afternoon session will focus on regulation and opposition to shale gas development. Fine and Dr. Van Romero, vice president of research at New Mexico Tech, will lead the panel, along with Alan Eichler of the Pennsylvania Environment Department and Jamie Bailey of the state of New Mexico.

Fine said the main debate over fracking relates to federal regulations. The sole federal statute that relates to the practice is the Safe Drinking Water Act of the 1970s. Most states have regulations specific to fracking, but the federal government has none.

The Friday morning session will delve deeper into the issues related to shale gas recovery. The panel will feature eight experts from Pennsylvania, New Mexico and Chesapeake Energy, a leading onshore developer of unconventional oil and natural gas plays.

U.S. Rep. Steve Pearce will deliver the keynote speech at Thursday’s luncheon. Pearce will discuss the potential economic impact and job outlook for the natural gas industry if shale gas is fully developed. Fine said preliminary studies tout 1.9 million additional jobs in natural gas by 2025.

N.M. Lt. Gov. John Sanchez and Pennsylvania Rep. Tina Pickett will provide Friday’s keynote talks. They will discuss the economic impact that shale gas could have on their respective states.

The event is co-sponsored by New Mexico Tech and the Economic Development Council of Lea County, led by president and CEO Lisa Hardison.

– NMT –

By Thomas Guengerich/New Mexico Tech