Let’s start with a place.
It’s an infographic published by the U.S. Energy Information Administration, based on data provided by the Pennsylvania Department of Environmental Protection that demonstrates Pennsylvania’s Natural Gas Production growth. In words: “Between 2009 and 2011, Pennsylvania’s natural gas production more than quadrupled due to expanded horizontal drilling combined with hydraulic fracturing.”
What’s the problem?
Hydraulic fracturing or “fracking” relies on a technique called horizontal slickwater fracturing. The headline of the video doesn’t use the term, fracking, largely, I think, because it is most frequently used by its detractors who are concerned about the environmental and social risks associated with the use of this technique which include contamination of our environment (air, water, land) and the health risks it poses to our communities and citizens.
The Detractors.
You can bet the recently released movie, Promised Land, staring Matt Damon, has the oil and gas industry all prepared with a PR campaign to counter claims made in the film that p
uts it decidedly in the camp of the detractors. Some of you reading this blog may know more about such plans than I, but I do know a movie like this means our citizens will find it harder to ignore this major issue as it moves to the big screen and money is invested in public relations to include that rascal of marketing, social media.
Hard to argue against, but…
For my part it looks like gas reserves are plentiful and provide the following: an “alternative” to oil; a competitive advantage to bringing manufacturing/service jobs back home; and profits to the oil and gas industry. Articles in the 
Financial Times with headlines such as “Europe’s public must be sold on shale’s merits” referring to a U.S. revolution of “economic, industrial and geopolitical significance” to ‘Gas strategy’ threatens carbon targets. Whoops. What’s that about climate change? “The [greenhouse gas] footprint for shale gas is greater than that for conventional gas or oil when viewed on any time horizon, but particularly so over 20 years.” (article) That’s a real show stopper for this sustainability advocate as are other disturbing environmental and health warnings.
Downside Management.
Externalizing the risks and costs (John Fullerton of Capital Institute video) associated with negative, possibly disastrous environmental, social, and cultural consequences of high risk energy alternatives is an accepted management practice to keep the downside off the books. The impact from legal and insurance actions (or non-actions) require all of us to educate ourselves and conduct due diligence.
Education and due diligence.
As an example there is an upcoming event by The Seminar Group on February 8th that caught my eye and is the kind of education we need more of across all professions and quickly. This program on Fracking includes a review of pending litigation and legislative efforts underway in response to the increasing use of hydraulic fracking and the central role played by domestic and international insurance brokers and insurers in providing insurance policies tailored to the specific and unique needs associated with the exploration for oils and gas.
This month as reported in the Financial Times “North Sea operators face tougher insurance conditions from January 1 as part of a wider tightening of rules designed to ensure UK oil and gas explorers are practically and financially equipped to deal with major spills.” This action was inspired by the Gulf Oil Spill. One hopes for tough insurance conditions when it comes to fracking and that’s what is meant by “tailored to the specific and unique needs.”
Sustainability and YOU
Ultimately, we need to look at the situation from the three perspectives of planet, people, and prosperity. We have a track record of externalizing risks and costs that has cost us and the planet dearly, maybe to a degree that we are quite literally cooked. Fracking offers us the opportunity to re-think the where, how and what of energy economics, consumption, and public policy. This won’t happen without awareness, education, and community leadership in other words, YOU.