Modeshift

Laser-graded, table flat drilling pads being constructed atop the steep Appalachian ridges on both sides of the upper Ohio River. Photo/Keith Schneider

The story of American energy used to be we use too much. There’s not enough. And a technical breakthrough in clean alternatives will save us.

How 20^th century. The new narrative – really, it’s true — of American energy is this: We’re using less. A national boom in oil and gas production, engulfing 12 states from California to Pennsylvania and North Dakota to Texas, is showing we have much more than we thought. And the clean energy economy, tiny by comparison and roiled by uncertain markets, is still decades away.

In no state are these trends colliding with more immediacy right now than in Ohio, which for years has been a modest oil and gas producer, and not long ago was widely viewed as a leader in passing legislation, promoting jobs, and installing  manufacturing for a clean energy economy.

Over the last year, though, everything in Ohio’s energy sector, like the nation’s, has changed. At night, on both sides of the upper Ohio River valley south of Pittsburgh, floodlights illuminate the laser-graded, table flat summits of steep Appalachian ridges that now serve as production pads for natural gas wells and processing plants (see pix from West Virginia side of river above). Drilling rigs 18 stories tall are starting to tap huge reserves beneath 17,000 square miles of eastern and central Ohio, beneath which lie two layers of deep gas and oil-bearing shale.

Big Production Results From First Wells
Early production results from Columbiana, Carroll, Harrison, and Belmont counties show the first completed wells are capable of producing millions of cubic feet of gas and over 1,000 barrels of oil a day. Families are signing drilling leases that pay up to $5,800 an acre. Nearly $2 billion in new gas processing and transport facilities have been announced for sites in the Ohio River Valley. The economy of the 145 miles of river from Pittsburgh to Marietta, for two generations a laboratory of industrial ruin, is perking up.

“It’s fantastic what this could do for this region,” said Sharon Davis, who owns a restaurant in Sardis, Ohio and recently earned up to $5,250 an acre for the 168 acres of minerals she and her family own in Monroe County.

Meanwhile, a plan to build an offshore windfarm in Lake Erie, near Cleveland, has faltered. Another proposal to build a big wind farm in western Ohio was fought to a standstill by local residents, who filed a lawsuit that went all the way to the state Supreme Court. In January one of the state’s prominent solar manufacturing companies laid off half its workforce, and the chairman and founder of a second solar company resigned, leaving a skeletal staff and big debts. Cardinal Fastener, the Cleveland company that supplied bolts to wind turbine manufacturers, and which was visited by President-elect Obama in January 2009, declared bankruptcy last June, laid off most of the staff, and then was bought in November by a German manufacturer.

“The energy picture has changed dramatically,” said Eric Burkland, president of the Ohio Manufacturers’ Association. “The price of electrical power is low. The price of natural gas is low. It’s changed the thinking on all alternative technologies. It’s affecting solar. You could say it’s taking the wind out of wind.”

It wasn’t very long ago, 2008 in fact, that clean energy production, and the development of a manufacturing sector to support it, represented a cogent business plan for Ohio, and other states interested in developing new jobs and contributing answers to environmental pollution and risks to national security.  President Obama ran on a platform that responded to rising gas prices and industrial obsolescence with a clean energy, good jobs message.

A National Clean Energy Drive Slows
Four years later the president’s energy goals, like this state’s, reflect a convergence of technology, market opportunities, politics (“drill baby drill”) and policy that has elevated fossil fuel production to a top economic priority and weakened the glow of clean energy.

President Obama now talks about an “all of the above” energy strategy, as he did in January in the State of the Union, when he hailed the fossil fuel sector for generating more natural gas than ever before and for relying “less on foreign oil than in any of the past 16 years.”  Weeks later the president dispatched Interior Secretary Ken Salazar to Ohio to tour a manufacturing plant that is adding jobs to build the bulk tank trailers used to haul millions of gallons water to drill sites to hydro-frack the nation’s deep oil and gas-bearing shales.

In the geography of Ohio’s energy sector, the contrast between the sagging fortunes of clean energy manufacturing and the boom in the fossil fuel industry is striking. In 2008, Ohio approved a renewable energy law that required utilities to purchase 25 percent of their power by 2025 from renewable and advanced energy sources. In 2010, the Environmental Law and Policy Center of the Midwest (ELPC), a Chicago-based nonprofit, counted 106 Ohio companies involved in supplying components for the wind industry, 63 supplying materials to the solar industry, and 7,500 workers in the state’s clean energy sector.

Today, noone in state government or the private sector is sure how many clean energy companies and jobs are still around in Ohio.  Almost everybody agrees the sector is struggling. “There isn’t one big thing influencing the market here,” said Robert Kelter, a senior attorney in ELPC’s Columbus office. “There are a lot of factors. There’s been a change in administration in Ohio. The Legislature wants to change the renewable energy law. There are other setbacks that lead to delay and layoffs. It’s hurting the industry.”

It’s not that Ohio has stopped generating power from new renewable energy installations. Iberdrola Renewables is getting ready to open a 304-megawatt wind farm in western Ohio, where another company opened a 100-megawatt wind farm last year. A 50-megawatt solar installation is planned for southern Ohio, along with a manufacturing plant that wants to build the solar panels in a new factory in Toledo.

The Solar Energy Industries Association reported this month that 1,855 megawatts of new photovoltaic capacity was installed in the U.S. last year, more than double the 887 megawatts installed in 2010.  The American Wind Energy Association said that U.S. utilities installed 6,810 megawatts of wind capacity in 2011, a 31% increase from 2011.

Clean Energy Companies Falter
But Ohio solar energy manufacturers, like others in the West – the Solyndra failure in California last year has become a presidential campaign issue — are going out of business. Wind energy suppliers are laying off workers. Competition from foreign manufacturers, from low prices for natural gas, which is steadily replacing coal as a favored fuel for electrical generation, and from uncertainty in renewing the federal production tax credit for wind power are blamed.

Iberdrola Renewables laid off 50 of its 900-member staff in January and the company’s executives say an amendment to Ohio’s renewable energy law would make it much harder to finance new wind farms in the state. The proposal, which Republican Governor John Kasich supports, would enable AK Steel, an Ohio steelmaker, to use state renewable energy credits to develop electricity from waste gases from its blast furnace. The co-generation project, notes Eric Thumma, Iberdrola’s director of policy and regulatory affairs, is itself fueled in part by non-renewable natural gas.

AK Steel’s co-generation technology, the company asserts, fits into clean and renewable energy development in Ohio. The U.S. Department of Energy has already approved a $30 million grant for the project. Gov. Kasich, who has introduced a new state energy plan that emphasizes fossil fuel production, has said repeatedly that using waste heat or gases from industrial processes to generate electricity should qualify for renewable energy credits.

But there is already more than enough wind energy online and planned, says Thumma, to soak up the available credits. The AK Steel project would add 100 megawatts of new power to the already saturated market and essentially render the renewable credits worthless. “It will crash the market for wind as a renewable energy in Ohio,” said Thumma.

Contrast the unsettled economic geography of Ohio’s renewable energy industry with the massing industrialization by the state’s fossil fuel sector. Some $3 billion, according to the Ohio Department of Natural Resources, is being spent on drilling and production, pipeline construction and supply chain manufacturing to serve the fossil fuel sector.  One new steel plant is opening in Youngstown, and three others in Lorain and Canton are expanding to meet demand for drilling pipe and other equipment made of steel in and outside Ohio.

Contrasting Economic Landscapes
It takes a lot of steel to tap Ohio’s 4,000-foot deep Marcellus shale, and 2,000 feet below it, the Utica shale.  Geologists in state government say the Marcellus contains trillions of recoverable feet of natural gas, a good deal of it so-called wet gas that produces ethane, propane, and other compounds that can be easily processed into valuable fuels and feed stock chemicals for rubber and plastics. Royal Dutch Shell, this month, announced that an upper Ohio River site, just across the state border, in Monaca, Pa. is its favored site to build a multi-billion dollar plant to convert natural gas to ethylene and other feed stock chemicals.

The Utica shale may be even more valuable, say state geologists, because it holds 15.7 trillion cubic feet of gas, and 5.5 billion barrels of recoverable oil. As of March 11, the state had issued 172 drilling permits, all but 13 for the Utica play, and 57 wells had been drilled, using the horizontal drilling and hydro-fracking.

The two drilling and production technologies, using millions of gallons of water shot down long wells at super high pressure, has stirred safety, health, and environmental concerns in Ohio and other energy-producing states. The Environmental Protection Agency, which is conducting a comprehensive assessment, confirmed last year that drinking water wells in Wyoming were contaminated by racking. The Colorado School of Public Health in March issued a report that found air pollution from the heavy equipment used in fracking may contribute to “acute and chronic health problems for those living near natural gas drilling sites.”

Gov. Kasich insists that Ohio is prepared for the onslaught and ready to limit the risks. Two years ago the state strengthened the law that oversees operations in the oilfield. “You cannot degrade the environment at the same time you’re producing this industry,” said Kasich in January. “It’s not acceptable. It’s not a false choice. The biggest companies know that you need tough environmental rules.”

Because fracking requires so much water, a good deal of which comes back to the surface contaminated with hydrocarbons and chemicals, wastewater disposal from the oilfield is a big challenge. Ohio requires the wastewater to be recycled or disposed in deep injection wells.

This month, in a step that seemed to confirm the governor’s pledge to be vigilant, the Ohio Department of Natural Resources (ODNR) imposed tough new regulations on the operators of the state’s 177 deep injection wastewater disposal wells. The new rules, prompted by earthquakes last year that were centered around a year-old injection well in Youngstown used to dispose of wastewater from hydro-fracked wells, will make Ohio’s Class II deep-injection wells among the most stringently monitored and regulated in the nation.

“We have the opportunity to get in front of the development with stricter rules,” said Trent Dougherty, staff attorney and director of legal affairs at the Ohio Environmental Council. “It’s only just getting started. We have a chance to oversee the industry better than other states have.”

State regulatory infrastructure will be tested in Ohio, as it is in other states. Similarly dense, hydrocarbon-rich shales lie beneath much of the rest of the country, and are being tapped at a frantic pace. Last year, according to the Department of Energy’s Energy Information Administration, the number of oil and gas drilling rigs in operation across the U.S. reached an average of 1,865 a month. That is the highest rig count since 2008, according to the EIA. More than 20,000 oil wells were drilled in the U.S. in 2011, higher than any year since 1985.

High Percentages
The deep shales, moreover, are almost a can’t miss opportunity, Of the more than 40,000 oil and gas wells drilled in 2011, said the EIA, almost 90 percent produced marketable quantities of fuel. Natural gas production last year set a record, a third of it from deep shale, and in December oil production climbed to 5.88 million barrels per day, the highest since December 2001.

The consequences are profound to the nation’s energy security and economy, By 2014, according to the U.S. Department of Energy, the U.S. will be a major exporter of natural gas. By 2030 or so, U.S. oil and fuel imports as a share of total consumption are projected to fall to around 22 percent. To energy economists, that’s a number that defines energy security. “It’s happening very quickly and it’s for real,” said Kenneth B. Medlock, an energy and resource economist at the Baker Institute For Public Policy at Rice University in Houston, who organized a one-day conference of environmentalists, scientists, academics, and executives in January 2012 to explore the American fossil fuel boom.  ”Increased supplies affect the balance of payments. It affects our geopolitical security. It has a lot of impact on reducing the cost of energy in manufacturing, making us much more competitive. It is, potentially, one of the most important economic events of the last 50 years.”

From the ridge summits high above the upper Ohio, on an unseasonably warm day late in a winter that wasn’t, some of the equally profound risks of perpetuating America’s fossil fuel economy also are visible. The growl of bulldozers clearing trees for new roads and drill pads can be heard across a landscape that consists of miles of unbroken forests and is now being fragmented. Wide and muddy corridors have been cut up and down steep hillsides for pipelines that gather natural gas for transport to processing stations. Erosion is increasing and pouring mud into the region’s streams. Big trucks, pouring diesel exhaust into the air, strain in low gear to haul equipment and frack water up narrow roads with such acute grades that in the West Virginia gasfield near Martinsville, authorities require they be escorted to limit traffic accidents.

Certainly the new energy comes with economic benefits, and a new era of reckoning for the little towns that hug the river long accustomed to having no pace other than the passing of old people to the grave and young people moving out. Motels and campgrounds are full with skilled oilfield workers from Ohio and other states. Restaurants are busy. But many people, even those who’ve gained new jobs in the industry, or reaped windfalls from their mineral rights, are nervous.  “Things will change now,” said Sharon Davis, the restaurant owner in Sardis. “We know that.”

An edited version of the article was posted by Yale Environment 360 on March 29, 2012.

– Keith Schneider

SARDIS, Ohio — Frank Ellis, who is a 51-year-old electrician from this Ohio River Valley town, spent much of his time since high school working upriver at the PPG plant in Natrium, West Virginia. He owns 140 acres and the rights to the oil and gas below them.

Denny Cowley (in pix below) is a 55-year-old sheet metal worker who was raised on a dairy farm near Canton, Ohio, and 16 years ago bought a 47-acre place just outside Sardis, with its mineral rights intact, where he settled into a life of hard work, hunting, and friends. He drives a Ford F-350 pickup, with a big diesel that whines as he shifts gears on the steep and narrow roads that climb to hill summits on both sides of the river that are becoming staging areas for oil and gas drilling and production.

The great American energy boom that is rewriting the narrative on oil and gas production in the United States, raising growing levels of civic angst about safety, and helping to push the country out of the Great Recession, is arriving in force along the Ohio River. Upriver on the Ohio side, in Columbiana, Carroll, Jefferson, and Mahoning counties, drilling has already started and big mineral leasing checks arrived last year, lots of them with six and seven figures.

Ellis (with Sharon Davis in pix above) and Cowley have spent the last six months helping to organize mineral owners around Sardis into an 8,000-acre block of mineral rights, more than enough to negotiate a lucrative lease that is, they say, “fair to everyone.” The two men have been spending a good bit of time meeting at Marv’s Place, the welcoming American cuisine cafe near the center of this town of 2,000 that was established over a decade ago by Sharon Davis. The cafe, with a long hardwood counter and big storefront display windows, is in the same two-story, 118-year-old brick building her grandfather once owned. Davis and her family own 168 acres of mineral rights.

Except for the prayers directed at lottery tickets, and the musings about accumulated wealth that occasionally cross the minds of hard working people unaccustomed to having money, neither Ellis, Cowley, nor Davis seriously considered the chance that their savings accounts would one day be filled to the brim. Then came Saturday, when the three joined some 200 other mineral-owning men and women at the Sardis Elementary School. The occasion: signing an oil and gas production lease with Eclipse Resources that instantly made the lessees financially comfortable, and could — if energy production soars — turn most into eventual millionaires.

“People stuck together and we got a good deal,” said Ellis.

Eclipse agreed to pay $4,250 for each acre of minerals leased for the first three years of the agreement. If Eclipse or its successors do not start a well in that time, mineral owners gain $1,000 more per leased acre. Other financial returns include a 20 percent royalty on gas and oil production, and a 20 percent royalty on production of liquid gas condensates like propane and ethane. By one estimate, made by a petroleum engineer who joined the negotiating unit and owns several hundred acres of minerals, the agreement will help ensure that every leased acre will generate $25,000 to $30,000 over the life of hydrocarbon production in the region, which could last 30 years.

“We wanted to bring something good here,” said Cowley. “The more we could get together, and stick together, and pull our acreage together, the more power we had to negotiate. We wanted something that was good for everybody.”

In an era riven by civic discord, the Sardis lease represents a rare feat of community cooperation achieved despite the competing emotions of greed, envy, and uncertainty. The latter three, of course, are generally exploited by gas and oil companies that swoop into energy-rich communities to take advantage of mineral owners who know nothing. I saw it happen here in my home region of Benzie and Manistee counties in northern Michigan, the western edge of the Antrim shale natural gas boom of the 1990s. Mineral rights owners signed five and ten-year leases for $10 an acre and 1/6th royalties that gave the energy companies pretty much the right to do whatever they wanted.

The Sardis mineral owners weren’t as naive. They turned for expert guidance to Jennifer Garrison, a lawyer from Marietta, Matthew Warnock, a lawyer from Columbus, and Bob Chase, a professor of petroleum engineering at Marietta College. The model lease that was signed on Saturday includes protections for the region’s water, safeguards to the land, and substantial returns for valley residents fortunate enough to own their minerals. The lease includes a provision that requires Eclipse to pay 80 percent of the increase in property taxes that could materialize as oil money draws new residents and land values rise. And the lease requires Eclipse to pay the 4.5 percent fee charged by the lawyers and Professor Chase.

Cowley smiles when he explains that provision. “This is going to help a lot of people here,” he said. “I can do improvements on my property. I can do some nice things for my family. It’s a good feeling to bring something that’s good for this community.”

The last point can hardly be overstated. For two generations, few places so darkly illustrated the erosion in American industrial vitality, and the heart sore circumstances of its people, than the upper Ohio River Valley. The 145 miles of river from Pittsburgh to Marietta, strikingly beautiful as it flowed past rounded hills, also drained a landscape of shuttered plants, broken towns, and lives bent by lost jobs and frantic worry. Sociologists and historians episodically descended on one river town or another to study the choices people made to stay, or to go. Journalists also came, treating the valley as a prime specimen in the nation’s laboratory of ruin. In the early 1990s, conditions had become so grave that residents and workers in East Liverpool, upriver from here, campaigned to build just about the only new industrial facility still interested in the upper Ohio — a big toxic waste incinerator constructed near an elementary school.

Last week, for the second time in a year, I spent some time in the upper Ohio River valley and found a much different mood. People were nervous, but not because another plant had announced a closing. They wondered how the new oil and gas wealth would change their lives and speed up towns accustomed to having no pace other than the passing of old people to the grave and young people moving out.

“Things will change now,” said Sharon Davis. “We know that. It could be fantastic for this community. It could also affect one of the really good things about this place. Our quaintness. Nobody likes change too much.”

– Keith Schneider

It’s been generations since an industrial development as powerful and as widespread as the new oil and gas energy boom has swept across the United States. The risks — drinking water infiltration, wastewater disposal, oil well explosions, wildlife deaths, and earthquakes — are steadily emerging. The question for federal and state regulatory agencies, already under seige from diminished budgets and lawmakers intent on weakening oversight, is how quickly inspection agencies will respond to public threats.

On Friday, in Ohio, we may have gotten at least part of the answer. Prompted by a series of earthquakes centered around a year-old deep wastewater injection well in Youngstown, including a big quake on December 31, 2011, the Ohio Department of Natural Resources imposed tough new wastewater disposal regulations that will make Ohio’s Class II deep injection wells among the most stringently monitored and regulated in the nation. (Thank you to Ohiofracktion for picture above.)

In a ModesShift post last week I noted that the United States has spent four decades installing the world’s best environmental protection and public safety infrastructure to limit damage from industrial development. The web of statutes and regulations is supported by agencies and personnel whose mission is to ensure that rules are followed, risks are managed, and violators are prosecuted. The oil and natural gas boom that is occurring in at least 12 states, and is getting ready to roll in Ohio, is challenging that regulatory infrastructure to both keep pace and effectively safeguard resources and public health.

Risks From Drilling and Waste Disposal
In the case of Ohio’s Department of Natural Resources, the regulatory infrastructure performed as it was designed to do, with one caveat. It permitted a wastewater injection well in a zone of deep rock with no prior record of earthquakes. It turned out that a fault line existed in the zone and the new wastewater pumping caused it to slip, said the state agency. The ODNR suspended issuing permits for new injection wells, which held up at least 13 more in the state in Mahoning, Washington, Portage, Athens, Noble, Muskingum, Trumbull, and Morgan counties.

The unexpected is always to be anticipated with big industrial transitions, like that occurring with the oil and gas boom. The farm chemical era of the late 20th century produced industrial agriculture practices that fed more people but also poisoned the water and wildlife and people with toxic chlorinated compounds. Nuclear development produced Three Mile Island and Chernobyl. Cars and highways produced suburbs and an expensive lifestyle of ease and convenience that also yielded record rates of obesity and heart disease.

The oil and gas boom is almost entirely the result of production practices that use millions of gallons of water shot under intense pressure into each well drilled into deep shales. The hydrofracking process shatters the rock. But about a third of the water — mixed with chemicals and sand – must be brought back to the surface for the well to begin producing. The wastewater contains all the compounds that were mixed in at the surface plus chemical constituents picked up from the shale.

Deep Injection Wells Linked to Earthquakes in Other States
Wastewater disposal is fast becoming one of the principal issues driving public resistance to oil and gas development, and a primary technical impediment to the industry.

In 1990, the Department of Interior found, in a report to the Environmental Protection Agency, that disposing industrial wastewater in deep wells could cause earthquakes. The report identified five instances of earthquakes centered around disposal wells, including one in 1967 at the Rocky Mountain arsenal. See the report (earthquake-hazard-associated-with-deep-well-injection-report-to-epa-nicholson-wesson-1990)

In recent months, authorities in Arkansas and Texas also have identified earthquakes around frack wastewater disposal wells. South Texas experienced a magnitude 4.8 earthquake in October 2011 near the Eagle Ford Shale play, which is home to many disposal wells. There have been other earthquakes linked to injection wells in the Barnett Shale.

When earthquakes began occurring in Arkansas in 2010 and 2011, the state Oil and Gas Commission banned wastewater disposal wells within a 1,150-square-mile area north of Conway in the Fayetteville Shale region.  According to the Arkansas Geological Survey, the new injection wells were being installed on top of an active fault line.

History of Youngstown Injection Well
The Youngstown injection well opened in December, 2010 to serve a growing market for industrial wastewater disposal caused by the natural gas boom in neighboring Pennsylvania. Though natural gas producers in Pennsylvania say they recycle 70 percent of the frack water they use, that still leaves tens of millions of gallons to dispose safely. Pennsylvania has six deep injection disposal wells. Ohio has 176 operating disposal wells. Companies want to install more of them.

D &L Energy, a Youngstown energy producer, recognized a market opportunity. Their Youngstown disposal well on Ohio Works Drive was one of the state’s newest. Soon after it opened residents began reporting small earthquakes. The ODNR, which issued the permit under regulations and guidelines that had been updated in 2010, investigated and eventually  counted 12 earthquakes in 2011 in the vicinity of the well.

On Friday, state regulators formally concluded that the Youngstown wastewater disposal well was responsible for the quakes. The agency issued a host of new regulations for installing, operating, and monitoring deep wastewater disposal wells. The agency finished its news release with these remarks:

“According to the U.S. EPA, more than 144,000 Class II disposal wells inject more than two billion gallons of brine every day in the United States. The U.S. EPA considers the deep injection of brine using Class II disposal wells as the preferred and environmentally safe method for disposal of oilfield fluid wastes. Prior to Class II disposal wells in Ohio, brine was stored in surface pits with harmful environmental results.”

– Keith Schneider

Public concern about fracking is the most important impediment the oil industry faces in advancing the American energy boom. Photo by Google.

This week, Ohio counted over 130 drilling permits that it had approved since last summer to a select group of big energy companies to drill for oil and gas in counties along the upper Ohio River. The state says 45 wells, aimed at the oil- and gas-saturated Utica shale, have already been drilled. River towns that have been growing old and shedding their talented young people for two generations are suddenly awake with jobs and new kinds of opportunities. The possibilities for the dead end counties of southern Ohio, the deteriorated buckles in the rust belt that the Ohio River has defined for decades, are looking up. Young people are hiring into jobs that pay honest wages. Local businesses are registering increases in sales. The entire region sees a future, and it isn’t so bleak. Among the biggest players in the development is Oklahoma-based Chesapeake Energy,

Job growth is one way to view the oil and gas boom that appears ready to engulf Ohio, crossing the Ohio River from Pennsylvania.

Here’s another way to look at it. Low natural gas prices, which are expected to stay low because of ample supply, are joining  new federal air pollution rules in prompting big coal-fired utilities to fuel switch to natural gas. That reduces air pollution, the need to expand eastern and western strip mines, and cuts emissions of climate changing gases. Last week, according to Penn Future, a respected environmental group in Pennsylvania, “GenOn announced plans to deactivate seven coal-fired power plants totalling 3,140 MW of generating capacity. Five of those plants are located in Pennsylvania; two are in Ohio, and one is in New Jersey.”

“According to Reuters,” said Penn Future, “more than 30,000 MW of U.S. coal-fired power plants will be retired over the next decade. Gas fired plants are displacing coal in record numbers. Since 2000, the market share of gas for electricity generation has risen from 16 to 26 percent, while coal’s market share has declined 52 to 42.5 percent.”

Rolling Stone magazine also jumped into the gas boom in recent days with a long article that seeks to eviscerate Chesapeake Energy and its chairman, Aubrey McClendon. It describes the boom as a scam, accusing companies of inflating estimates of recoverable reserves, and projecting a speculative bubble that is ready to burst. It sorts out some of the environmental issues and reaches the conclusion that a calamity approaches. It quotes Robert Kennedy Jr., the environmental attorney, to the effect that the development of shale gas reserves is a “disaster” in the making. Kennedy, by the way, said the same thing about a proposed offshore wind farm near his family’s Cape Cod compound. You can read the article here.

There are several interesting internal disclosures in the Rolling Stone piece about how the company operates.  But there’s not much more that I recognize from my own reporting of the energy boom that rings true to me. The oil and gas reserve estimates published by states, the federal government, and energy companies and trade associations differ in specifics but all consistently point to mammoth new supplies that can be tapped with new technology. And the various risks of oil and gas production to water, air, and the climate are demonstrably lower than producing similar amounts of energy from coal.

Moreover, the oil and gas boom comes at a time when state and federal regulatory infrastructure and law are in place, and experience is long. Forty years of environmental and public health protection policy is readily available and is being applied to this  huge new industrial sector. No industrial expansion of the scale and speed now exhibited by the energy boom comes without risk. But the country is much better positioned to avoid the sort of near-term “disaster” predicted in the Rolling Stone piece.

The disaster we need to worry about is utterly failing to take advantage of the 20-year economic reprieve provided by the oil and gas boom and developing cleaner alternatives in large enough quantities before this period ends. The regulatory infrastructure America constructed since 1969 is being deployed, and can, with ample civic oversight and pressure, provide the measure of safety  the public says it needs to enable this bridge to the cleaner energy future to be built.

– Keith Schneider

Little by little America seems to be catching on to the unexpected oil and natural gas production boom engulfing the United States. The 40-year catechism of U.S. energy, that supplies are going down and Americans use too much, is being completely rewritten. Americans, in fact, are using less energy. Meanwhile, a convergence of new exploration and drilling techniques, and rising global demand that is keeping prices high, is producing what looks to be the most powerful surge in fossil fuel production in U.S. history.

From every vantage, as I’ve noted in previous posts, the economic, environmental, cultural, and political consequences are momentous.

1. The boom in oil and gas production represents a generation-long economic reprieve for the United States. Almost every  analysis by the U.S. Department of Energy, the U.S. Geological Survey, and by the major oil and gas companies projects that the production trajectory for domestic oil and gas production will steadily increase for 20 years, maybe longer. More than $100 billion annually in capital investments is pouring each year into energy-producing states for exploration and drilling equipment, new pipeline construction, refinery expansions, and for pumps and trucks and transport depots to move fuel to market. Dense pockets of new job growth in oil and gas production, processing, and services have formed in a dozen energy-rich states, helping to lead the U.S. out of the recession.

Three of those states – Ohio, Pennsylvania, and Colorado – are essential to the re-election of President Barack Obama, who noted the energy boom and expressed a new sense of buoyancy about the nation’s prospects in the State of the Union in January, 2012.

2. The new narrative of domestic oil and gas production is transformational in its geopolitical implications. In the State of the Union, the president celebrated the highest levels of oil production in eight years, the lowest level of oil imports in 16 years, natural gas supplies that could last a century, and “a future where we’re in control of our own energy, and our security and prosperity aren’t so tied to unstable parts of the world.” It looks like he’ll be the first U.S. president in the era since President Nixon pushed hard for the same outcome during the oil embargo of the early 1970s to actually mean what he says.

By 2014, according to the U.S. Department of Energy, the U.S. will be a major exporter of natural gas. By 2030 or so, U.S. oil and fuel imports as a share of total consumption will fall to around 22 percent. To energy economists, that’s a number that defines energy security.  “It’s happening very quickly and it’s for real,” said Kenneth B. Medlock, an energy and resource economist at the Baker Institute For Public Policy at Rice University in Houston, who organized a one-day conference of environmentalists, scientists, academics, and executives in January 2012 to explore the American fossil fuel boom.  ”Increased supplies affect the balance of payments. It affects our geopolitical security. It has a lot of impact on reducing the cost of energy in manufacturing, making us much more competitive. It is, potentially, one of the most important economic events of the last 50 years.”

3. The risks of perpetuating America’s fossil fuel economy are equally momentous, producing a new era of national reckoning. Ample natural gas supplies and low prices are dampening demand for wind, solar, geothermal, and other non-polluting sources of energy.  One result is that clean energy manufacturing plants are closing in the Midwest, Rocky Mountain states, and California. Two solar producers in Michigan, for instance, have shut their doors in the last year.

Public investment in non-fossil fuel innovation is uncertain. It’s not at all clear yet whether Congress will renew the tax credits that expire later this year and that have spurred wind and solar use and manufacturing.

If the U.S. spends another generation in an oil and gas coma, choosing not to pursue alternatives with the fierce commitment to success that propelled the Apollo program to land a man on the moon, it will end up even more economically stretched and politically unstable than it is today.

That conclusion is easy to draw. Persistently high prices for oil, caused largely by rising demand in Asia, is strengthening the energy industry and its ability to convince state governments and Washington to scrub interest in developing cleaner energy alternatives. The urgency to avoid this scenario is keen for the millions of Americans who could work in the alternative energy sector, and for the planet’s health.

Water supplies in the drilling zones are endangered by production practices that require billions of gallons of fresh water, yield torrents of polluted water, and are overwhelming the federal and state regulatory agencies charged with limiting the damage.  Continuing to burn natural gas and oil, moreover, increases production of carbon, methane, and other sources of climate changing gases that are causing expensive havoc with weather patterns in the U.S. and globally.

The reprieve provided by the new American energy boom is also producing a reckoning with the future that we just can’t mess up.

– Keith Schneider

CHARLOTTESVILLE, Va. — When Bob O’Connor (far right above) was 18, he lived directly above me in a second-floor dorm room in Barclay Hall at Haverford College. He’s a big-boned guy with a quiet way, a sizable intellect, and likes to have fun.

Two upper classmen, Pete Doan and Evan Lippincott, lived across the hall from my first-floor room. Pete and Evan were dorm reps and were supposed to keep tabs on freshmen like me and Bob. They did. They bought us beer and bourbon at the state store in Ardmore.

The other important aid Pete and Evan provided was introducing their young charges to their friends. That’s how I met Andy Solberg (second from right), an Illinois boy a full foot taller than me, infinitely more amusing and intelligent, and can be charming and cranky all at the same time. We get along real well.

The other two guys in the picture are Jim Walker (second from left) and Pierce Homer (third from left). Jim possesses the curious and incalculably valuable capacity to talk about almost anything with depth and authentic expertise. He also knows how to relax. One morning I found him asleep in the bathtub of my junior-year Haverford Parks apartment.

Pierce is a riot, whip-smart, and our lives really connected in the years right after college when I was a young writer in Charleston and he was living in Alexandria, Va. preparing for graduate school in public administration. On reporting trips from the South to Washington, D.C. I spent nights at the carriage house with the outdoor pool that he rented in Old Town. We had a ton of fun.

Last week, for the first time in quite awhile, the five of us gathered in Charlottesville for a couple of days at the comfortable and spacious modern home that Bob shares with his wife, Sara, and youngest of four children, a daughter, Carolyn. Our time was spent climbing to the summit of Humpback Rock in a cold, gale force wind. We played pool and (good surprise) ate healthy food, including a delightful gumbo sent north from Birmingham, Ala. from Alice Walker, Jim’s wife. We did a good bit of remembering events, and friends who weren’t able to join us. We marveled at the clear sky and view of the Shenandoah blue ridge that greeted us each morning from Bob and Sara’s kitchen. Mostly, we delighted in our strong connection and company.

Robert Frost wrote, “We dance round in a ring and suppose, But the Secret sits in the middle and knows.”

The five men pictured above represent many of the highest ideals of our generation. I say that without any sense of hubris or irony. Our lives as adults have been stoked by the kindling of opportunities and distresses of our time. We thrived even as the country steadily shifted from an era of entitlement, and a dismaying sense of exceptionalism, to a new period of competition, doubt, and caprice. Had we grown up in the same era as our millennial children, worried about educational opportunities limited by diminished financial resources, competing to gain a slim hold in a nation distorted by rigid ideology and real fear, our choices and our paths would have been much different.

The secret, though, sits in the middle and knows.

These men married well and are raising fine children. They are good husbands and fathers. They all are in good health. Their ability to cultivate strong friendships is essential to their well-being.

Their work matters, too. At age 55 and 56, each constructed lives that are wonderfully relevant. Bob is professor, chair, and physician-in-chief in the Department of Emergency Medicine at the University of Virginia Health System. He spends enough time in emergency rooms, in Virginia and overseas, to save lives, lots of lives. Andy is a commander in the Metropolitan Washington, D.C. Police Department. In the 25 years he’s been with the department he helped turn Washington from one of the most dangerous cities in the country to one of the safest.

Jim’s helped to put people into homes, first as director of planning and development in Wilmington, Del. and now as a federal Housing and Urban Development official in Alabama.

While on the way out to Charlottesville, Andy and I passed underneath the new bridges and tracks that are extending the Washington Metro system 23 miles to Dulles Airport. That’s a $2.6 billion project that Pierce helped to make happen as former secretary of transportation in Virginia.

I came away from those two days feeling so content, humbled by the fortune of lifelong friendship with these men, and privileged to know that our adventure together moves forward.

– Keith Schneider

Making the complex simpler to understand is one of the guiding missions of my life as a journalist. In the last several years, in reporting from Australia, Europe, Asia, and North America, I’ve devoted much of my time to reporting on global energy issues, particularly the coal production and clean energy surge in China; the gas and oil boom in North America, and the promising rise and troubled fall of clean energy prospects in the U.S.

A new piece of this saga is unfolding in Ohio, of all places.

Ohio, as you may know, is a center of clean energy manufacturing. During the 2008 campaign, and just prior to the inauguration, President Obama visited Cardinal Fastener, a manufacturer of specialty bolts used in wind energy production. The Legislature approved a decent renewable energy standard for utilities in 2008 (12.5 percent by 2025) and established several loan and investment accounts to encourage clean energy manufacturing and production, resulting in new wind farms and encouraging wind and solar plant expansions.

Ohio, as you may not know, also is steadily elevating as a center of oil and natural gas production. The Marcellus shale (natural gas) and the Utica shale (oil and gas) lie beneath much of eastern and southern Ohio. Two weeks ago, Interior Secretary Ken Salazar visited the MAC Liquid Tank Trailer in Kent, Ohio, which expanded its bulk tank and trailer production facility. The equipment hauls water used in fracking deep oil and natural gas wells that are coming online in eastern and southern Ohio, and in neighboring Pennsylvania and West Virginia. A torrent of investment in mineral leases, manufacturing plants, pipeline construction, and drilling platforms signals what business executives and state energy officials say is the most significant surge in oil and gas development in Ohio in decades. Since 2005, Ohio’s employment in the drilling sector has grown by 1,100 jobs, according to an analysis by EMSI, a labor market research group in Idaho.

The fossil energy and clean energy narratives are now colliding across Ohio. One poignant example is what’s going on at AK Steel, a Middleton, Ohio company that proposes a $310 million expansion in steel production. The proposal includes deploying new technology to use gases from its blast furnace as a fuel to produce steam for a 100-megawatt electrical power plant rather than emitting a waste gas that it must by law now flare. The co-generation electrical plant would be large enough to power a city of 85,000.

Where this idea becomes interesting and relevant to the new state and national energy narratives is what lies behind the plan. The AK expansion is prompted by rising demand for steel in the growing gas and oil production sector in Ohio, as well as the surging auto industry. Three new steel facilities are under construction in Ohio to serve the energy sector. Another is under construction south of Toledo for auto manufacturing.  A fifth $7 billion steel plant, proposed by a Russian-German-American consortium, is under consideration in southern Ohio.

AK Steel’s co-generation technology, the company asserts, fits into clean and renewable energy development in Ohio. The U.S. Department of Energy has already approved a $30 million grant for the cogen project.  AK steel has asked the Legislature to amend the state’s clean energy development statute so that it can gain some of the $1.5 billion that lawmakers put there when it passed three years ago. If the Legislature agrees, the other new steel plants, as well as Ohio’s existing steel manufacturers, could gain state funds to convert their facilities to produce electricity. John Funk of the Cleveland Plain Dealer wraps up more of the details here.

Ohio’s major environmental organizations, among them the Ohio Environmental Council, support the change. So does the NRDC and the EPA. But the state’s wind energy production and manufacturing sector, led by Iberdrola Renewables Inc., opposes the amendment. The wind industry believes it would further disrupt Ohio’s clean energy power markets that are already roiled by low prices for natural gas. Iberdrola executives, who built a 304-megawatt wind farm in Ohio, predict that if the amendment is approved it would end wind farm construction in the state.

The debate outlines the steadily mounting influence that oil and gas production is having in Ohio’s clean energy sector, and nationally. Rising oil and gas production is rattling the alternative energy manufacturing and production industry. Simply put, the entire conversation about energy is being turned on its head in Ohio and nationally.

Since the 1970s the essential narrative on energy in the U.S. was this: We use too much, and oil and gas reserves are declining.

But since 2008 we’ve been using less and domestic supplies are increasing.

Those of us who’ve reported on energy all these years anticipated that the technological breakthrough that would alleviate our energy woes would come in the alternative fuels sector — wind, solar, geothermal, algae, cellulosic ethanol, and the like. Wrong. The big breakthrough came in drilling and extraction technology – most specifically in horizontal drilling and high pressure hydro-fracking that is drawing the U.S. steadily closer to an unexpected era of fossil fuel security.

– Keith Schneider

See more of my reporting on the American energy boom.

Plus these pieces from North Dakota:

In North Dakota’s Bakken Oil Field, The Smell of Diesel, the Sound of Trucks

Boom in Bakken Oil Play, and Elsewhere Starting to Drive U.S. Economy

Bakken Oil Wells Surround North Dakota National Park

Is American Energy Exploration and Production Breaking the Great Recession?

Bakken and Other Big Oil and Gas Plays Produced 600,000 New Jobs Since 2005

Great Plains Bakken Riches Describe New Wealth, New Risks

North Dakota Oil Boom Like Air Ambulance Flying In Storm

How Long Will North Dakota Bakken Oil Surge Last? Decades Due To China