With abundant availability of natural gas, the time for drilling has come, says Mitchell Schnurman, FW Star Telegram
Once again, shocking news has nations rethinking their energy policies. In Japan, a nuclear power disaster has put millions in danger, prompting some to reconsider nuclear expansion. In North Africa, uprisings have sent oil prices soaring. Last year, a deep-water explosion spewed oil into the Gulf of Mexico for months and led to a government moratorium on exploration.
But in Fort Worth, the pioneer in urban gas drilling, the natural gas business is booming as usual. Production has soared in the past decade, without any catastrophes or major setbacks so far. Opposition remains strong in some areas, but residents and operators have found common ground, and as more people get used to the industrial activity, many concerns have eased.
Consider how a four-month debate over drilling near public schools came to a head last week: Fort Worth trustees decided that drill sites must be 1,200 feet from schools, twice as far as the city standard.
That's it -- no major overhauls, no moratoriums, no being roiled by world events. After roughly a decade of drilling in the Barnett Shale, the latest oversight adjustment came down to bumping the setback by 600 feet.
Trustees would like operators to use an electric motor, rather than diesel. But that's just a suggestion. Their comfort level couldn't be much more comfortable, unless the school board proclaimed, "Drill, baby, drill." That slogan, first adopted for domestic oil exploration, is a better fit for natural gas in the United States. And Fort Worth's experiment in urban drilling can stand as Exhibit A.
Operators, city leaders and residents have often clashed over drilling: Mayor Mike Moncrief called it both a blessing and a challenge. But they've steadily improved the rules, and the public has voted with its pocketbook.
In Tarrant County alone, more than 340,000 gas leases have been filed since 2007. That's almost 10 times more than in the previous decade, according to data from the Powell Shale Digest, the Fort Worth newsletter that tracks the industry.
More than 15,000 wells have been drilled in North Texas, the newsletter reports, and other areas are eager for a piece of the action. In the Eagle Ford Shale around San Antonio, 1,229 drilling permits were approved in 2010, compared with 33 permits just two years earlier, according to a local report. Advocates are touting big economic benefits, including 12,600 full-time jobs and $2.9 billion in total impact -- the kind of numbers that we take for granted here.
In the U.S., natural gas production grew almost 11 percent from 2005 to 2009, and shale gas accounted for all the increase. More than 67,000 wells were added during that time, and Texas accounted for 31.5 percent of production in 2009, according to the Energy Information Administration.
There's more to do before more people accept drilling, especially in dealing with wastewater and emissions, and increasing regulatory oversight. The Environmental Protection Agency has joined the fray, starting a major study and taking actions in North Texas.
But this region has made progress in striking a balance between the economics and the impact on the environment and quality of life. In Fort Worth, setbacks have been extended and noise restrictions strengthened, and the almost constant give-and-take between drillers and residents has lifted awareness across the board. Operators seem more mindful about timing their activities, so they're less disruptive.
A group of British leaders visited recently to learn how Fort Worth did it, and a contingent from Canada is scheduled to come soon. One local geochemist spent nine months in France to provide advice on shale drilling.
Many other countries are exploring this option, because shale deposits are widespread. Like us, they want a domestic alternative for energy, recognizing that it could improve national security.
"It's the beginning of a watershed year," said Ken Morgan, director of the Energy Institute at Texas Christian University. "When I speak to groups about natural gas, they all ask the same thing: 'Why haven't we done this already?'"
Natural gas prices rose almost 9 percent in the past week, after world events made the fuel more attractive. Natural gas sells for roughly a quarter as much as a comparable amount of crude oil, Morgan said, and burns cleaner than oil and coal.
More important, the supplies are abundant, thanks to new seismic and drilling techniques. Estimates put the U.S. supply at 100 years or longer, depending on advances in recovery rates.
Operators used to get 19 percent of gas in a well, Morgan said. Now they get 25 percent. If that trend continues, drillers will revisit older wells, tapping them and drilling new wells at the same site.
"The potential is so enormous," Morgan said, adding that AT&T, Waste Management and other fleets (including the T, DART and Dallas/Fort Worth Airport) are embracing natural gas as a transportation fuel.
The industry has been promoting such benefits for years, led by T. Boone Pickens' plan. By converting 10 percent of vehicles to natural gas, he says, the nation could save $50 billion annually on imported oil.
Drilling opponents insist the industry is not safe enough. The state has responded, and the Barnett Shale will become the most monitored airspace in Texas, if additional measuring devices arrive as planned.
In January, the Texas Commission on Environmental Quality reported that it had investigated nearly 900 natural gas sites in the Barnett, and nearly all problems were caused by human or mechanical failure. More diligence could have prevented them, officials said.
"Corrective actions amounted to little more than replacing worn gaskets, closing open hatches and repairing stuck valves," the agency said in a presentation.
Sounds like low-hanging fruit. As drilling spreads to other parts of the country, many want industry and government to address wastewater and groundwater contamination, too. Austin lawmakers propose several changes, including the disclosure of chemicals used in drilling.
"It's a little early to declare complete victory," said Jim Bradbury, a Fort Worth lawyer who has been on city drilling task forces since 2006. "The regulatory structure has not caught up with production."
No doubt, the industry can always get better. But examine the Barnett Shale and weigh the pros and cons, and costs and benefits, and natural gas looks better all the time.
Mitchell Schnurman's column appears Sundays and Wednesdays. 817-390-7821