Hydraulic fracturing (fracking) best practices need to be improved, but the drilling practice can be done safely, according to Stanford University's Steven Chu, who served as Energy Secretary during the first Obama administration.
"Hydraulic fracturing recovery of gas and natural gas liquids and oil can and should be done in an environmentally sensitive manner," Chu said Tuesday at America's Natural Gas Alliance's Think About Energy Summit in Columbus, OH.
"You can have your cake and eat it too. I think it's a false choice to say either you develop natural gas and oil in the United States with hydraulic fracturing and horizontal drilling and live with the environmental consequences, or you stop it because of the environmental consequences. You can develop it in an environmental safe way. Is regulation needed? Yes -- but I do hope that the industry actually takes a leadership role," similar to the Institute of Nuclear Power Operations (INPO).
Formed by the nuclear power industry in the wake of the Three Mile Island accident, INPO promotes operational excellence and sharing of best practices at nuclear power plants.
"This has become a very effective organization, and I think the oil and gas industry could use that as an example," Chu said. The country needs to move toward renewables by mid-century because of climate change, and natural gas "is a great transition fuel," he said.
Some criticism of natural gas drilling and fracking, including one study by researchers at Cornell University released during his tenure at the Department of Energy (DOE), was "not credible," according to Chu (see Shale Daily, April 13, 2011).
"The other expression, in addition to having your cake and eating it too, is don't kill the goose that laid the golden egg. This is something you that you can do in a safe way...people realize that things happen, but we also realize that you can get better and better. If you look at the safety record of airplanes and automobiles and industrial accidents, they get better and better and better. As long as the best practices continue to improve, continue to go up, I think we can use this resource, and I hope we can."
The flood of natural gas coming out of U.S. shale plays is likely to keep gas prices low for some time, according to Chu.
"I think it will remain low because the technology is rapidly improving. You went from one to six to 12 to 20 wells on a single pad...the ability to frack and not to overfrack, to keep the rocks open longer, it's all improving..."
"For the next couple of decades, the price of gas will remain naturally very low. I will be personally surprised if it spiked up for any significant amount of time above $6.00/MMBtu. I really expect it to be around the $4.00-6.00 range."
Chu announced in February that he would not serve a second term in the Obama administration (see Daily GPI, Feb. 4). In announcing his departure, he highlighted some of the progress made while serving at DOE, including the formation of the $45 million inter-agency effort last year by the Interior Department, DOE and EPA to research fracking.