April was a pretty good month for the natural gas industry.
Prices are finally rebounding. After dropping below $2 per BTU last year, they’ve now rebounded to over $4 as cold weather lingers and stockpiles diminish.
The price of natural gas is notoriously volatile, and the initial boom associated with the Marcellus Shale deposits and hydraulic fracturing has cooled, but the long-term outlook remains promising.
A Duke University study released last month concluded that tougher environmental regulations on coal and lower natural gas prices will continue to drive utilities toward gas for electricity generation.
Meanwhile, natural gas production and hydraulic fracturing came out ahead in two separate environmental findings.
First, the Environmental Protection Agency determined that there is much less methane coming from drilling sites than first believed. Methane is the second most common greenhouse gas. (Carbon dioxide is the first.)
The EPA says the drilling industry’s pollution controls have brought methane releases down 20 percent below projections. The Associated Press reports that the decline means natural gas operations generate slightly more methane than “belches from cows and other animals.”
But perhaps the most significant development came in Franklin Forks, Pennsylvania. That has become “ground zero” in the fight over fracking. Some local folks along, with celebrities such as Yoko Ono and Susan Sarandon, have been making the case that fracking has contaminated water wells with methane.
However, the Pennsylvania Department of Environmental Protection says a 16-month study has determined that drilling did NOT contaminate three families’ drinking water.
“The water samples taken from the private water wells were not of the same origin as the natural gas in the nearby gas wells,” the DEP found.
The findings are in line with what the industry has said about the drilling process; that there have been no confirmed cases of fracking contaminating a water supply. That assessment is shared by the EPA.
West Virginia is an important player in the natural gas industry. Our state sits on top of the gas-laden Marcellus Shale. The economic benefits will extend well beyond drilling. Chris Guith, Vice President of Policy at the Institute for 21st Century Energy at the U.S. Chamber of Commerce, predicted that gas-related employment will expand from the current 12,000 jobs to 30,000 jobs by 2020.
The industry knows it has to get the environmental part right. A serious mistake would help validate the claims coming from opponents, and that could lead to an overly restrictive regulatory climate.