Could Shale Gas Power the World?

Natural gas from shale rock promises to provide cleaner, abundant energy for the U.S. and the world. But there's a catch. It could come with significant environmental and social costs. Can the energy industry deliver the goods so that everyone benefits?

  • Share
  • Read Later
Jeff Riedel for TIME

A suspected leak from a wastewater pond on Don and Carol Johnson's farm meant their cows had to be quarantined

(3 of 5)

Engelder should know; he played a key role in the discovery of the Marcellus Shale. At the beginning of the last decade, a Texas-based company called Range Resources began experimenting on Marcellus wells in western Pennsylvania. The company had little more than expensive holes to show for it until it began tweaking Mitchell's method. By August 2007, Range had a winner, even as Engelder, a gas-shale expert, began to realize just how huge the Marcellus play could be. During a December 2007 conference call with investors, Engelder estimated the recoverable amount of natural gas in the Marcellus at 50 trillion cu. ft. (1.4 trillion cu m). Estimates now range up to 10 times as high, which would provide the energy equivalent of 86 billion barrels of oil. "I remember thinking, Merry Christmas, America," Engelder says now. "It was absolutely an amazing thing."

The agents of drilling companies had already begun moving into Marcellus territory, snapping up gas leases. That's not unusual in Pennsylvania — most farmers and other large landholders have leased the gas rights to their land for decades, often for little more than a few dollars an acre (0.4 hectare). But not much actual drilling was ever done. (Landholders are paid an up-front bonus per acre for a lease, plus some percentage of the value of any produced gas as a royalty.) When word got out that the Marcellus was for real, the price for leases skyrocketed — rising to $5,000 an acre by the summer of 2008, according to Engelder — and dozens of gas companies jostled for territory. Once land was leased, the drilling rigs arrived, clustering in rural areas of southwestern and northeastern Pennsylvania. More than 2,400 Marcellus wells were drilled from 2006 to the end of 2010 in the state, and some 300 were drilled before March 10 of this year. "It's like a treadmill. Companies have to keep drilling wells and adding new ones to their inventory," says Tim Considine, an energy economist at the University of Wyoming. "That's a lot of activity that adds up."

Considine co-authored an industry-sponsored study in early 2010 that estimated that Marcellus drilling would create or support 88,000 jobs that year and more than 100,000 in 2011, plus billions of dollars in economic value for the state. Those numbers are debatable, but it's impossible to miss the buzz of economic activity in drilling regions. Relatively few of those jobs directly involve drilling and fracking —most of that work goes to roughnecks with Texas or Oklahoma license plates on their pickups — but there are work and wages for local truck drivers, subcontractors, waiters and bartenders. Rural Bradford County has long been one of Pennsylvania's poorer areas, but last year the county led the state in job creation. Gregg Murrelle manages the Riverstone Inn and Comfort Inn in Towanda, the Bradford County seat, and his hotels are fully booked for weeks on end, full of gas workers on 14-day stints. He's building another unit, and he estimates he's hired an additional 20 employees since the drillers moved in, with another 15 to 20 needed for the new hotel. "It's just been wonderful that these businesses have come into the area," says Murrelle, who has leased the land around his properties for drilling. "We're not being impacted by the recession at all."

For a state that is billions of dollars in debt, it's hard to resist the economic potential of drilling, drilling and more drilling — not that many politicians are trying. A just-released Penn State study found that sales-tax revenues from Pennsylvania counties with at least 150 Marcellus wells experienced an 11.36% increase from 2007 to 2010, while counties without wells experienced sharp declines. New Republican governor Tom Corbett — who has received hundreds of thousands of dollars in contributions from the gas industry over his career — sees the Marcellus as the key to Pennsylvania's economic rebirth, and he's already begun removing some limits on drilling. "The Marcellus is a resource, a source of potential wealth, the foundation of a new economy," said Corbett last month in his maiden budget address. "Let's make Pennsylvania the Texas of the natural gas boom."

Which, as some very unhappy Pennsylvanians see it, is exactly the problem.

The Flowback
It wasn't the fact that the gas company used the family driveway to bring hundreds of trucks to the well being drilled on their property that annoyed the Johnsons so much. Nor was it that the multi-acre well pad was just a few hundred feet from their back door, even though the Johnsons had leased hundreds of acres on their dairy farm outside Wellsboro. But when their cows last summer ended up drinking from a suspected leak in a drilling wastewater pond —slurping up water contaminated with the radioactive element strontium — that was too much. You don't mess with a farmer's livestock, and dozens of the Johnsons' cows had to be kept in quarantine. "We wished the gas company had never come around here," says 75-year-old Don Johnson, who has lived in the area his entire life. "They affected the water, and without water you can't farm here and you can't live here."

  1. 1
  2. 2
  3. 3
  4. 4
  5. 5