 Good afternoon. I'm Steve Levine with the New America Foundation We're in the midst of the most turbulent age in energy since Rockefeller the the number of countries involved the volumes of energy in involved are unprecedented the the Impact the potential impact on countries on geopolitics on Geo-economics has never been greater but the epicenter of this whole boom that we're talking about is the United States and the and the center of it is a Drilling method called fracking So this is the subject of Russell Gold's book new new book called the boom so we're lucky to have Russell here with us and we're gonna start with Russell making a few remarks and then I'm going to engage him in a bit of Conversation and then and then we'll open up open it up to questions We should have plenty of time for a very nice conversation. We've got a full hour. So Without further ado. Well, just picking up on what you said last week I was in California at a conference where there are a number of CEOs there from mid utilities a coal company a solar company and Every one and a stat oil CEO is there so across the energy spectrum and they all to a person agreed We are at the beginning of a very profound energy transition We don't exactly know where it ends up and I Think it could end up in any number of different directions But but there are some major changes under it going right now and I just wanted to start to kick off by talking about something that as I reported this I found very interesting and That was sort of this contrast between the the European and the American approach to to oil and gas exploration Or just industrial policy in general Typically the Europeans Have a what what they more of a precautionary approach. They want to prove something is safe They want to have a safety case developed before they go ahead And let a new technology drilling the United States takes the opposite approach We drill first and ask questions later And I wanted to read a quote from Rex Tillerson in my book the CEO chairman and CEO of Exxon mobile because I thought it sort of summed up It says the United States doesn't subscribe to this approach Exxon's Rex Tillerson for one approves quote if you want to live by the precautionary principle Then you crawl up in a ball and live in a cave. He said so that's sort of but you know it's easy to sort of chuckle at that and and and to sort of agree with the European approach but this full Throttle, let's just try things. Let's Use you know acid and explosives and nuclear bombs to see if we can get more oil and gas out of these rocks and then High-pressure water, which ultimately did the trick You know was very risky, but it totally changed the energy Running out of natural gas, you know The precautionary principle because we did go forward drill first and ask questions later And in some ways that worked out great. We had major technological changes lots of energy But we're on we're in an inflection point right now where if we want to keep doing this if communities will To prevent communities from basically rising up and saying no more You know, there maybe needs to be more of a European approach to say, okay What more can be done to make this safer to protect communities and to make this a less obtrusive process So just some general thoughts to start off very very good it when When we hear about shale when we read about about it, it's usually one of two things It's from a policy standpoint. What what should we do? What what shouldn't we do or it's? It's from one spectrum or the other politically. This is a necessary Factor in the in the resurgence of the United States American manufacturing Renaissance or the other side a Real environmental pushback, but I want to start start from a very very basics What is shale? So shale is a very dense rock. It is what's known as source rock. It is where the oil and gas was created it's a sedimentary rock which was created by microorganisms little zooplankton and and and other Tiny organisms which settled there and died and then ultimately work was converted by heat and pressure over millennia Into fossil fuels. So this is where oil and gas begins and and it's an incredibly dense rock and over time little bits of it the oil and gas escape and travel up and Often will keep traveling up sometimes to the surface. Sometimes they'll hit An impermeable barrier and pool there and that's the great oil and gas reservoirs that of your that that people go You know try to find what we've hunted most of those we found most of those We've depleted most of those so now we're going to trickier and trickier deeper and deeper So now the industry has figured out now how to target the shale rock itself this incredibly dense rock That's that's the beginning of it all so you this book beautifully written by the way it's And and and much of it is a story not not policy driven at all and I Wonder if you if you could want one of the parts that I liked was where you went around the world and described the shales, right? Could you do that? Well start here in the United States, which is where shale expiration begins the United States gets was very lucky in this sense that as the Continent developed you had the Appalachian mountain chain on the east towards the east through the Rockies on the west and there's great inland sea That basically covered everything in between from Pennsylvania straight through to where Denver is My home in Texas was under would have been underwater and in that great sea That's where it was just a perfect environment to create shales because you had all sorts of Organisms living off the Sun and then they died went to the bottom and and you just had these Enormous contiguous shale resources, which we now call the Marcellus and the Barnett and the Fayetteville and etc etc the Eagleford But elsewhere The the inland seas didn't exist quite as much and so you find shales around the world the North Sea boom of the 1970s Well, there's the Chimorrhagian shale underneath there and and the great Saudi Arabian oil the great Saudi Arabian oil fields come from shales As well and everywhere you go around the world the Siberian oil fields the Bosnian off shale There are shales, and they're all slightly different Some are waxier some were generated more by woody like dead trees dead plants those tend to be a little harder Waxier to extract the oil and gas from And it's it's sort of it's interesting because if you think about the one shale in the United States Which has eluded the industry they've drilled into it, but they can't quite figure out the special sauce to make it work It's the Monterey shale in California Which happens to be outside of that inland sea it was developed in a different way, and and I think that's why internationally you're seeing Some reeds one of them reasons you're seeing more trouble Developing these shale assets because the shales are just they're not quite as good and contiguous and just nice big and thick Which is what the oil and gas drillers love, right? So so is it is it Really is that the the drillers because we read about China has the largest shale Potentially in the world the Bajanov in Russia Poland would love to have Ukraine is having they would love to get off of Russian gas, but you know drillers have gone in there are they just spoiled they just do they want it just One block and we drill in it, and they don't want anything else, but there are a couple reasons why international oil and gas International shale development hasn't taken off first of all we have drilled Hundred times more wells in the United States than any other part of the world. We have just drilled Enormous number of wells we understand the geology we understand the rocks better So even though we know there's shale in Poland, we don't know it as intimately Is it the right kind of shale is it brittle? How thick is it? How deep is it? What's the extent so some of the the drilling that's gone on internationally has been a little more hit-and-miss than what we found the United States but the bigger difference is a Has to do with mineral rights United States mineral rights are owned privately and Typically not always but typically the surface owner owns the mineral rights as well And so that means if I come to you you own the land and the middle rights I'm if I'm a landman I'm gonna cut you a check and say you might not want a drilling rig on the edge of your property But here's $10,000 an acre plus, you know an eighth world to to make it worth their while That doesn't exist anywhere else in the world. The incentives are very different. There's not that profit incentive So you go to a place like Poland you go to Argentina Russia etc and the local communities have been very upset because they're sort of saying well, what's in it for us? We understand, you know, we're concerned about the environmental impacts. We don't want the trucks. We're concerned about the earthquakes I'm all these very legitimate issues, and we're not getting anything from it, right? And and then just to real round it off. You've got water issues in China And you got population density issues in China. I mean that's like New Jersey basically So you would contend what population density wise So you you would contend that if if the French for example had had Were Individually able to profit then you might have shale in the Paris Basin I think you would have a lot better chance of it. Absolutely. Okay, your family did this you're you describe The far the family farm. Yes Which I should say, you know, it's not where I was you know, we're an urban family raised and filled up And we just called it the farm and this was sort of a hundred acres that We bought on the cheap because the local farmers it was too hilly and rocky local farmers didn't even want it So it was something that was picked up for cheap vacations So don't I don't want to give the sense that that we were out there, you know, tilling the land or anything That's not what this was But it was it was land that we felt a connection to and I've been going there since I was a kid So, you know, this is we have a deep connection. It's a place. We went to get away from Philadelphia And and your your father signed a Deal. Yep. They said when they called me and they said what should we do? And it was it was sort of a you know I've been at that point for 20 years a reporter 10 years reporting on on oil and gas and you know I sort of knew all the details, but they were suddenly asking me a much tougher question much tougher assignment Which was well, should we do this and how can we do this? Should we embrace drilling or keep it at arm's length? And it really got me thinking about some of the bigger questions that we all face and as the United States is facing right now also, okay, so you you You went out you've gone out and watched fracking. Mm-hmm. So What does that look like and who who are these guys doing it? Well, so in the book I describe 24-hour period where I went out into the Bakken with marathon oil And to the drilling of the Irene Kovaloff 1118 H One particular. Well, nothing special about this. Well, it was one of ten being drilled at the time in North Dakota This was this was just where they would have me and It was is sort of an amazing experience because here is this technology that is changing the country changing our Economics and our politics and yet the number of first-hand accounts of what it's like to be there and what actually happens Our minuscule or tiny you really have to go looking for them There are a couple good blogs actually right now that are worth reading on that if you're really interested So I'm out there. It's Almost everyone I talked to had the same story and it all sort of begins with well I was a landscaper or I was doing housing construction until 2008 and then so this was a lot of These were people who are used to working outside used to working hard and Had been involved in the real estate boom had been employed by the real estate boom And then when that went away, they started looking around and this is what they found And in fact, that's one reason this has been so beneficial to the economy is that it's been able to Sort of sponge up a lot of that excess labor And so I'm out there and it's just it's sort of this fascinating you have to sort of imagine that they're building a small factory on a two-acre pad and It's they have it down to a science. You can't imagine Two three hundred different pieces of equipment all arranged onto this pad. You can barely walk anywhere It's so tight. They have the water trucks which are the back end of trucks, you know There's the trailers of trucks so close to each other. You can barely even put your hand in between you can't even do that They warn you constantly look where you're walking look down because there's so many pipes on the ground that you could hurt And fall and hurt yourself and then you get into the data van Which is really where all this happens where all the information comes comes in and where they send out everything and you know It sort of reminded me first of all You know kind of remind me a little bit of well The data van that's a there. There are two vans there. I'm sorry. I got a little mixed up two vans one where they test The frack fluid this really everyone's Controversial frack fluid what's in it and that reminded me very much of the breaking bad RV, right if Jesse was running it But not Walter white because it was like a 20 year old kid there working there But then you get into the data data van and that's where everything is run out of Computers everywhere and it's sort of reminding me a little bit of the of a NASA Moon launch or satellite launch except instead of everyone having been clean cut They're very hard to find a haircutting place there filming too much And so they all had big long hair and facial mustaches. So sort of NASA meets NASCAR is what it felt like to me And what do they actually do? Follow directions sent from Houston You know they had this 40 page what they call the Prague a program and it told them exactly what to do turn on this amount of water fire up this release this ball because They have they have the well already drilled goes down about two miles and then the lateral that the Horizontal leg of it run ran about another two miles and their job was to Release these balls down into the well the balls would open up a particular section So they start in the far end, maybe 200 300 feet and then you send in Extraordinarily high pressure of frack fluid mostly water with chemical bio sides friction reducers and a lot of sand Frack that one particular segment and then keep doing it 30 different frack stages for this particular well Who take about I think it took them 29 hours to do the entire fracking just one after the other and it was Just it was it was a routine, you know, they had it down to routine. They had the coffee going they had music going You know that it was just now life inside the data vans nice life outside the data vans a little tougher. I mean it was 40 degrees the wind was blowing overnight it got down into the 20s and you had people working there You had sand silica blowing because you know you're putting the sand into the hopper to mix it up And you've got fine dust everywhere the date, you know the chemicals that have this sort of sweet Just kind of saccharine sweet smell and Not not I would not particularly want to work outside It is is a tough job and a lot of people show up there and last two weeks They didn't realize how physically demanding it is and fracking the the actual action of fracking means you sent those Send those balls that there are small explosions, right? No, it's not even explosion. It's water You know that there may be a small Little with a perf gun to break through the well, but essentially water doesn't compress So if you pump water and hard enough Eventually you'll overcome and cause a crack in the rock and the water will flood into these new cracks Bringing the sand with it and it will leave the sand behind to prop it open And that sort of creates that the cracks and you bring the water out And you have all these little fine cracks where the oil and gas could flow out of and basically, you know the cracks have much lower pressure than what's in the rock so so Nature likes to balance things out So the oil and gas will try to move from inside the high pressure to low pressure and flow into the well so it's water and One point I point out that this is 200 times the the pressure which were the water is being pressed against the rock 200 times your car tire pressure and If you were to sit, you know in a meditative pose on the bottom of the Gulf of Mexico down 12,000 feet I believe is the deepest part of Gulf of Mexico the pressure of the water above you You know would not be equal to the pressure that they're putting on to the bucket to crack it And for anyone like me who's ever dove down six or seven feet and your ears start to hurt with the pressure I imagine going down 12,000 feet. So it's muscular. Yeah. Yeah, so You know seven years six seven years ago the the the plans were from cutter To ship LNG to the United States gas prom established an office in Houston mm-hmm and It was developing the Stockman natural gas field They bought or or leased a pipeline from Mexico up in to California to to ship that's that stuff the United States was spending 365 billion dollars a year the Balance of payments on its oil now The u.s. Is on the verge of exporting the gas right the that balance of payment quickly being reversed This me fracking was invented five years ago, right a little more than five years ago I mean we saw the first I meant that as a joke you you you you actually go back to the 19th century, right? Yeah, I mean Yes, there's sort of three stages of fracking. It's actually very divisive, right because you know the anti-fracking people Fractivists will say well this technology was created just a few years ago And this why I don't have a sense of humor about it because I get caught in this all the time It was only a few years ago and so it's a new untested technology and they're partially right and then the industry will say no We've been doing this for 60 years. In fact, you probably got this too I just got a happy 65th birthday card from some Organization here in Washington celebrating fracking and they're partially right too We have been doing a form of sort of low pressure fracking, but I traced it all the way back to the 1860s when You had just the beginning of the oil age You had Colonel Drake running around Western Pennsylvania drilling wells And as it turned out when you drilled wells back then you often came up dry Because we had no way to know where the water was and you can come Assuming where the oil was you come this far from hitting an oil seam And that would be the difference between a good well and a bad well between being wildly rich and being destitute And so into all this a a colonel from the Union army who had Been in the battle of Fredericksburg watch shells raining down on his troops Notice that shells that fell into ditches covered with water exploded a different way So well, why don't we put a bomb down the bottom of these newfangled wells cover with water and detonate the bomb See if we can create new cracks to hit those oil seams And so, you know, I went back and I thought to myself as I was researching this well There's no way that's really fracking. I mean, that's that's blowing stuff up. That's a different But the original patent if you read it says that the purpose the art of you know As they call it was to create fractures in the rock So this whole idea that we can drill a well But then after that we're gonna go in and we're gonna create fractures to create a big drainage area is really as Old as the oil age at this point and can you take that forward a little bit? How did we get where we are? so fracking Was very successful back in the 1860s and 70s in fact Colonel Drake the the Drake's well the founder He ends up penniless because he can't you know Living on the streets of New York But Colonel Roberts who invents this torpedo this this this fracking this early fracking device ends up one of the richest people in the United States Everyone wants this torpedo everyone wants to use it. He has a patented. He charges a lot of money for it anyone who wants to so this is big trade actually in people sort of doing knock off Torpedoes and they've got to do it at night because if they get caught they'll be thrown in jail And so that's where the word moonlighting actually comes from because they would do it under the moon they would light their charges and so That's all that's going fine for for 10-20 years and then we find spindle top in Texas And there's such big oil fields that the oil just comes gushing up its own You don't need to blow anything up Just giant oil fields and for 20 30 years. It was sort of the error of the gushers and Then those start to go away at least here in the United States and we have to get back to this What can we do the sort of this petroleum engineers quest to? Do whatever they can to the rock to to bend it to their will and so that's when you have fracking come back And this is early it's early what they call the hydrofrac treatment where they're using much smaller amounts of water and It's very successful. You go back and you read like the petroleum magazines of the 1950s and everyone's using this new hydrofrac treatment really popular they licensed it to Halliburton, which was around back then and That sort of continues until but the big difference is they're not fracking shills. They're fracking much Sandstones limestones is much easier to work with rock much more porous rock and Then in the late 1990s Mitchell energy George Mitchell North of Fort Worth. He just has this hankering. He's he's a stubborn guy And he knows that if you just work on it long enough He can figure out a way to crack open the shale and finally one day one of his engineers figures figures it out And the secret is lots of water lots of pressure It's almost too simple for anyone to have realized and that's what begins this five years ago as you say This revolution we're underneath we're undergoing all right. All right, so so You've got this very very powerful Revolution mm-hmm, which you which you also use that phrase in in the book underway in the United States That Has caused some consternation What do you you know, where do you come come down on that before I get to that I wanted to ask about the about the What just yeah, is it safe is it yeah, right? This is an industrial process There's no question about that industry. There are issues with industry anywhere you go Does it cause earthquakes? Injection wells do cause earthquakes not the fracking itself doesn't but once you have all this extra waste water They're putting it down You're gonna cause earthquakes. I mean we have now Large numbers of small earthquakes in Oklahoma and Texas, and it's been proven scientifically proven Is it Contaminating the water that's yes the arguments of that bad wells Once again, it's not fracking itself It's the wells and I don't mean this as an excuse because if you're gonna frack a well There's a whole series of industrial activities that have to go along with it drilling the well fracking the well Disposing of the waste and it's all sort of part of this kind of the big fracking package So where I come down on this is that we're doing it we're getting a lot of benefits from it and There are ways to do it right there are ways to do it which minimize these risks and minimize The negatives involved, you know, I bring up earthquakes Well, the state of Texas finally got around to hiring a seismologist It's been only a hundred years that we've been drilling for oil and gas But we now have a seismologist who works for the oil and gas Regulator actually, I don't think we actually have one yet, but we put out for you know We've posted on Craigslist or wherever we post it So so there this is a kind of a common-sense solution to this right if you don't want to lubricate existing earthquake faults Maybe you shouldn't license and permit an injection well where there are faults So you have a seismologist to tell you they're faults right here, but not right here So we can do injection here, but not right there With the water if you build wells correctly and you cement them correctly and you test to make sure the cement is good You're not gonna have methane leakage You're not gonna have the methane going up into the aquifers so that when people turn on their water all of a sudden their waters bad You know once again, these are not these are not hugely technical fixes I mean what the other issue is methane leakage, you know with methane leaks out into the air It's a very potent greenhouse gas contributes to global warming to climate change So how do you make sure that we're not leaking methane well as it turns out you can hire somebody to walk around with an infrared camera and Detect it. It's not really that difficult and you can eliminate I don't know the numbers, but the great majority of the leakage not a hundred percent But the majority with some very simple fixes. It's plumbing so we can do a much better job with this and And I think it makes a lot of sense to continue fracking because if we're not doing it here If we're not doing the oil and gas development here We'll just go back to being an importer and the same environmental problems the same social problems We'll just export those and I have a lot of confidence Hopefully it's not misplaced that we can figure out ways to do it right in the United States And then export not just the technology to do it, but the know-how to do it right And then you get a lot less in the in that scenario you get a lot less pushback From from some communities in in Europe Quebec and so on yeah, if we can excuse me I mean if we can demonstrate that not just we have the technology to extract the oil and gas But we've developed a good suite of ways to do it. So you're not admitting You're not admitting methane and B-tex chemicals etc. Etc. We can prove that we're doing a good job building the wells and the cementing I Would think that there are a lot of communities that would like the economic benefit of it So then you said figure out what to do all the trucks because that's the number one complaint when I'm traveling when I travel And I've traveled through a lot of shale development places You always hear the number one complaint are trucks. There's so many trucks on the road They're never used to be trucks here I used to be able to drive to my you know my friend's house and now I can't even take a right turn here So I'm not sure what the answer to that is but that that's we're still working on that So so you you use that that that whole answer was the the pronoun in the whole thing was we we as though This is a public no no that was though. This is a public policy question when it's a commercial It's a commercial issue. What is the aren't the the companies themselves push back on when I say we I'm talking about everyone Yeah, industry regulators people because they all are involved. Okay, so what's with the companies? I mean this is to their benefit to to use the best practices so they can continue Yes, they I and that's a lesson which they're slowly some are realizing some aren't so there's sort of two ways to look at that first of all in Places where there's been a lot of political pushback Colorado is a perfect example for communities last November voted to voted for a moratorium or a ban on franking Not surprising happen in Boulder Kind of surprising it happened in places like Broomfield So there's a lot of opposition there and there's talk about a statewide vote in moratorium Lo and behold all of a sudden we have the three big operators in Colorado Working with the governor's coming up with a whole new suite of regulations basically saying we want to be regulated more We want to prove to you we can do it right. I don't think that's a coincidence that those two are going on same time but the other thing to remember is I Was playing around with some data from Pennsylvania a number of wells drilled and operators and I forget the exact number I apologize, but it was something like a hundred and fifty or two hundred different companies in the last 12 months Grilled wells in Pennsylvania So you have a group like the Center for Sustainable Shale Development, which is Chevron and Shell and EQT some of the big companies But what about the companies are drilling two wells a year and what about the companies are doing the smaller companies? So there are some those are difficult questions to get at you know, so let's say we can The big companies the Chevron the shells realize that it's in their best interest to do good practices to spend the extra money What about the smaller companies? It's it's not clear to me how that's going to be resolved, but I'm watching. Yeah, that's the journalist to me now so that the the scenario as Foreign players that have skin in the game Saudi Arabia and Russia primarily the most to lose by by shale revolution spreading abroad Take take solace in in the in the glass half full scenario, which is that? Decline rates are so steep the recovery of Gas and oil from shale 2% You have a big big piece of rock and then sweet spots once you hit that sweet spot then then what and that and that scenario is just just for the benefit of the audience we peak at around 2020-2022 and then Levels and then starts going down and I get emails from Saudi you know Saudi friends who say you know This is flash in the pan You know enjoy it while you got it and then and then you know, we're gonna make hay again But I was are they right? No, I don't think they're completely right I mean there's sort of a couple things to think about here in order to keep Production growing you need to drill a lot of wells because you just put your wells These are these are overachievers right they'll they'll peak and then they'll drop off You need to drill the next one the next one So if there's anything in terms of opposition that gets in the way and slows that down that will impact production But on the other hand for everyone who says oh well 2022 will be gone. Da da da. I say go to current County, California, you know, this is a hundred hundred year old hundred plus year old oil filled out there and Once you've drilled the wells Once the companies have put the pipelines in they've sunk all this capital cost It's in their interest to figure out ways to get a little bit more out You know they went in they got maybe 10% of the oil and gas in place just an easy stuff And then they come in and to do what's called secondary oil recovery tertiary oil recovery They are very good at figuring out how to get more out and right now with the shales They're just getting a fraction of the oil and gas out and they've drilled all these wells so They will go back into those wells and figure out how to get another two and three and four percent out So, you know tell your Saudi friends the prices might go up a little, but I think this is a resource that's gonna be around past 2022 so that the the history of oil is technology giving new life and bring bringing new Revolutions and and you don't see that stopping No, I think there'll be incremental improvements in in shale. I mean some of the existing oil fields will start off with 80% recovery and 70 or 80 years later, they're up to 80% recovery and they're just finding new technologies to get more and more out I don't see I haven't heard anyone give me an explanation why that won't also be the case for shale now equally Want one of the subtexts that that one sees in in in the discourse on fracking is it's this question Should we do fracking and and your tone tone seems to be what do you mean? Should we be we're doing and we're gonna be doing it and and incidentally it's gonna spread everywhere. Is this right? Is that yeah? Well, we we whether it spreads everywhere I think that's still a little bit of open question, but certainly United States. We were fracking hundred wells a day You know, it's almost like If sometimes the facts get in the way of a good argument, you know, it's like the facts are we are fracking I mean right now there's this big discussion going on about should we be exporting natural gas Well, we've already permitted enough facilities in the United States that once they're built We will be the world's second largest natural gas exporter behind cutter So the question we really are asking is should we be number one or number two in the world? Not should we be doing it? It's The cars out of the, you know The horses noses and the camel's nose is already in the tent, right? So it would be very difficult for me to see the political will to sort of roll this back and say Ah, we're gonna need more terms it could happen. We could have different places. It certainly is a possibility in Colorado I just haven't seen it yet. There's a lot of political momentum there There's also a lot of political momentum in renewables right now There's a lot of just like there's opposition to franking there's a lot of support for renewables and that's where I think you might see a little bit more of that tension because Politics and what people want are gonna start really pushing and influencing these different energy resources Okay, so let's let's get into that a bit a little bit that there seems to be something when other Lee About maybe it's the word fracking But but it's it seems to to trigger unusual ruffles the feathers Yeah, it's the the the the apprehension It's it seems to be well, you know the you know where the word comes from or at least what the association is Is that it comes from Battlestar Galactica? That's where it entered the popular lexicon and it was used as a curse word there to to avoid FCC sensors So by the time the industry starts talking about fracking spelling it slightly differently that it already kind of been out there So yes, it is it definitely has that profanity Touch to it right so all right. So how just in the big picture in which You know, we're the the narratives are energy transformation Climate change, you know getting off Fossil fuels Moving toward something. How does fracking fit into that big long arc picture? Well, here's here's my pitch We're going through an energy transition The last thing you want to do when you're going through an energy transition is is being forced to do it because you're short of energy Right, that's where you get chaotic. It gets dangerous You know you get geopolitical struggles over resources We actually have an abundance of resources right now in the United States and more generally Developing around the world. So this is a great time to pursue an energy transition and The other sort of good piece of news in that sense is that if you want to talk about renewables and bringing more renewables Onto the grid wind and solar, you know, you need what it's called balancing You need something available so that when the wind and the Sun shut down It's available now. There are different ways to do it But natural gas is a great fuel for turning on and turning off and help balancing the grid and keeping the grid robust So there are ways you could certainly envision a world where you have significantly more Renewables than we're using right now balanced by this lower carbon natural gas. Is that where we're heading? It's certainly a possibility But, you know, we'll come back here in ten years and find out All right, just one more and then and then and then we'll open it up for questions from the audience the other narrative that's out there is US energy independence and US manufacturing revival and the Renaissance. Yeah, Renaissance and these these are, you know, the good news stories after these years of Reading and we still read American decline China rise the jobs question economic questions and Fracking fracking comes in and this is going to save us How much of that what piece of that is it all accurately? Yeah Well, look, there's no question that the United States is the envy of large parts of the world right now because of its Inexpensive energy Europe would love to have the inexpensive natural gas that we do Natural gas in Asia. It costs four times as much as in the United States So there's certainly an attracting that attractiveness to build some manufacturing here and there's a lot of talk about this manufacturing Renaissance There are some petrochemical facilities that have started to be built. It's not a Renaissance yet But it is slowly happening on independence We are never going to be independent of the rest of the world Nor should we be there's always there's a lot of good reason to have trade of oil and get moving moving around the world What we are heading towards as we reduce our imports is that we're no longer Utterly dependent on one or two countries when you need less you can be Pickier about where you get it from or if in Libya for instance all of a sudden the spigots close because of you know political instability That doesn't send us in a in a tizzy because there are other ways to make up that oil So when you're no longer dependent on specific nations, does that mean you're independent? No, but you're You're a lot farther along to it and your your foreign policy is a lot less driven by the need to keep those oil spigots on And we're certainly heading in that direction right now Yeah, just on the I just wanted to nail you down a bit because you you added in a qualifier on the Renaissance We're not in a Renaissance yet meaning you think that that's not hype Oh, no, no, no, I Think the jury's still out on that There's a lot of talk and there's a lot of interest But one does not build a lot of new manufacturing just on energy prices There are a lot of you know where the markets whereas labor, you know, there are all sorts of different issues I have not yet seen the investment numbers to back up The claim of a Renaissance and that's something frankly It's only really been developing the last few months where suddenly realized that the Renaissance is not moving Quite as quickly as people thought and I think that bears paying attention to right, right, right, okay All right. Well, let's let's get some questions From the audience if you have a question just raise your hand identify yourself and wait for the mic Would anyone like to start my name is Hugh McElratham or a retired intelligence officer To what extent do you think the gas suppresses oil, I mean coal production globally globally or is it just augment Coal production and we end up actually burning all of the carbon anyway Well, I know you emphasize globally, but let me start in the United States because the lessons the United States is very simple More gas has been displaced in coal Cheap gas displaces coal. It's gas gets more expensive. It becomes a little more Some coal comes back on but there's been no question that gas has been displaced in coal and Cities like New York are a lot more breathable now because of that New York's air is better than it's been in a couple decades because of that. However So what happens we'll burn into coal that we're not using we begin exporting it Port of Baltimore, I think it's turned into a major coal exporting port so Clearly if you look at places like China and increasingly India as well Air pollution is becoming a bigger issue and it's becoming a very political issue and a potentially destabilizing issue So therefore those countries have a lot of interest in doing what's happening in the United States replacing their coal production with gas production It has the it has a great potential to do just that to displace instead of just augment Whether it ultimately ends up displacing versus augmenting depends a lot on energy efficiency If there's a lot if there's a push towards energy efficiency and making the kilowatts and the barrels go farther Then yes, I think potentially you could start seeing some coal that that stays in the ground but that's Let me put it this way at least we can have this conversation a couple years ago We couldn't even have that conversation So we've we've made some progress in that we can have this conversation But there still needs to be the gas supplies and there has to be more energy efficiency because otherwise you end up with the sort of the classic energy paradox which is Energy gets more plentiful gets cheaper. We use more of it. Hello. My name is Roberta Stanley I'm a former reporter to and a retired state of Michigan employee We sit in a unique geographic area and of course a political one this Area endured an earthquake and the allegation was that it stemmed from a fracking area out in Middle, Virginia. Could you address that please I? Have read a lot of the peer-reviewed literature on earthquakes in the Southwest and even in Ohio And that's pretty clear that those are related The Virginia earthquake. I haven't seen anyone conclusively show that that was related so I'm personally a little leery at this point that it was caused by it that particular earthquake so Just real quickly just maybe to finish the thought when we talk about fracking earthquakes They are also these are earthquakes that would happen over time Ten thousand years we'd have you know having earthquakes sometime so what fracking is doing is speeding up those earthquakes So it's not causing any new earthquakes. It's just speeding up Earthquakes and faults that they're already having pressure on them. So my sense is the Virginia one probably wasn't related Was that But my I Just given it the level of activity where that was it just I haven't seen anything I mean, you really need to be scientific about this and I have not seen anything that would indicate that it was Well You know I disagree with you on that There's a lot of seismological seismological work in the universities going on to look at that very issue these very issues, so My name is Bryce Jordan. I'm a grudges student at Georgetown And I was just you know as you as you said there's been kind of a lack of oversight and regulation and on the state level Pushback has caused at least regulation to be part of this conversation And I'm wondering if you could speak that this is probably a little naive, but I'm wondering if you could speak a little about How regulation of fracking where that conversation is in Congress and in the Obama administration? I Don't really see much of it in Congress The Obama administration to me at least and this is from an observer And I don't report on the politics of it as closely as I do other things They've seemed to staked out a very pro fracking position Secretary Moniz has been even before the secretary was with sort of pro fracking that's been the push they seem to reserve their political fights and some of their regulatory muscle for for Changing the rules and regulations on emissions for power plants, so I don't see this really is more of a state issue at this point Ben Nostorf, I'm a senior policy analyst with the Bureau of Land Management Regarding what you just spoke about and seismologists in Texas isn't Isn't the underground injection control program something which is under the auspices of the EPA? So what shouldn't the EPA be assuming responsibility for that as opposed to the state of Texas or is there a gap somewhere that I'm missing? That's an excellent question. I need to I don't want to I don't want to answer that and I Don't want to give you a very specific answer because you raise a really good point there And I'm not sure the extent to which this is a program where the states can Assume responsibility for it or the EPA when the states don't want to I suspect that that's what it is But yes, you're right that this is there is a federal role for the EPA and it is my understanding that there are no injection wells That no permits anywhere right now for injection wells require a seismological assessment So whether that state or federal but I would suspect that that's coming I'm Jill Shanklin. I work on social impacts of oil and gas mostly in developing countries I agree very much with what you're saying about about Europe I think in the end in my country the UK if we go ahead it'll be under very tight regulation But the real issue is going to be the actual footprint print on the ground We're a small crowded country and some of the first places are a very very densely populated upscale areas So do you see any trends in the sector about being able to really reduce that physical above ground? footprint You know, they're worse. There's certainly some trends in the past where they're the pad the footprint has gotten smaller, but Realistically, you're still talking a one two acres for an eight well pad. I haven't seen it get much smaller than that I don't think you can really so Well, right. That's for eight. That's for eight wells going off in all directions and then you need another pad You know a quarter mile down the road because you know as you probably know when you frack Even if you're doing a great job of fracking your the frack wings are only covering maybe 400 feet in either direction So if you want to get all the oil and gas out then you need to go to the next place And and try to connect them. So Yes, there is there is a above ground footprint you know that said The industry has managed to do it in a place like Fort Worth, you know Which is completely a very large city and it's amazing when you drive around Fort Worth. They're very creative, you know, there will be Interstate exit ramps, you know, there's little grass medians and boom There's a there's a well there I mean they they find very creative places to sort of to stick them in even in the middle of a city So it can be done Eric Eric pages with onto works. I'm currently heading up a research project looking at the local economic impacts of Marcella shale in Pennsylvania and You know really what what we're finding to a large extent is that you know Most of the communities there are a little disappointed in terms of the local job generation that has occurred Many of the workers are coming from Texas and other places that are more you have a longer experience working in drilling and things like that What's your take on the regional implications of the shale plays? Is it going to benefit the local communities? You know, certainly I understand the big picture cheaper energy could have an impact on manufacturing But being nearby or approximate to the shale resources. Is that going to be a benefit to these communities? You know, I think there's there what I've read indicates that there is an economic benefit a lot of those jobs that are created are truck driving You know that you're absolutely right. The more technically skilled jobs are coming from Oklahoma and Texas people who've been doing this for a while, but there's a lot of truck driving. There's a lot of Aggregate that needs to be delivered. So I mean there are some local opportunities. This is not This is not going to change everything and make your community a vibrant robust place It's a nice stopgap for areas that are still feeling the lingering effects of the Great Recession but a lot of the real economic benefit right now comes from the fact that That the industry is able to absorb basically this excess labor who lost jobs and have not had a chance to find jobs again If and when we get back to a period of more full employment Some of the benefits of this will actually decrease on the local level because then they'd be you'd be competing for those same the same labor pool so Bottom line I see benefit, but not you know, this is not the it's not solution to everything. This is not a great huge benefit Marvin Ott Johns Hopkins University To two tightly related questions years back sort of era the Carter administration as I would call it You would occasionally hear references to deep deep gas tight gas Gulf of Mexico hard to get at Least to a question. Is there an offshore future for fracking? Is this something that could could go in that direction and related to that? How big can this get? 2025 yeah, we reconvene if everything sort of goes well How big a piece of the US energy pie is this? Well, I mean it's already an enormous piece of of oil and gas production I think it just continues to grow and the conventional resources are Declining so this is just not just taking over for those declines and conventional but increasing the overall size of the pie Yeah, absolutely offshore It hasn't been done yet because you still have you know, I just sort of talked about how Night, you know, you had spindle top. You had the great big gushers onshore Well, there's still some of those offshore, you know, and that's it's so expensive that the only reason you're gonna go Offsures if you have a really nice big oil field, but eventually You're gonna run out of those and the industry will be looking at well Where do we have the infrastructure? Where do we have the platforms and can we go into some of this tougher rock? But you know you mentioned The federal government Carter administration and you know since we're here in Washington I'd be remiss to point out that a lot of the R&D that went into this that developed some of the early shale work Was was was Department of Energy? Out of Morgantown, West Virginia actually and so it's fascinating to go back and read the papers that they put out because it was It was a series of breadcrumbs, you know you read it and you can just take you know It goes right up there Eventually needed to jump to the private sector because they didn't have enough money To do more than one or two wells a year and then they would run out of their budget But and you need someone to drill more wells But they had horizontal drilling and they had shales and they were experimenting with fracking And they were trying to put it all together in the eastern shales is what they called it. So It's a very nice Very nice segue into my talk because my name is Aud Hartstein. I used to be on that program in the 70s, I'm old and I just I just want to make a few comments Because of that and it was an interesting time. I Work with Morgantown. Although I was headquarters Al Jost Say Al Jost. Yeah, it's a good friend of mine. He's still there. He's still there. He's not dead yet He's in the book. He's in the book You can yours seem to be conflating gas production and oil production You you talk about the Bakken shell North Dakota. That's oil production gas is really the name of the game now Although they've been doing fracking forever as you pointed out But only from the 70s because of the horizontal drilling doesn't make any sense to do Fracking at 8,000 or 10,000 feet because of the economics of drilling a well 10,000 feet down here. You can drill a well and go Two miles three miles like you said out and you can have eight wells. So you could imagine from one pad as an aside Hollywood, California has oil drilling in The center of Hollywood they build an enclosure. You can't tell what it is. It looks like a very nice building But it's got a pad with a lot of wells on it But to answer a question about conflation the same technology the horizontal drilling and the hydraulic fracturing is Driving the Marcellus gas production ourselves as well as oil production the Bakken and now in the Permian Basin So I'm complaining in the sense that the same technology which were developed for gas are now also responsible for oil Do you want to tie up your thought and then? Quickly I just want I just making a couple of comments EPA is Doing the underground injection control, but the states have primacy Some states have primacy. They're allowed to do with themselves because they're better or equal to or better than EPA regulations and they are working on it now It's another thing transportation versus electric power Mm-hmm. Gas is electric power. Mm-hmm oil is transportation That's why you can have gas at three dollars a million and in a barrel of oil Which is six and a half million BTUs could be over a hundred dollars, right? All right. I will I will quit Can we call it there? Yeah. Okay. Thank you. Let's go right here Do you do you still have a question? Yeah, they're there. Can you identify yourself J. Bond Stengwell Columbia, Maryland? There there are many folks in this country who really don't believe in the concept of energy independence for this country or for that matter for any country when When our fuel goes on to the world market How does that? How does that result in energy independence for Americans? well You know depends how you define it. That's why I was trying to get up before I mean, there's the one idea of energy independence the very simple Definition which is that we're not importing or exporting we are an island and I don't think that's very realistic The way I like to define it and I think it makes most sense is to say look we're independent if We are no longer dependent on any one nation and we have we're no longer forced to deploy Our our fleets to any particular place because we absolutely have to keep those sea lanes open that type of options Makes it a lot easier for us to choose pick and choose our foreign policy And that's a type of independence and that's sort of what I'm arguing should be a goal That type of independence so as we export more doesn't make us more independent No, it connects us with with the global market. I don't think there's anything wrong with that There's a gentleman right here Thanks. Hi, my name is Dave price. I'm a DC resident who likes his energy and also is concerned with his environment So here to learn so thank you for a very Journalistic presentation of facts you spoke about your family and I'd like to just return to that for a moment So in their fracking experience are they being terrorized by a Godzilla like no released under the or they more Jed clamp it from the Beverly Hill billies or what happened seriously, so somewhere in between somewhere in between Okay, so good good and bad news, right? They built the pad two of the wells have been drilled so far good news They can still go up to the land. They can enjoy themselves. All that's great the bad news is that I I Suggested that they find out as much as they could about how the well was built so they could be proved and My father worked the phones with Chesapeake energy could not find a straight answer About what type of well integrity? How can you be sure etc? That's a little disconcerting and then the other thing I bring you this up is that Forget about a year ago. Maybe a year and a half ago. I got a panic call from my father saying we just got a call from the from from Chesapeake They were drilling a gathering line a small bore pipeline to connect wells underneath a small stream on the property Some bar right was leaked The use for the drilling. There was a small fish kill. What should we do? You know, they want to go on the property permission So fortunately one of our neighbors is a county commissioner up there And I just said called the county commissioner have him take care of it But you know, so there you have it that in some ways that that encapsulates the experience It's not all perfect not all Jed clamp it certainly not major You know on the royalty is very much money off this and if you follow Pennsylvania politics, you'll probably understand why But but it's not been Environmental devastation either you can still go up and enjoy the land and you forget that there's a well-packed nearby Hi, my name is Gina and Jill I'm retired physician and I've been following this issue rather closely for the last period of time I'm concerned with Several different factors that I think were glossed over a little bit in this discussion One of which is this notion that wells can be made safe Dr. Tony and graphic Cornell has excellent data showing that at the bare minimum You have five percent leaks right off the bat in these wells and he's looked at the data out of Pennsylvania And there were six to seven percent leakage rates in the last three years and the rates that are happening in the newer Wells are actually higher So this is not something the industry necessarily wants they'd like to correct this. This is a an engineering problem So given that reality and the reality that what we're putting down in those wells is not just water and sand sand carries its own health risk, it's also Extremely toxic chemicals with known carcinogens known endocrine disruptors known neurotoxins I think that it's going to take time to see what the real health effects are and My concern is there a question. Yes, it is there is a question What is the industry's role and government's role in putting the brakes on this so that we can actually do studies? Because industry has actually blocked the medical profession's ability to do studies by forcing nondisclosure agreements and nondisclosure agreements in Pennsylvania and trade secrets, so we don't even know what chemicals So just a couple real quick reactions. I'm familiar with Dr. and Graffia's work. There have been a lot of other studies that have disagreed with him Non-industry supported folks like Rob Jackson at Duke and I would encourage you to take a look at that he is considered an outlier and In terms of his numbers, you know, I make the point in my book that we are ten years into this and We're just now asking some really critical questions environmental health effects There are studies going on. I think the MacArthur Foundation is funding a bunch of them It would have been really nice to have done them five and seven years ago So we have the information at least they're going on right now You suggest I I don't see any political will frankly to doing a full stop to do that full Environmental health and environmental assessment. I don't think that's realistic right now. I also have not seen The evidence that would leave me personally to say this is such a dangerous activity We need to stop that until we have a better understanding the you know, I would encourage you to look at some of the work being done by the Colorado Public School of Health and You know and I've talked to the folks out there And I don't hear a sense of huge alarm that we need to stop everything I hear from them a sense of we're finding some things. We need to make some corrections But it's it's more of a we need to make corrections not we need to do a full stop Okay, okay, let's some groups. So we we have to let's go ahead and ask both at the same time We have a few minutes left I'm Linda Galfi. I'm a former USDA employee and I'm from Wisconsin just south of where they're Getting the silica sand from and so when you said that the silica sand was blowing around on this Place where you were and you could smell the chemicals were those outside workers in hazmat suits or anything that would keep them from Absorbing the chemical's or breathing the silica sand Okay, hang on a second. Okay, we're gonna group. There's another person who had their head. Yeah Hi, Elizabeth Andy local resident my question is You said that they it could be done safely my question is of the Places out there now. What percentage are done safely? I mean as you indicated in Pennsylvania, it's it's above the average of Natural leakage so like what I mean where does other than maybe forcing Colorado to try to fix that? Are there you know, is that the one lone place where there's any kind of Well, let me give you a couple quick answers. Um, I Look at Colorado right now and it's a little well at Colorado as being really where The state government the environmental community the activist community are having the most sort of frank forward discussion And that's why I'm most interested to see what comes out of it So I don't have a good answer I'm not sure anyone has a really good answer what percentage is safe because I'm not sure how you need to define that You know, I you need to do certain things, you know, you need to build the wells, right? You need to deal with water. You need to deal with air. I mean this is it's not It's doable and and there are certainly steps being made in that direction as for the silica. No They did not have mass although I'm told that this was back in late 2012 when I visited That those were new rules coming to require mass and ventilation So they were aware that it was an issue But the new state regulations hadn't come into effect yet and they did not have protective gear clothing So it's not it can be dangerous to work on this is a difficult job Well, you can smell the chemicals when you're in the chemical van when you're close to them that then and they were mixing them And there was some so you you cannot smell the chemicals everywhere you walk around that two-acre path No, you can smell the diesel because of the diesel fumes, but that's about it Yes, they were wearing protective like it has Matt type suit I Just real quickly, I think there's a simple answer for that There are many different potential uses for water agricultural human consumption Industry, I think there are very important competing needs for this water The one area where I am slightly troubled is that the oil and gas industry can outbid everyone else It's not a fair fight. That is an issue right now I'm not you know, and I'm not I don't have a real clean policy fix for that They're clearly different uses and we need to make sure that the water goes to different areas But from what I've seen at least in Texas. It's not a fair fight. All right. All right Fracking this is something that's going to be with us for a while to come the issues We're talking about, you know, probably do something like this again and again Thanks so much Russell for coming to talk about having me. Thanks very much