White House Chronicle

News Analysis With a Sense of Humor

A Civics Lesson on Government-Private Collaboration

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The world is awash in natural gas and, to a somewhat lesser extent, in oil. This is due to the controversial but hugely effective technology of hydraulic fracturing, known as “fracking.”
 
The principal of fracking is so simple that it has been discussed and tried since the latter part of the 19th century; in other words, it is as old as the oil industry. If you find something you want in the crevasses in the ground, why not dislodge it with something else?
 
It was frustrating to know that you were leaving more oil behind than was coming to the surface. Ditto when natural gas also became an important fuel.
 
In the 1960s, the federal government had not one but two programs to see whether nuclear detonations could release natural gas in tight formations. These foundered not on their feasibility, but on fears that the gas would be radioactive. That scheme sounds crazy now.
 
Crazy was what some people said of a Texas oil man, George Phydias Mitchell, who believed that fracking could be developed on a grand scale to unleash natural gas and oil in shale. By any standards, Mitchell, who died at the age of 94 in July, was a visionary who knew, from wildcatting, that on the frontier of technology, you will fail before you succeed.
 
He also knew that he needed the U.S. government.The U.S. government may not have known that it needed George Mitchell and his company, Mitchell Energy and Development, but together they forged a partnership so effective that it has changed the world and brightened America’s prospects as world competitor because of cheap energy at home.
 
There are those who want to believe that Mitchell did it all by himself; that the U.S. government was wasting our money on other things. But that is not so.
 
Starting in 1975, the U.S. government began putting money into advanced oil and gas recovery, fracking. The United States brought science to bear at a time when about half of Mitchell’s own employees thought he was on a wild goose chase.
 
Key to the success of the drilling revolution was the naval technology three-dimensional mapping. First developed for tracking submarines, it was possible to look under the ground and establish the contours of the resource.
 
Horizontal drilling was the essential breakthrough: the well — or borehole as it is called in oil-speak — could follow the shale seam laterally, but sometimes rising or falling with it. A well that is a few hundred feet might have horizontal branches, stretching out as much as 10,000 feet. The oil or gas is driven out under the pressure of water, sand and a cocktail of chemicals. The role of these is to prop open fissures created by the pressure, and so release the precious hydrocarbons – pry them from their eternal rest.
 
There are well-known environmental problems, especially the enormous quantities of water used and what becomes of it afterward. But fracking works and has changed the geopolitics of the world. More than 40 countries may have shale resources that change their prospects. For example, in time, Australia may be a bigger supplier of gas than Qatar. Already, Russia is treating its European contracts with a new respect. There is looming competition.
 
To me the lesson is that wondrous things happen in U.S. government-funded science, especially in its laboratories, and when it is combined with enlightened managers on both sides.

 

So it is a tragedy the federal research budgets are being cut by budget sequestration. We know what can be done when the U.S. government research machine, together with private collaborators, is unleashed: America leaps forward.
 
Medicine is the permanent frontier challenging us, but only 8 percent of research grant requests are funded by the National Institutes of Health. The sick suffer, competitiveness suffers, and American loses its edge as the fertilizer and incubator of science.
 
The idea that all research is or will be undertaken efficiently in private industry is fallacious. At present, there is a desperate need for research on the diseases of the immune system like Chronic Fatigue Syndrome, where a miniscule $6 million is budgeted. New antibiotics are needed to counter the declining effectiveness of those in use. Tragically, it is not happening in the private sector. A medical calamity is possible if research dollars are not committed to this high risk endeavor.
 
Science is our best national investment. George Mitchell knew that. — For the Hearst-New York Times Syndicate

 
 
 
 
 

The Benefits of Natural Gas

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Natural gas is nifty stuff. It burns twice as clean as other fossil fuels, leaves no ash to be disposed of and is critical to many industrial processes.

It is used for everything from drying grain to distilling liquor. It also can fairly easily substitute for oil as a transportation fuel. Buses in big American cities increasingly run on it, as taxis in Australia have for years.

Its history is a tale of how markets work, how technology can broadside the best futurists, and how planners and politicians can get it wrong.

More important than the lessons of history is the fact that we appear now to have more natural gas than was ever predicted, and we can look forward to possibly hundreds of years of supply at present rates of use. And it could slay the foreign oil dragon, or at least maim the brute.

Trouble is, because of its tortured history, natural gas has often been put on the back burner.

When the first commercial oil well, the Drake, was sunk in western Pennsylvania in 1859, natural gas, or methane to give it its proper classification, was not on anyone’s mind except deep miners, for whom it was a lethal hazard. The Oil Age began without natural gas. When it was found in conjunction with oil, it was unceremoniously burned off: a process known as flaring.

In the United States, natural gas faced political problems as well as infrastructural problems. Natural gas production was regulated by the predecessor of the Federal Energy Regulatory Commission, the Federal Power Commission. It was bound by a legal ruling known as the Permian Basin Decision that kept the price of natural gas artificially low, discouraging new supplies and new infrastructure, such as processing plants and storage. This led to shortages and to a lack of confidence in the future of natural gas.

During the energy shortages of the 1970s, natural gas was discounted by the government and much of industry. Congress panicked and passed a piece of legislation called the Fuel Use Act, which forbade the use of natural gas for many things, including pilot lights in new kitchen stoves. Utilities were told not to even think of burning natural gas: It was too precious and there was too little of it.

Gas demand declined precipitously in the 1980s. And in 1987, the Fuel Use Act was repealed. Along with deregulation of gas, a gas boom resulted.

But it was technology that changed everything. New drilling techniques increased supply. New turbines, based on airplane engines, started to enter the electricity market. They were clean, easy to install, and reached high efficiencies of fuel-to-electricity conversion. Today, 30 percent of our generation comes from these “derivative” machines.

So successful was natural gas in the 1990s that new concerns about supply shook the industry; and the public was told that gas would have to be imported from the Middle East, especially from Qatar. Permission was sought to build dozens of liquefied natural gas terminals around the coastlines.

Now it looks as if natural gas is a fuel with an enormous resource base–thanks to technology. The technology in question is horizontal drilling. Imagine you sink a hole 2 miles into the earth and then send out horizontal roots in all directions from this vertical trunk. That, in essence, is horizontal drilling and it makes available trillions of cubic feet of natural gas trapped in close formation shale deep in the earth.

Ironically, or fittingly, this takes the energy story back to Pennsylvania where a vast shale field called the Marcellus is being developed and will write the next chapter of hydrocarbon energy. This is good because it is plentiful, it is here and it builds on extant pipeline infrastructure.

Of course, it makes investments in many “alternative” sources of energy, particularly ethanol from corn, look like very poor investments. Cars and trucks that run on natural gas are an appealing alternative to ethanol with less disruption of the food chain and stress on the farms. –For the Hearst-New York Times Syndicate