It’s clear that, as has been the case since time immemorial, the eyes of Texas are on the oil and gas industry.
As last week wound down, a study emerged from the University of Texas predicting steady growth for U.S. natural gas production during the next few decades. That is — and this is my caveat, not one emanating from the folks in Austin — unless hydraulic fracturing becomes entombed by the stream of opposition that’s designed to thwart its progress.
Iterative studies, it seems, have become the order of the day regarding fracking, or TransCanada Corporation (USA) (NYSE:TRP)‘s proposed Keystone XL pipeline, or any other activity judged verboten by environmentalists.
We won’t get rid of this gas for a while
The Texas study focused on the Barnett Shale, which sits in a north Texas expanse generally surrounding Fort Worth. Funded by the Alfred P. Sloan Foundation, the study, the first to comprehensively focus on the geology and economics of shale drilling, examined 15,000 wells that have been drilled in the Barnett.
As The Wall Street Journal noted, Scott Tinker, director of the Bureau of Economic Geology at the university said at the conclusion of the study, which he helped to lead: “We are looking at multi, multi decades of growth.”
Indeed, it’s anticipated that the Barnett alone contains another 44 trillion cubic feet of natural gas, and that gas production in the U.S. won’t plateau until 2040. Many of the nation’s future gas wells will be drilled in the giant Marcellus Shale of Pennsylvania and surrounding states — unless, of course, excessive fracking runs into a generalized roadblock.
Fracking flunks at Cornell and passes at Texas
As I told Fools a couple of years ago, a Cornell University study resoundingly turned thumbs-down on fracking. The study’s leader, Robert Howarth, a professor of ecology and environmental biology, said at the conclusion of his effort: “The take-home message of our study is that, if you do an integration of 20 years following the development of the gas, shale gas is worse than conventional gas and is, in fact, worse than coal and worse than oil.” Huh?
For the next study, we return to the home of the Longhorns. Early in 2012, UT’s Energy Institute released a report that judged the environmental risks from fracking to be minimal. That clearly was not the correct conclusion in some quarters. Thus followed a cacophony claiming the existence of a conflict of interest, since Charles Groat, the former U.S. Geological Survey leader and the major domo of the study, was a paid board member of Plains Exploration & Production Company (NYSE:PXP). For all intents and purposes, the study’s conclusions have been tossed out like Sunday’s newspaper.
However, that same environmental chorus had, not surprisingly, become mum regarding Howarth’s apparent conflicts and flaw-laden conclusions. As Forbes contributor Jon Entine wrote subsequently:
Last April the Times ran two articles in a week heavily promoting Howarth’s bizarre claim that shale gas generates more greenhouse gas emissions than the production and use of coal … When the Times didn’t report then, and until now has almost systematically ignored, is that almost every independent researcher — at the Environmental Defense Fund, the Nation Resources Defense Council, the Council on Foreign Relations, the Energy Department and numerous independent university teams, including a Carnegie Mellon study partly financed by the Sierra Club — has slammed Howarth’s conclusions … Within the field, Howarth is considered an activist, not an independent scientist.