WASHINGTON — Wielding the chairman’s gavel for the first time, Sen. Ron Wyden, D-Ore., oversaw the Senate Energy and Natural Resources Committee’s hearing Tuesday on the implications of the natural gas boom.
New drilling technologies have allowed energy companies to access vast stores of domestic natural gas, but if America primarily exports its cheap energy source, foreign countries will be the main beneficiaries, Wyden said.
“Let’s see if there is an economic and environmental sweet spot where U.S. gas producers can make enough money to continue producing and U.S. manufacturers have an affordable, stable supply of natural gas, and where the environment is not only protected, but actually benefits,” he said.
Driven by a surge in gas extracted from shale wells, the amount of natural gas produced in the United States has grown steadily, from 24.7 trillion cubic feet in 2007 to 28.5 trillion in 2011, according to the Energy Information Administration.
Over the same period, the number of gas wells in the country has risen from almost 453,000 to almost 515,000.
Oregon had only 24 active gas wells in 2011, according to the EIA’s annual natural gas report published in January. Those produced 1.3 billion cubic feet, less than 1 percent of the country’s total production.
But like the rest of the country, Oregonians have benefited from falling natural gas prices. In 2007, residential gas cost $14.65 for one thousand cubic feet, compared with $11.76 four years later.
Sen. Lisa Murkowski, R-Alaska, the committee’s ranking member, said new technologies, such as hydraulic fracturing and horizontal drilling, have changed the energy landscape.
“I think it is absolutely clear that much of the economic stimulus that we have seen, the jobs that have been created in recent years, so many are coming from states that are hosting opportunities within the natural gas sector,” she said.
Colorado Gov. John Hickenlooper told the committee members that the U.S. is on target to become a net exporter of natural gas by 2020.
“Natural gas has made American industry more competitive. We have seen new investment in energy-intensive companies. American chemical and fertilizer industries are growing because of inexpensive natural gas. Foreign investment in electricity-intensive industries has also been flowing into the country, as natural gas helps keep utility rates low, even as domestic coal remains cheaper,” he said.
But this doesn’t mean that the country should abandon its investments in renewable energy, he said.
“We must chart a parallel path, continuing investments in wind, solar and other renewable sources of energy, including conservation and efficiency,” he said. “A coherent strategy for the future cannot be dependent on one fuel source. We need a diverse energy portfolio that drives the economy, and at the same time prepares for future contingencies.”
Frances Beinecke, president of the Natural Resources Defense Council, warned that the increased use of hydraulic fracturing, or “fracking,” which cracks underground layers to extract natural gas from shale deposits, has outpaced the necessary governmental safeguards and regulations needed to protect the public and the environment.
“Shale gas production comes with the risk of a range of environmental and health impacts, including contaminated drinking water supplies; the release of methane, a potent greenhouse gas; unhealthy air quality; poorly managed toxic waste disposal; impairment of rivers and streams; disruption of communities; and destruction of landscapes and wildlife habitat,” she said. “These impacts stem from all aspects of the shale gas extraction process.”
There was not a clear consensus among the witnesses over whether the U.S. should look to export as much natural gas as possible or use it domestically.
Jack Gerard, president and CEO of the American Petroleum Institute, emphasized how many jobs “unconventional natural gas production” supports. Currently, 1.7 million jobs are associated with the industry, and that number is expected to grow to 2.5 million by 2015 and 3.5 million by 2035, he said.
Liquid natural gas exports “will create thousands of U.S. jobs, generate billions of dollars in revenue, improve our trade deficit and spur major investment in infrastructure, which will strengthen our energy security,” he said.
But Andrew Leveris, chairman and CEO of the Dow Chemical Co., maintained that the resource was best used domestically, where it would create more manufacturing jobs.
Using 5 billion cubic feet of natural gas per day domestically would add $4.9 billion to the gross domestic product and create 180,000 manufacturing jobs, while exporting the same amount would add only $2.3 billion to the GDP and create 22,000 jobs, he said.