Could shale deposits bring mid-Atlantic states $2 trillion?
A new oil industry study says there is as much as $2 trillion in natural gas locked in shale deposits beneath New York, Pennsylvania, and West Virginia. But drilling for it can be fraught with problems, critics say.
Underneath parts of West Virginia, Pennsylvania, and New York is a shale formation with enough natural gas to make the region second only to Texas in terms of supplying consumers with the clean-burning fuel.
In fact, if the Marcellus shale formation, as its known, is fully exploited, it has the potential to create 282,000 jobs between 2011 and 2020 and result in more than $6 billion in local, state, and federal taxes, according to an industry-backed report released Wednesday. The value of the gas reserves could be as high as $2 trillion at current prices, the report suggests.
“A lot of people have no idea there is a super giant gas field just 150 miles to their west,” says Tim Considine, an energy professor at the University of Wyoming in Laramie and author of the study, which was paid for by the American Petroleum Institute (API).
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In order to obtain the gas, however, the industry would have to do horizontal drilling and hydro fracturing, or "fracking," of the shale formations in which the gas is trapped. Fracking involves a mix of water and chemicals to release the gas.
Environmentalists are concerned about the impact of the process on water supplies, possibly making them unsafe to drink. As a result of these concerns, New York’s Department of Environmental Conservation is adding horizontal drilling regulations to its environmental requirements, which have essentially frozen new drilling. Environmental groups in Virginia and Pennsylvania are raising similar concerns.
“I have lots of qualms about the drilling, you only have to look at other states to see the potential for damage in New York state,” says Robert Sweeney, a New York Assemblyman from Babylon, N.Y., and chairman of the Environmental Conservation Committee.