Market News

 March 28, 2012
Gas Industry Still Has Its Head In The Sand On Fracking

 65% of Americans favor more regulation of fracking - 72% of Ohio residents favor a state moratorium on fracking

At the Wall Street Journal's recent ECO:nomics conference, the chief executive of Atlas Energy LP was asked how fracking had become a four-letter word. Edward E. Cohen's response: "I think when we talk about the natural-gas industry losing the PR war, that is not correct."

If that is typical of how the natural gas industry is interpreting public opinion on hydraulic fracturing and the development of shale gas, then it's got its head in a borehole.

Recent polling gives a more realistic picture of the public's broad and deep concerns about the technique that is widely used, in conjunction with horizontal drilling, to stimulate production from oil and gas wells. The practice involves pumping a combination of water, sand and chemicals underground at high pressure to crack rock formations and release oil and gas.

A Bloomberg News poll conducted earlier this month, for example, found that 65% of Americans favor more regulation of fracking and only 18% favor less regulation. The survey of 1,002 adults had a margin of error of plus or minus 3.1%.

In Ohio, a January poll conducted by Quinnipiac University found that 72% of Ohio residents favor a moratorium on fracking in their state until the process is better understood. Ohio has been the site of a series of earthquakes which the Ohio Department of Natural Resources said in early March were most likely caused by the underground injection of wastewater produced during fracking of natural gas wells.

At the Wall Street Journal conference, Chesapeake Energy Corp. CEO Aubrey K. McClendon appeared to adopt the same no problemo attitude. "I fracked 15,000 wells," he said. "Ninety-nine percent of American gas is fracked, and it has been for 50 years. [Today there are] 1.2 million wells. Where are the 1.2 million disasters?"

Someone should tell McClendon it doesn't take a disaster rate of 100%. It only takes a few. Like the one in Pennsylvania where his own company was fined $900,000 by regulators for causing the methane contamination of the water supplies of 16 families.