Scrappy American companies are exporting their controversial drilling techniques to Asia and Europe, where "fracking" could face less regulation.

News and commentary about environmental issues.
Nov. 22 2010 10:11 AM

Shale Goes Global

Scrappy American companies are exporting their controversial drilling techniques to Asia and Europe, where "fracking" could face less regulation.

Shale gas. Click image to expand.
A shale gas drilling rig 

In the blink of an eye, the United States has rocked the once-sleepy natural gas market. Since the 1950s, American energy companies have drilled into massive formations of shale rock to get at the natural gas trapped beneath them, but historically these shale gas ventures required large cash investments to access a relatively unpopular fuel. In the last few years, however, shale gas has suddenly become much more profitable, thanks to three factors: The discovery of large reserves of this low-emissions fuel, tweaks to a process called hydraulic fracturing ("fracking" for short), and improvements in drilling that allow one well to access a reserve in multiple directions. The sudden surge in the supply of natural gas has driven prices down around the world and sparked countries throughout Asia and Europe to develop their own shale gas reserves.

While ExxonMobil and Chevron have dominated the oil industry, scrappier independent companies have pioneered the shale gas industry. In a world hungry for cheap, low-carbon fuel, the shale-drilling expertise of companies like Devon Energy, Chesapeake Energy, and Range Fuels has become a hot commodity. Exxon, Shell, and ConocoPhillips have all tried to tap this expertise through mergers and buyouts. But as possible regulations loom in the United States, the American companies that pioneered the shale industry are exporting their controversial drilling techniques abroad.

Fracking—a process that entails blasting a mix of water and chemicals into shale rock formations at high pressure—has played the evil menace in environmental campaigns nationwide. Though only recently a hot topic, fracking—in its earlier, less efficient form—has actually been around for 60 years. Early shale gas wells were typically located in low-population regions of Wyoming and Colorado. But as new drilling techniques made fracking more profitable, drilling expanded to more populated areas in Texas, Pennsylvania, and New York, setting off a public backlash. People have been setting their natural-gas-laced tap water on fire  all over YouTube. The wildly successful HBO documentary Gasland featured interviews with family after family suffering the consequences of contaminated air and water. Fracking makes a great villain—Halliburton has been involved in its development, and it was exempted from the Safe Drinking Water Act as part of a 2005 energy bill, thanks to Dick Cheney. But, according to a recent report, the environmental problems stem more from poorly designed wells, drilling techniques, and wastewater management than fracking itself. Either way, Congress has begun discussing stiffer regulations.

Advertisement

Fracking is currently regulated by the states, some of which do a good job, others not so much. The natural gas industry would prefer it to stay that way, arguing that local experts know the risks and benefits better than D.C.-based regulators would. The House and Senate are considering twin bills known collectively as the Frac Act, which would regulate fracking nationally but have little chance of passing until the EPA completes its study of fracking, likely sometime in 2012. In the meantime, local governments may take action: Just last week, Pittsburgh, Pa., became the first city in the nation to ban natural gas drilling within its limits.

While few analysts think Congress will ban fracking outright, or that city drilling bans will affect shale gas development much, the industry is preparing for stricter regulations. These regulations would likely force companies to disclose the contents of their fracking fluids and improve how they handle wastewater, making shale gas development more expensive in the United States. If fracking becomes more expensive, companies will drill less, which will drive down the country's estimated shale gas reserves.

As discussions of regulation slow the shale gas rush stateside, American companies are expanding their drilling to other countries, where interest is high, money is available, and environmental regulations haven't caught up yet.

TODAY IN SLATE

History

Slate Plus Early Read: The Self-Made Man

The story of America’s most pliable, pernicious, irrepressible myth.

Rehtaeh Parsons Was the Most Famous Victim in Canada. Now, Journalists Can’t Even Say Her Name.

Mitt Romney May Be Weighing a 2016 Run. That Would Be a Big Mistake.

Amazing Photos From Hong Kong’s Umbrella Revolution

Transparent Is the Fall’s Only Great New Show

The XX Factor

Rehtaeh Parsons Was the Most Famous Victim in Canada

Now, journalists can't even say her name.

Doublex

Lena Dunham, the Book

More shtick than honesty in Not That Kind of Girl.

What a Juicy New Book About Diane Sawyer and Katie Couric Fails to Tell Us About the TV News Business

Does Your Child Have Sluggish Cognitive Tempo? Or Is That Just a Disorder Made Up to Scare You?

  News & Politics
History
Sept. 29 2014 11:45 PM The Self-Made Man The story of America’s most pliable, pernicious, irrepressible myth.
  Business
Moneybox
Sept. 29 2014 7:01 PM We May Never Know If Larry Ellison Flew a Fighter Jet Under the Golden Gate Bridge
  Life
Dear Prudence
Sept. 29 2014 3:10 PM The Lonely Teetotaler Prudie counsels a letter writer who doesn’t drink alcohol—and is constantly harassed by others for it.
  Double X
Doublex
Sept. 29 2014 11:43 PM Lena Dunham, the Book More shtick than honesty in Not That Kind of Girl.
  Slate Plus
Slate Fare
Sept. 29 2014 8:45 AM Slate Isn’t Too Liberal, but … What readers said about the magazine’s bias and balance.
  Arts
Brow Beat
Sept. 29 2014 9:06 PM Paul Thomas Anderson’s Inherent Vice Looks Like a Comic Masterpiece
  Technology
Future Tense
Sept. 29 2014 11:56 PM Innovation Starvation, the Next Generation Humankind has lots of great ideas for the future. We need people to carry them out.
  Health & Science
Medical Examiner
Sept. 29 2014 11:32 PM The Daydream Disorder Is sluggish cognitive tempo a disease or disease mongering?
  Sports
Sports Nut
Sept. 28 2014 8:30 PM NFL Players Die Young. Or Maybe They Live Long Lives. Why it’s so hard to pin down the effects of football on players’ lives.