New Jersey and France Ban Natural Gas Drilling Based on Fracking

Without fracturing, there is no unconventional gas production–and without production from these fields, the nation’s dependence on foreign energy would send gas prices and energy bills soaring.

— Elliott Gue, The Energy Strategist

New Jersey and France don’t have much in common, but one thing they agree on is that hydraulic fracturing, which injects chemicals into the ground to extract natural gas from shale rock, pollutes water supplies and should be banned. The New Jersey legislation states that fracking

has been found to use a variety of contaminating chemicals and materials that can suddenly and in an uncontrolled manner be introduced into the surface waters and groundwater of the state.

For New Jersey, the ban is not much of an economic sacrifice because the state doesn’t possess any Marcellus shale rock located deep enough to drill anyway. But the story is much different in France, which has shale oil and gas fields that “are potentially some of the most promising in Europe.”  Despite the economic potential, the French legislature passed a law that gives energy companies two months to declare what type of drilling techniques they will use in areas they have received drilling permits. If a company doesn’t respond or answers that it plans to use fracking, French regulators will revoke its drilling permit.

France’s eco-friendly legislation reflects the strong green movement in Europe right now and follows Germany’s decision to ban all nuclear power by 2022. The French Canadian province of Quebec has imposed a moratorium on fracking since March pending a detailed environmental review.

The energy industry dismisses environmental concerns about fracking, stating that current regulations are adequate to prevent water contamination. But many are not convinced by these self-serving assurances. For example, Democratic members of the U.S. House of Representatives released a report in April documenting that 650 of the 750 compounds found in fracking liquid are” chemicals that are known or possible human carcinogens, regulated under the Safe Drinking Water Act, or listed as hazardous air pollutants.” Earlier in January, these same Democrats reported that energy companies including Weatherford (NYSE: WFT), Halliburton (NYSE: HAL), and BJ Services –since acquired by Baker Hughes (NYSE: BHI) – have continued to pump diesel fuel into the ground without a permit even after it was outlawed by the U.S. Environmental Protection Agency.  Furthermore, a New York Times investigation recently discovered that the fracking process releases radioactivity into rivers as well as carcinogenic chemicals:

Thousands of internal documents from the Environmental Protection Agency, state regulators and drillers show that the dangers to the environment and health are greater than previously understood.

A list of the damning documents can be found by clicking here.

If you think that all this handwringing about fracking contamination is purely theoretical, think again. In April, a natural gas drilling site in Pennsylvania exploded, spewing thousands of gallons of fracking liquid onto several farms, including fields where cattle graze. Later testing by the EPA found three drinking wells contaminated.

Nevertheless, New York State Governor Andrew Cuomo is seeking to lift a fracking moratorium subject to strict regulatory safeguards. This sounds like a more sensible approach than does an outright ban.

Elliott Gue, editor of the market-beating Energy Strategist investment service, agrees with the moderate Cuomo approach. Mr. Gue is confident that the U.S. will not ban fracking, calling the controversy a ‘tempest in a teapot.” His reasoning is convincing:

The Haynesville Shale of Louisiana is typically found at a depth of 10,000 to 14,000 feet below the surface, and the productive shale layers are anywhere from 200 to 500 feet thick.

Freshwater aquifers are found roughly 1,000 feet or less below the surface. There is certainly no drinkable water located at a depth of 10,000 or 14,000 feet. Accordingly, wells used to tap these aquifers would be located more than 10,000 feet (roughly two miles) away from drinking water supplies. In between the aquifer and shale layers are multiple layers of solid rock of different composition.

It’s all-but-impossible for fracturing fluids injected into a formation 12,000 feet underground to migrate through two miles of rock and into an aquifer if a well has been properly installed and cased.

Proper regulation is the key. Let’s mend it, not end it. American independence from foreign oil depends on it!

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