PAST PROGRAMS

The Howard Baker Forum focuses on critical issues facing the nation and, in the leadership tradition of Senator Howard Baker, seeks practical and bipartisan solutions in the national interest. Shale gas and liquids are potential game-changers for American political, economic, and energy security. The Howard Baker Forum is actively working toward a national consensus. With its technology partner, Lawrence Livermore National Laboratory, the Howard Baker forum seeks to address the contested issues surrounding this important natural resource.

The two institutions have been working together to broaden the national dialogue on shale energy by inviting a wide array of stakeholders to join the process of consensus building and national policymaking. The American Shale Consortium is being established to institutionalize these efforts and bring together diverse stakeholders interested in practical, near-term solutions.

Background

Cheap and abundant natural gas has transformed U.S. industry and global energy, with implications for energy security, geopolitics, manufacturing, environmental protection, and global climate change. Underlying this energy boom are new approaches to stimulation of tight hydrocarbon reservoirs, chiefly multi-stage stimulation, horizontal drilling, and hydraulic fracturing (commonly known as “fracking”). To understand and assess the longevity and continued impact of a gas-abundant energy future, the Howard Baker Forum and Lawrence Livermore National Laboratory hosted a two day symposium featuring experts from the commercial, industrial, research, and political spheres. The resounding conclusion is that abundant low-cost gas is here to stay, but the nation’s ability to use this resource depends on how technology, policy, and regulation interact.

The first meeting of the Consortium’s Washington Conference Series on Shale Energy, entitled The Changing Outlook for U.S. Energy: Will Shale Gas Transform America’s Energy Future, was held September 24 and 25, 2012 at the Newseum in Washington, D.C. The first day focused on economics, domestic and international politics, and environmental concerns—the second day on technical issues and their impacts. View the agenda and list of speakers here. Keynote speakers included Daniel Yergin (IHS-CERA), Amy Myers Jaffe (UC Davis), former Gov. Dave Freudenthal of Wyoming, CEOs and CTOs from oil and gas production and service companies, and surrogates from the presidential campaigns.

Security and Geopolitics

Speakers discussed the profound impact of low-cost gas production on two related topics: U.S. domestic energy security and geopolitical rebalancing. Sustained U.S. development of tight hydrocarbon resources (shale gas and tight liquids) has reduced imports of oil and could lead to exports of Liquefied Natural Gas (LNG). This new domestic energy supply has already cushioned impacts from Middle East turmoil and sanctions on Iran. The consensus is that over the long-term shale gas development globally will reduce Middle East and Russian influence in Europe, Africa, and Asia. If the U.S. proceeds with substantial LNG exports, it may also rebalance trade, improve U.S.-China relations, and help Japan through its energy reformation following the Fukishima nuclear accident.

Economic Impacts

During the conference, participants identified many of the economic benefits associated with tight hydrocarbon development. These include some of the lowest power prices in the developed world, increased tax revenues, and the resurgence of energy intensive industry and manufacturing. Extraction of tight hydrocarbons has helped to create more than 200,000 jobs in previously depressed areas such as the the Rust Belt and rural America.

Environmental and Regulatory Concerns

At the conference discussion focused on the nature and depth of environmental problems and the potential regulatory approaches to manage them. Despite questions by audience and moderators regarding state versus Federal regulatory roles, most speakers suggested that both state and federal regulators have a role and solutions should focus on the capacity of regulators and the content of proposed rules. Many agreed that the industry record of drilling and completions is quite good, yet additional progress is still needed. Ultimately, participants agreed that the safe and environmentally sound production of tight hydrocarbons was possible with current best practices and that prudent, considered regulation can contribute to environmental protection.

Two major environmental concerns dominated the discussion—ground water contamination (chiefly from poor drilling and completion practice, less from composition of hydrofracking fluids) and air pollution (including fugitive methane emissions, flaring, and production of NOx from diesel generators and trucks). Many representatives of the energy industry and environmental NGOs agreed that issues such as road traffic and noise were a major public concern. Most agreed that existing technology could manage many of these concerns, and that urgent regulation was unwarranted. All agreed that public outreach and reduction of public grievances are essential.