From an article in Forbes by energy reporter Christopher Helman:

A group of Yale economics graduates...recently set out to do a cost-benefit analysis, valuing and balancing the pros against the cons. They’ve released their findings in a paper called “The Arithmetic of Shale Gas.”...

Consider that back in 2008, before the shale boom really took off, the nominal price of natural gas (that is, the price at the Henry Hub in Louisiana) averaged \$7.97 per mcf. In 2011, the price averaged \$3.95 per mcf. Multiply that price drop of \$4.02 per mcf by the 25.6 trillion cubic feet the country consumed in 2008 and you find that thanks to the shale boom, America is paying \$103 billion a year less for natural gas. (With gas prices falling even further since 2011, in 2012 the benefit will be even greater.)...

But it’s not enough to just look at the benefits. What about the costs?...

Despite any evidence showing that drilling and fracking cause spills or pollution with any frequency [although the authors of the report searched for such evidence, they found none], the authors decided to calculate the costs for a scenario that assumes 100 spills a year out of 10,000 new wells drilled each year. They figure that if 5,000 gallons of polluted frack water were to spill into a field, the cost to scrape up a hypothetical 5,000 cubic yards of contaminated soil and dispose of it at an offsite landfill would be on the order of \$2.5 million. Furthermore, if a potable water well were polluted by fracking, the cost to haul in a potable water supply and drill a new water well would be about \$5,000. Given 100 incidents in a year, the clean-up costs associated with fracking accidents would be roughly \$250 million.

Comparing this \$250 million a year in damages against the \$100 billion in savings, and “economic benefits, as estimated in as limited methodology as is reasonable, exceed costs to the community by 400-to-1.”

Benefits of four hundred to one--and yet for four years the Obama administration has treated hydraulic fracturing with either indifference or hostility.

A vote for Romney would represent a vote for all kinds of things.  A certain decency.  Suspicion of big government.  Tax reform.  Yet as Romney made clear during his big speech on energy the other day, it would also represent a vote for cleaner, cheaper energy.

Lord.  November 6 can't come soon enough.

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May '12

### Re: The Arithmetic of Shale Gas and Candidate Romney

And imagine the ratio given that there have been 0 spills or contaminated soil remediation resulting from hydraulic fracturing non-conventional reservoirs.

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Apr '12

### Re: The Arithmetic of Shale Gas and Candidate Romney

Keep the conversation on this to win.

A green and left type who is CEO of a fracking "water" cleaning company said the same about a year ago. What about the Coal Lobby groups. I hear they are serious detractors to this or any gas. It's a competitive threat. The President of the USA has so many interest groups to balance - the lobby groups being but one set of stakeholders. How do they impact? Will they affect Romney?

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Jun '12

### Re: The Arithmetic of Shale Gas and Candidate Romney

This administration's energy policy is gross negligence at the very least.  Lisa Jackson's EPA is amok.  Amen on 11/6/12, the day sanity is restored, Lord hear our prayer.

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May '10

### Re: The Arithmetic of Shale Gas and Candidate Romney

The Uncommon Knowledge on fracking was great. The one question I wish your guest had discussed: if there is a breach that contaminates, how hard is this to repair and how large an area of an aquifer does a breach affect? Worst case scenarios need to be aired.

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Feb '11

### Re: The Arithmetic of Shale Gas and Candidate Romney

Indaba....I don't think the coal lobby is going to be supporting Obama; he hates coal even more than he dislikes oil and gas.

The fracking-driven nat gas boom is great and will do a lot for this country (including improving US export competitiveness for certain product categories), but I'm concerned about the rate at which electric power generation is transitioning from coal to gas. Power plants are long-lived assets, and given the almost-certain increases in gas demand, it's quite likely that nat gas prices will be considerably higher in 10 years than they are today.

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Mar '11

### Re: The Arithmetic of Shale Gas and Candidate Romney

Peter, I can't understand how you could be so callous about this. I mean, really, don't you know that these shoddy fracking and shale oil towns are dirty, and they have housing shortages, and not enough teachers.....and.....and......well, its bad for the environmental and even causes earthquakes (gasp!).

How could anyone support this fracking business, anyway!?

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May '12

### Re: The Arithmetic of Shale Gas and Candidate Romney

 ParisParamus: The Uncommon Knowledge on fracking was great. The one question I wish your guest had discussed: if there is a breach that contaminates, how hard is this to repair and how large an area of an aquifer does a breach affect? Worst case scenarios need to be aired. · 2 minutes ago

More than 90% of fracturing solution is fresh water and sand, polymers are a minor part of the formula. The horizons being fractured are generally more than 5,000 feet below the native water table or acquifer. Can frac water and solution escape from the top of a non-conventional formation? Possibly. Can it flow almost a mile up through rock, sand, clay, soil, etc.? I think we have a better chance of winning the lottery.

Where the well bore penetrates the water table there are two layers of coment and steel casing.

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Feb '12

### Re: The Arithmetic of Shale Gas and Candidate Romney

Is it true there is no scientific evidence that fracking causes pollution of the water table or other environmental damage? I am skeptical that fracking is any more damaging than other extraction methods, but I am also skeptical that it creates zero pollution. Hence, there should be some sort of study showing some pollution...Shouldn't there???

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May '12

### Re: The Arithmetic of Shale Gas and Candidate Romney

 Jacob Fox: Is it true there is no scientific evidence that fracking causes pollution of the water table or other environmental damage? I am skeptical that fracking is any more damaging than other extraction methods, but I am also skeptical that it creates zero pollution. Hence, there should be some sort of study showing some pollution...Shouldn't there??? · 1 minute ago

Jacob, I don't think it is fair to characterize it as zero polution. The fratcturing fluids flow back out of the well bore and have to be disposed. Most often they are injected thousands of feet underground in permitted and monitored injection wells.

Additionally, non-conventional reservoirs: coal bed methane and shale produce formation water. The water is brackish with some hydrocarbon. The hydrocarbon fluids can be separated and sold if there is enough of a concentration. The brackish water is injected along with the flowback water.

Neither of these processes affect groundwater. The isolated cases in PA of natural gas in drinking water were both naturally occurring and the result of bad cement jobs on surface casing in the early wells, not from fracturing the producing formations.

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Feb '11

### Re: The Arithmetic of Shale Gas and Candidate Romney

With a President Romney, I predict we will see sub \$2/gal. gas within four years.  I don't have the study at my fingertips, but I have seen more than one study showing that the known sources (not reserves, because that is a term of art) of petroleum, natural gas and coal in the US can supply our current needs for approximately 350 years!  That's longer than the internal combustion engine has been around.

Edited on August 24, 2012 at 10:47pm

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May '10

### Re: The Arithmetic of Shale Gas and Candidate Romney

 david foster: Indaba....I don't think the coal lobby is going to be supporting Obama; he hates coal even more than he dislikes oil and gas.The fracking-driven nat gas boom is great and will do a lot for this country (including improving US export competitiveness for certain product categories), but I'm concerned about the rate at which electric power generation is transitioning from coal to gas. Power plants are long-lived assets, and given the almost-certain increases in gas demand, it's quite likely that nat gas prices will be considerably higher in 10 years than they are today. (emphasis added)

I suggest you review the history of the Ehrlich-Simon Bet.  I suspect the same principle will apply here.

Joined
Mar '11

### Re: The Arithmetic of Shale Gas and Candidate Romney

Normally I would think the whole idea of energy independence is silly. I mean what other commodity do we think we need to be 100% self sustaining in. The  policy  goes against the idea of competitive advantage.  However, considering the energy resources we have when you combine how much Oil, Gas and Coal is in the U.S.  it really is not a silly idea. Energy material should be one of our competitive advantages as a nation with all the natural resources, capital and infrastructure we have. That is we should be net exporters.

As far as pollution from what I have heard most Fracking operations at least in PA are recycling all their Fracking material voluntarily  so they keep on the good side of state regulators and the public.  So even if there has been no proven reason the remove the material they are doing it anyways.

Edited on August 24, 2012 at 11:17pm

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Jun '10

### Re: The Arithmetic of Shale Gas and Candidate Romney

Obligatory:

Didn't you see Gasland!!!!11!!eleventy

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Sep '10

### Re: The Arithmetic of Shale Gas and Candidate Romney

There's reason to hope that a Romney / Ryan administration will encourage a flowering renaissance in common sense and basic arithmetic.

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Apr '11

### Re: The Arithmetic of Shale Gas and Candidate Romney

Fracking is a religious matter.  Just because you are an apostate you shouldn't think you and others can highhandedly  violate the tenets of Green religious  dogma.

Edited on August 25, 2012 at 4:14pm

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Feb '11

### Re: The Arithmetic of Shale Gas and Candidate Romney

TomL..."I suggest you review the history of the Ehrlich-Simon Bet.  I suspect the same principle will apply here."

I'm indeed familiar with the history of the bet. It doesn't imply that commodity prices never have unsustainable lows.

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Sep '10

### Re: The Arithmetic of Shale Gas and Candidate Romney

Oh sure! Give us all that number and math stuff. Don't you understand that solar and wind feel better? And for the Left, feelings always trump facts and figures.

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Apr '11

### Re: The Arithmetic of Shale Gas and Candidate Romney

 Vance Richards: Oh sure! Give us all that number and math stuff. Don't you understand that solar and wind feel better? And for the Left, feelings always trump facts and figures. ·

For many on the right, too; if you think that Gov. Romney's individual mandate represents a bigger portion of the burden of government than Johnson's 2/3 spending increase, ie. that the mandate represents 2/5 of the total state government burden, then you're talking about your gut rather than your head.

Likewise if you compare Johnson's relentless spending with Martinez' cuts (Bill Richardson, Johnson's Democratic successor, also grew government less, but Martinez , Richardson's successor, is showing how a true libertarian/ Republican manages the budget). If you think that Johnson is better because he used the veto a lot, you're confusing what is satisfying with what you're actually calling for.

But you hear this. A lot. One of Romney's central difficulties is that his chief successes have been about finances (corporate/ Olympic/ State), and most people, of all political persuasions, just tune out numbers. Good/ bad is all the detail they'll accept, and even there they prefer anecdotes.

Joined
Jun '11

### Re: The Arithmetic of Shale Gas and Candidate Romney

Neither of these processes affect groundwater. The isolated cases in PA of natural gas in drinking water were both naturally occurring and the result of bad cement jobs on surface casing in the early wells, not from fracturing the producing formations.

BrentB67, I've bumped into a few people from up that way (Dimmock Twp. PA) who claim that the tap water ignited long before any fracking ever occurred.  It's been going on for years and the residents always said it was some sort of methane gas that made their water flammable.

Fracking just made their problem a lawsuit, money-maker.

This is only hearsay.

Joined
Aug '10

### Re: The Arithmetic of Shale Gas and Candidate Romney

On a recent drive through upstate New York, a perpetually depressed area, I saw many pre-printed yard signs saying, "No Drill, No Spill". Great work, enviro-extremists!

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