As far as I'm concerned, all fossil fuels are dirty - from oil to coal to Nat gas, to uranium. It's a matter of degree. Recycle fuels are in-between: ethanol made from food sources: bad, ethanol made from agricultural waste: better. Renewables are the best, but still not 100% clean in the manufacturing cycle.
We need to change our economic system tax externalities. Then we'll see that fossil fuels pollute so much they are actually more expensive than renewables. That the politicians haven't figured this out is testament to the influence of the fossil fuel industries and the defense contractors who want to build weapons to go to countries and steal their oil. Tax bads, not goods. Tax Resources, not production.

Just wanted to say thanks for being up front and straight forward about the downside of natural gas and other 'green energies'.
It occurs to me that the drive to alternative energy is really based on the overpopulation of humanity. That being said I see that Cisco has teamed up with IBM to build completely wired and green cities in South Korea. Are there any investment plays in this field?

Jeff,

I completely agree: NG is a slippery slope. I'm a water & wastewater treatment process engineer in PA and have been doing a lot of work related to the Marcellus Shale play (consulting our municipal clients on treatment options). There are + and -, but the net result is that the human health and environmental risk outweigh the multibillion dollars of extractable gas value.

The state issued 2200 permits in 2008 to drill NG wells. So far about 660 of them are active. The state was looking at this opportunity to balance the budget. PADEP has established limits on WWTP's on acceptance of frac water. So they are now able to effectively bring the O&G companies into compliance of the clean water act if they haul the fluid to a WWTP; however conventional WWTP's can't treat the high TDS and radionucleides. Most of the current operators are able to recycle frack fluids onsite for refracking (much higher percentage than other recent shale plays).

The concentrated production water (less volume than the millions of gallons needed for fracking) is far higher in TDS because of it's longer contact period to get to super saturation. I mean, this is ancient seawater that is being pumped back up. The current "treatment" method is to recycle onsite, concentrate and haul to Ohio where permitted deep well injection is approved. PA's geology limits this practice here. But the deep well injection has been widely accepted in TX & OK where a number of the drillers are coming from. One of the "learning curves" we've encountered is that these drillers are used to just setting up a huge pond for frac water to evaporte and reduce the volume. Whatever is left is pumped into the ground where they have confined geology. They just don't understand why they can't dump a few million gallons of frac water on a farmers field in PA. I think they are starting to understand that PA cares about it's water and that at 95% relative humidity, you're not going to be evaporating much.

PA has a rich history of O&G drilling with over 350,000 wells since the mid 1800's. I see a big threat to drinking water because we have hundreds of thousands of wells that are out of service and were supposedly capped. With all the new drilling projected, there is a huge potential for high pressured fracking fluids (8-12,000 psi!) to affect PA's unconfined geology and contaminate water supplies through abandonned or unproperly capped wells. Drillers will maintain that the fracking process is taking place 7-10,000 feet below grade and that only the first 1-2,000 feet impact groundwaters. Yes, but if improperly capped or orphaned wells are in the area, the high pressue fluid is going to find the path of least resistance.

There are standards for O&G drilling but the regulators are under manned to inspect & enforce all drilling operations. Accidents happen (search Clearfield County), fines are issued and drillers get a 10 day suspension (slap on the wrist) but they're back drilling at the 241st hour. I have heard some competitors of ours who are participating as drilling inspectors as 3rd party observers to fill the DEP inspectors void, but I haven't been able to confirm this with any of the PADEP offices yet. As of October 2009, there were 15 people in the DEP williamsport office doing permitting, inspection and enforcement. I don't know how much support they get from central office, but this time last year 300+ people were laid off due to budget cutbacks.

Furthermore, PA is very water rich. So there is potential at the well pads for spills to enter the surface water supplies, especially during wet weather events where surface runoff isn't managed properly or containment berms are improperly constructed.

To be fair, the disturbed area is much less with a fracking process compared to conventional vertical drilling because the are able to tap multiple horizontal wells from the same vertical well pad. So the surface impacts in the Marcellus fairway appear to be less than what Mr. Fox has shown on his documentry of Rifle, CO and other areas that had severe envrionmental issues with NG drilling. I've seen several of these documentaries now and all of them paint a doom and gloom picture. There are the unfortunate ones that have had their lives impacted negatively by this; but nearly all of them got some kind of compensation. People see dollar signs and they become quick to sign off their land rights for a 10% royalty.

The good news is that there are companies out there capable of zero or near zero discharge treatment of the frac using distillation processes. Other treatment includes selective ion exchange coupled with either reverse osmosis or sequential chemical percipitation. These methods are expensive.

The biggest cost now is the trucking that's involved with getting freshwater to the well pads and hauling frac & production waters offsite.

One potential solution is to set up closed systems at local WWTP's to use treated WWTP effluent as "freshwater" and have private firms supporting the NG drillers bring in their 0-discharge equipment to do more centralized treatment. The haulers come to local WWTP's, drop their load in the specialty process designed to treat TDS (no comingling of wastewater & frac water), then the trucks can be filled up with treated effluent to return to the site w/ "freshwater".

This reduces the current amount of potable water used and would significantly reduce trucking traffic; however the chemistry of frac fluid is very site specific and each driller uses their own proprietary chemical mixture for fracing (pH balance, scale inhibitors, biocides, etc.). adjustment of WWTP effluent may not be as consistent as potable water, thus requiring more chemical adjustment. It's solution with limited impact depending on the site; but it certainly doesn't address the failure potential associated with properly casing the wells, managing fluids at the well pads and migration of gas, frac water and or production waters into neighboring drinking water wells during the high pressure fracking process.

Currently there is a glut of supply and the rig count is down in PA, but permits are still open and once the market demand returns, I think we'll see another surge of drilling.

In conclusion, you can see that there are a number of health and environmental concerns for NG drilling in the Marcellus Shale. I encourage every landowner thinking about signing a gas lease to educate yourselves on the environmental impacts you may be passing on to your kids and grandkids. Think about structuring your lease to include site restoration and use it for that (not a new car, or a new kitchen remodel). Half of this problem is driven by our own greed. Know the facts, get involved. It's not going anywhere for a long time.

hank you for bringing the doc to everyone's attention. I found it a sobering and very real look at just what is involved in bringing nat gas to the market. The most telling part of the movie occured in the credits at the end where Josh lists the many gas industry specialists and corporations that he invited to speak on camera. Not one corporate or significant gas producer chose to be filmed. That is the stonewalling that we will get and frankly, I'd almost rather they despoil the saltwater's of the earth than do what these gasproducers will do to our fresh ground and surface water supplies. We really need to power down and transition to renewables soon or its game over, despite the chance to make some additonal bucks in the market at some poor western rancher's or Pa. farmer's expense and health.

Just as Josh exposed the nastiness of natural gas exploration and recovery.....and believe me I know first hand....I've been fighting the industry since it came to the 4 corners of colorado in the 80's..., let me inform you, uranium is far deadlier; it is a radioactive monster that we would gift to our children and generations to come as spent uranium remains toxic for thousands and thousands of years and it's radiation properties grow stronger with age!!!!!!!! AND we have no real solution for storage of this waste!!!! please discontinue encouraging your investors to consider uranium as a green alternative!!!!! dana

I saw the documentary after I heard its Director interviewed on NPR's Fresh Air program. The revelations about the perils of hydraulic fracture plus the lack of regulatory structure and lack of political will to implement a strict regulatory regime, have all put me off considering nat gas as a clean fuel. And yes, my investment decisions do hinge on environmental principles, so nat gas will not be in my portfolio unless and until the regulatory status quo changes.

Anybody who is interested in "cleaner" energy sources other than oil is also interested in how these new technologies are produced. To kill off the environment and human health to produce natural gas is no better than the methods that the oil companies use to extract oil. But hey, we can drive our cars and turn on the gas logs. If I am going to invest in natural gas, it will only be IF the companies spend their operating and extraction costs in a responsible way. As it stands now they are poisoning everything around them and eventually all americans will be suffering, on top of all the suffering that the oil companies are raining down on us.
I want the truth about how these companies operate, not by their silly advertisements about producing cleaner energy for America.

Jeff & Diggatron,

I'm at a lawfirm in Chicago that deals in energy. We're trying to decipher the pros and cons of natural gas and whether it deserves support so I ask this question- do you think that natural gas fracking can be done safely (in terms of drinking water and radionucleides) if there is added more government regulation?

Natural Gas is a blessing and not a curse. Josh Fox manipulates the viewer and hardly sticks to the facts in this film. There are so many errors in this film it would take a 20 page article to point them all out (I actually read one the other day debunking nearly every scene of the film.)

The fact of the matter is that all hydrocarbon extraction is going to have some environmental impact. The companies mentioned in this film are the ones who work the hardest to minimize the impact of the these environmental problems. They spend billions every year to help leave a smaller footprint on the environment. Environmental issues are a byproduct of using hydrocarbons for our everyday energy needs.

Unless you don't drive a car, heat your house, use electricity, cook food, use plastic, or basically do anything other than live in a tent then you are dependent on hydrocarbons. So please don't bash on the people that are trying to use the most environmentally friendly version of hydrocarbons available.

I don't feel sorry for the people in this film. If you have wells being drilled on your land then you are getting compensated at a ridiculous rate. A 10% royalty of a well that makes $50-100 million dollars is not bad. Go buy some bottled water and quit bitching.

RE: Comment from Max - "Josh Fox manipulates the viewer and hardly sticks to the facts in this film"

How did he manipulate the fire ball shooting out of that guy's faucet? How did he manipulate the drinking water that made all those people sick - and in more than just one place? I don't think we'll stop using natural gas, but I don't buy for a second that what I saw in that movie isn't real. Just face it, we're addicted to cheap energy and we don't care how much of our environment we destroy to get it.

Absolutely scary to invest one way or the other. call/put spreads...expect volatility.

I am a documentary maker in Tasmania, Australia and have been making an environmental documentary for the past two years. It shows the hypocrisy of the current Labor Government in terms of environmental reform. A new Prime Minister with the same agenda. http://www.awormintheapple.au.com