New York State’s decision this week to impose a moratorium on new drilling permits for shale gas wells until May 15, 2011, comes at a good time for the industry. The point of the moratorium is to give the state more time to investigate the environmental impact of the hydraulic fracturing and horizontal drilling used to extract the gas from tight rock.
Given that this probe must be done anyway – the environmentalist calls have grown too loud – there is no time like the present. US gas prices are so low that many drillers are putting down their rigs or selling their acreage to cash-rich, state-owned oil companies or international oil companies, which can afford to wait for the rebound in prices.
Let the investigators get in there and investigate a process the industry insists is safe. The moratorium might well stop some new wells from being drilled, which could give prices support. That way, when the probing is done (if no big negatives are found), the drillers can get back to work in a better price environment and with the environmentalist question asked and answered. A win-win for all.
Many thanks for all your questions for Ditlev Engel, the CEO of Vestas. His answers will appear on this site on Friday.
Next week, the person in the hotseat will be Yvo de Boer, the man who tried, and failed, to lead the UN to a binding climate change agreement in Copenhagen. He is now an advisor to KPMG, and on the final day of the Cancun summit, he will be on hand to talk about all things climate change.
Send in your questions on anything from why Copenhagen failed to whether the US will walk away from Cancun, or what role business has to play in any agreement.
Email all your questions to email@example.com by the end of Monday, December 6th.
Yesterday’s decision by the Obama administration to put a moratorium on drilling in the eastern Gulf of Mexico further intensifies the current debate about hydraulic fracturing, the controversial process by which much of the unconventional gas is being exploited in the US.
The process has been at the centre of the most recent argument between the oil and gas industry and environmentalists since Gasland was released earlier this year, highlighting the effect of some of the chemicals used in extraction. But the argument has gathered pace in the last few days, not least because of the announcement by Ken Salazar (pictured) that he would consider tightening up rules so that companies have to disclose what chemicals are being used to extract the gas.