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.