Industry giant to invest $1 billion in natural gas; question remain about true profits
NEW PALTZ, NY (WAMC) - As oil and gas companies wait to find out how much access they'll have in New York to natural gas resources, there are indications of how businesses in the industry are faring, and how willing they are to invest. WAMC's Hudson Valley Bureau Chief Greg Fry reports...
On Monday, Chesapeake Energy unveiled what it calls a bold plan to transform the US transportation fuels market. The company will invest over a billion dollars in the next ten years, in an attempt to "utilize abundant domestic supplies of natural gas and oil."
Chesapeake is one of the industry's leading companies, and has its eyes set on New York, because of its rich natural gas resources.
Steve Everley is a spokesperson for Energy in Depth, a Washington DC based organization that supports the natural gas industry. He says there's a vast energy source under our feet, which can be safely and responsibly developed. He says when that opportunity exists, it is hard to look past it.
Energy in Depth officials point to a new report from the US Energy Information Administration, which highlights an increased amount of natural gas production in the country - at levels not seen since the 70's. That report also states that new advancements in technology could make well drilling and natural gas extraction more productive, and less costly. Everley says new opportunities arise every year. He says that's due to new technology, and the discovery of more basins to explore in.
But, it's a troubling report for those who are opposed to drilling, and more specifically, high-volume hydraulic fracturing, the controversial process being proposed to extract natural gas from the Marcellus Shale in New York. Ramsay Adams heads the environmental preservation group Catskill Mountainkeeper. He questions how profitable the industry truly is, and the amount in subsidies given to companies. Adams says the whole question about natural gas as a transition fuel is in question. He says it's no surprise in light of multiple stories about the industry, and the response from industry officials.
On a consistent basis, reports are touted by industry officials, which show the potential for economic development brought on by natural gas exploration. The counter to that comes in reports that show damage done to areas around well sites, and in municipalities, along with questions about where the jobs go once a company is finished extracting gas from a certain area.
Adams says natural gas was called the next super-giant, but says companies realize that they have to strike now, due to competition. He says the way for companies to do that is to invest billions of dollars right now. Chesapeake Energy Announcement © Copyright 2011, WAMC