Natural Gas Intelligence
Experts Wary of 'One Size fits All' Shale Regulation

Monday, May 02, 2011

Natural gas experts said last week they believe the Marcellus Shale play can be developed in a way that benefits both industry and area residents, but they voiced concern about possible federal regulation of hydraulic fracturing (fracking) that they said could be based on situations unique to the Marcelluss Wary of 'One Size fits All' Shale Regulation

Porter Bennett, CEO of Bentek Energy LLC, agreed.

"One of the real dangers is taking problems that involve one place and assuming you have that same problem elsewhere," Bennett said. "All of the states regulating the production of natural gas and oil do it very effectively, but they do it based on the idiosyncrasies of the formations and operations in those states.

"Some of the debate out there now is saying the federal government ought to take this over. There is a propensity to have 'one size fits all' kinds of solutions, and that's not a good thing. It will end up costing consumers a lot of money and diminish some of the capabilities the industry has to produce this bountiful resource."

Opining on the future of the shale gas industry, Bennett said the market continued to evolve but predicted that companies with reserve holdings in places like the Marcellus and Eagle Ford would fare "quite well in a low-price environment," and predicted that there would be some consolidation.

"The companies that don't have [reserve holdings] will have to drill more conventional wells, which are more expensive and don't have the economies of scale. There will be a lot more pressure on them, and there will probably be some consolidation, with the 'have nots' being picked up by the 'haves.'"
Bennett added that there was still no question that shale posed some geological risk.

"There is some real question [among academics] as to why shale even works; the mechanisms are not well understood," Bennett said. "But as time has gone on, those risks are being dampened. There is a lot lower probability of shale gas fizzling out than there might have been a couple of years ago when there was a lot of skepticism. I think there is enough evidence to say that shale is going to be the 'horse' it appears to be and it will be a long ways down our energy future."

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