On January 30. 2011, Bill Loveless of Platts Energy Week interviewed Kevin Book of Clearview Energy Partners and Matthew Armstrong of Bracewell and Giuliani to get their reaction to the recent announcement that Josh Fox's Gasland had received an Oscar nomination for best documentary film. The interview is worth watching, perhaps more than once, to see how an energy industry financial analyst who focuses on opportunities for investors and a defense lawyer who has "clients who are shale gas producers and service companies" respond to Bill's questions about concerns raised by the film.

I hope that some people who are directly affected by the industrial development of rural properties for natural gas extraction by hydraulic fracturing watch this interview. If they do, I expect that they will get increasingly angered by the way that a couple of prosperous urbanites dismiss their concerns. Essentially the two gentlemen indicate that Americans who are disturbed by the steady stream of water filled trucks, the noise of the drilling rigs, the ponds of drilling mud and sludge, the impact on their well water caused by drilling through their aquifer, the impact on adjacent properties from building the pipeline infrastructure required to put any extracted gas to use, and the long term reduction in property values caused by the existence of depleted wells once the gas burp has disappeared should just "get used to it."

Here is a dismissive quote from Mr. Armstrong.

I don't think that there is really going to be further fallout for the industry. You know, Gasland speaks, I think, as Kevin noted, to a specific section of the population, you know, heavily based in urban areas with an almost zero appreciation for how energy is generated. You know, they want clean, sustainable sources of energy that are carbon, umm low carbon or carbon neutral and they do not want it extracted in their back yard. So to the extent that there is a little bump in that population from the movie being nominated for an Oscar, okay. That's fine. I don't think it will have an appreciable impact on policy.

Here is my translation of that last statement - Mr. Armstrong's clients probably believe that they have done what it takes to ensure that the fix on policy is already in and that they do not have to worry too much about a little negative bump in public acceptance of natural gas. I am not willing to so easily dismiss the information that the film makes accessible to a questioning audience.

Expanding the population of people who understand a little more about what natural gas extraction systems do to rural communities will help to dissipate the oil and gas industry's marketing message that using methane as a replacement for other fuel sources is a "clean" or "natural" bridge to an alternative energy utopia. Burning massive quantities of hydrocarbons, even hydrocarbons with a relatively higher portion of hydrogen compared to carbon, should not meet anyone's definition of "low carbon" energy. Building massive amounts of new infrastructure with borrowed money whose repayment depends on a long term cash flow does not imply a short term bridge to anything since the investors will do what it takes to keep that cash flowing.

Gas combustion is only marginally less carbon intensive than combusting coal or oil, but the chemical process cannot compete with the big, fat zero that is produced when you fission uranium. There is a small amount of pollution produced building the infrastructure that enables fission to be used (less than 20 gms/kilowatt-hour), but take a hard look at the fossil fuel investment into the cycle of exploration, extraction, processing and distribution of methane gas and you will realize that the emissions measured when the material is actually burned are only a portion of the total emissions from the process.

A critical jury that pays attention to the phrasing and body language used by defense lawyers should be able to recognize whether or not Mr. Armstrong's dismissal is the truth or simply an effort to make a case for his clients. In this particular case, I think that the jury would side with the prosecution since Armstrong did not do his clients any favors with his lack of respect for the concerns of the victims and his arrogant assumption that his well-connected client would skate anyway. If I was a gas extraction company operator, I would find another defense lawyer.

Additional Reading

Energy In Depth (February 1, 2011) EID to the Academy: Consider GasLand’s “Many Errors, Inconsistencies, Outright Falsehoods”. Just in case you do not know much about Energy in Depth, here is a quote from their About Us page.

Who We Are

America’s natural gas and oil producers – the majority of which are small, independent businesses with less than 12 employees- are committed to strengthening America through the safe, responsible and environmentally-friendly development of domestic energy resources. Together, we’re working to keep energy affordable here at home, creating new jobs and minimizing our dangerous dependence on foreign oil.

Thanks to new innovations and the hard work of the hundreds of thousands of Americans in the petroleum industry, we’re doing just that. Spread throughout small towns and communities across the country, our companies keep local economies moving by providing goods and generating tax revenues through lease payments and production royalties.

In fact, America’s oil and natural gas producers account for the federal treasury’s second largest revenue source (with personal and corporate taxes being number one). EnergyInDepth separates fact from fiction about our nation’s natural gas and oil industry – especially on emerging policy issues such as the environment and taxes.

I hope you are not fooled by the gas industry's continuing effort to paint itself as a friendly, neighborhood mom and pop industry. This is the industry were ExxonMobil recently spent $41 billion, more than the market value of the largest nuclear operator in the United States, to purchase a company named XTO, a virtual unknown outside of the petroleum industry. Industries dominated by "small, independent businesses" do not denominate company valuations with words like "billions".