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I think too often energy development and environmental protection are perceived as being irreconcilable
alternatives. That we either develop the energy that we need but in doing so despoil our environment,
or we have to, in protecting the environment, forgo the energy that we utilize and some
of the tax and employment and other economic benefits associated with that. I don't think
that's true and I don't think that's accurate. I think we can do both and I think Colorado's
experience indicates how we can do both. In the three years after we comprehensively amended
our regulations, energy production increased significantly in the state. Oil production
is up 30 percent. Natural gas production is up ten percent. Colorado has had more new
wells started than any surrounding state and we've been able to accomplish this in an economic
recession and despite continued low natural gas prices. At the same time, we are doing
a better job of protecting our environment. The use of close-loop drilling systems that
reduce the potential risk of water contamination has more than doubled during this period of
time. Based on a survey taken early last summer, about 60 percent of the hydraulic fracturing
fluids were being recycled. About 85 percent of the well completions were green completions
that minimized methane omissions. Wells are being constructed further away from existing
residences. Oil and gas companies working with the state of Colorado have developed
14 different wildlife mitigation plans that are allowing energy to be developed while
doing a better job of protecting wildlife and habitat over 750 square miles of some
of our best habitat. So we have been able to do both - produce energy, protect the environment
and that's important because at the end of the day we are all energy consumers but we
are also all environmentalists.
The first thing to understand is that shale cannot be economically produced without hydraulic
fracturing so hydraulic fracturing is not optional. It is necessary to produce shale
and other unconventional oil and gas resources economically today. Second thing to understand
is there has been a lot of experience with this process. It is not a new technology.
The commercial application of hydraulic fracturing began in the 1940s. So we have more than 60
years of experience with it. It's evolved during that period of time in terms of the
volumes of fluids and the pressures and some of the applications but the essential process
of injecting fluid mixtures under high pressure down the well board to fracture the hydro-carbon
formation goes back decades and more than a million wells in the United States have
been hydraulically fractured. It's an industrial process and all industrial processes have
certain environmental risks, but states like Colorado have adopted responsible regulations
to minimize those risks. So we require as I explained earlier, that wells be cased and
cemented to ensure that the hydraulic fracturing fluid going down the wellbore and the oil
and gas going up the wellbore won't contaminate ground water. We impose requirements at the
surface like secondary containment and other regulatory requirements to minimize the risks
of spills and releases at the surface, of these fluids. We do a number of other things
form a regulatory standpoint to address hydraulic fracturing.
I think looking forward over the foreseeable future, if unconventional oil and gas resources
are to be developed it will require hydraulic fracturing and it will require hydraulic fracturing
of the sort that has occurred in the United States. Now again, I think like other industrial
processes, that can be regulated in a safe and environmentally protective manner and
I think states like Colorado, other states in the U.S. have developed regulations that
are transportable for this purpose, that have worked well in Colorado to protect our environment,
and that can be looked at as a model by countries in Europe who have this resource and are interested
in developing regulatory programs for this purpose. The other point that is worth making
about hydraulic fracturing and shale in particular is that the shale resources that are being
fractured are typically 3000 meters below the surface. The usable ground water is typically
much shallower, several hundred meters below the surface, so there is a great geologic
separation between the two. In the United States, we typically characterize this as
a mile, about a mile of geology, geological formations, are separating the hydrocarbons
that are being fractured from the ground water that we are intending to protect. That geologic
separation coupled with the kinds of well construction requirements that I mentioned
earlier, requiring the casing and the cementing of the well and other measures help minimize
the risk of ground water being contaminated by hydraulic fracturing.
I think the question that's challenged me the most, and it's a question that challenges
us in the United States as well, is how do we educate the public about energy production
and hydraulic fracturing. I view hydraulic fracturing as a symptom of a larger challenge,
which is I think the public too often misunderstands where our energy comes from, what our energy
options are, and what the issues associated with those energy options are. We all perceive
the need to move to ultimately more renewable sources of energy but that is going to take
time and today in the United States for example, about 60 percent of our energy comes from
oil and gas, about another 20, 25 percent comes from coal and so it is going to take
time to transition from a hydrocarbon based energy system and economy to a more purely
renewable energy system and economy and we need a bridge to get there and i think many
people in the United States believe that natural gas can provide that bridge and do so in a
manner that helps reduce greenhouse gas emissions when we compare natural gas to coal and that
can provide lots of economic and employment and other benefits during this period.