Home Interviews “Hydraulic fracturing can be done dangerously or safely”

Dr. Michael A. Levi

Interview with Dr. Michael A. Levi, author of the book ‘The Power Surge’ and expert from the Council on Foreign Relations

“Hydraulic fracturing can be done dangerously or safely”

The number of reports and articles describing the shale gas revolution in the United States and the fracking method of extraction is mounting. However, much of this information makes use of half-truths and highly emotive language. In the words of the international analyst Michael A. Levi, we at last have someone who can bring a modicum of objectivity to the subject based on his observations in the field. He has put his expertise into the book ‘The Power Surge,’ which offers a multi-layered portrait of the energy revolution in the US.

ITN: “Mr. Levi, what is your personal view on fracking? Is it a dangerous method?”

Michael A. Levi: “Hydraulic fracturing, like any other industrial process, can be done dangerously, or it can be done safely. The danger involved depends on how companies pursue it, how it is regulated and how communities handle it.”

ITN: “And do you think that it is handled carefully in the US?”

Michael A. Levi: “I think hydraulic fracturing is handled inconsistently in the United States. It varies not only depending on regulations but also on the particular company involved and the role that individual landowners and mineral rights holders establish in the contracts of companies.”

ITN: “Do you support fracking as a method for producing shale gas? Is it better than other ways of producing shale gas?”

Michael A. Levi: “It is quite well established to extract natural gas from impermeable formations that fracturing is necessary so that the gas can flow. So, as a matter of technology, this is how it’s being done. It’s great that we see developments for hydrofracturing that require less water or the use of different chemicals. That is a positive development and something that should be encouraged. But it is not like people are sitting here and asking, ‘Should we fracture this formation, or should we extract the shale gas in some different way?’ The far bigger question is: How important is it to get the natural gas from the formation in the first place? And of course, there are benefits to being able to extract natural gas as well as costs, and you have to balance this.”

ITN: “So, further methodical and sustainable improvement will justify the use of hydraulic fracturing even in the long-term perspective?”

Michael A. Levi: “Well, it is about continuous improvement, about observing and measuring what’s being done and finding ways to do things better. Many environmental improvements are going to be driven by the companies themselves because of growing pressure by the local communities, while other improvements are going to be driven by regulations. Both forces are important.”

ITN: “Why did you choose the title ‘The Power Surge’ for your book? Is this a synonym for the gas and oil boom?”

Michael A. Levi: “No, the book deals with a host of different changes unfolding across the energy landscape – not just oil and gas, but also renewable and efficiency. It’s this whole set of changes, each one of which alone would be big, but together they comprise the largest set of changes in America in energy in the last 30 or 40 years.”

ITN: “And where did your motivation to write this book come from?”

Michael A. Levi: “Change often comes along with confusion. Clearing up that confusion offers an opportunity for analysts to really help people to make better decisions and to better understand the world. So I wanted to do that. And on top of that, I see a lot of opportunities in all the changes that are happening, and at the same time, I see that untenable fight that seems to paralyze our country to take advantage of this change.”

ITN: “In general, have you recognized a rift in American society as regards the energy revolution and hydraulic fracturing? As the title suggests – you talk about a battle. Who are the participants in this battle?”

Michael A. Levi: “I think we have gone back to an old battle where one camp is about growing the supply of fossil fuels and the other is about alternatives and conservation. In each of the camps, you find politicians, companies and citizens. Practically every one of them is emotionally involved, has their own facts and often believes what they want to. This battle is overlaid with the fight between people who think the government is the answer to most things and people who think that the answer to our problems is to get government out. Thus, you have this ongoing fierce tension. And particularly this tension over the role of government tends to make it more difficult for people to have pragmatic discussions about how to manage our risks and take advantage of the opportunities we have in energy.”

ITN: “But you don’t see a rift between the population and the government?”

Michael A. Levi: “I do not think so. But there are surely big debates over what the appropriate role of government should be.”

ITN: “Do you see any appropriate role?”

Michael A. Levi: “Well, I think there certainly is one. Markets are very good at a lot of things, but they are not good at handling external damages created by economic activity, whether that is climate change or pollution. They are also not good at dealing with national security problems arising from excessive reliance on oil. But they can be very effective once you’ve established the right policy framework, for example one that penalizes excessive emissions or the overconsumption of oil and other things that are economically, environmentally and strategically damaging.”

ITN: “If you look at the research work for your book, what was the most touching moment or experience?”

Michael A. Levi: “Those communities in the United States who were struggling with the oil and gas development made the biggest impression on me. I met people there with their own concerns and their own histories. Some of them are afraid of the potential impact of the oil and gas development on their communities, and others are perhaps equally or even more afraid of the economic hardship that they face and which they can address by bringing new industry to the area.”

ITN: “Who did you meet? Can you tell me about the one place that affected you most?”

Michael A. Levi: “I spent a little bit of time in southern Ohio, for example, where I met with farmers, representatives of the industry and people doing development. Each of them brings their own story. What is most striking is to see the closest friends disagreeing harshly about gas or oil development, in part because of whether they have their own property, in part because of what their own business is and because of different attachments to the community.”

ITN: “What places did you visit?”

Michael A. Levi: “I went to Ohio, Pennsylvania, Colorado and a lot of other places in order to get a sense of how different communities react to the changes in the energy landscape.”

ITN: “What are the fears and concerns of the local population and communities about hydraulic fracturing?”

Michael A. Levi: “There is a mix of concerns. The overriding worry that people have is about the pollution of water. Too many people focus too much on risks that come from what you pump underground and probably not enough about the risks that come from how you dispose of wastewater that ends above ground after high-pressure injection. But people understand it better over time, and that lets you come up with better rules. The other thing that affects people is that even if the development is done right, you are talking about intense industrial activity coming to places that are not used to that. And that’s going to cause disruption and concern among some people. People also worry that even with good regulations, they will not be enforced. When I was in Athens County, Ohio, I met with Warren Taylor, who owns a creamery and is a strong critic of the natural gas development. He experienced that companies had been able to pollute the area and had not been penalized for that.”

ITN: “Do midsize manufacturing companies in the US benefit from the shale gas boom and the low energy costs involved?”

Michael A. Levi: “I do not see why the size of companies would matter. And the price of natural gas is a tiny part of most businesses at the bottom line. But there are some exceptions like energy-intensive manufacturing industries, particularly steel, cement, chemicals and fertilizer, that benefit from lower energy prices or lower natural gas prices. I think the chemical und fertilizer industry will benefit substantially because they use natural gas as a feed stock and not just as a source of energy. But even if it comes to a steel plant, the difference in price for natural gas between the United States and Europe or Asia is material, but other costs such as transport or labour costs also play a significant role. And a lot of these energy-intensive industries like steel and cement have seen bigger impacts from demand for their products from the oil and gas industry than they are seeing an impact from lower natural gas prices.”

ITN: “Not everyone is as enthusiastic about the shale gas revolution as the Energy Information Administration (EIA) is. For instance, J. David Hughes (Post Carbon Institute) believes that this revolution cannot be maintained in the future. What do you think?”

Michael A. Levi: “What you hear in public debates is that a lot of people say that others are overestimating things. But you have to ask who is overestimating, by how much and what the actual reality is. Yes, many analysts overestimate what is happening, but that does not mean that there is not big change under way.”

ITN: “How long will the road be from a ‘coal-fired country’ to a leading ‘clean-energy country’?”

Michael A. Levi: “This road requires technological change in clean energy and natural gas as well as policy. Ultimately, if you just wait for the technology to show up, be cheaper and do all this by itself, then this is not going to happen at the pace needed to address our climate challenges. Policy is, therefore, necessary to increase the incentive for companies to use clean energy technologies.”

ITN: “Do you think that hydraulic fracturing has a future in Europe?”

Michael A. Levi: “Europe has different conditions than the United States. The US benefits from private ownership of mineral rights, broad access to interstate and intrastate pipeline systems, and deep financial and physical markets for natural gas. None of these conditions are in place in Europe. On top of that, a lot of European places where significant shale gas deposits are located have very high population density and greater environmental challenges naturally. I think that shale gas production is in its early days in Europe. Without a doubt, there are opportunities there. And there is also a chance for Europe to learn from what the United States has done well and from what it has done poorly.”

ITN: “Europe will not be the loser of the energy transition in the US?”

Michael A. Levi: “I do not see why Europe has to be the loser from what’s happening in the United States. It can use the same technologies, but as I said before, the impact of competitiveness is somewhat limited.”

ITN: “If you were to advise President Barack Obama about the energy future of the US, what would you advise him to do?”

Michael A. Levi: “I would advise him to follow a ‘most-of-the-above’ energy strategy. This means to increase our opportunities by making sure that we can deal with our own gas development well, by making sure that we have a host of clean energy technologies available, but at the same time penalizing damaging behaviour like excessive carbon emissions and oil consumption in order to reduce our risks. Now, that is not something that Barack Obama can do alone. He can take a lot of steps himself, but ultimately he and the future presidents need the cooperation of Congress in order to effectively pursue a serious energy strategy.”

ITN: “Mr. Levi, thank you for your time!”

VITA

Dr. Michael A. Levi is the David M. Rubenstein senior fellow for energy and the environment of the Council on Foreign Relations (CFR). Located in New York, the CFR is considered to be one of the most influential American think tanks on foreign policy. Dr. Levi is also the director of the CFR program on energy security and climate change. He is an expert on climate change, energy security, arms control and nuclear terrorism. Furthermore, Dr. Levi is the author of the recently published book ‘The Power Surge,’ offering a detailed portrait of the ongoing profound changes in the energy landscape of the United States of America.

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Related Keywords

Energy-Intensive Industry

Shale Gas Boom

Water Pollution

Rock Formations

Shale Gas Revolution

Hydraulic Fracking

Shale Gas Production

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