Authors discuss implications of ‘shale gale’
It’s been 25 years since the Cold War between Russia and the West officially ended, but Ezra Levant sees a new conflict heating up, this time over natural gas.
Levant, the author of “Groundswell: A Case for Fracking,” was one of two featured speakers Wednesday at the Washington County Chamber of Commerce’s 10-year celebration of the first Marcellus Shale well drilled here. The event was held at the Hilton Garden Inn, Southpointe.
The shale transformation began quietly enough when oil and gas exploration company Range Resources drilled at the Renz site in Mt. Pleasant Township in October 2004. The discovery proved t horizontal drilling techniques the company successfully used in the Barnett Shale could be transferred to the Marcellus, eventually creating the “shale gale” that put the county squarely in the center of a natural gas revolution that now has global impact.
The enormous success of natural gas extraction from the Marcellus drew Levant, a Canadian writer, broadcaster and conservative political activist, here and provided the basis for his book.
On Wednesday, Levant provided an entertaining view of how the record-setting production of natural gas from shale, specifically from the Marcellus strata, has elevated the United States into a major energy power, pitting it against Russian President Vladimir Putin and Gazprom, the giant natural gas company that is 51 percent owned by the Kremlin.
According to Levant, Putin has used Gazprom as “a big weapon” in Russia’s conflict with neighboring Ukraine, cutting off natural gas supplies.
Beyond the Ukraine, Gazprom also provides 100 percent of natural gas supplies to the Baltic states, all of Scandinavia, and serves about one-third of Germany’s energy needs.
But noting Putin’s former position as head of Russia’s KGB, Levant, who showed slides of Gazprom’s garish board room, said Putin and Gazprom’s executives run the company in a manner not unlike that of television’s famous mobster Tony Soprano.
“The whole place is run a little bit like the Sopranos,” Levant said, noting that with Gazprom designated by the Kremlin as a “strategic industry,” it is wielded like a weapon over those who depend upon its product.
“Vladimir Putin is your competitor, whether you know it or not,” Levant told an audience of 430 chamber members.
He said while Gazprom has run anti-fracking propaganda campaigns against the United States, it is engaging in the practice itself, inking major deals with France’s Total S.A. and BP, with another $400 billion deal to sell Gazprom gas to China.
The hydraulic fracturing technology that was successfully used in shale fields like the Marcellus pushed the United States past Russia as the world’s largest natural gas producer, with Levant noting that just 10 years ago, the U.S. was preparing to import liquefied natural gas from countries like Iran and Russia.
The sea change in U.S. natural gas production was discussed by Nissa Darbonne, author of “The American Shales” and editor-at-large for Oil and Gas Investor, who shared the dais with Levant.
Darbonne described the risk Range Resources took in 2004, when one of its geologists, Bill Zagorski, recommended to then-chief operating officer Jeff Ventura that it use Barnett-style fracking on the Renz well, where it had already spent $6 million with no success.
At the time, she said, Range’s stock was trading at $4 and its capital expenditure budget was $120 million a year.
While the rest is history – Range is now the leading natural gas producer in the Marcellus and the largest producer of natural gas liquids in the Appalachian Basin. Darbonne, like Levant, said the achievement has global implications.
“The U.S. shale gas play, particularly the Marcellus, is going to change the world,” she said.
Several other speakers on Wednesday noted the game-changing effect the Marcellus has had on the area, which is now known as “The Energy Capital of the East.”
Chamber President Jeff Kotula gave a historical perspective, noting that in 2004 when the Renz well was drilled, President George W. Bush was being challenged by Sen. John Kerry, and Ben Roethlisberger had his first start with the Steelers.
“What a difference a decade makes,” Kotula said, noting that “since then, our state, region and Washington County has changed” because of the shale gale.
“It’s a good old American product, and there’s lots of it,” said U.S. Rep. Tim Murphy, R-Upper St. Clair, noting shale’s ability to move America toward energy independence.
Range spokesman Matt Pitzarella, who introduced Zagorski to the audience, noted that the geologist “risked his reputation, his career” when he persuaded the company’s senior management to drill the Renz well.
Zagorski was later named a “Founding Father of the Marcellus Shale” by the Pittsburgh Association of Petroleum Geologists.