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NATURAL GAS: FUEL OF THE FUTURE

Energy is becoming an issue of increasing importance in the United States. Currently, three-quarters (75%) of the U.S. general public consider energy issues extremely or very personally important. This may be because the public believes the energy industry is directly tied to the economy. Nine-in-ten (92%) U.S. adults believe the energy industry is extremely (47%) or very (45%) important to creating economic growth in the U.S. and 70 percent report it is extremely (33%) or very (37%) important for Congress to address energy policy in 2011.

A fuel source gaining momentum from an economic and environmental perspective is natural gas. In the U.S., natural gas currently meets one-quarter (23%) of the energy demand and 24% of the electricity supply is generated by natural gas power plants. In his State of the Union address, President Obama called for the country to generate 80% of its electricity from clean energy sources by 2035. Renewables, nuclear power, natural gas and coal with carbon capture and sequestration (CCS) are likely to contribute to achieving that goal.

The United States has vast domestic natural gas resources. However, an estimated 59 percent of undiscovered natural gas resources in the U.S. are located on federal lands and offshore waters, and much of these resources are off-limits to exploration and production despite public support. The majority of the general public (58%) believes expanding energy production while protecting the environment should be a top priority for Congress and over half (51%) favor allowing more offshore oil and gas drilling in U.S. waters.

In order to increase natural gas production, the United States is utilizing advances in hydraulic fracturing technologies in the nation’s shale beds. The process of hydraulic fracturing involves injecting mixtures of water, sand and chemicals deep underground and under high pressure to break up shale rock formations to release and produce natural gas. This technology has helped lower U.S. dependence on imports by increasing total U.S. natural gas reserves by almost 50 percent over the past decade and can also provide an economic boost to local land and farm owners.

However, shale bed gas exploration has also come under fire due to risks to drinking water, the amount of water used, and emissions. While most of the country is unaware of hydraulic fracturing (43% not aware at all, 13% not very aware), when the process is described, most (78%) support tighter public disclosure requirements as well as informing the public of health and environmental consequences of the chemicals used in the drilling process. Still, federal legislation is not expected to be considered until after the 2012 elections and until then states will continue to regulate the process.

In areas where hydraulic fracturing is currently taking place, for example Pennsylvania and New York, residents have a much higher awareness level of potential risks. Half (50%) are very (22%) or somewhat (28%) aware of hydraulic fracturing’s potential impact on water supplies without having the process described. To address concerns, New York has issued a drilling moratorium so that studies can be conducted to assess the potential risks, and the city of Pittsburgh has also issued a ban.

Natural gas will remain an important energy source for the U.S., and there will continue to be a need to develop this domestic resource through offshore drilling and hydraulic fracturing. The debate between the benefits and risks of the methods used will continue to unfold. However, low levels of awareness leave room for education and it will be interesting to see who emerges to lead the conversation over the next year, particularly in regards to hydraulic fracturing.

For research references, please contact Jenn Haskins.

Jenn Haskins
Vice President
StrategyOne, DC
(202) 777- 3885

Off Shore Drilling

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