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Decades of federal dollars helped fuel gas boom


February 17. 2013 2:51AM


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PITTSBURGH — It sounds like a free-market success story: a natural gas boom created by drilling company innovation, delivering a vast new source of cheap energy without the government subsidies that solar and wind power demand.


"The free market has worked its magic," the Barnett Shale Energy Education Council, an industry group, claimed over the summer.


The boom happened "away from the greedy grasp of Washington," the American Enterprise Institute, a think tank, wrote in an essay this year.


If bureaucrats "had known this was going on," the essay went on, "surely Washington would have done something to slow it down, tax it more, or stop it altogether."


But those who helped pioneer the technique known as hydraulic fracturing, or fracking, recall a different path. Over three decades, from the shale fields of Texas and Wyoming to the Marcellus in the Northeast, the federal government contributed more than $100 million in research to develop fracking, and billions more in tax breaks.


Now, those industry pioneers say their own effort shows that the government should back research into future sources of energy — for decades, if need be — to promote breakthroughs. For all its success now, many people in the oil and gas industry itself once thought shale gas was a waste of time.


"There's no point in mincing words. Some people thought it was stupid," said Dan Steward, a geologist who began working with the Texas natural gas firm Mitchell Energy in 1981. Steward estimated that in the early years, "probably 90 percent of the people" in the firm didn't believe shale gas would be profitable.


"Did I know it was going to work? Hell no," Steward added.


Shale is a rock formation thousands of feet underground. Geologists knew shale contained gas, but for more than 100 years the industry focused on shallower reserves. With fracking, large volumes of water, along with sand and hazardous chemicals, are injected underground to break rock apart and free the gas.


In 1975, the Department of Energy began funding research into fracking and horizontal drilling. But it took more than 20 years to perfect the process.


"The government has to be involved, to some degree, with new technologies," Steward said.




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