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ENERGY PLANNING

As noted earlier, the field of energy planning came into existence abruptly after the Arab-Israeli War in the fall of 1973 caused crude oil prices to quadruple in the space of a few weeks. The main purpose of energy planning was to accommodate the increase in fuel costs and the prospect that further increases looked likely. In recent years the focus has largely changed to concern with the greenhouse gases released by fossil fuel use.

Table 15-1 shows the big picture on U.S. energy use and production, and it also shows the substantial changes that have occurred over the past few years. The largest single use for petroleum, a little over half, is for transportation. Most of the remainder is used for industry, agriculture, as a raw material for various petroleum-based products, and heating. A little over two-thirds of natural gas is used for space heating and for some industrial processes. The rest is used for the generation of electric power. About nine-tenths of coal is used for the generation of electric power. Nuclear and hydroelectric are used entirely for electric power. In the renewables category the major share of energy comes from bio-waste. About 1 quad comes from wind and solar. That sum, though still small, is increasing rapidly in percentage terms.

The difference between consumption and production is America's energy import. As Table 15-1 shows, there was a substantial decline in net energy imports from 2009 to 2013 because of increased domestic production of both natural gas and petroleum. The decline has continued since then. Hydraulic fracturing breaks up shale and makes it possible to recover oil and natural gas from "tight" formations that were previously inaccessible. Horizontal drilling makes it possible to reach out for great distances in many directions from a single bore hole.

The improvements in oil and gas technology have made it a new game in a very short period of time. Several years ago there was much talk of "peak oil," the idea that world oil production was at or close to its alltime high and would soon be heading down, with an obvious implication of higher oil prices. One hears little talk of it at present, since new drilling technology has greatly expanded readily exploitable reserves. If there is peak oil in our future it is now very far off.

From the perspective of the national economy increased oil and natural gas production is very positive. It reduces expenditure on petroleum imports and holds out the prospect of substantial earnings on the exports of natural gas. That reduces the balance of trade deficit and, all other things being equal, increases the GDP and employment. Reducing dependence on imported oil has obvious geopolitical advantages. Low-cost natural gas makes U.S. manufacturing, which has lost employment in recent years, more competitive. But fracking has some very determined opponents.

Fracking involves pumping huge amounts of fracking fluid (water, grit, and a variety of chemicals) underground, and opponents of fracking argue that this fluid may contaminate groundwater. It is also argued that methane from fractured shale formations can rise into overlying aquifers and from there into households' water supply. The industry asserts that there are no documented cases of drinking water contamination. That is vociferously denied by homeowners and environmentalists, and the industry has received a great deal of bad press on the subject. Disposing of millions of gallons of fracking fluid after use can be a serious problem. Because many fracking operations run 24 hours a day and involve large amounts of trucking, they can produce strenuous resistance from nearby residents.

The regulation of fracking is a complex and changing situation. The Energy Policy Act of 2005 in a clause subsequently referred to as the Hal- iburton Amendment (after the drilling and oil well services company of which George W. Bush's vice-president Richard Cheney had previously been CEO) excluded materials injected into wells from the definition of the term pollutant. That was just one line in a long and complex bill, but it effectively prevented the EPA from regulating fracking. Thus the regulation of fracking was essentially left to the individual states.

The various states have taken very different positions on the matter. For example, Pennsylvania was so eager to promote fracking that Act 13 signed by Governor Tom Corbett in 2012 prohibited local zoning laws from contravening state regulations on fracking. For example, if the state laws specified a minimum distance between a fracking operation and a certain type of land use, a locality could not require a greater distance. That portion of the law was struck down by the State Supreme Court in December 2013 and is therefore no longer operative, but it does make the state's basic pro-fracking attitude very clear. At the other extreme New York State, which shares with Pennsylvania a long border running through the huge Marcellus shale field, does not permit any fracking at all. For a state's governor his or her stance on fracking can constitute a tough political choice. An anti-fracking stance will please many environmental groups but opens the Governor up to obvious charges that he or she is passing up a great opportunity to bring in jobs and tax revenues— just look at the boom conditions fracking has brought to North Dakota.

There is much uncertainty in the future of fracking. There have been moves in Congress to rescine the Haliburton Amendment which would permit the EPA a role in establishing national standards. It seems very likely that at some point a fracking case appeal will come before the U.S. Supreme Court, and that may change the rules of the game in some important way. One way or another, controversies over fracking will be consuming a great deal of planners' and attorneys' time.

 
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