U.S. gas bonanza from fracking slow to spread globally

World_Shale_Basins_Map01_05-05-11

In less than a generation, the United States has soared to world leadership in extracting natural gas from shale formations by hydraulic fracturing. But as the world debates whether “fracking” is an economic boon or a budding environmental disaster, few foreign countries are following the U.S. lead.

GlobalFocusConditions unique to the United States have encouraged investment in the abundant source of low-carbon energy and boosted prospects for reducing dependence on costly and unpredictable supplies of foreign oil. Of the natural gas consumed in the United States last year, 94% came from domestic production, according to the U.S. Energy Information Administration.

“The availability of large quantities of shale gas should enable the United States to consume a predominantly domestic supply of gas for many years and produce more natural gas than it consumes,” the agency reports, predicting a 29% increase in output by 2035, almost all of it from shale fracking.

The rapid advance toward self-sufficiency has made the U.S. industry both a model and a cautionary tale for other countries pondering all-in development of their shale-gas reserves.

Significant deposits of natural gas trapped in coal and shale seams have been identified in Eastern and Western Europe, Canada, Australia, China, South Africa and the cone of South America. Global energy giants like Shell and Chevron are bankrolling billions in exploration, sizing up the cost-effectiveness of replicating the U.S. boom in more remote locales with little infrastructure.

Technological advances in horizontal drilling have made it feasible to tap small pockets of gas trapped in shale layers a mile or more below the surface. Contractors bore thousands of feet down through soil, rock and water layers, then drill laterally through the shale to create a horizontal well. When sand, water and chemicals are blasted into the bore holes, the force fractures the shale, releasing gas from fissures within the sedimentary rock. The gas is captured and ferried by pipeline to distribution grids or to port facilities where it can be converted to liquefied natural gas for overseas shipment.

But the process leaves behind tons of chemical-contaminated mud. There are also reports of drinking water pollution from the chemicals and methane gas that escapes into underground reservoirs. A study last year published by the Proceedings of the National Academy of Sciences documented “systematic evidence for methane contamination of drinking water associated with shale gas extraction” in the aquifers above the Marcellus and Utica shale formations in the U.S. Northeast.  This spring, the U.S. Geological Survey reported “a remarkable increase” in the occurrence of earthquakes of magnitude 3 or larger that it tied to fracking operations.

This month, the U.S. Government Accountability Office acknowledged that the Environmental Protection Agency was finding it “challenging” to inspect and enforce clean air and clean water regulations in the fast-moving fracking industry. For example, the GAO report noted, the EPA is often unable to evaluate alleged water contamination because investigators lack information about the water quality before the fracking occurred.

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Controversial Czech alcohol ban, spurred by poisonings, to continue

Hard liquor sales banned in Czech Republic
Authorities in the Czech Republic have outlawed hard liquor sales after at least 23 deaths from bootleg alcohol poisoning. But the ban is stirring the ire of bar and restaurant owners in the tourism-dependent country and raising fears it will only drive more drinkers to buy suspect spirits on the black market.

The action announced Friday on sales of beverages with 20% or higher alcohol content has swept more than 20 million bottles of alcohol off store shelves in the Eastern European state renowned for its beer but also a major producer and consumer of stronger drinks.

On Wednesday, President Vaclav Klaus called the ban "an unreasonable and exaggerated solution" to the rash of poisonings and likened it to Prohibition, according to the Ceske Noviny  website. During a visit to Italy, Klaus in part blamed the poisoning crisis on what he called "absurdly high taxes" imposed by the government and said the known deaths and dozens of nonfatal cases of methanol poisoning demonstrated "a fundamental failure of the state" to ensure safe spirits production.

A nationwide search for the source of the toxic spirits has led to the seizure of large barrels of alcohol with methanol content over 30%, as well as 94,000 government stamps from an unlicensed bottling plant that had been issued for an authorized producer, Deputy Interior Minister Jaroslav Hruska told a news conference in Prague on Wednesday, Ceske Noviny reported.

The tainted drink that was the source of some of the poisoning deaths was sold under counterfeit labels of legitimate Czech distillers, Hruska said.

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Ireland votes on treaty aimed at controlling Europe's deficits

Irish voters went to the polls in a referendum on a treaty aimed at controlling the runaway deficits of European Union countries
LONDON -- Irish voters went to the polls Thursday in a referendum on a treaty aimed at controlling the runaway deficits of European Union countries.

The voting is being watched throughout Europe. Ireland is the only country to put to the EU plan, instigated by Germany early this year, to a public vote. Irish constitutional law requires public approval on major reforms.

The treaty calls on member states to limit spending and stick to budgetary targets. It aims to coordinate EU fiscal and budget policies and hold annual structural deficits within 0.5% of gross domestic product, with bailout funds from the European Stability Mechanism available to those who ratify.

Fines are to be imposed on those who fail to comply with debt targets.

Of the 27 EU nations, Britain and the Czech Republic have opted out of the treaty, which must be ratified by 12 of the 17 Eurozone states by next March. So far, Romania, Slovenia, Portugal and Greece have approved it. 

Polls indicate that the treaty will pass, but Ireland has a quixotic record on EU treaties.  Two previous referendums -- on EU enlargement in 2001 and a more streamlined EU administration in 2008 -- were rejected by Irish voters, then accepted in a second vote after amendments. This time there will be no second vote for Ireland.

But Irish voters are expected to reluctantly favor more austerity and continued access to EU rescue funding. Ireland has already been saved by a massive European bailout of $108 billion in 2010.

Although one poll shows the treaty passing with 60% support, there is also the specter of low turnout. 

In a last appeal before the balloting, Prime Minister Enda Kenny urged Ireland's 3.1 million voters to "vote yes on Thursday, yes to stability, yes to investment," and give greater credibility to Ireland when it takes over the EU presidency in January.

Fierce criticism of the measure has come from the Sinn Fein opposition party, once the political arm of the outlawed IRA revolutionaries of Northern Ireland but now a legitimate and popular left-wing force in Northern Ireland and the Irish republic. Party leader Gerry Adams told voters not to give up their say over Irish economic policy and "not to write austerity into the Constitution."

Results of the vote are expected to be known by Friday.

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 -- Janet Stobart

Photo: Posters for and against the EU fiscal treaty are seen outside government buildings in Dublin, Ireland. Credit: Peter Morrison / Associated Press


Romanian government is latest victim of EU austerity

Romania
Romania's government fell after a no-confidence vote and the leadership of the Czech Republic narrowly survived a similar challenge Friday in the latest challenges to European efforts to heal the Continent's debt crisis with tough spending cuts and higher taxes.

Jobless rates also rose this week in Spain and France, where austerity measures are angering citizens and undermining faith in the government officials trying to balance budgets and shore up the euro common currency.

The governments of Ireland, Portugal, Greece, Italy, Spain, Slovenia, Slovakia and Finland already have fallen as the European Union struggles to restore economic stability to its 27 member states. Now, the  Romanian parliament by a narrow margin has declared no confidence in the 2-month-old leadership of Prime Minister Mihai Razvan Ungureanu.

Romanian opposition to belt-tightening swelled to an intensity not seen since the 1989 pro-democracy revolution as the government boosted a sales tax to 24% and cut the salaries of government workers. The spending constraints are an attempt to satisfy conditions imposed after a 2009 bailout by the European Union, the International Monetary Fund and the World Bank.

President Traian Basescu later nominated opposition leader Victor Ponta to succeed Ungureanu, the national news agency Agerpres reported. Ponta, 39, had been a critic of government actions that have hit Romanian civil servants with major pay cuts and raised the cost of living for many others. He will have to submit his own proposal to parliament for meeting the country's bailout obligations.

In Prague, where the Czech Republic's three-party coalition collapsed earlier this week, Prime Minister Petr Necas won grudging endorsement to continue his program of tax hikes and spending cuts on services including higher education, pensions and healthcare. Necas won 105 votes from 198 deputies after a nine-hour debate dominated by critics demanding his resignation and early elections, the CTK news agency reported.

Some lawmakers who defected last week nonetheless stood by Necas, heeding the warnings of respected economists that essential austerity measures will only be more painful if postponed.

More than 100,000 people protested the cuts at a rally in Prague a week ago, one of the largest outpourings of discontent since the Velvet Revolution that ended Communist rule 22 years ago. 

Hungary's economy is also hobbled by a credit crunch, and Prime Minister Viktor Orban urged the IMF on Friday to swiftly negotiate an emergency borrowing option for Budapest in case of turmoil in the European bond market.

The Netherlands was at risk of missing the EU's budget-deficit target for a fifth year before the government of Prime Minister Mark Rutte cut a deal with the opposition this week that will keep austerity measures in place until new elections in September. 

Both Greece and France are in the throes of heated election campaigns in which opposition candidates are gaining traction because of hardships brought about by budget-balancing measures.

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-- Carol J. Williams

Photo: Romanian Prime Minister Mihai Razvan Ungureanu at the parliament session in Bucharest Friday that ousted his government with a no-confidence vote. Credit: Vadim Ghirda / Associated Press


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