Cuadrilla Resources, a British energy company using fracturing techniques to retrieve natural gas, has admitted that their operations are most likely what triggered minor earthquakes in the Blackpool area. Originally attributing the 1.9 and 2.8 magnitude tremors to “an unusual combination of geology and operations,” the company has taken responsibility for the shocks. Cuadrilla is the only company in the UK using hydraulic fracturing or “fracking” as a means of excavating natural gas. Fracking involves pumping highly pressurized sand, water, and chemical mixtures into the ground to release the trapped gas. The method is controversial as many people are worried about potential environmental and health risks stemming from chemical leaks into underground water supply and the irreversible damage that occurs when creating fractures underground. Cuadrilla suspended all fracturing operations until further notice.
This article brings up an interesting point that we as the Energy Group have been discussing. Is fracturing something to be supported? What does the future look like for a company that is considering using fracturing as a mean of retrieving natural gas? Because the technique is so controversial and potentially harmful to the environment, one wrong move by a company could lead to dramatic profit/revenue loss. For example, over the summer Exxon, the giant oil producer, was considering expanding its natural gas production using fracturing techniques. This cause an outcry from many people in the public and forced Exxon CEO, Rex Tillerson, to attempt to defend the controversial operation method. It will be interesting to see how fracturing grows/declines as a energy retrieval tool over the next few years.
Resources: http://online.wsj.com/article/SB10001424052970203804204577013771109580352.html
http://fefwww.istockanalyst.com/business/news/5188573/exxon-ceo-defends-fracking-techniques
I think the issue of fracking leads a difficult decision when making investment recommendations as well as assessing a company's future growth in the industry. Fracking is an ethical dilemma while it might not be directly related to the internal ethics of a company, it is related to how the company as a whole treats its environment around them. Fracking is tough to assess because on one hand there is an alternative energy source that comes from it that could potentially be useful in the future and other people may look to it as being an alternative to the resources we use today that might be running out. However tracking is a serious controversy in many areas where it is taking place. From seeing anti-fracking campaigns first hand where I live I can easily tell that many people feel the problems that this method has to the environment and do not support it. As far as I know from my own knowledge nothing through the government is being done in order to prevent tracking from happening, so there is room for growth within the method, however it will be difficult go gauge if it has the consumer interest to keep it going.
ReplyDeleteExactly. You're totally right, Lela. It's a decision similar to the one about the XL Pipe going on right now. The pluses and and the negatives are seeming to even out and its very difficult to make a decision because it seems like no one can ever be happy. If the president makes the hard decision (or the CEO make the hard decision) then they are potentially ruining their careers if something horrible happens. I'm not even sure what I would do in this situation.
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