Companies Chase Huge Natural Gas Profits, Despite Environmentalists’ Efforts
Environmentalists are still fighting against hydraulic fracturing, but energy companies are nonetheless in a natural gas frenzy.
Proponents of natural gas have argued that it is cleaner than other forms of energy and that the vast stores of natural gas in the United States could radically alter our dependence on foreign oil. Critics say the means of extracting natural gas — including the controversial hydraulic fracturing, in which millions of gallons of water, sand, and chemicals are pumped into the ground to break the shale and release gas — pose serious environmental and health risks.
Even as legislators in states like New York debate the costs and benefits of extraction methods and how to appropriately regulate the natural gas industry, corporations are taking action to capitalize on what could soon become an even more lucrative market. According to The Wall Street Journal:
One of the nation’s largest operators of natural-gas pipelines is buying a rival for $21.1 billion in cash and stock, making a big bet that natural gas blasted from shale rocks around the country will become a huge force in America’s energy future.
Pipeline giant Kinder Morgan Inc. says that by buying rival El Paso Corp. it will become the largest operator of natural-gas pipelines in the country, and the fourth-largest energy company in the U.S.
The new entity would have a network of 67,000 miles of natural-gas pipelines stretching into virtually every major region where natural gas is produced. It would connect Pennsylvania, Arkansas and Texas, and give Kinder Morgan entry in to Florida, a growing market for gas-fueled power generation.
Combined, the two companies would also be positioned to build new pipelines that will carry natural gas to customers from fields under development from New York to Ohio to Texas. Pipeline companies have been trying to redesign their routes to connect fast-growing markets for gas in the southern U.S. with new sources of natural gas made possible by recent technological advances that make it easier to pull natural gas from rocks far below the earth’s surface.
Sunday’s deal is one of the largest announced this year.
Such deals mean that large energy companies stand to make massive profits from increased natural gas production — a fact that will undoubtedly amplify the political pressure to remove remaining barriers to hydraulic fracturing and other forms of extraction. Environmentalists concerned with the risks of hydraulic fracturing will face an increasingly difficult battle against corporate cash in convincing politicians to limit and regulate natural gas production.