Alexander Pyles//Daily Record Business Writer//June 24, 2013
//Daily Record Business Writer
//June 24, 2013
OCEAN CITY — A boom in energy production will be the key to economic growth in the United States, including Maryland, a Baltimore economist said on Monday.
But Anirban Basu, chairman and CEO of Sage Policy Group Inc., said that while other states have gone through the “front door” by embracing hydraulic fracturing — colloquially called fracking — and horizontal drilling to extract natural gas from mile-deep rock formations, Maryland has focused on longer-term, more risky energy sources such as offshore wind.
“Maryland is trying to get into the energy renaissance game, but through a different door,” Basu told representatives from dozens of Maryland towns and cities during a session at the Maryland Municipal League’s annual conference at the Roland E. Powell Convention Center.
States growing fastest — led by North Dakota — have capitalized on natural resources, Basu said, including natural gas drilling. But a state commission is still studying the potential environmental impacts of fracking, which involves drilling a mile underground and blasting a water and chemical mixture into Marcellus Shale, a rock-encased deposit of natural gas. The process fractures that rock and releases natural gas, which burns cleaner than coal.
A study conducted by Duke University researchers that was published by Proceedings of the National Academy of Sciences on Monday found that drinking water wells in northeastern Pennsylvania were more likely to contain high concentrations of methane gas if they were close to natural gas drilling sites. The industry has in the past rebutted such claims.
Despite the apparent risks involved, low natural gas prices are expected to drive future Marcellus and Utica shale exploration, Basu said. By 2035, some projections show the United States will be energy self-reliant, he said.
“This decade is very much about shale technology,” Basu said.
While he billed the expansion of natural gas production as a certainty, the production of other energy resources remains more risky, he said. Offshore wind, while a clean energy resource, is the most expensive of the potential renewable resources.
“In terms of producing electricity as cheaply as possible, you can’t beat coal and natural gas,” Basu said. “To really grow, you need something really competitive in the market.”
Yet harnessing offshore wind energy early will help Maryland, he said, if the state becomes one of the first to establish an industry. The first state that does so will be able to sell that technology to the states that come after.
“This is a long-term proposition, not a short-term proposition,” he said.
Bloomberg reported on Monday that President Barack Obama plans to call for more solar and wind projects on public lands in a climate change speech on Tuesday, in which he is also expected to outline limits on carbon emissions from power plants, an act that would be unfriendly toward coal but a boon to the natural gas industry.
With prices so low and natural gas expected to continue booming, Basu said that could have a positive impact on American manufacturing. Companies are likely to seek countries with low energy prices.
“One of the things this creates is the environment for the industrial production,” he said, adding that companies who had shifted operations overseas might return.g