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Fracking Opportunities

Jeff Siegel

Written By Jeff Siegel

Posted May 9, 2011

Last year, I wrote an article that took a look at some of the environmental issues associated with fracking operations in the Marcellus Shale.

Since that article, there’s been a constant debate over whether or not fracking is safe.

But one thing is certain — over the past month or so, critics of fracking have had no shortage of news to back up their claims.

I’m sure you already read about the fracking explosion in Calhoun County last month.

Following that explosion, thousands of gallons of fracking fluid spilled over containment walls, through fields, onto personal property and farms (where cattle continue to graze), and into Towanda Creek, which feeds into the Susquehanna River.

And that was a legitimate operation.

I won’t even get into the Congressional probe from earlier this year that found a dozen energy companies used diesel in their fracking fluid without permits…

Of course, none of this will end the debate.

But let me tell you that I’ve personally taken a trip to a few of those spots where folks claim that fracking operations have polluted their land and water. I’ve seen and smelled the results of these unsafe fracking operations. It’s no illusion, my friends.

There are some real problems that need to be nipped in the bud.

Because let’s be real here: We’re going to tap that gas. There’s no two ways about it.

And there’s also no question that there’s a ton of cash to be made in the fracking game.

Just ask my colleague Keith Kohl, who’s been making a fortune in the shale game — and he expects this company to have a great next three quarters.

But whether or not we do this in a responsible way is completely up to us.

Two Undeniable Truths

Last week, the Department of Energy was asked to form a panel of academic and environmental experts to identify any immediate steps that can be taken to improve the safety and environmental performance of fracking.

The panel will also provide advice on practices for shale extraction that will ensure the health of the public.

Following news of this panel, a number of fracking supporters criticized the creation of the panel, saying it acts as a mechanism that could ultimately require more unnecessary regulations.

Dozens of environmentalists criticized the creation of the panel as more government support for something that should have been ended yesterday.

But beyond the extremist rhetoric, politically-driven sound bites, and irrational attacks on those who simply want to preserve our natural capital, we all need to take a deep breath and accept two undeniable truths:

  1. Cheap energy in the form of domestic natural gas supports economic growth and serves as both a  transitional energy source and backup storage for clean, domestic renewable energy.

  2. We absolutely have to stop sacrificing clean water for access to cheap energy. It is a practice that is simply unacceptable at a time when access to clean water becomes more difficult and more expensive to provide every day. And if you don’t agree with that, let me dump a few of those carcinogenic chemicals in your water and see how you like it.

Clean Up on Clean Water

Don’t get me wrong; from an investment standpoint, I won’t deny for a second that these fracking operations will continue to deliver huge profits for investors.

But I would argue that new efforts to keep the water clean and the surrounding areas safe could also offer opportunities. Certainly we’ve seen this on a number of occasions when it comes to water safety and treatment.

One of my favorite water treatment plays is a company called BioteQ Environmental Technologies (TSX: BQE).

BioteQ Environmental works with a number of different companies in the mining, oil sands, and power generation sector to:

  • reduce the environmental liability associated with contaminated wastewater;

  • eliminate the production of waste sludge;

  • save money with lower life cycle costs, compared to other water treatment processes;

  • generate revenue from the sale of recovered metals and other by-products; and

  • produce high-quality treated water that can be sold, recycled, or discharged.

And one of BioteQ’s most promising addressable markets is shale gas frac water.

You can read the company’s most recent presentation here.

To a new way of life, and a new generation of wealth…

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Jeff Siegel
Editor, Energy and Capital

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