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Hydraulic Fracking & Water Pollution


In planning my series on the environmental impacts of natural gas for The Energy Collective, I had always intended for my third post to cover the critical issue of water needs. While climate concerns may dominate for some (see my previous posts), it seems fair to say that the most contentious aspect of the shale gas revolution is related to fears over high water demands and contamination risks posed by hydraulic fracturing, i.e. “fracking”.

Unfortunately for me, Jesse Jenkins inadvertently pre-empted my article with a great recent post asking how much water is actually consumed by fracking for shale gas? (Short answer, probably not nearly as much as you think.) While I don’t wish to reproduce Jesse’s article verbatim, I think a recapitulation of his main points is in order:

  • The U.S. fracking industry was responsible for around 0.3 percent of the country’s total freshwater consumption in 2011. Even in arid regions like Texas, this figure is probably not much larger than one percent.
  • A coal-to-gas reversion in the electricity sector would likely lead to substantial drop in the water demands of power generation. This is primarily due to the fact that gas-fired power plants are more thermally efficient than their coal counterparts and thus require much less cooling water. The same is true for nuclear power. [*]
  • There are caveats, however, since the focus on aggregates does mask some important conflicts at the ground level. (E.g. In cases where farmers come up against the competing water demands from a large gas development in their county.) This makes water an inherently local issue.

The final sentence above strikes me as a good departure point for the additional context that I can provide to Jesse’s article. I am therefore going to concentrate on two intertwined issues, namely water pollution risks and property rights. 

Water pollution risks: So far, so good (mostly) 

There will be no shortage of information awaiting anyone that wants to form an opinion on shale gas and whether it poses a risk to freshwater resources. However, much of the debate is characterised by little more than heated rhetoric with frequent disregard for any meaningful supporting evidence. What, then, does the (peer-reviewed) scientific literature actually say about the risks of water pollution due to fracking activity?

It be should stated upfront that this is something of a nascent field and research continues apace. However, the available evidence so far appears to paint a fairly positive picture for fracking proponents. Thus, one of the first studies to systematically investigate the water contamination risks posed by the shale gas industry was presented by Osborn et al. (2011). Despite being published in the prestigious U.S. Proceedings of the National Academy of Sciences (PNAS), this paper still managed to inspire some amusingly contradictory headlines.[**] Nevertheless, by comparing neighbouring sites, the authors observed that gas leaks in shale formations were most likely the result of natural processes rather than human activity. They further concluded that there was probably no correlation between gas drilling and chemical contamination of shallow groundwater systems. (From the abstract: “We found no evidence for contamination of drinking-water samples with deep saline brines or fracturing fluids.“) Osborn and his co-authors did, however, note the presence of abnormally high methane levels near some drilling sites. Nevertheless, the uncertainty surrounding its origins – e.g. whether thermogenic or biogenic – led them to conclude that more research was needed in order to draw definitive conclusions: “More research is needed across this and other regions to determine the mechanism(s) controlling the higher methane concentrations we observed.” (p. 4)

PNAS then published an intriguing paper by Olmstead et al. (2013) last month, which investigates instances of surface water pollution due to shale gas developments. (A press release of the paper can be found here.) To summarize, despite examining over a decade’s worth of data from across a wide geographic area, the authors were unable to find any statistical evidence of water contamination due to leaks at the actual well sites (i.e. drilling locations). They did find some evidence of pollution downstream from wastewater treatment facilities in the form of raised chlorine levels. This suggests that improved handling of wastewater could effectively eliminate the observed problems of water contamination due to shale activity. Moreover, the authors are clear to point out that such developments have already been ongoing in Pennsylvania (the region under examination) for some time.

In general, the available scientific literature appears to support a cautiously optimistic view of the dangers posed by fracking to our freshwater supplies. Definitive evidence may yet come in the form of a wide-ranging study by the U.S. Environmental Protection Agency (EPA). The completed results of this project will only be made available in 2014 and the EPA is remaining rather tight-lipped about any preliminary findings thus far.[***] However, alongside the above studies, I would imagine that their failure to raise any red flags up to now bodes well for the shale industry. 

Property rights, liability and contingency plans 

A robust discussion of the economic application of property rights to water resources would take up far too much space in what is already becoming a lengthy post. I will merely say that water has long been treated as a rather unique good in comparison to other natural resources – often to the chagrin of economists. Indeed, the chronic underpricing of water in numerous parts of the world has regularly resulted in unchecked profligacy and unsustainable usage. (For those interested, Sheila Olmstead, lead author of the aforementioned PNAS study, has a good review of the economics of scarce water resources here.) However, it is perfectly obvious that property rights matter. This applies to both water and gas reserves, so that different regimes might have notably different implications for the various stakeholders. For example, whereas underground resources in the U.S. belong to the individual landowners, in my home country of South Africa those rights are claimed by the state. This has added a layer of complexity to the already acrimonious debates surrounding the substantial gas reserves (485 Tcf) that are believed to lie under an environmental sensitive, semi-desert area known as the Karoo.

Abstracting from the specific complications of varying property rights regimes, my personal preference would be that producers face full liability costs in the event of (preventable, negligent) accidents. If I were a resident in an area under shale development, I would also want to ensure that compensation agreements are underscored by contingency plans in the event of contamination. This presumes the presence of a clear regulatory framework that not only codifies what qualifies as “negligent” behaviour (for example), but also extends to the appropriate protection of outside parties that stand to be affected by the agreements between, say, a gas producer and local landowners. In fact, I would think that the extreme difficulty of prior contracting between all potential stakeholders pretty much makes the provision of overarching environmental legislation an absolute necessity. (As opposed to pure contract or tort law agreements between individual agents.) On this score and to the best of my knowledge, it should be said that the U.S. appears to be largely headed in the right direction and other countries would be well advised to follow its lead.

Conclusion [with slight edits based on the comments]

It would be strangely naive to suggest that there are no potential risks to our water resources due to fracking activity. Like all energy sources, there are trade-offs to securing the benefits of shale gas and the possibility of water contamination is one of those. However, anti-fracking advocacy groups do their credibility few favours through the selective interpretation of – or pure disregard for – the existing scientific evidence, and what this actually says about the extent of these risks. Several comprehensive studies have thus far failed to establish any systematic relationship between drilling activity and water pollution. Important research is ongoing, but we clearly have reason to be optimistic at this stage. Regardless of the final outcome, I believe that such matters should be handled according to a clear regulatory framework that incorporates full liability and assures other stakeholders of the requisite contingency plans should an accident occur. After all, effective risk management is an entirely different animal to prior restraint.

Image: Abandoned Oil Rig via Shutterstock


[*] Subsequent to Jesse’s post, a new study by Laurenzi and Jersey (2013) has effectively come to the same conclusion. I should perhaps also point out that I have a forthcoming paper on the (substantial) water demands of thermal-based power plants, which also investigates the associated impact on electricity prices.

[**] Compare the headlines of these two articles, for instance. That they are ostensibly written about the same study gives you an idea of how absurdly polarised this debate has become at times. More on partisan interpretations of the Osborn et al. (ibid) paper here and here.

[***] From the executive summary of the most recent progress report (12/2012): “At this time, the EPA has not made any judgment about the extent of exposure to these chemicals when used in hydraulic fracturing fluids or found in hydraulic fracturing wastewater, or their potential impacts on drinking water resources.” (p. 3)

Content Discussion

Michael Berndtson's picture
Michael Berndtson on April 30, 2013

Dr. McDermott writes:

However, advocacy groups do their credibility few favours through the selective interpretation of – or pure disregard for – the existing scientific evidence regarding the extent of these risks.”

What advocacy groups? How are they selectively interpreting or disregarding risk?

You may want to change your writing style, it comes off more shrill than earnest. A cowboy hat wearing Texas oilman seems way more honest to me than an environmentally sensitive hipster economist. Shell is sponsoring this post – not good intentions. 

Grant McDermott's picture
Grant McDermott on April 30, 2013


Take my comment on advocacy groups to be a general observation. There is no shortage of particular candidates on this score though, and you can compare the articles within my second footnote to get a sense of what I am referring to. I would also say that you must be following a very different debate to me if you don’t think there have been some very strong claims made about fracking and water pollution. (E.g. The word “ban” occurs frequently.) I’m sure that you can find some good examples here, as a start though.

Thanks for the advice on my writing style; I’ll do my best to adopt a more earnest tone in the future.

I must say, though, your final paragraph confuses me. Are you suggesting that I would increase my credibility w.r.t. fracking by donning a cowboy hat and adopting a Texan drawl? Does being a hipster economist preclude the possibility of expressing a sincere opinion on the environment, or energy for that matter? Shell may be sponsoring this post, but my wiriting agreement is purely with The Energy Collective — indeed, I had no idea of Shell’s involvement until after I had submitted my posts. Regardless, my claims (as they were) are based entirely on what I could find within the peer-reviewed literature. If you have any disagreements with my interpretation or are able to provide superior evidence in opposition, then I am happy to receive it.

Best, Grant

(Not a “Dr” for another two or so years, unfortunately, but still an environmentally sensitive hipster economist all the same.)

Jesse Parent's picture
Jesse Parent on April 30, 2013

Out of fairness to TEC, Mr McDermott, and Siemens, I think it’s not exactly on point to suggest that Shell is essentially pimping out cronies to write stuff here. The Future Energy Fellows program is a fairly legit idea to try to engage young/er, involved people in the discussion. I support that idea, and even, generally speaking, how TEC goes about fostering discussion here. It is mostly laissez faire – there posts from APA  propaganda outlets as well as super liberal greenies, but that’s more or less how it goes in any field ot study, especially when there is supposedly serious discussion on the internet. 

I’m sure Mr McDermott will come into things more so over time, but, I more or less am set to trying to encourage and challenge people, especially my generation, to participate in more debate, discussion, and so on – so I don’t find much fault with him. I think this is a good post, if my opinion is of consequence.

There are only so many things and so many ways you can write about things, which is part of the frustration – at least personally. But where else, and how else are we going to talk about things? It’s part of the process. 


Jesse Parent's picture
Jesse Parent on April 30, 2013

Also, “After all, effective risk management is an entirely different animal to prior restraint.” Yes – and, as much as this is what I always say… I’m more concerned about human folley and awkward political/economic inhibitors, rather than the actual science. 

And I’m still not entirely settled on the health and full-spectrum safety of fracking, in any case. But I’m attemptiong to keep an open mind and find more sound data, case studies. The trouble is finding a good report and a good example, positive or negative, involved the tedious task of really checking out who did the report, who supported it, and what their collective leanings are. So it takes time, especially in this world of data saturation. 

Grant McDermott's picture
Grant McDermott on April 30, 2013

Thanks Jesse. 

We can all do no better than keep an open mind on subjects like these. I certainly agree that important research is ongoing, while the sheer volume of existing information (and opinion) can make it difficult to sort out the wheat from the chaff…

However, as with virtually everything, sticking to the peer-reviewed science seems the best place to start from my perspective. And on that score, so far we have good reason to be optimistic that fracking activity is not likely to contaminate our water resources. (As I said though, next year’s EPA report may yet provide the authorative account.)

Best, Grant

Grant McDermott's picture
Grant McDermott on May 1, 2013


Upon re-reading the comments this morning, I think that you have may actually have misinterpreted my position. Take a look at the post again. My claims are that a) fracking uses relatively minor amounts of water in the scheme of things, and b) the available evidence has failed to establish a systematic relationship between drilling activity and water pollution. We therefore have good reason at this stage to believe that fracking does not pose a significant risk to our freshwater resources.

I might make a small edit to the conclusion just to be clear on this…

Robin Carey's picture
Robin Carey on May 1, 2013

Michael, thanks for your thoughtful comment. The Future Energy Fellow program is entirely editorialy independent, as is The Energy Collective. Our next couple of posts will focus on wind, wave & tidal technologies, biofuels and yes, fossil fuels. The entire program will discuss the entire energy mix that we are currently using, so look forward to some more in depth analysis on solar power, energy storage or fracking.

For more information on our partnership with Shell, please check out my initial post on the partnership:

Michael Berndtson's picture
Michael Berndtson on May 1, 2013

I re-read your post. It is well written and insightful, but 25 years too late. United States environmental protection is at precipice, instead of say a fork in the road as an analogy. I’m not familiar with South African environmental law so won’t comment on that.

The Republican party, starting with candidate Mitt Romney, were ready to close down the US EPA.  That may have been mindless bloviating to stir up the stupid, but I’ll take them at their word. Many people know that at the municipality, state and federal levels, regulations protecting our food, water, land and air are being eroded, i.e. less protection. This erosion started in the late 1980s and continues to this day. The issue isn’t so much that Democrats think it’s bad to feed your child still bottoms and benzo (a) pyrene and Republicans think that it’s only the family’s responsibility. Republicans and others believe ALL regulation is bad. (Except of course regulations protecting major corporations from competition and profit erosion).

Fracking could be safe I guess. O&G believes it should be fine. Politicians hope so. Non-government organization (NGOs) focusing on environmental policy are pretty sure its fine, if that what’s its major donors want.

My problem with fracking is that it’s being cowboy-ed, with almost no federal oversight and a bare minimum at the state and municipality levels.

For you to make a declaration on whether fracking is environmentally OK or not – is either naive or blatantly dismissive. There has been almost no pre-drilling characterization and perfunctory at best environmental monitoring during development and operations. Simply put, there’s no baseline data upon which to compare to non-existing standards. We’re beyond 25 years ago – more like 40 years before NEPA, CAA, CWA, SDWA, RCRA, CERCLA etc.

Paul Roden's picture
Paul Roden on May 3, 2013

I think you need to read the new CEREs Study on Water Use for Fracking at  Whether the risks of accidents or leaks have or have not contaminated acquefers, land or watersheds are hotly contested on all sides.  That being said I have seen no studies estimating the cost of procuring the water needed to frack, the recycling, treatment or long term storage of water used for fracking.  So were is all of this water going to come from?  How much will it cost to transport, use, treat, recycle and dispose of this “produced”, “flow back”, or “used water?”  Even if none of it leaks out or spills in this industrial scale drilling and gas treatment operation.  If well casings only last 25-30 years, what happens then?  What is the cost of monitoring and replacing the well bore casings?  No one has studied or estimated the cost of that.  This is looking more and more like what has happened to nuclear power.  We don’t have a solution to the waste problem there and the existing plants are wearing out.  I can recall growing up in the 50’s and 60’s when the nuclear and electric power industries told us that nuclear power was “safe, clean and economical” and also that it would be “too cheap to meter.”  We have been sold a bill of goods that fracking is safe, “that we need this natural gas for our energy independence” and as a “tranistion fuel” because “renewable energy is not ready or developed enough to meet our energy needs.”  If that is true, which I don’t think is true, then why is the gas industry petitioning to build or transform 19 ocean seaport terminals for the export of natural gas from fracking?  The burden of proof on the safety, economics and reliability is on the gas industry.  After reading the “Drilling Down” series in the New York Times, the reports and stories on the, the book “Fracking in Pennsylvania:Flirting With Disaster” by Wlater Brasch, viewing the movies “Split Estate”, “Gasland”, “FrackNation” and finally the research studies of Dr. Mark Jacobson of Stanford University and Dr.Mark Delluchi of the University of California at Davis the only conclusion that I can come to is that fracking is too dangerous for our environment, health and safety.  Fracking is too expensive to be conducted safely without adverse impact on global weather, public health and public drinking water.  And in conclusion fracking is totally unnessary for our energy needs anywhere on planet Earth.  We have the technology, the science, the resources, raw materials, capital and know how to create a renewable energy system for the whole world by 2030, without the need or use of fossil fuel or nucleear power.  What we are lacking is the political will because the centralized utilities, fossil fuel and nuclear power industries have bought our elected government leaders and brainwashed the public to believe that the world is not ready for renewable energy and that if we stop subsiidizing fossil and nuclear power and transition to a more sustainable power system that we will all “starve and freeze in the dark.”  A renewable, sustainable, decentralized electrical, solar, wind, geothermal, hydroelectic, tidal, river current, hydrogen fuel cell, pumped hydoelectric, battery storage, mass transit, conservation,biomass fuels and energy efficient system is a threat to their profits and their dominant power in the world.  The status quo will not yield without a fight.  I am not alone in that conclusion,  There are more of us who are convinced of this.  I hope we havve enough time to change course and reverse the climate disruptions by transitioning to a “soft energy path.”

Ronald Weedbaum's picture
Ronald Weedbaum on May 3, 2013

The original post here was excellent. Right on the money. I think the lack of any detectable problems in the studies that have been done wrt fracking contaminating groundwater do say a lot – mainly that if there are problems that they are not widespread.  The only cases I have seen where there was a problem was where there was a spill on the surface. That is a real issue that needs to be monitored and regulated. But the broader fear that fracking is going to massively contaminate groundwater appears to be unfounded.

RE: federal government oversight. Ihave been thinking about this complaint lately – that the lack of federal oversight is a problem with shale gas development. It is commonly stated as evidence of some dark plot that hydraulic fracturing was exempted from the clean water act. The reason it was exempted from the clean water act was so that the federal government did not have to issue a permit for every well that was hydraulically fractured. The states already do this and it was seen as a duplication of effort and a waste of tax payer dollars. Some seem to insinuate that because the federal government is not overseeing the process that it is unregulated. This is not true. The states have been regulating it for decades – and usually very effectively. Why would we want to build a whole new bureaucracy at the federal level to do something the states are already doing? It would be like getting a federal DMV and making everyone pass a state driving test and then taking a federal driving test.

Plus – the federal government is not all that good at oversight. The worst drilling related disaster in US history was probably the BP Horizon in the Gulf and that was under federal regulators – the MMS.

I’d be interested in hearing from people who think that fracking should be covered by the Clean water act and regulated at the federal level as to why that would be a good expenditure of tax payer dollars.


Grant McDermott's picture
Grant McDermott on May 4, 2013


Thanks very much for your comment. I would, however, contest many of the points that you make. Allow me to make some observations.

Questions regarding the cost and transport of water are largely the concern of the private energy companies. I see no indications that they regard these as insurmountable obstacles to profitable operations. (The fact that the shale revolution is already underway in the U.S. should be taken as clear evidence of this. As further indicated in my post, the shale industry accounts for less than half a percent of the country’s water consumption.) Of course, there may be some instances where local freshwater supplies prove inadequate, or too contested, to utilize. Even then, I have seen a large number of solutions being put forward, from the use of deep brackish water to seawater pipelines.

If that is true, which I don’t think is true, then why is the gas industry petitioning to build or transform 19 ocean seaport terminals for the export of natural gas from fracking? 

Because they will sell energy to whoever is the highest bidder. However, gas from shale remains expensive to transport (see my first post), so local consumers will clearly be in a favourable position relative to foreigners. That said, I agree that energy independence is a misnomer. The U.S. will remain entangled in the global energy market even if (when?) it produces as much gas and oil as it consumes. Yes, it could be self-reliant in the event of extreme circumstances like a world war, but clearly that’s not most people have in mind when they think of energy independence. Michael Levi had a nice op-ed on the subject here.

After reading the “Drilling Down” series in the New York Times, the reports and stories on the, the book “Fracking in Pennsylvania:Flirting With Disaster” by Wlater Brasch, viewing the movies “Split Estate”, “Gasland”, “FrackNation” and finally the research studies of Dr. Mark Jacobson of Stanford University and Dr.Mark Delluchi of the University of California at Davis the only conclusion that I can come to is that fracking is too dangerous for our environment, health and safety.  Fracking is too expensive to be conducted safely without adverse impact on global weather, public health and public drinking water.


Like I said in the post, there is no shortage of opinion on this topic… much like other controversial issues like climate change and GMOs. And, because of that, I’d preferably stick to the the peer-reviewed literature that I described above. (Side point, but I’m constantly bemused/dismayed by the inconsistency that people have w.r.t. peer-reviewed science and environmental issues.) I certainly don’t regard Gasland or FrackNation, for instance, as particularly credible sources. Both are probably best regarded as slick propaganda pieces. The former has particularly been subject to no end of withering critiques due to its many misleading claims.

I truly do not see how you can claim that fracking — a commercialised technology with a proven track record — is “too expensive”, but that the broad suite of renewables is exempt from this charge. On that note:


We have the technology, the science, the resources, raw materials, capital and know how to create a renewable energy system for the whole world by 2030, without the need or use of fossil fuel or nucleear power.

As someone that has a) Spent a great deal of time studying the economics of energy and technological change, and b) Believes the science on man-made climate change to be wholly compelling… Your comment strikes me as sadly misguided. Forgive my phrasing, but I don’t regard the assertion that we can adopt a fully renewables-based energy system by 2030(!) as economically plausible in the slightest. (Or even desirable for that matter, given the costs that it will impose on currently poorer regions of the world.) Technical feasibility is perhaps another question, but that is of little practical relevance. I can think of no credible study that comes close to making such claims on economic grounds. Again, I fully subscribe to the notion that AWG presents a vast externality that requires a substantial reduction in carbon intensity over the coming decades. However, to insist that this can take place in such a short time-frame and without substantial contributions from nuclear and/or complimentary technological breakthroughs like CCS is wishful thinking. This is one reason that I, like many others, are hopeful that natural gas can play an important role in ushering in this transition.

Grant McDermott's picture
Grant McDermott on May 5, 2013

Thanks Ronald, that’s a valuable contribution to the discussion.

It seems like everyone here is in agreement about the need for robust regulatory oversight. As you say, however, bureaucratic duplication of that oversight is neither efficient nor desirable.

Grant McDermott's picture
Grant McDermott on May 5, 2013

PS – A quick addition to questions about whether water clean-up and monitoring costs will make fracking prohibitively expensive….

David Zetland (water economist who blogs at sent me this op-ed that he wrote in mid-2011, which makes some useful comparisons regarding the relative costs and wastewater treatment options for frackers.

Grant McDermott's picture
Grant McDermott on May 22, 2013

Thanks David,

I know that we discussed this over email, but I might as well copy in my response to you for others to see:

Always good to hear your thoughts on this (and other) environmental issues.

As indicated in my post, I’m sceptical of the ability of tort/common law to adequately address the concerns surrounding fracking in of itself. I’m certainly less inclined to believe that the Deepwater Horizon disaster would simply not have happened in the absence of regulation. (Poorly enforced as it might have been. It seems to me a false dichotomy to argue otherwise.) However, our opinions will have to suffice in the absence of satisfactory counterfactuals!

I think that robust regulation can underscore, rather than undermine, the preventative and recompensatory elements of common law. Correct me if I’m wrong, but you more or less seem to reach the same conclusion in your Petroleum Economist article, no? In that sense, I think that we are in agreement regarding the importance of liability obligations that reflect the full extent of damages.

I have a post fleshing out my broader scepticism of (sweeping) claims regarding the (innate) superiority of the tort system here if you’re interested!

PS – To those still reading the thread, David and I had in-depth discussion about this topic via Google Hangouts. You can watch the YouTube video here.

Bob Lee's picture
Bob Lee on May 31, 2013

Grant…I am not sure what is happening in the States but here in Alberta there are a few companies that have come up with proprietary systems which allow the returned frac water to be treated and recycled for use on subsequent fracs. Usually we will get 30% to 50% of the water back following a frac. The cost for their services are priced below the costs to haul away and dispose of the returned frac water and bring in new supply. The issue is that they are having trouble keeping up with the demand. We are hopeful the technology will develop further to allow brackish or produced water to be recycled for use in fracs. The other positive is that the technology may be employable for areas requiring treating of water for drinking or agricultural use.

The use of water for fracs is a big step up from the practice only a couple of years ago where oil was typically used. The oil fracs were very expensive and used VOPs in the mix. Water fracs use fewer chemicals and the argumnent can be made that water is at least partially replinished through the nature cycle.

Grant McDermott's picture
Grant McDermott on June 1, 2013

Very interesting. Thanks Bob, your comments are consistent with much of what I have been reading on the issue of water re-usage. It will certainly be good to keep an eye on this!

Quick question though: By “keeping up with demand”, do you mean water demand of the wells, or demand for application of the technology to other frackers? If the latter, then that sounds like a pretty ideal business problem to have…

Bob Lee's picture
Bob Lee on June 12, 2013

Grant…the issue is being able to keep up with the demand for application of the technology. It takes time, money and manpower to build the equipment as well as the time to convince the energy companies that this is a viable technology. Often times the energy companies stick with a program because “it’s the way things are done”. Changing the mentality can be as big a challenge as building the equipment.

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