Horizontal directional drilling and hydraulic fracturing (or “fracking”) will continue to result in larger domestic energy supplies in the U.S. and lower prices for consumers this year, according to energy industry experts, including Lawrence T. Borgard, the president and chief operating officer of Integrys Energy Group.
“We have a number of great resources in this country,” said Borgard. “When we are able to responsibly develop them, it can lead to all sorts of good things.”
Improvements in drilling and fracking have resulted in increased domestic supply of oil and natural gas, which is driving down energy prices, Borgard said. The U.S. Energy Department reported that U.S. oil production in early January exceeded 7 million barrels a day for the first time since 1993. The average price of a gallon of gasoline will fall 5 percent to $3.44, according to the U.S. Energy Department.
Natural gas prices have fallen to “levels we haven’t seen in years,” Borgard said, which has also resulted in lower electricity costs.
Fracking has created an economic boom in some areas. However the technique is controversial and critics say fracking can have detrimental environmental effects, including groundwater contamination.
But Borgard said he is confident that the oil and gas drilling industry will make sure its operations do not harm the environment, otherwise those industries will ultimately suffer.
“Good actors in this industry recognize the responsibility to be good developers,” he said. “If you’re in any business for the long haul you need to be a responsible actor.”
Meanwhile, renewable energy development will remain limited this year as the costs to obtain energy from those sources remain higher, Borgard said. Many states, including Wisconsin have requirements that a percentage of the energy used in the state must come from renewable sources. But efforts to increase those requirements remain on hold as politicians are reluctant to mandate more high-cost energy for consumers while the economy remains in a weak recovery mode, Borgard said.
Lower natural gas costs have not only lowered energy prices for consumers, they have provided more financial resources for utilities to make upgrades to their infrastructure, Borgard said.
Energy industry trends
- Fracking will continue to boost U.S. energy supplies and will keep prices lower.
- Renewable energy development will emain limited due to its higher costs.
- The closure of the Kewaukee nuclear power plant will have little impact on electric rates in Wisconsin.
