Energy: The pros and cons of shale gas drilling

Emerging energy source burns cleaner than coal, could reduce U.S. dependence on foreign oil

This story was first published Nov. 14, 2010. It was updated on June 21, 2011.

Natural gas has been the ugly stepchild of our national energy debate: Never enjoying the political muscle of oil and coal, and never capturing the imagination like solar panels and wind farms. And to top it all off, it was in short supply.

But that's changing and now this stepchild is being touted as the hope of the future - the answer to our energy problems.

What's brought about the change is there's a new unconventional process for extracting natural gas from shale, a dense rock formation two miles underground.

And if you're sitting on top of it, you may become a new American phenomenon: A "shaleionaire."

And yet, if the BP spill last summer taught us anything, it's that exploring for energy has safety risks. But as we first reported in November, that can get lost in all the excitement.

What is increasingly evident is that shale gas is overwhelmingly abundant right here in the U.S.A.

Extra: Meet the "shaleionaires"
Extra: Gas drilling horror story
Link: Haynesville Shale

"In the last few years, we've discovered the equivalent of two Saudi Arabias of oil in the form of natural gas in the United States. Not one, but two," Aubrey McClendon, the CEO of Chesapeake Energy, told "60 Minutes" correspondent Lesley Stahl.

"Wait, we have twice as much natural gas in this country, is that what you're saying, than they have oil in Saudi Arabia?" Stahl asked.

"I'm trying to very clearly say exactly that," he replied.

Chesapeake Energy is the largest independent gas producer in the country. McClendon is on a mission to get the U.S. off foreign oil and dirty coal.

Gas has nearly half the carbon emissions of coal, and no mercury.

"But natural gas is still a fossil fuel," Stahl pointed out.

"So is it perfect? No," McClendon said. "The answer is it's not perfect. But for the next 20 years, natural gas is probably our best bet. And the good news is, we've got it. And we've got as much of it as anybody else in the world."

There are shale formations across large parts of the country, and there is production or exploration in over 30 states. It's an American energy renaissance.

Some 10,000 wells will be drilled in northwest Louisiana, in some of the poorest communities in the country, where impoverished farmers are becoming overnight millionaires as they lease their land for drilling.

"I never dreamed of money like this," C.B. Leatherwood told Stahl. "

Leatherwood, a retired oil field worker, got a bundle to drill under his farm: $434,000.

His cousin, Mike Smith, also profited: he was paid nearly $2 million.

"So what'd you do that day?" Stahl asked Smith.

"I sat back and thought about it for a, all day. And I said, 'I'm a millionaire.' And that didn't sound right," he replied.

They actually call them "shaleionaires," and they don't mind putting up with the noisy, smelly drilling when the wells are built because they get a cut of the profits, which could last for years and add up to millions more.

Within a year, shale drilling generated almost $6 billion in Louisiana in new household earnings. As the rest of the nation plunged into a recession, the region added over 57,000 local jobs, and the Cadillac dealership in town is hopping.

People have known for a century that shale contained gas, but it was too difficult and pricy to extract.

Produced by Shachar Bar-On

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