Business Leasing and Finance News (BLFN) Special Summer Edition Issue 90

    15 August 2011

    by David G. Mayer


    This special summer edition of Business Leasing and Finance News focuses on investing and other financing of unconventional sources of natural gas. “Hydraulic fracturing” or “fracking” has become a game-changing method of extracting natural gas from rock formations referred to as shale.

    Huge amounts of capital have been flowing into developing and operating drilling sites. Some governmental bodies, organizations and individuals have expressed concern over the environmental impacts of shale gas drilling and the associated hydraulic fracturing. The shale gas industry claims that it can and does manage the risk associated with drilling, supporting its contention with independent government data that shows that it has drilled a million wells without a confirmed case of drilling-related pollution in ground water. Lenders and investors have become aware of media reports warning of the potential environmental risks of fracking. They analyze these factors, among others, when determining whether to invest in fracking ventures.

    The feature article examines how to apply environmental due diligence practices long used in financing oil and gas projects to identify and manage the environmental risks of financing unconventional recovery of natural gas and oil from shale. You can balance the risk factors when deciding the best practices for managing risk associated with investing in this massive energy resource.