The United States is awash in natural gas, thanks to a recent boom in a controversial drilling technique known as "fracking." But the flood of low-cost natural gas has raised all sorts of questions about America's energy future.
Some experts fear that fracking will result in widespread groundwater contamination, while others worry that a temporary supply of cheap natural gas will delay development of solar, wind and other renewable energy technologies.
On Wednesday, hundreds of energy leaders gathered at Stanford University for a half-day forum on U.S. energy policy sponsored by the Hamilton Project at the Brookings Institution. Among those attending were Facebook COO Sheryl Sandberg and former Treasury Secretary Robert Rubin.
Hydraulic fracturing, or fracking, is a way to extract natural gas by drilling wells and injecting large quantities of water and chemicals, which create pressure that moves the natural gas. Environmentalists have raised concern that the recent drilling boom has contaminated drinking water, and New York Gov. Andrew Cuomo's administration is trying to limit the places in that state where fracking is allowed.
"Fracking itself does not contaminate drinking water," said Kathleen McGinty, a former director of the White House Council on Environmental Quality, during one of the day's panel discussions. "But improperly developed wells have contaminated drinking water."
Natural gas is also making it harder for renewable forms of energy such as solar and wind, which are more expensive, to compete. While the cost of solar panels has dropped dramatically in recent years, natural gas is still cheaper, having fallen by more than two-thirds over the past four years.
Some experts call natural gas a "blue bridge to a green future" because it produces far less carbon emissions than coal. But Jim Rogers, the CEO of Duke Energy, warned the Stanford gathering that natural gas, while cheap now, has historically been volatile and that the price is certain to rise.
"Ben Franklin said there are two certainties in life: death and taxes," said Rogers. "To that, I would add the price volatility of natural gas."
Utility companies such as Duke, which is based in Charlotte, N.C., take a portfolio approach to their energy mix. Duke gets its electricity from hydropower, nuclear, natural gas, coal and renewables. The company is retiring older coal plants and is investing in solar and wind.
"Because gas is so cheap and cleaner than coal, there's a lot of pressure from state regulators to build all gas, all the time," said Rogers. "My number one fear is that we'll be pushed to build natural gas at the expense of solar and wind."
Venture capitalist Vinod Khosla said that energy innovation happens at the fringes and that startups will disrupt the energy sector. He also reminded the crowd that failure, such as the bankruptcy of Fremont solar maker Solyndra, is all a part of taking risks.
"You win big or you lose, but there's no such thing as winning small," said Khosla. "One loser like Solyndra doesn't constitute proof that the technology doesn't work."
Many agreed that the U.S. government needs to set some kind of federal tax on carbon emissions to further drive the market for renewable energy. But that policy will be difficult to enact because so many states, particularly in the South, are heavily dependent on coal for their electricity.
"I look at what's likely to happen in the next five years, and I don't think we're going to see a carbon tax," said Khosla.
Contact Dana Hull at 408-920-2706. Follow her at Twitter.com/danahull.