AC/DC Controversy of the 1880s Applies to Natural Gas Today: Reflections After 2011 MIT Energy Conference

3/11/11Follow @BillAulet

In the 1880s, Thomas Edison was locked in a battle with the legendary inventor Nikola Tesla and the entrepreneur George Westinghouse.

Edison argued that alternating current was “impractical” and highly dangerous. He supported the demonstration of electrocution of numerous animals to show the press and the public the danger of alternating current. He even went so far as to commission the development of the electric chair as part of the campaign. Alternating current was also dangerous economically to Edison and his new company, General Electric, as they were set up to exploit direct current and they lost one of their core advantages if the world went to alternating current. It was the classic innovator’s dilemma.

Well, after a fact-based analysis, alternating current was chosen to be piloted for Niagara Falls in the 1890s, and it clearly worked and all the hysteria was swept away. History has shown it to be clearly superior to direct current for most applications. Later in life, Edison came to regret that he had made this clearly off-base calculation, as well as his tactics.

Fast forward to today. Last week on the front page of The New York Times an article titled “Gas Wells Recycle Water, but Toxic Risks Persist” (the title is different in the online version) was yet another example of the publicity campaign to warn people about the dangers of natural gas production if we are not careful. Is this a balanced fact-based dialogue on how to address the problems of a probable energy source that can so dramatically help our country on each of the three fundamental criteria that we should be making energy decisions today—economic security, environmental, and economic? Or rather are we falling into the same mistake that happened in the 1880s with alternating vs. direct current?

Much like the safety considerations of alternating current which were real and needed to be addressed, the concerns with water are legitimate and must be addressed. It is essential to our country that these issues are discussed in a rational manner to avoid a situation where FUD (Fear, Uncertainty, and Doubt) rules as opposed to a constructive, fact-based dialogue.

From what I understand speaking with people who are much more expert than I in this, the challenges for dealing with water and natural gas fall into three categories:

1. Misperception: The fact that people continue to think that natural gas drilling affects the aquifer, is a misperception. Once the facts are understood, this is not a serious consideration.

2. Process: The purification and disposal of water from the fracking (hydraulic fracturing) process—which is where the real issues are—relate to whether the companies and governments are … Next Page »

Bill Aulet is the managing director of the Martin Trust Center for MIT Entrepreneurship and a senior lecturer at the MIT Sloan School of Management. He is also the author of “Disciplined Entrepreneurship: 24 Steps to a Successful Startup”, published by Wiley, which was released in August 2013. Follow @BillAulet

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  • Jerry Jeff

    Mr Aulet, I think you’re a bit too sanguine here. Even if the articles in the NYT are exaggerated environmental scare stories drummed up by the coal lobby (which would be grossly ironic) I don’t believe for a minute that we can trust any of the extraction industries to police themselves. The best case scenario is that shale gas recovery is in its infancy and that the development of the techniques and the industry will drive improved efficiency, safety, and environmental protection. But in the meantime state and federal regulators have to make sure that shale gas production is safe, that the waste is treated appropriately, and that the companies don’t evade responsibility for the brownfields that they are likely creating.

  • Bill Aulet

    Jerry,
    Your point that we need regulation for safety, I certainly agree with for sure. I believe that the problems are solvable in time and we should work to resolve them with a fair and impartial third party judge and not let ourselves be unduly swayed by vested interests who spread FUD (Fear Uncertainty and Doubt) but rather work to constructively solve the problems and realize the great potential benefits natural gas in the US represents.
    By the way, the current situation in Libya shows why developing the shale gas is so important – safely and responsibly.
    Thanks for the feedback, and I am looking forward to the MIT study on this matter which is due on in April.
    Bill

  • Michael

    The situation in Libya has nothing to do with gas or coal (heat and electricity) but liquid fuel and petrochemicals. The prices for the latter are affected, the prices for the prior are not (qed). The premium is being paid for the liquid form of energy (10x).
    Further, while gas is less bad in climate change terms, it still is increasing the carbon dioxide content as it is as fossil as coal and oil. Woolsey considers both dependency on foreign resources and threat to global environmental situations with consequences for domestic security.
    The answer lies in using non-carbon (solar, wind, geo, hydro) and carbon negative (biogas, biofuel, ethanol, butanol) fuels, NOT natural gas.

  • Scott Thomson

    Michael,
    You are missing the message with regards to Libya.

    How about this:
    -we continue to utilize natural gas for heating
    -turn to coal and biomass gasification technologies, ex: Synthesis Energy Systems, to supplement the US demand for petroleum distillates (FYI, coal can be converted into diesel/petrol at an economically competitive price when crude oil stabilizes above $80/barrel; and in the processing, C0² may be separated for CCS)…obviously this doesn’t happen overnight, but I believe it to be a step in right direction

  • http://www.northamericanrepower.com Dr. John Reed

    I agree that fracking has had some bad outcomes, primarily when done by under capitalized small drillers reworking old wells that were never cased in properly to handle the fracking pressure. Like all things, it comes down to costs, and if it is too costly to just dump the waste water, then it will be cleaned and reused.
    Self regulation never works until serious economic consequences occur that change the mind set of those doing the work.
    Of more immediate environmental impact is the tremendous amount of poorly controlled diesel exhaust generated at a gas well site from the non-road equipment clustered at the site. These engines are still allowed high pollution emissions compared to new on road diesels. The Texas Railroad commission and the Penn EPA are looking at work site emission level regulations to curb this pollution. One easy and money saving way to accomplish dramatic reductions in diesel emissions is to convert all this equipment to CNG and use the well gas to run it.
    It is time the Gas suppliers put their own fuel to work for themselves.