[ASSURAS] Drilling for oil in shale rock deep below the surface, fueling America's biggest oil boom in decades and igniting an economic revival in America's heartland.

[RUSSELL RANKIN, BRIGHAM EXPLORATION] There's something magical about bringing on a 4,000-barrel-a-day well.

[ASSURAS] But critics say, "What's the rush?"

[DAN KALIL] Oil has been here 400 million years, 500 million years -- we're going to get it all out today.

[ASSURAS] It takes millions of gallons of water to get the oil out. Could the historic drought in Texas bust the shale oil boom there?

[JOHN BRAUDAWAY, OIL FIELD CONSULTANT] Never in the past, on any of the oil booms, was water a factor. It is a big factor this time.

[ASSURAS] The difficult choice -- oil or water?

Plus, environmental concerns about fracking for oil and gas. We'll hear from the administrator of the Environmental Protection Agency, Lisa Jackson.

[JACKSON] We have no data right now that lead us to believe that there needs to be specific federal regulation of the fracking process.

[ASSURAS] This is "energyNOW!"

Hello, everyone, I'm Thalia Assuras. Welcome to "energyNOW!", a weekly look at America's energy challenges and what we're doing about them.

One of the biggest challenges is our appetite for oil. The U.S. imports about half the oil we need, putting our nation's energy security at risk and costing hundreds of billions of dollars a year. Now, a relatively new drilling technology stands to put a big dent in those numbers and could help wean us off our dependence on foreign oil. And it's helping create an American oil boom the likes of which hasn't been seen in decades.

[STEPHEN HOLDITCH, OIL INDUSTRY CONSULTANT] It's just going to knock your socks off. It's going to be a game changer. It's really going to help our economy.

[ASSURAS] Across North America, beneath states like North Dakota, Texas, Nebraska, Colorado, California, and Ohio, there are vast quantities of previously inaccessible oil, as many as 34 billion barrels, that have been trapped in hard shale rock formations miles beneath the surface of the Earth. Now that oil is coming up -- a lot of it.

[RUSSELL RANKIN] Before we drilled our wells out here, they called this "dry hole country." And now it's just, you see oil rigs popping up everywhere.

[ASSURAS] Thanks to the drilling technology called hydraulic fracturing, or fracking, the same technology responsible for a 25% surge in U.S. natural gas production in just 5 years. To get to that oil, a well is drilled thousands of feet down and then miles out horizontally. Millions of gallons of fresh water mixed with sand and chemicals are sent down at very high pressure, fracturing the rock, releasing the oil.

Now, U.S. oil production is on the rise for the first time since 1991, creating tens of thousands of jobs.

[GOV. JACK DALRYMPLE (R) NORTH DAKOTA] Well, we have a bona fide oil boom going on.

[ASSURAS] By 2035, the U.S. and Canada may get 3 million barrels of oil a day from shale rock. That's more than America currently imports from the Persian Gulf and Venezuela combined. But there are concerns, from water quality...

[MARVIN WITTE] We have a fear that it may drift into the water wells, and then we'll have polluted waters.

[ASSURAS] And quantity...

[ALYSSA BURGIN] The prognostications for Texas for water supply are very poor.

[ASSURAS] And the landscape...

[DAN KALIL] We're industrializing western North Dakota overnight.

[ASSURAS] A quick note -- "energyNOW!"'s initial support comes from the American Clean Skies Foundation, which is funded in part by Chesapeake Energy, a major player in the natural gas and oil industries. We are editorially independent.

The shale oil boom and its impacts are being felt the most in North Dakota and Texas, home to the largest producing shale oil fields in the world. In today's show, we'll visit both states. First, Williston, North Dakota, and the Bakken oil field, where correspondent Patty Kim found a town in the middle of a modern-day gold rush, as you'll see in this "energyNOW!" Spotlight.

[KIM] In these tough economic times, North Dakota is marching to a completely different beat. People here are celebrating, not only the 60th anniversary of the discovery of oil here but the biggest oil boom in the U.S. in decades. Here, wells are pumping more than 450,000 barrels a day. And that could soon catapult North Dakota to number two, behind only Texas, in U.S. oil production.

[RUSSELL RANKIN, BRIGHAM EXPLORATION] We're talking about an oil discovery that's as big as the East Texas oil field is, you know, 40 years ago. This is huge.

[KIM] This is the Bakken, named after the family who owned the land, a vast sea of oil that lies two miles underground, stretching from parts of North Dakota, Montana, and into Canada. Oil trapped in extremely dense shale rock.

This is an example of it, it's the shale rock, and it feels just like concrete. Oh, my gosh! It was only recently, with new technology, that they were able to crack it open.

There it is, black gold. I'm just going to go put this into my car.

[RANKIN] Okay, just fill 'er up.

[KIM] But in the rush to strike it rich, small-town North Dakota is bracing itself as it rides the ups and downs of life as a boomtown.

Welcome to Williston, a hub of oil mania. In recent years, the population of this North Dakota town has nearly doubled to over 20,000. People from all over the country are flocking to the northwest corner of this state, lured by oil jobs with average salaries of $95,000 a year. But with big money sometimes comes big risk.

[REPORTER, KXNC, SEPTEMBER 15, 2011] We have some more details now on a fatal oil field accident that we first told you about last night.

[REPORTER, KXNC] The explosion happened just before 6:00 last night, just south of the Missouri River in Mackenzie County.

[KIM] Still, for many, it's a chance worth taking. North Dakota boasts the lowest unemployment rate in the country at 3.5%. It seems oil companies here need all the help they can get. Tourists are sometimes recruited on the spot, at airports, restaurants, and, well, even during TV interviews.

Is it cutthroat?

[RANKIN] Sean could go out and get a $75,000 job tomorrow, so I hope you're paying him well.

[KIM] Don't tell our cameraman that, shh!

With the influx of workers, Williston faces a housing shortage. Construction can't keep pace. Some folks are resorting to camping out wherever they can. [Telephone rings]

[WOMAN] El Rancho, front desk.

[KIM] And hotels, you can forget about those.

[WOMAN] I have 92 rooms, and they're all full.

[KIM] So oil companies have built temporary housing. Thousands of workers live in so-called "man camps."

Well, it's not exactly the Hilton, but it will have to do. Yep, even our little TV crew couldn't get a hotel if our lives depended on it, so we're staying in a "man camp," too.

[TEXT ON SCREEN] Tour a North Dakota man camp at energyNOW.com.

While the town may be swollen with oil workers, other jobs aren't being filled fast enough. So in just about every shop and fast food chain at any hour, you'll find this. ["Now Hiring" signs]

[WOMAN] Three cheeseburgers, three cheeseburgers!

[KIM] Some restaurants are hiring foreign students to fill the gaps.

[HOWARD KLUG, EL RANCHO RESTAURANT] I didn't realize I needed to speak Spanish and Russian and Chinese to run a restaurant in Williston, North Dakota.

[KIM] At one time, the McDonald's in town even dangled signing bonuses to attract new workers. But as more money and people pour into the area, so do more big-city problems. Traffic jams are now routine, rents are sky-high, and so is crime.

Do you lock the doors at night?

[KLUG] Absolutely, now I do. I really never did that for 30 years. And now, my wife, the other day, said, "Hey, the door's locked."

[KIM] What's more, others fear a way of life may be vanishing. Dan Kalil's North Dakota farm has been in his family for over 100 years.

[KALIL] Our quality of life has deteriorated so greatly. It's the loss of our solitude. Oil has been here 400 million years, 500 million years. We're going to get it all out today.

[KIM] Would you ever consider leaving this farm in North Dakota?

[KALIL] Not until now, not until now. Now I think about it all the time.

[KIM] Still, other landowners welcome the boom, newly minted millionaires you're more likely to spot not in a Lexus but on the back of a tractor.

[JACK CVANCARA, NORTH DAKOTA FARMER] I think probably the year we got married, I think my whole crop amounted to one pickup load of durum wheat.

[KIM] Oh, no!

[CVANCARA] That was about it.

[KIM] And she thought, "Wow, he's a keeper!"

In lean times, Jack Cvancara and his wife, Judy, took extra jobs to make ends meet. On top of farming, he also drove a school bus for 30 years. Now, with oil wells on their land, the Cvancaras are raking in royalty checks.

What was that like when you actually opened up that envelope and saw that check there with all those zeroes?

[CVANCARA] Couldn't believe it.

[KIM] Really? In shock?

[CVANCARA] In shock.

[KIM] All those years farming and then, boom, one envelope.

While it's today's boom that's changing the fortunes of the people of this town...

[RANKIN] They were pioneers. They went out and they did what people said they couldn't do. And I feel like we're kind of in that same boat again.

[KIM] For some, it's the past that's never felt more alive. In Williston, North Dakota, Patty Kim, "energyNOW!"

[ASSURAS] The shale oil boom is being felt across America. But in the state we think of most when we think of oil -- Texas -- it comes at a really bad time. When we come back, how the state's historic drought is pitting the use of water for farming against water for oil production.

[WITTE] You know, we can live without oil, but we can't live without water. We have to have water.

[ASSURAS] And later, an interview with the administrator of the Environmental Protection Agency, Lisa Jackson.

[BREAK]

[ANNOUNCER] "energyNOW!" is celebrating its first anniversary. Thanks to you, our show now reaches over 150,000 TV and Web viewers every week. From Washington to Beijing, from Houston to Tel Aviv, we tell you about new energy jobs, breakthrough technologies, climate action, and how to cut back America's dangerous reliance on foreign oil, which is costing our economy roughly $300 billion a year.

[T. BOONE PICKENS, CEO, BP CAPITAL] We've got to get on our own resources.

[DON CHEADLE, ACTOR, ACTIVIST] When are we going to make this jump?

[ANNOUNCER] But the in-depth reports you see on "energyNOW!" also have a price tag. So to keep "energyNOW!" growing, we want to form new partnerships with foundations and corporations who are equally concerned about America's energy future.

[ZEPPS] What we do right here has a direct impact on what happens here.

[ANNOUNCER] Join us in bringing "energyNOW!"'s message to more and more viewers. Please have your company or foundation contact us today.

[TEXT ON SCREEN] Please contact our General Manager, Hardy Spire, 202-621-2916, sponsor@energynow.com.

[END BREAK]

[ASSURAS] South Texas is home to the country's second-largest-producing shale oil field, the Eagle Ford. Oil production there is skyrocketing from just 787 barrels in 2004 to more than 8 million so far this year. Like North Dakota, the oil boom is helping the local economy, but fracking all those wells takes millions of gallons of water, and Texas is suffering through an epic drought, one of the worst in the state's history.

Look at this map of the world's drought-stricken areas. The big patch of red -- that's Texas. Farmers are hurting, and in parts of the state, local governments are trying to limit the amount of water used in oil and gas drilling. I recently traveled to south Texas to get a firsthand look at the controversy.

Massive fires have ravaged neighborhoods. Dust storms have blackened the sky. And lakes are rapidly shrinking.

[MINISTER] We ask, Lord, for that abundance of rain.

[ASSURAS] Texans have literally been forced to their knees seeking relief.

[MAN] You bring that rain, we will rejoice in it.

[MARTIN WITTE] It's hurting, terribly.

[ASSURAS] For lifelong ranchers like 82-year-old Marvin Witte, the dry spell has meant having to sell off animals. He's down to about 80 head, half his normal herd. One of the reasons -- several of Witte's water wells are bone-dry.

[WITTE] That's devastating when you're without water on a farm, you know. Gosh, animals need water, people need water.

[ASSURAS] Witte blames the lack of rain, but he also suspects something else might be at play -- the oil boom. After all, he lives in Karnes County, Texas, in the very heart of the Eagle Ford shale. Oil production here has skyrocketed in just a few years thanks to hydraulic fracturing. It can take nearly six million gallons of water per well to pressure oil out of the shale. Fresh water. And while fracking only uses 1% of the water used in the region, much of it comes from the same sources nearby residents depend on, the underground aquifers feeding their private water wells.

[JOHN BRAUDAWAY] They are hydraulically fracking right now.

[ASSURAS] Here in Karnes County, veteran oil man John Braudaway showed us this hydraulic drilling operating in progress, one of 151 local wells that have been fracked.

[BRAUDAWAY] These are the fresh water pipes bringing in from a central place where they have a well and a real large reservoir.

[ASSURAS] Braudaway has been in the oil business here since the 1950s.

[BRAUDAWAY] Never in the past, on any of the oil booms, was water a factor. It is a big factor this time.

[ASSURAS] This is an historic drought by all accounts.

[BRAUDAWAY] Yes.

[ASSURAS] Bad news if oil companies are using all this water?

[BRAUDAWAY] It pulls the water table down. And with a drought and as much water as they're using, there will be problems in landowners' water wells.

[ASSURAS] Geologists say that could be what is happening at wells like Marvin Witte's.

[WITTE] We didn't have this problem prior to the commencement of the oil drilling.

[ASSURAS] They're taking a lot of water, these oil companies?

[WITTE] Yes, very much. You know, we can live without oil, but we can't live without water. We have to have water.

[ASSURAS] And that water itself has become a hot commodity. Some landowners are cashing in by selling it to the oil companies, which in turn are laying down new water pipelines as fast as possible.

[THOMAS MOY, JR.] We drill a lot of wells.

[ASSURAS] And water well drillers like Thomas Moy, Jr., are smiling big. Moy says his 70-year-old family business has shot up more than 40% in the last two years thanks to hydraulic fracturing.

This isn't only a oil boom. It's a water boom.

[MOY] It's a water boom.

[DAVID BLACKMON] Tanker trucks will come and fill themselves up with water, take it to the location, wherever the job is.

[ASSURAS] David Blackmon of El Paso Oil and Gas says the industry needs a lot of fresh water, storing it in reservoirs for ready use.

[BLACKMON] It certainly is an issue for this area because we're in a drought.

[ASSURAS] But Blackmon says the industry is unfairly blamed for using more than its fair share of water.

[BLACKMON] It's a lot of water, but when you put it in context, it's really very sustainable.

[ASSURAS] In fact, according to the Texas Water Development Board, water use for fracking is small compared to major users like farms or municipalities. But Alyssa Burgin, who runs the environmental group the Texas Drought Project, says the state can't behave as if fresh water will remain abundant.

What happens if there isn't rain over the next few years?

[BURGIN] Texas dries up and blows away. That is really not too absurd a thought.

[ASSURAS] State climatologists predict the current drought could last until 2020. At the same time as drilling increases, state officials predict the amount of water needed for hydraulic fracturing may increase 700% over the next decade.

[BURGIN] I believe hydraulic fracturing is a very big threat. Particularly as it expands.

[ASSURAS] But there are some potential solutions in the works.

Oh, that's kind of ugly. What is that?

[BRENT HALLDORSON] That's oil primarily, floating on top.

[ASSURAS] Brent Halldorson of recycling company Fountain Quail says that 20% of frack water comes back to the surface, and it can be treated and reused.

[HALLDORSON] We just go where the need is the highest, and right now, due to the drought, the need is very high right here, so we want to be here helping the industry succeed.

[ASSURAS] Fountain Quail is the first recycler to enter the Eagle Ford. So new, in fact, we were shown its $10 million system still in the testing stage.

[HALLDORSON] If we can make recycling part of the equation, bring more sustainability into the entire big picture, I think it's a win-win for all involved.

[TEXT ON SCREEN] Tour the fract water recycling plant at energyNOW.com.

[ASSURAS] At this one facility, about 210,000 gallons of water a day are being recycled, a small fraction of the water consumed by fracking. But for Texans like Marvin Witte, every drop counts.

[WITTE] Water, water's everything, you know. Money and oil is good, but water is the best thing we have, to survive.

[ASSURAS] Of course, the best solution to the drought comes from the beautiful blue, but cloudless, skies above.

One solution that's emerging in the Eagle Ford -- oil and gas companies are drilling deeper wells for farmers if they share some of the water.

But there may be another solution -- water-free fracking. Canadian company GasFrac says it can fracture shale rock with a propane-based gel. When the oil or gas starts flowing, the company says the gel mixes right in, turns to a vapor, and returns to the surface and can later be recovered and reused. For now, GasFrac's propane gel is more expensive than water and isn't widely used for fracking.

While Texas oil is an important part of our energy picture today, it was absolutely vital during World War II. To get that oil to tanker ships, the U.S. government built the Big Inch Pipeline from Texas through the Midwest, to refineries and shipping ports on the East Coast. But it had to clear some geographic hurdles, as you'll see in this energyTHEN from 1943.

[Film projector running]

[NARRATOR] Constructing an oil pipeline from the Midwest to eastern points in the United States, engineers are forced to cross many a mighty river. Big Inch, as the line is called, now has another waterway to hurtle. So they plant tons of dynamite to blast a bed for the pipe beneath the river's bottom. Now, hold tight, and watch for the explosion.

[ASSURAS] After the war, the Big Inch and its sister pipeline, which was called Little Big Inch, were converted into natural gas pipelines still in use today.

Coming up, an interview with the head of the Environmental Protection Agency, Lisa Jackson. Her take on fracking when we come back.

[BREAK]

[TEXT ON SCREEN] Can I recycle a beer bottle with a lime wedge suck inside?

Natch. But limes make good compost. Just sayin'. www.grist.org

Laugh now or the planet gets it.

[MONIQUE O'GRADY] Hi, I'm Monique O'Grady, with a smart homeowner energy-efficiency tip from the Alliance to Save Energy and "energyNOW!"

Many consumers already use compact fluorescent light bulbs, or CFLs. They use only a quarter of the energy of a traditional incandescent bulb and can last 10 times as long.

LEDs are at least 75% more efficient. They are pricey but can last about as long as a traditional mortgage.

A new energy-efficient halogen incandescent bulb costs about $1.50 and has the same look and light as the old bulbs.

Replacing just 15 bulbs with a combination of the new lighting saves you $50 to $100 a year.

Energy-efficient lighting choices -- just one simple step you can take to save energy now.

[END BREAK]

[ASSURAS] Welcome back. Without horizontal drilling and hydraulic fracturing, the shale oil and natural gas booms wouldn't exist. Critics say the drilling can contaminate ground water, claims being investigated by the Environmental Protection Agency.

EPA Administrator Lisa Jackson was in Madison, Wisconsin, this week to speak with university students and with young budding scientists at an elementary school. We caught up with her to talk about pressing environmental issues, including fracking.

The EPA is doing its own study of the environmental impacts of fracking. From what you've seen so far, should there be new federal regulations?

[JACKSON] It's too soon to tell. We're doing a congressionally mandated study of the impact of hydraulic fracking on drinking water sources, and we're taking a life cycle approach. We've announced that the earliest we'll start to see some preliminary results will be next year. Of course, if we see something along the way, I've said, we're not going to keep that hidden, especially if it has a potential impact on the environment or health, but we have no data right now that lead us to believe one way or the other that there needs to be specific federal regulation of the fracking process.

[ASSURAS] A study in Wyoming just came out, your own study, that detected contamination of aquifer water. Does that concern you? That was near natural gas fracking.

[JACKSON] Well, certainly any detection of pollution is something to be concerned about. We met with state officials and we met with local leaders and we also talked to the company involved -- it happened to be EnCana -- about our results. And we have results from two additional monitoring wells, and they are of concern. One of the things that I think is important to recognize is that that particular formation in Wyoming is a fairly deep form-- a shallow formation, excuse me. And so it is possible that fracking in one bearing zone might have impacted nearby areas that may contain some ground water. But we have absolutely no indication right now that drinking water is at risk, and actually the company has stepped forward to provide alternate sources of water, and we're working with them on potential needs for any additional protection.

[ASSURAS] So hundreds of shale wells are being drilled across the country -- at this point, you consider them safe, there shouldn't be a slowdown of any sort?

[JACKSON] Well, what we consider is that they are regulated already at the state level. The vast majority of oil and gas production is regulated at the state level. There are issues of whether or not the federal government can add to protection and also peace of mind for citizens by looking at large issues like air pollution impacts, which can be regional. EPA has proposed regulations out right now to deal with air pollution impacts. We have the study you mentioned in terms of drinking water impacts, and we recently announced that we intend to regulate -- it will take a period of time to develop regulations -- wastewater from fracking to ensure that it's properly disposed of. So it's not to say that there isn't a federal role, but you can't start to talk about a federal role without acknowledging the very strong state role.

[ASSURAS] Coal-fired power plants, okay? They provide about half the electricity in this country. Most of them are more than 30 years old. And the Energy Secretary said earlier this year that there will be massive retirements. How many are going to be shut down, do you think, under your regulations?

[JACKSON] First off, EPA doesn't require shutting down of any plant. What EPA does is set nationwide limits for how much a plant can emit, how much mercury you're allowed to put in the air, how much lead, how much arsenic, how many ozone precursors, how much SO2, which contributes to acid rain. That's EPA's job. How much particulate matter. Once EPA sets those rules and sets a national standard, a business has to look at their portfolio and make a decision about whether to invest in plants or not. You know, coal is less than 50% of our generation now. And, because of increasing supplies of natural gas, natural gas is becoming an economical way to provide base-load power in our country.

[ASSURAS] Is that what they're going to be replaced by?

[JACKSON] No, I can't say what a business will decide to do. Some businesses are investing in nuclear, some are looking at natural gas. There are states that are leading the way on solar or wind. All those kinds of energy choices and energy policies are important decisions and discussions for our country. What EPA's role is to do is to level the playing field so that pollution costs are not exported to the population but rather companies have to look at the pollution potential of any fuel or any process or any plant or any utility when they're making their investment decisions.

[ASSURAS] So when it comes to greenhouse gas emission restrictions, you've sent some draft regulations to the White House. You going to tell me what you proposed?

[JACKSON] I'm sorry, I cannot. "energyNOW!" will have to wait. Not now, maybe a little later.

[ASSURAS] Okay, Soon? But do the regulations mean that new coal plants would not be allowed to be built if they do not have carbon capture and storage capability?

[JACKSON] I can't tell you what the regulations say right now, but what we're planning to do is release them early next calendar year.

[ASSURAS] When do you think carbon capture and storage will become commercially viable? The DoE has supported about half a dozen projects, not really going anywhere.

[JACKSON] Well, they are still on the books. We know some of them are in the permitting process and still planned. We've looked at sort of the status of those facilities, because, in part of the development of the rule, we have to know what's going on out there, so I continue to believe that there are going to be opportunities to invest in and try to perfect that technology. I don't know -- I know it can be years, maybe a decade or more, until we have a technology available at commercial scale. And it would be shortsighted or you'd have to have blinders on not to look at the fact that there are other game changers out there like our nation's supply of natural gas, that are going to be important as people look at where they want to make investment decisions. It's not EPA that's going to tell a utility, a power company, where to invest, but what EPA can do is say, here are the limits you're going to have to meet from an air or water perspective so you can make those determinations.

[ASSURAS] You can see more of my interview with Lisa Jackson on our Web site, energynow.com. Also check out our blogs, get the latest energy news, watch video extras, and be part of the energy conversation on our Web site. And reach out to us on YouTube, Facebook or Twitter. Search for us at energyNOWnews. That's it for this week's "energyNOW!" I'm Thalia Assuras. See you next week.

[BREAK]

[ANNOUNCER] Help us make "energyNOW!" a continuing success in our second year. To keep growing, we want to form new partnerships with foundations and corporations who are equally concerned about America's energy future. Join us in bringing our message to more and more viewers. Please have your company or foundation contact "energyNOW!"

[TEXT ON SCREEN] Please contact our General Manager, Hardy Spire, 202-621-2916, sponsor@energynow.com.

[END BREAK]

[END SHOW]