Friday, June 10, 2011

The Week in Hydrofracking

It's been a busy week. Working nights is a bear and leaves little time for much else. I hate it. Work all night, try to spend some time with the family in the morning and evening, sleep during the day and back to work at night. I shouldn't complain too much as it only accounts for about 6 weeks out of the year, but still, switching from day to night to day is a difficult endeavor. I am realizing that I am not the idealistic intern/resident I used to be.

Regardless, life marches on.

It has been a good week for those supporting hydraulic fracturing in New York state, in spite of the Assembly voting to continue the moratorium for the next 12 months. I would like to draw your attention to three developments that I think are quite important as we move forward.

First, the Manhattan Institute for Policy Research released a report entitled "The Economic Opportunities of Shale Gas Development". The report highlights some incredible numbers highlighting the economic benefits that would take place if the renewed moratorium on drilling were lifted. You really have to read it to believe it. You will be left wondering, as I am, "What the hell is wrong with New York".

From the Executive Summary:
Directional drilling and hydraulic fracturing have unlocked vast new reserves of natural gas in the United States. Development of these resources is now well under way in Pennsylvania and West Virginia. Unlike their neighbors to the south, however, New York residents are not directly benefiting from natural gas development as the result of a government-imposed moratorium, itself a response to environmental concerns surrounding hydraulic fracturing. This study analyzes the economic and environmental impacts of shale gas drilling in New York and finds the net economic benefits to be significantly positive. Specifically:
  • An end to the moratorium would spur over $11.4 billion in economic output.
  • Some 15,000 to 18,000 jobs could be created in the Southern Tier and Western New York, regions which lost a combined 48,000 payroll jobs between 2000 and 2010.*
  • Another 75,000 to 90,000 jobs could be created if the area of exploration and drilling were expanded to include the Utica shale and southeastern New York, including the New York City watershed. (This assumes a regulatory regime that protects the water supply but permits drilling to continue.)
  • Localities and the state stand to reap $1.4 billion in tax revenues if the moratorium is allowed to expire.
  • This study also reviews the public records of environmental violations reported by the Pennsylvania Department of Environmental Protection over the period 2008–10. It then quantifies the impact of these violations on land, water, and air resources. The costs of these environmental impacts are then estimated on the basis of the value of the environmental amenities at stake. Our main finding is that the cost of these environmental impacts is far smaller than the economic benefits that drilling can provide.
    • The typical Marcellus shale gas well generates about $4 million in economic benefits.
    • The economic damage resulting from the environmental impacts of a typical shale gas well comes to $14,000.
    • Got that, $11.4 billion in economic output, 100,000 jobs and $1.4 billion in tax revenue. More to the point that's $4 million in economic benefits per well for every $14,00o dollars in environmental impact. Seems like a no brainer to me, but perhaps that is because I have a brain. You can decide that, I suppose, but it seems like a boon for the NY State budget.

      Secondly, there seems to be a building dissension in the ranks of hydrofracking opponents. The opposition could be divided in the true believers, that is no carbon source for energy at all, and those who see fracking as an opportunity for growth requiring sufficient regulation and monitoring to ensure safety.

      Last week there was a rally in Harrisburg Pennsylvania organized by the anti-fracking crowd with Josh Fox as the headline speaker. They were only able to muster 200-300 protesters, which is a testament in itself about the diminishing influence of these naysayers. As an aside, I have recently noticed there are more for sale signs in front of homes that "no drill/no spill" signs. Regardless, a notable absence in the crowd was that of Penn Future, "Pennsylvania's leading environmental advocacy group" according the the Philadelphia Inquirer. The Northeast Marcellus Initiative has the details:
      This rally has shown that, at least on one issue, we stand in agreement. Seems both of us want to see natural gas developed safely in Pennsylvania. We, and PennFuture, both want to embrace the economic benefits the Marcellus Shale brings while protecting the environment in which we live. And like us, PennFuture is opposed to a moratorium that would bring to an end the one industry in our state that’s actually creating jobs. Because of this, PennFuture did not attend the anti-fracturing rally in Harrisburg on Tuesday.

      Of course, the dirty little truth here is that the radical anti’s don’ t exactly have the best interests of the people or environment of Pennsylvania or New York at heart. And as you’d expect, some of them have some pretty wacky ideas on a whole host of other things that have nothing to do with natural gas development. Take Mark Ruffalo, for instance. Sure, he’s dreamy. And from what I can gather, he seems to be a pretty good actor. Mark wants to see hydraulic fracturing banned. Of course, he also believes that9/11 was an inside job. And if there were any remaining doubts over this man’s judgment, the fact that he would pose for this picture, I think, should eliminate those once and for all.

      As I noted, the one and only Josh Fox was the featured speaker. What a piece of work this fellow is. He attempts to make the argument that those opposing hydrofracking are in some way on par with the Freedom Riders of the 1960's and the women's suffrage movement . I would like to comment here that it is the anti-fracking crowd that is seeking to impose the will of the minority on the wishes of the majority. Pennsylvania has seen an employment and economic boom the likes of which only Texas can appreciate. By seeking a ban on this economic benefit they are castigating the less affluent to continued unemployment and loss of economic opportunity. As I have noted in other posts, "much of the opposition in places like Pennsylvania comes from the weekend residents or drop ins who choose to act like organic goatherd/ peasants compared to the local permanent population who have never had an option but to live like peasants."

      Finally, the notion of energy independence, or at least a bridge to the future is gaining a foothold within the mainstream media. Is spite of all the negative publicity the truth is coming out and is being distributed.

      A USA Today editorial cuts to the meat of the matter:
      "Little more than a decade ago, the United States was running so low on natural gas that companies were making plans to cover the shortfall with imports of liquefied natural gas. Today, though, the marine terminals built to dock huge LNG ships in Texas, Louisiana and Maryland are being converted to ship gas out, not just bring it in."
      The New York DEP updated SGEIS is due out by July 1st. The New York economy is held in the balance.

      Please bookmark!

      1 comment: