LET'S COOL IT

  In the past few weeks an impetus has been building  in New York to delay the commencement of the natural gas play until the EPA concludes its two-year study on hydraulic fracturing.  Activist groups have petitioned the DEC to hold off issuance of its final sGEIS until the report is in.  Meanwhile, a bill is circulating in the legislature providing for a two-year moratorium on gas drilling.

For nearly two years now, many of us have been questioning what  the hurry was, anyway, because of the bad news on the impacts of “unconventional” gas development in Texas, Colorado and Pennsylvania.   We knew the gas in the Marcellus Shale,  then as now, was not in danger of drying up or dribbling away.  Since that time, facts have come to light about the drilling process and the industry, about international energy dynamics, and about politics, culminating in the 2005 Energy Policy Act, that have helped to reveal the forces behind the pressure to drill and to put the drilling debate in perspective. There’s no sound reason for New York to hurry.

The industry continues to pound impatiently on New York’s door and to warn that if the state gives it too hard a time it will have to hurt us all by walking away. Never mind my personal response to this threat.  Even from the industry’s own point of view, it makes no sense. True, a dollar today is worth more than a dollar two years from now.  But the price of gas is presently depressed, and will presumably go lower yet as more of it is recovered.  That means gas companies will realize less value for each mcf of New York gas they drill now than they will if they wait until a time when it is in scarcer supply. As there is no present capacity for stockpiling gas, there is no price float to benefit them, either.

The same is true for the state, in terms of taxes to be realized, and for landowners in terms of royalties payable to them, since both are measured by the price of the gas produced.  I, for one, am unsympathetic to the respective interests of the State fisc and the hard-up landowners in getting a “quick fix” now, because evidence is mounting on the extent of collateral damage that may be inflicted upon our citizens in order to provide it to them.  Part of that evidence suggests that the losses to the state and its communities from an immediate gas play, even in purely economic terms, may end up outweighing the gains. (I advert here to the study that was the subject of my March 31 post, and to another look at the economics in a webinar.

So, a quick fix for the state from the riches of the Marcellus Shale is probably a pound-foolish delusion.  As for the landowners who believe that “their” gas entitles them to special consideration, they need to be reminded that when they leased away certain rights in their own land, they also gave away, free of charge, many of the rights of their neighbors to enjoy their own lands,  as well as the security of the water supplies of people in distant downstream regions. That somehow fails to make their needs a priority for the rest of us.

Two years will serve to cool many heads. By the end of  two years, there should be some useful published statistics on the human health impacts within drilling communities in other states, and on the communities’ economic health as well.  There should also be  progress in the unsettled matter of how to treat and safely dispose of the large-scale toxic wastes produced by hydraulic fracture drilling.

 In two years, too, technology will change.  The Halliburton formula could by then be superseded by something far safer.  Whatever happened to fracking with propane, the process tested in eastern Canada and alleged to be safer and more efficient ?  Could it work in deep shale?

In the meanwhile, two years lost to gas drilling will mean two years of confidence that the water we drink won't have stuff like toluene in it, and two years for safer sources of energy to take hold in New York.

By way of a postscript,  I add that moving precipitously ahead with drilling in New York will NOT aid U.S. efforts to become energy-independent.  Gas will not supplant mid-eastern oil until such time as gas applications become as broad as oil’s.  We will need to keep importing oil until we’ve got natural gas cars and trucks. We’re not there yet.  In the interim, New York’s supply , given the current glut in the U.S., will doubtless flow overseas: perhaps (who knows?) to Saudi Arabia.

DRILLING IN THE MARCELLUS SHALE: IT'S ALL ABOUT MONEY. BUT WHERE'S THE MONEY?

Here's a paper on the economic potential for gas drilling in New York's Marcellus shale region, prepared by an economist, Dr.Janette Barth, who's really done her homework. She urges that officials take the time now to look beyond the gas industry's  projections of prosperity at some hard, cold statistics that point in another direction. These come both from New York's own history with natural gas exploitation and from the recent experiences of other states with deep-shale drilling using the hydraulic fracturing techniques to be used here.

None of this comes as a surprise to me.  The only surprise is that no one in government seems willing even to  verify the economic realities before setting our ship of state on such a dangerous course.

RUMBLES FROM THE MARCELLUS SHALE REGION

Renewable energy sources are a long time in developing, and some of them already have their critics. Windmills are unsightly, some say. Solar just isn’t powerful enough. Geothermal isn’t right for everyone’s needs. Meanwhile, we’ve got great quantities of mile-deep natural gas (“Cleaner than coal!” “Cleaner than oil!”) to keep our nation’s busy engines churning.  Why not just grab what there is and face up to our energy problems when it runs out?

Well, lots of reasons, most of which have been thoughtfully enumerated. Aside from fossil fuel emissions that contribute to global warming, Americans need to reconsider the profligacy with which we have come to consume energy, which is out of whack with our awareness that we have only a diminishing supply of fossil fuel  to use to perpetuate the consumption.

 Natural gas is being seen, especially by that wheeler-dealer, Mr Pickens, as the replacement for oil, not just for preparing the way for renewables but for heating and so that trucks can continue criss-crossing the country to deliver food and other products from remote centers to places where they could just as easily have been produced.  As long as we keep thinking this way, we will continue turning up the thermostat to keep our leaky houses warm. The availability of gas, in other words, allows us to ignore both reality and common sense. It’s time to think both smaller and smarter.

Harvesting gas is not clean, as many commentators have noted.  Nor is it economical, broadly speaking.  It clearly pays off for the industry itself, or players would not be darkening the sky above shale formations like crows over a cornfield.  They, of course, need not live with the dirty consequences of their work;  when their feast is over, they can fly home.  Newly rich land lessors, also, can take their money and run.  I think many of the rest of us have wised up to the seductive promises of prosperity and have come to realize that the economic costs of coping and cleanup can equal or exceed the income to be realized.  Last month, Calvin Tillman, mayor of Dish, Texas, told  listeners in Callicoon, New York that his initial hopes of economic benefit for his little town were quickly dashed, that the tax base had dropped, and that he couldn’t blame anyone for not wanting to live in a place where breathing is a health hazard.  The economic calculation does not begin to address the health and environmental consequences that simply can’t be cleaned up.

One of these days, clean and  green technology will take hold.  But if Mr. Pickens has his way, it will be too late for it to restore quality of life to the shale regions that will have given their all to the energy market. The money and the jobs will have moved away, leaving a sad landscape which a photographer from Syracuse, Laura Brazak,  has envisioned as the dystopian  future of the Marcellus:

         “All the money is gone.  We're living in an industrial wasteland that used to be our pristine environment.   We're waiting for the first of many water treatment facilities to come online and in the meantime we're drinking bottled water.  Somewhere down the road, we're trying to fix the roads which got ruined from the truck traffic.  There are clusters of cancers and respiratory issues and skins rashes.  The air smells funny.  And there is no money to even begin cleaning up the mess.  Mortgage companies cancel your mortgage insurance because your well water has become contaminated. People start to move away.  Agriculture suffers and the vineyards and wineries close.  Tourism tanks.  Rich people stop sending their kids to Syracuse University and our other fine colleges until the "water situation" is rectified.  The organic farmers have left and what was beginning to be a slow food movement dies on the vine. The plan to revitalize downtown gets put on hold again and all the money goes to clean up the sites of old drill pads and to try to find companies capable of dealing with environmental disasters of this magnitude--but they are all busy in Pennsylvania....”

What a shame not to have slowed down and concentrated on renewables in the first place.  These may ultimately include different technologies we haven’t heard so much about, such as....algae farms.  I  read 
 that the chemical composition of at least some algae is identical to that of gasoline.  Apparently algae as potential fuel is quite efficient, besides being eminently cultivable.  Who could find this objectionable? There is something deeply satisfying about the notion of being able to apply what has been regarded as a pestilence to the solution of a major worldwide problem.  And the best part?  The wastes can be fed to cows!

Stay tuned.

How They Do Lie

GXYBAU4G29S5We knew it all along: Shale boom leaves industry considering US gas exports | FT Energy ...
Energy independence is the "national need" footing of the bullshit pulpit from which the industry has been preaching the virtues of gas drilling.  So much for that pledge.  The very least we should have been able to expect was that our plundered harvest would be reserved for use here at home.

The other pulpit props, the promises of community prosperity and good jobs, are proving just as unsturdy.  The landowners  and businesses that stand to benefit are few. And here's how the industry treats the people who work for it: Disposable Workers of the Oil and Gas Fields — High Country News.

'Nuf said.

We Shale Overcome, Together

The City has definitively spoken out against any natural gas drilling in its watershed which involves the contemplated hydrofracking process.  Some, but not all, of its spokesmen have also urged that no such drilling should take place in upstate regions, either. As a part-time resident of both places, I  fervently  hope they mean that.  Given the powerful forces that have been aligned to make this “done deal” a  reality, it’s essential that the City and upstate opponents maintain a common front until they both get what they want and need.

The watershed.  Almost all the talk about watershed protection has centered on buffer zones, and how big they need to be.  I believe buffer zones will not be enough;  they can’t guarantee the degree of safety the City has said it requires.  Out west, it has been shown that surface waters have  transported contaminants long distances from wellsites, distances much greater than any of the protective boundaries for the watershed (no more than five miles) that have been discussed.  All water is connected, it has been said, and our state has more of it than perhaps any other.  Flooding is common within the Marcellus region, and low-lying bodies such as reservoirs are instant targets of stormwater, plus anything it has swept along with it.  That can include chemical spills and overflows from waste pits on distant hills.

Underground contamination is no less a threat.  Not even water experts can predict with accuracy the movements of  the voluminous, chemical-laden waste water (some 70 percent of used fracking fluids) that operators do not pump back to the surface.  Its migration through faults and seams,  natural or induced, has  no timetable.  Migration could occur even long after all drilling operations cease.

In the event the watershed region  proves to be treasure trove of gas, then the margins of any protective zone for the City’s water supply will predictably become jammed with as many wellpads as the law allows.  The DEC’s steadfast refusal to analyze environmental impacts cumulatively will virtually assure that. The potential for wastewater contamination is such that, for the level of protection it requires, the City must demand a region-wide ban on the chemical hydrofracking process. Now, owing to recent revelations of  high radioactivity in the Marcellus Shale, see the 2008 OGAP report, it may need to demand more than that.  The health risks posed by gas drilling in radioactive rock may not be abated solely through the elimination of hydrofracking .  The OGAP report states that gas production operations can concentrate naturally-occurring radioactive materials (“NORM”) through changes in temperature and pressure, thereby releasing toxicity that would otherwise be dormant. A ProPublica article has reported that radioactivity is particularly high in the New York Marcellus. If the watershed region is high in NORM, then the City’s concerns may need to go beyond hydrofracking. 

Both advocates for the watershed and upstate activists need to insist on much better protection for the City’s water than a buffer zone offers.  There should be a ban on drilling throughout the region at least until the known toxic threats can be controlled and the DEC can demonstrate that it is able, and also willing, to control them.  If the City should  go off satisfied with anything less, we will all be sorry, and that will be especially true for the residents of the largely rural Marcellus area.   For them to be able to preserve, not their water alone, but their quality of life, their livelihoods,  and the health of whole upstate communities, they will need the continuing power of the City’s voice of support.

Upstate communities.  I choose to believe that City officials have spoken out for protection for upstate aquifers  not purely out of self-interest, but out of  an appreciation of the terrible burden that the state is placing on unsophisticated communities in the name of energy development.  Water contamination is only one of many threats.  Cash-strapped local governments and their citizens are totally unprepared for large-scale air and soil pollution, for constant noise, for (night) light pollution, for the fragmentation and flattening of their landscape, or for the prodigious impacts on their roads and weak infrastructure that are in the offing.  The survival of rural towns will mean adapting to boom-bust economics, getting by on short-term money gluts and population spikes while watching their long-term assets – revenues derived from property taxes, agriculture, fishing, sporting, and tourism - decline. Some of these traditional assets may disappear entirely. 

 The economic picture for the Marcellus region and most of the people in it is, in short, looking uglier by the day, eroding any credibility in the gas industry’s unsecured  promises of prosperity.  The new wealth of landowners and retailers will not brighten the picture, because the rich won’t linger in a damaged place;  they will take their money and run. For the rest,  resistance to gas drilling as championed by the State is growing, and can no longer be dismissed as NIMBY sentiment.  It is something that we, as communities both large and small, simply cannot afford. 

City and country folk, keep up the fight!

Economics and Gas Drilling in the Marcellus Shale

From the beginning of the Marcellus gas hoopla in our region, I’ve been hearing about the local benefits that drilling will bring to local communities, including my little town in the New York Catskills. Set aside for the moment the environmental issues that are getting all the press. I’m talking here about economics. Gas drilling will bring jobs, jobs, jobs, we are urged. It will bring other wealth in the form of stimulus to business activity and royalties to local landowners. We, the locals, will enjoy the benefits of the cleanest form of fossil energy, even while we’ll be doing our part to free the U.S. from dependency on foreign oil. These are the reasons we should bow to the wisdom of our state governments and welcome out-of-state developers to dig for gas in our hills and valleys.

None of these “benefits”seem to me to pan out, at least not at the end of the day. Here’s my take on them, below. If you disagree, I invite you to refute what I say, but with facts, please, not rhetoric. And that's not just rhetoric on my part;I really do want to receive some feedback from both sides of the gas drilling debate.

Jobs: Start with on-site jobs. The best of the jobs, I’ve been informed, come along with the gas operators. These are professional and management posts, and the rig jobs that are filled by highly paid itinerant workers. No kidding, these rig operators pull down some $75,000 a year and up. Do these jobs figure into the impressive Pennsylvania statistics that we’ve seen, for example, on gas play job growth? They shouldn’t. These workers are residents of other states whose local jobs will end and who are not likely to stay or to invest their riches locally. We’re told that the well drilling and fracking processes will be completed in a matter of weeks or a few months, so that rig workers, and presumably the managers, professionals, foremen, et al, will at that point move on. What seems to be in the offing for locals in the way of industry jobs are truck driving, security, and some low-level office work

Non-industry jobs and business development: Yes, the workers will need to be housed and fed as long as they are around, so there will be new staffing at delis, restaurants, bars, and real estate agencies. For how long? Weeks? I’m hearing the sound of a quickee boom, and then a bust. Gravel quarries will do well in the longer haul. But what the yea-sayers are leaving out is that much of the other work that will generated by the gas play will be in the nature of policing, social services and cleanup. And that will need to be funded, not by the gas companies or out of gas income, but by the same strapped taxpayers who will not have benefitted from the gas play in any way, including those whose real estate values have plummeted through proximity to it.

Landowners: Those who have entered into well-negotiated leases will certainly come out ahead economically. Even many of them may be unsettled to learn of the extent to which their lives and their land will be disrupted, but they will probably be rewarded in due proportion to the harm that comes their way. That is, a protracted disruption will be due to high production which will also produce substantial royalty payments. So, the more damage is done, the more likely it is that they will move away, leaving their property desolated and taking their disposable income with them.

Clean energy: Many reporters have noted the distinction between the environmental effects of the harvesting process and those of the use of gas as a heating fuel: the former is very dirty; the latter is clean as fossil fuels go. The people in the Marcellus will be getting the dirty. Many will not get the clean, as there is no natural gas service throughout large rural reaches of the region.

Patriotism: Finally, there’s the What’s Good for the Country is Good for You argument. “Our” gas will be used in the U.S.and help to wean our country from reliance on wicked oil suppliers in the Middle East. Nonsense, I say. We’re not geared to keeping the gas here for future use, and have nowhere to put it all. I’m certain that much of Pennsylvania’s gas is already destined, if it has not been delivered, to overseas markets. Who is it that controls where the volumes pumped out of the Marcellus via the massive pipelines, such as the newly expanded Millennium, will go? It’s the gas companies, including the foreign entities like Statoil that hold substantial interests in them, who will decide. It won’t be Uncle Sam.


So, if these arguments are supposed to be delivering the good news on gas drilling, they’re lost on me.