Fretting frackers restrain economic opportunities

August 16, 2011

By Christopher Swann
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Critics of hydraulic fracturing contend its hazards have been downplayed and the benefits exaggerated. A new U.S. report suggests just the opposite. Yet until safety concerns are tackled, as with a proposed cleanup fund in New York, the potential of this energy source won’t be fully realized.

Shale gas producers using the fracking process in just a few years have made nearly as many enemies as it took oil companies generations to acquire. This was almost inevitable given the nature of the drilling. While much oil exploration now takes place miles off coastlines far from public view, frackers have intruded on populated land regions.

Other vested interests have been challenged, too. Discovered reserves have sent gas prices tumbling, making greener solar and wind energy less economically viable by comparison. It’s no wonder some detractors have been tempted to overstate the risks.

The latest report from a panel of experts assembled by the Department of Energy lays out a sensible strategy for mitigating genuine environmental worries and allaying public fears. While the threat that fracking itself could contaminate ground water is “remote,” more care needs to be taken disposing of fluids used in the process.

Measuring water quality before drilling, as recommended by the agency’s publication, might prevent fracking from being blamed for pre-existing problems. And proposals unveiled in the Empire State this week to force gas drillers to contribute to an accident cleanup fund, as oil drillers do, might also help win over a nervous citizenry.

Not nearly enough has been done along these lines to set the risks against the vast potential gains. Already fracking has created some 200,000 jobs, according to the DOE’s estimate, which seems conservative according to some industry experts. It also has helped to lower electricity prices and the nation’s trade balance.

An average Pennsylvania well generates about $4 million in economic gains, against typical environmental costs of $14,000, the Manhattan Institute for Policy Research found. The same report suggested lifting a drilling ban in New York could yield $1.4 billion a year in tax revenue.

The temptation of such lucre in hardened economic times should not blind policymakers to genuine dangers from fracking. But with proper oversight, these threats nevertheless look manageable.

Comments

Obviously, Mr. Swann hasn’t experienced life in gasland and is blinded by the shiney, i.e. gas driller promises of everyone being a “shaleionaire” and have millions of jobs.

Creating 200,000 jobs – according to INDUSTRY experts – key word INDUSTRY. These jobs have not materialized in Pennsylvania for Pennsylvanians. The numbers game depends on how you manipulate statistics. Remember figures lie and liars figure.

As far as the $4million per well figure goes – very little of it goes to the property owner. Recently Chesapeake informed property owners their royalty checks will be decreased by 25% to cover “operating expenses”. The only people making what could be described as a decent size royalty checks are those who have leased 100 acres or more. Those under 10 acres have seen royalty checks as little as $25.00.

Proper oversight is the key. It’s not enough to just say there needs to be proper oversight. In Pennsylvania we say the DEP stands for DON’T EXPECT PROTECTION. The PA-DEP is weak and ineffective.

Property owners as far away as 9 miles from an active drill site have reported extreme increases in methane levels, to the point where they have to keep windows open in their homes or abandon their home completely. Gas drillers have consistently refused to take responsibility.

Gov. Corbett received well over $1million for his campaign from the gas industry. His Marcellus Shale Committee is overwhelmingly stacked with people who work for or are intimately connected to the gas industry. Corbett and his buddies are working very hard to eliminate the little “oversight” which now exists.

The elephants in the room – if gas drilling is so safe, why are they exempt from the federal clean water and air regulations? If gas drillers did not contaminate water wells, why are they providing water jugs and water buffaloes to effected property owners, and why are these property owners forced to sign non-disclosure agreements.

Mr. Swann, take a tour of Gasland, PA., talk to the people who live it everyday.

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