Skip to comments.Shale Game - New York State is a lonely holdout against the natural-gas revolution.
Posted on 01/11/2012 10:05:34 PM PST by neverdem
From Australia and China to South Africa and Eastern Europe, the global economy is being transformed by the extraction of huge amounts of natural gas from shale rock. The United States has played a major part in this revolution; new plays, as fields of shale gas are known, are now producing in Texas, Louisiana, Illinois, Arkansas, Colorado, West Virginia, and other states. In the last three years, more than 3,000 gas wells have been drilled in western Pennsylvanias share of the huge Marcellus shale formation. With more and more producers in the business, the price of natural gas has dropped steadily, and the U.S. has become the worlds leading producer of natural gas. A new age of clean, cheap shale-gas energy is about to begin—except, perhaps, in New York State, where influential environmental groups seem to be winning their struggle against shale.
One might expect a no-drill agenda to find few friends in New York, which desperately needs the revenue and economic growth that shale gas has brought to other states. The Empire State faces a $3 billion budget gap for fiscal year 2013. According to State Budget Solutions, a nonpartisan think tank, New Yorks deficits, long-term debt, and pension obligations total $305 billion. High taxes, unemployment, and a burdensome cost of living make New York Number One in emigration to other states. Governor Andrew Cuomo has described the states financial outlook as grim.
Shale gas development would help turn things around, especially in rural areas where jobs are scarce. Much of upstate New York sits directly on top of geological features that hold the promise of an economic bonanza—including the Marcellus, one of the largest shale-gas formations in the world, and the Utica, an even larger formation beneath the Marcellus that extends from Kentucky to Ontario. The Marcellus and Utica formations represent an extraordinary opportunity for New York. Various studies agree that for decades to come, shale-gas development in the state could create billions of dollars in new economic activity and tens of thousands of jobs.
But in 2008, former governor David Paterson imposed a moratorium on shale-gas drilling in New York. Paterson had been pressured by environmental groups claiming that hydraulic fracturing, or fracking—a drilling method that shatters shale formations with a mixture of high-pressure water, sand, and chemicals—polluted aquifers and water tables and perhaps caused earthquakes. A year later, Robert F. Kennedy, Jr., the president of the environmentalist Waterkeeper Alliance, seemed to signal a change of heart within New Yorks green community when he wrote an op-ed for the Financial Times extolling the virtues of natural gas and hailing it as an energy source much cleaner than coal. The moratorium, however, remained in effect. When Governor Cuomo took office last January, he likewise left the moratorium in place but appointed an 18-member advisory panel to make recommendations about it.
For a while, there was widespread speculation in the natural-gas industry that the panel would recommend that Cuomo give fracking the green light in 2012. Last October, however, that optimism faded when Kennedy—a member of the panel—published a lengthy article in the Huffington Post renouncing his earlier support for shale gas. The industrys worst actors, Kennedy wrote, have successfully battled reasonable regulation, stifled public disclosure while bending compliant government regulators to engineer exceptions to existing environmental rules. Captive agencies and political leaders have obligingly reduced already meager enforcement resources and helped propagate the industrys deceptive economic projections. Kennedy then switched from rhetoric to saber-rattling: As a result, public skepticism toward the industry and its government regulators is at a record high. With an army of over 40,000 highly motivated anti-fracking activists in New York alone, popular mistrust of the industry is presenting a daunting impediment to its expansion.
Coming as it did in the middle of Occupy Wall Streets intimidation tactics, Kennedys rhetorical deployment of an army of activists sent an unmistakable warning. The day Kennedys article appeared, costumed demonstrators marched from the Occupy encampment in downtown New York City to a Federal Energy Regulatory Commission (FERC) hearing in Greenwich Village. The whole world is watching! one demonstrator shouted. The hearing was about Spectra Energys plan to build a 30-inch natural-gas pipeline from New Jersey to the lower west side of Manhattan, via Staten Island. Though the streets of Manhattan have been piped for gas since 1825, anti-fracking activists and public officials told the FERC hearing that a new source of natural gas meant trouble: possible radioactivity, terrorism, pollution, accidents, and explosions. Manhattan borough president Scott Stringer warned that the pipeline could be used to transmit natural gas from fracked wells in Pennsylvania.
Coal and oil are obvious targets for environmentalists, but why does a clean and useful commodity like natural gas make greens see red? The risks are small: last summer, MIT issued a report on fracking that found that the environmental impacts of shale development are challenging but manageable. . . . The newly realized abundance of low-cost gas provides an enormous potential benefit to the nation, providing a cost-effective bridge to a secure and low carbon future. In October, at a panel discussion on shale gas sponsored by the New York Policy Forum (NYPF), Terry Engelder, a professor of geosciences at Penn State and an expert on the Marcellus formation, told the audience that the natural-gas industry was getting smarter about addressing environmental concerns. After a slow start, he said, drilling companies were moving toward nontoxic fracking fluids and state inspectors were making sure that jobs were done right.
Fracking brings enormous economic opportunities. Natural gas heats homes and commercial buildings, fuels vehicles, powers factories, provides raw materials for chemical industries, and—because it has the lowest carbon content of any fossil fuel—can replace coal- and oil-fired generating plants and heating systems with cleaner technologies. Natural gas is produced inside the U.S.—great for Americas balance of payments—and its quickly and cheaply distributed by pipeline to consumers around the country.
Perhaps what motivates the environmentalists attack on shale gas is worry about the survival of their movement. The green movement gave up on hydrocarbons years ago: it has already announced the arrival of peak oil, and the imminent demise of petroleum power—despite many recent discoveries of large oil and gas fields around the world—is a fundamental article of green faith. Environmentalists see shale gas as a relapse, a return to destructive habits, an end run around their self-appointed role as judge and jury for energy policy in America. And they understand that natural gas is a much harder target than dirty coal or imported oil. Further, an acceptably green technology that can compete with natural gas doesnt exist yet, so once consumers enjoy the benefits of the shale-gas revolution, it will be almost impossible to wean them away from hydrocarbons and steer them to more expensive and less reliable technologies, such as solar and wind.
What will New York do? Governor Cuomo and the commissioner of the states Department of Environmental Conservation, Joe Martens, are keeping an eye on the economic boom in Pennsylvania, where shale-gas production has created tens of thousands of new jobs. They are well aware that economic activity and prosperity are spilling across the border from the gas fields of Pennsylvania into the southern tier of New York. Theyre also watching Pennsylvanias efforts to implement and enforce environmental safeguards, regulate drilling, and prevent fracking accidents. However, in the spoken version of his January 4 State of the State address—while hundreds of anti-fracking activists demonstrated outside—Cuomo praised solar and wind power but did not mention shale gas. The text version of his speech simply says that the state will continue to study the situation. There is no indication that shale-gas development in New York will begin in 2012. Thats a shame for the Empire State, because that anti-fracking demonstrator in Manhattan was wrong. The whole world isnt watching. What the whole world is doing is fracking.
Clark Whelton is writing a book about the environmental movement.
New York is obviously holding out for more Federal money - you and I paying for their environmental agenda. Otherwise, it’s no skin off my shin of NY refuses to take advantage of natural resources under their feet.
The only thing NYC did for the US foster Wall Street whose reckless behavior with paper destroyed 11 million American jobs and almost destroyed the world economy with their toxic assets and derivatives. At least the oil and gas companies produce honest products that can be accounted for, sold and exchanged for real money vs Wall Street paper games that even federal regulators could not understand. If the US wants to recover, dump Wall Street and embrace honest products produced by mines and factories.
Up state New Yorkers and Wall St. types have little in common.
As a former NYer, I say let them tax the idiots to death while prosperity abounds around them. People will move out lowering the tax base forcing even higher taxes.
Government caused the financial melt down, not Wall Street.
Wall Street simply reacted to stupid Federal mandates.
The environmentalists’ opposition for selfish reason is similar to what is occurring in the U.K. There, environmental groups oppose the construction of a Lithium plant. It is clean, low-risk and has no waste issues. The dangerous factor for environmentalists, however, is that it can process dangerous nuclear waste from Nuclear plants, converting it to harmless material. This enrages environmentalists, since the danger of nuclear waste has been their biggest talking point against nuclear energy. They can’t articulate this, so they have become quite irrational, though of course no less effective among their constituency.
Wall Street simply reacted to stupid Federal mandates.
There's plenty of blame to be shared by both the Feds and Wall Street.
Wall Street banks were pitching the sales of these toxic assets to the public while at the same time was betting against them. The Federal Government, which helped create them by forcing these Wall Street banks to issue them to otherwise uncreditworthy homeowners in the name of "diversity."
“New York is obviously holding out for more Federal money “
No, they just don’t want any gas or oil production because they think it is dangerous and they don’t seem to understand how much MONEY it could generate.
Believe me, the downstate dipshirts that run this state really ARE that stupid.
I live not far from what would be NY’s “frack central”. It would sure be nice to have some economic activity that wasn’t govt related around here.
We could go a long way to solving many of NY State’s money and employment problems if we would let private enterprise go after the natural resources under our own damn feet.
We sit here with dead towns all over the place while right across the PA border they are booming. And all we have to do to boom right along with them is let private enterprise do it’s thing.
It makes my blood boil!
FReepmail me if you want on or off my New York ping list.
Boys will be boys. I have no problem with that. ... Just don't turn around and run for President saying that you've been creating jobs. We and Newt will call you on that.
Don’t let some of the Romney bots hear you saying that on here. They’ll tell you that you don’t understand capitalism and claim that you’re a Conservative OWS.
To hell with the moral hazard issue with Romney’s (lack of) business ethics or his other even more abominable stances on health care, gay marriage, gun rights, etc. Just believe, the mushy Massachusetts moderate that lost to Ted Kennedy can beat Obama. Believe. /sarcasm
That is the sad part. New York state is blessed with much resources yet liberal NYC dictates the terms.
Fed gov is responsible for causing part of it. However Wall Street bankers invented the liar loans, had rating agencies rate it AAA paper and sold it to unsuspecting investors and pension funds. This was not perpetrated by a few isolated bankers, it was bank wide. Almost everyone was doing it until it exploded. MERS, robo signing, liar loans, etc were not Federal mandates. The only thing the feds did wrong was subprime loans and willing to guarantee the mortgage notes thru Fannie Mae and Freddie Mac without thorough review of the paper they were buying, and lying about the losses till it was too late. Gov is further complicit by not prosecuting the bankers for violating SEC laws as well as local state laws on banking. Obama is suppose to be the most anti business POTUS has not even put one major CEO in jail, instead he goes to them for political donation for 2012 election. Can we say Wall Street owns Wash DC?????
Some freepers will call you a Communist for holding bankers partially responsible for this mess. Some of them are blinded by their ideology that corporations can do no wrong and all blame falls on gov. Democrats are the opposite, gov can do no wrong and everything falls on corporations. Bottom line is by the time we convince the people of the truth, it is already too late. Spend the time to prepare your family for the currency crisis as our financial system is running out of paper schemes to prop it up. Stock up on food/water, guns/ammo, prescription drugs, toilet paper, precious metals and hard assets. Read up on Argentina, Mexico, Serbia and even Russia as their gov ran out of money and the banking/paper currency system collapsed. Bank holidays, high inflation, shortages and outages, and currency resetting will destroy people’s savings unless one is prepared properly. Also study post WW2 Britain as their society had to cope as the British pound no longer was the world reserve currency and the hardships the middle class endured as their buying power eroded slowly. The erosion of the middle class has political ramifications. When our two party system can no longer provide fast solutions or answers, then a third way will be seek. Depending how bad it gets, it could mean a dictatorial government and the end of our republic. Right now part of the revolt think it is big government and the other part think it is Wall Street bankers, sooner or later someone is going to figure out it is really both. When that happens the existing elites of our nation will be swept away thru polls and the new government will jail Dems/GOP/Wall Street bankers.
Robert F. Kennedy, Jr., the president of the environmentalist Waterkeeper Alliance
This is the problem, him and his other family member working for Hugo Chavez.
Only in NY where more people have left than arrived every year for the past ten years.
Only in NY where, in my Town, the cost to educate a single student in a mediocre school system, is over $24,000/year.
Only in NY where 90% of Long Island Railroad employees retire with disability benefits.
Ah yes... New York. Land of the giant sucking sound.
But this story is continuing proof of why Upstate needs its own state.
Only in NYS do you hire 50,000+ people during a hiring freeze at a time when your state is losing enough people to cost it 2 House seats.