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Hydrofracking New York: A Letter to Gov. Cuomo

December 1st, 2011 by admin

11/27/2011

Greetings Governor Cuomo,

My name is Michael Varley.  I’m a Long Island-born, upstate-educated, Brooklyn-residing New Yorker, writing to you with concern about the gas extraction process known as hydrofracking.  Many guesses have been made at your intentions behind supporting this controversial drilling method, but I’m not looking to add to the stack of speculations.  I’ll take it as a given that you are a practical leader with the best interests of our state in mind – chief among those interests being attracting corporate investment and employment of our citizens.

Between news stories, demonstrators and letters from constituents, I’m sure you’re aware of the many apprehensions regarding hydrofracking and its potential impact on water quality, the environment, traffic congestion, and so on.  Your exposure to these arguments I will also take as a given – not to trivialize their merits by any means, but to conserve our time in favor of different discussion.  Rather than drive home the negative, I wish to explore with you briefly the two touted positives of fracking New York State’s chunk of the Marcellus Shale: job creation and promises of energy independence.  Upon personal investigation into these areas, I have grave doubts about the strength of these claims.

First, we have jobs.  Job creation is cited by hydrofracking boosters as one of the prime draws to the process.  In the Department of Environmental Conservation’s study on the subject, job creation figures range from a low-end estimate of 13,500 jobs to an average estimate of 54,000 jobs.  Of this average estimate, 25,000 jobs would be directly attributed to the gas companies and 29,000 would be indirect employment jobs.  This job growth projection would amount to .7 percent of the current New York work force.

Our neighbors to the south in Pennsylvania have been in the fracking business for several years now.  A report done by the Pennsylvania Department of Labor and Industry identified 6 “core” and 21 “ancillary” industries related to fracking the Marcellus Shale.  In these industries, 48,000 new hires were reported from 4th quarter 2009 through 1st quarter 2011.  While championed by gas companies, “new hires” is a misleading statistic.  The number of new hires remains the same even if, in the same span of time, large numbers of jobs are eliminated by other employers, say, for instance, if a local well has passed its peak employment needs.  In this instance, new hires may be less a sign of employment growth than employment shuffling.

The same report puts employment growth in these identified “core” and “ancillary” industries at 10,600 from 1st quarter 2008 to 3rd quarter 2010, or a little more than .15% of the total New York work force.  However, the report is quick to point out that “While the vast majority of Marcellus Shale employment can be found in these industries, not all establishments in these industries are involved in Marcellus Shale.”  In other words, you might live in Flushing Meadows, but that doesn’t necessarily make you a Mets fan.

Another question to consider is how long do these jobs last?  Most hydrofracking companies state that shale gas wells have a 30-40 year production life, but preliminary studies from Texas suggest otherwise.  The average commercial life of a well in the Barnett Shale formation is 7.5 years, with the most common commercial life being 4 years.  Some wells reach 8-12 years of production, but few eclipse even half of the industry’s estimate at fifteen years.

All this shuffling employment and short-lived commercial viability is a recipe for boomtowns, and indeed the effects are already being seen in Pennsylvania.  In Bradford County, the state’s most heavily mined county, DUI arrests are on a pace to rise 40 percent in 2011 after rising 60 percent the year before.  Sentences for criminal offences were also up 35 percent in 2010.  The influx of migrant workers, mostly single men from states more experienced in gas drilling, equates to an anonymity that makes them feel above the law and spending habits focused on entertainment rather than services that build community.

In contrast, Governor, consider the jobs we already have in the Southern Tier potentially threatened by hydrofracking.  The Finger Lakes region, home to 7 percent of the world’s fresh water, accounts for 25,000 tourism and scenic beauty jobs and 500 million dollars of income.  Agriculture and food processing accounts for 19,000 jobs and another 700 million in income.  All of these are stable jobs, easily accessible to locals and designed to keep the generated income in-state and in-community.  It is unlikely that hydrofracking will cause a loss of more than a handful of these jobs in the immediate term, but ask yourself this: It will only take one newsworthy contamination incident to destroy both industries forever.  Is this constant, looming threat worth a .15% decrease in New York’s unemployment?

Second, we have the promise of energy independence.  As you may know, estimates for the amount of natural gas trapped inside Marcellus Shale vary significantly.  Geologists Gash Lash and Terry Englander estimate Marcellus Shale may contain as much as 489 trillion cubic feet, or TCF, of natural gas.  The Potential Gas Committee, a non-profit, volunteer coalition of academics and gas industry experts, estimates the Appalachian Basin – which includes Marcellus Shale – contains 227 trillion cubic feet.  A recent U.S. Geological Survey put the Marcellus number at 84 trillion cubic feet.  In our state’s Supplemental Generic Environmental Impact Statement, or SGEIS, the number quoted was the Lash/Englander estimate of 489 trillion.

Of course, not all of this is recoverable.  Using the fracking methods practiced at the Barnett Shale shelf in Texas, about ten percent of that could be recovered, or a bit under 50 million TCF.  The end result is enough natural gas to fill all U.S. gas needs for two years.

Do you know where most of our natural gas comes from?  I suspect you do, but many people I talk to are surprised at the statistics.  In fact, about 85 percent of it is produced domestically, in states like Texas and Louisiana.  Of the other fifteen percent that’s imported, 95 percent of it comes from Canada – or as New Yorkers affectionately know it, the place you go to have fun between the ages of 18 and 21.  There is a demand for liquefied natural gas brought here via ocean tanker, but it remains less than one TCF and comes from countries like Australia, Indonesia, and Trinidad and Tobego.

I say all this in order to pose you the following question: what system are we emancipating ourselves from by pursuing natural gas drilling?  Natural gas already enjoys the status of cheapest fossil fuel available (save coal), and there’s no danger of surprise supply cut-off due to political instability or far-flung natural disaster.  Furthermore, natural gas and oil are not interchangeable.  Natural gas is used for heating and industrial activity, oil primarily for transportation.  To switch our transportation preference from petroleum to natural gas would require a level of effort equivalent to nation building, not even entertained in these strange political times.

Paradoxically, Governor, perhaps what we should be looking out for is our natural gas being taken from us.  Our neighbors to the north are already experiencing this problem.  Rapid expansion of hydrofracking in Canada over the past decade has flooded the markets with natural gas, driving prices down.  Gas companies, of course, would prefer to have prices higher, and to do that you need to shorten supply.  A recent agreement between Canada’s National Energy Board and the gas companies allows for gas exportation to Asia, even as projections from export proponents suggest Canadian demand for gas will outstrip supply in less than 25 years.

The exportation approval process is already underway in the Gulf Coast, where three gas companies – Southern Union Co., Cheniere Energy and Freeport LNG Development – have filed papers with the Department of Energy to export Liquid Natural Gas from ports around the Gulf.  One company, Cheniere Energy, received the go ahead in May to export gas out of its Sabine Pass port in Louisiana.

Observation shows us Marcellus will likely follow precedent.  Natural gas will flood an already cheap market and companies will look to export it out from ports like the one owned by Dominion Resources Inc. in Cove Point, Maryland, presently a site for gas imports that has ground to a halt in the wake of recent shale gas extraction.  As of October 4th of this year, Dominion has submitted papers to the Department of Energy to convert their port to an export station.  The infrastructure is there; all that’s needed is the approval.

Finally, Governor, for those who might hold out hope that the gas companies would stick true to their claims of promoting New York or U.S. energy independence, consider simply the companies buying interests in the Marcellus Shale business and their countries of origin:

–BG Group and BP (UK)

–Total and Schlumberger (France)

–Mitsui & Co. and Sumitomo (Japan)

–Statoil Hydro and Nornew (Norway)

–Epsilon, Talisman, Range, EnCana and Gastem (Canada)

–Royal Dutch Shell, Petrochina and Hopu (China)

–KNOC (Korea)

–ONGC and Reliance (India)

–Temasek Holdings (Singapore)

–ENI (Italy)

–Halliburton (United Arab Emirates)

–Petsec (Australia)

I’m no xenophobe by any means, but why any of these companies would have an interest in US energy independence is beyond me.

So with all this said, what are my thoughts on the impending deadline for permit issuing?  I believe it should be postponed until the EPA releases its official study on hydrofracking in 2014.  Failing this, I would settle for a one-year moratorium on drilling, allowing local governments time to get their road use and zoning laws in line with the will of their citizens.

Governor, I’m a regular follower of politics, and I can see the rare alignment of opportunity presented before you.  Here is a chance to bring job prospects to a sagging economic area and an influx of new revenue to a cash-strapped state.  The project would undoubtedly be a feather in your cap, granting you credentials in both economic growth and energy policy should you ever entertain thoughts of entering politics at the national level.

My modest request to you would be this: consider the facts and not the spin.  Heinous acts against the environment aside, not even the positives of hydrofracking hold up well when illuminated by statistics.  It makes for great talking points and it never hurts to have friends in gas, but the brass tacks gains don’t measure out to the potential tolls, emotional and physical, on our great state.

In my mind, the mark of a great leader is one who aspires to creation but values foremost preservation.  I hope you’ll continue to search out ways New York can lead as innovators, and pray you’ll foster the qualities that make us unique in the nation.

I thank you for your time and consideration.

With Regards,

Michael Varley

References:

Job Creation

DEC employment numbers:
http://tinyurl.com/DECEmpl

Pennsylvania Dept of Labor and Ind numbers:
http://tinyurl.com/PennEmp

Finger Lakes Employment numbers:
http://tinyurl.com/Pamphlett

Barnett Shale Life expectancy:
http://tinyurl.com/BarnShaleNum

Bradford County Crime Reports:
http://tinyurl.com/BradfordCrime

Energy Independence

Gary Lash//Terry Englander Estimate:
http://tinyurl.com/LashEng

Potential Gas Committee Estimate:
http://tinyurl.com/PGasComm

USGS Estimate:
http://tinyurl.com/USGSest

Ten percent recovery and two years of gas:
http://tinyurl.com/harvestEST

Where our gas comes from:
http://tinyurl.com/WhereGas

Canada’s exportation problem:
http://tinyurl.com/CanadaExportLNG

Export activity in US:
http://tinyurl.com/USExportLNG

List of invested foreign Companies:
http://tinyurl.com/ForeignCompInvest

Comments

  1. Looks like you’ve been doing some homework. Well done. Keep charging, Brother.


    Brett Baer
    December 6th, 2011

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