The New York Times had another article on the environmental impacts of shale gas drilling, which reminded me that I had intended to write something else on the subject after February’s post on the fracking panel at AAAS, but never got around to it. The hook for the article is yet another study showing that the environmental questions are more complicated than just the question of how much CO2 is released in burning gas vs oil or coal, with loss and leakage during the drilling process potentially producing a lot of greenhouse gases.
This is, of course, a single study, and includes the obligatory dismissive comment from an industry spokesman, but also this bit toward the end, from somebody with a more environmental organization:
David Hawkins, the director of climate programs with the Natural Resources Defense Council, said that much could be done by regulators to nudge drillers to capture more of the fugitive methane, but that it is often more economical for industry to simply let it escape.
Mr. Hawkins also said that too little was known about just how much methane was being lost and vented, and that studies like Mr. Howarth’s, while needed, relied on too slim a data set to be considered the final word.
The end of that first paragraph really goes to the center of what I think about the issue. This is, of course, strongly colored by having grown up in Broome County, where they are now considering how to develop the gas-bearing shale deposits underneath the region. To a large extent, this strikes me as a case where the community potentially has a great deal more power than is usually the case when negotiating with major industries, and industry is to a large extent trying to keep them from realizing it.
To my mind, there are two absolutely critical facts that need to come into any analysis of developing these resources:
1) Shale Gas Doesn’t Spoil: The gas deposits in question have been underground for millions of years, and will remain underground for millions of years more without significant degradation. This isn’t a situation where immediate action is required– the gas will be there to be drilled at any time in the future.
2) Natural Gas Is Finite: While the US has large quantities of natural gas, including those in the Marcellus Shale, the total amount of such gas is limited, and will eventually be used up.
There are both good and bad aspects to these points. Taken together, they mean that if the affected communities in the Souther Tier want to use it, they have a great deal of power to dictate how the gas is developed.
That gas is going to be there until and unless somebody drills it out, so there’s no hurry to extract it. And as other gas reservoirs run down, the value of that gas is only going to go up, as the price of gas increases.
And that’s the critical factor to keep in mind when people– whether industry representatives or people from environmental groups– talk about the economics of various measures. When somebody says that doing this or that “isn’t economical,” what they mean is that doing that thing– whether it be capturing leaking gas, or protecting drinking water or other natural resources– would make the price of extracting the gas high enough to cut into the profits of the people doing the drilling, at the current price of natural gas. If that price goes up, though, then what counts as “economical” changes.
That is, after all, the entire story here. This gas isn’t something new– it’s been there for millions of years, and it’s been known to be underneath New York and Pennsylvania for years. Nobody has drilled it out before because it wasn’t economical to do so– the price you could sell the gas for wasn’t high enough to justify the hassle of getting it out of the ground. As technology has improved and demand has increased, though, it’s started to look like a better deal, leading to the current rush to exploit the Marcellus Shale.
But the thing is, as time goes on, the extraction technology will only get cheaper (as it’s refined in places where they’re already drilling), and the price of the gas will only go up (as other sources run down, because gas is finite). That means that what isn’t economical now will become economical down the road, if you just wait.
This potentially gives local communities a great deal of power to dictate terms: to set minimum standards of conduct for the companies drilling the gas. If meeting an acceptable level of environmental protection– both things like recapturing leaking gas before it contributes to global warming, and also things like making sure shoddy construction practices don’t contaminate streams and drinking water– would make the profit margins too narrow today, that’s fine. The gas will still be there later, when technology and economics make it financially acceptable to get the gas out in a responsible manner.
I realize, of course, that this is easier to say from my perspective as somebody with a stable income living elsewhere– if I were collecting unemployment in Binghamton, I might feel differently. I hope I’d still be able to take the longer view, but I acknowledge that this is a real problem.
And, in a sense, the problems of the region actually serve to underline the importance of caution and negotiation in this case. Because really, the economic troubles of the region can be traced to the loss of manufacturing jobs thirty-odd years ago. And too-hasty development of the natural gas resources will set the region up for exactly the same sort of catastrophe down the road– the children or grandchildren of people living there now will bear the brunt of the next great collapse.
Because, remember point 2) above: the gas is a finite resource. And unless some serious planning is put in now, when the gas is gone, the money will go with it.
So, as this resource is developed– and really, if you think it won’t be developed, you’re crazy– it’s absolutely critical to think long-term, and use the money coming in to prepare the region for life after gas. That means things like investing in development that is sustainable over the long term– reconfiguring the existing communities to make it easier to use less energy when the time comes– and doing whatever can be done to build up resources that won’t run out– investing in education and infrastructure to draw other businesses in, rather than depending entirely on the exploitation of a single natural resource. We’ve got ample evidence regarding what happens to a region that depends on a single resource when that resource runs out, and I don’t want to see that happen to the area where I grew up.
That kind of planning necessarily means taking a hard line on both the environmental issues– making sure that when the gas is gone, it’s still safe to drink the water, and there are still fish and wildlife and the other natural resources of the region– and also on economic ones. Politicians shouldn’t be looking to give tax breaks to drilling companies, or waive regulations– on the contrary, they should hold the line as strictly as possible, and get every penny possible out of the process. That money’s going to be needed to soften the shock when the gas eventually runs out, and something else has to take its place.
This is, of course, exactly the opposite of the line the gas companies are pushing. Their whole business model involves trying to obscure those two key facts above. If they can get local communities to cut hasty and foolish deals right now, then they’re golden. They’ve got an immediate source of profits, and those profits will only go up.
And make no mistake, those companies do not have the best interests of the region at heart. Yes, they’re going to provide a huge influx of cash, but the money coming in will be dwarfed by the money going out. And the people cashing the really fat checks– the executives of the companies running the drilling operations– aren’t from the region, and won’t be moving there any time soon. As I understand it, most of the people doing the actual drilling won’t be from the region, either– they’ll bring in crews from down South to do the work, and get most of the pay. What gets out to the community will be table scraps– service industry and support jobs that will dry up the minute the gas does.
Which means it’s critical to take a hard line now, and use the power provided by those two key facts above to get the best deal possible. They’re the difference between developing a resource for the community and exploiting a resource for the benefit of people who aren’t from there, don’t live there, and don’t give a damn about what happens once the gas stops flowing.
I’m not opposed to drilling per se– as I’ve said before, it’s potentially the first really good economic news for the region in my lifetime. I want to see the gas developed, but I want to see it done in a responsible manner that preserves as much as possible of the place where I grew up, and where my parents, aunts and uncles, cousins, and friends still live. I want to be able to go there with SteelyKid as she grows up and show her around with a sense of pride in the good things that the region has to offer, rather than regret over what was lost in a needless rush.