Dryden Safe Energy Coalition

DSEC was in Enfield this evening—part of the presentation was Don Siegel speaking on water and fracking. That reminded us that we had this in the DSEC video vault from summer, 2011:

Dueling headlines...NPR affiliate WNYC entitled its article "Solar Panels Compete With Cheap Natural Gas." The post at MDN referring to that NPR piece is entitled "Solar Panels Can’t Compete with Cheap Shale Gas." 

Renewable energy is growing rapidly in the U.S., with wind and solar industries enjoying double-digit growth each year. Part of that growth comes from more homeowners choosing to install solar panels.

 

With government subsidies, some people can even make a financial argument for installing the panels. But in recent years, the price of one fossil fuel — natural gas — has declined so much that solar panels are having difficulty competing.

 

The reason natural gas prices have fallen is because production is way up, thanks to hydraulic fracturing...

 

...Barbara Scott had 21 solar panels installed last March on her house in Media, Pa. Scott's family was the first in the community, and she was prepared to evangelize, "We can have open houses and write newsletter articles and promote the idea of solar," she said. But that was before the economics changed.

 

With government rebates and tax incentives, Scott says, her family spent $21,000 to install the system. She figured it would take eight years to recoup that investment.

 

A lot of other people had the same idea at the same time, which sent the price of solar energy credits down sharply in Pennsylvania. Scott says that added another seven years to the payback period.

 

On top of that, Scott says, electricity rates aren't going up as quickly as she thought they would, thanks in part to low natural gas prices.

 

"So that, again, adds another two years to our payback period," she says. "We're up to 17 years, which is, essentially, the life of the system. And we haven't even considered what happens if the system breaks or what it's going to cost to take the system off the roof and dispose of it"...

Regarding using subsidies to make economic what is not economic and the failure to develop what is economic to develop that which is overly costly...from the Mackinac Center For Public Policy:

Each Chevy Volt sold thus far may have as much as $250,000 in state and federal dollars in incentives behind it – a total of $3 billion altogether, according to an analysis by James Hohman, assistant director of fiscal policy at the Mackinac Center for Public Policy.

 

Hohman looked at total state and federal assistance offered for the development and production of the Chevy Volt, General Motors’ plug-in hybrid electric vehicle. His analysis included 18 government deals that included loans, rebates, grants and tax credits. The amount of government assistance does not include the fact that General Motors is currently 26 percent owned by the federal government.

 

The Volt subsidies flow through multiple companies involved in production. The analysis includes adding up the amount of government subsidies via tax credits and direct funding for not only General Motors, but other companies supplying parts for the vehicle. For example, the Department of Energy awarded a $105.9 million grant to the GM Brownstown plant that assembles the batteries. The company was also awarded approximately $106 million for its Hamtramck assembly plant in state credits to retain jobs. The company that supplies the Volt’s batteries, Compact Power, was awarded up to $100 million in refundable battery credits (combination tax breaks and cash subsidies). These are among many of the subsidies and tax credits for the vehicle...

An interview at the Livingston County News (LCN) with John Holko, who manages or owns 139 hydraulically fractured natural gas wells in Livingston County, as well as about 350 more in other places:

[....]

LCN: Are there any aspects of the hydrofracking opponents’ arguments which you see as having merit?

 

Holko: Every issue anybody has with anything should be raised and discussed. The biggest problem we have is that the opponents don’t want to discuss; they want to stop us.

 

The key to going forward in anything is to weigh the goods and bads and make sure the goods outweigh the bads. If you mitigate the negative impacts, the positive impacts make what you have decided to do worthwhile.

 

With the opponents, there basically are three concerns that come out: The groundwater, the socio-economic impacts, and road use.

 

For groundwater, most impacts originate on the surface. The laws of physics tend to keep things that are down deep right where they are.

 

We do have to be concerned about minimizing the chances for spill. DEC guidelines take that into consideration and make sure everything is in tanks and pipes.

 

LCN: Does part of the fracking fluid stay in the ground?

 

Holko: The initial flowback of fluid is about 20 percent of what was pumped down. What comes back will be reprocessed and reused. The other 80 percent comes back later in the life of the well, or stays down there.

 

It’s not coming up.

 

There are rock formations down there which contain very bad water to begin with — and it’s not coming up.

 

Processes have been developed to extract the heavy metals and other undesirable things that come back up with the flowback fluid. Industry has been handling these chemicals for many years. We know how to treat the materials to make them inert and safe.

 

The fluid will be regulated, monitored and controlled and will not be contaminating the groundwater.

 

LCN: In the movie ‘Gasland,’ we see documentation of fluid residues getting into people’s home water systems, to great ill effect. Could something like that happen here?

 

Holko: Josh Fox’s movie is entertaining, but as somebody who has been drilling oil and gas wells for 30 years, I find parts of it so far-fetched as to be hard to believe. Still, I can see how it can scare people.

 

In Pavilion, Wyoming the fresh water aquifer and the coal zone where the natural gas is coming from are almost one and the same. In New York, we will not be fracking in fresh water aquifers.

 

LCN: Some of the maps we’ve seen show a grid of well heads filling the landscape, with very few areas free of the noise from running pressurizers.

 

Holko: That’s not going to happen. Where we may drill is limited by the presence of flood plains, distance from highways, waterways etc.

 

When we do drill, we can reach the equivalent of two square miles of land from a single well head. A temporary pad uses about five or six acres, shrinking to two acres in the production phase.

 

There are very few uses of natural resources in this world which have such a small ratio of impact area to use area. We are disturbing two acres and recovering a resource from 1,280 acres.

 

And this is one of the few industries which directly supports those affected. There are bonus payments and royalties to the landowner, as well as taxes paid on the production value of the property. All that money goes right to the community which is affected.

 

LCN: Isn’t this similar to the wealth produced here at the salt mine?

 

Holko: Natural gas benefits the community even more. There is no tax on extracted salt. There is a tax on the extracted gas.

 

In addition, landowners get cash back as the gas is recovered — up to 12-to-15 percent of the total. That doesn’t happen for the landowner when salt is recovered under his property.

 

LCN: Exactly how is a gas well taxed?

 

Holko: The producer gets two tax bills every year, just as if he owned a home: one in January and one in September. Title 5, Article 5 of the Real Property Tax Law specifies that the production coming out of the well creates the value of the [surface] property, as calculated over a five year average. A

 

well which produces a dollar value in natural gas each year is taxed the same amount as a home of that value.

 

A Pennsylvania well, if it were here, might be paying $300,000 a year. Taxes will pretty much track the market commodity value.

 

LCN: How is gas transported from the well head?

 

Holko: By a pipeline from the well head to a central facility. By the way, New York’s natural gas is dry — which means you can take it directly from the well and burn it in your home . It has no contaminants at all. A lot of landowners with wells on their property have a connection to their homes and get free gas.

 

LCN: How wide are the easements for these pipelines?

 

Holko: Most easements will be 30 foot wide when the pipeline is under construction, then end up 10 foot wide for maintenance. Pipe diameter can range from 6 inches to 24 inches — buried, as required in New York State, to ‘below plough’ depth. In some cases, higher pressure lines need to be buried deeper.

 

LCN: Do you have eminent domain to lay pipes where you want?

 

Holko: No. Everything has to be negotiated with the landowners — and the Public Service Commission will dictate routes. We tend to use already impacted areas. Lines are installed where pipelines already have been. Gathering lines from wells may be right next to distribution lines from utilities.

 

LCN: Do you pay a separate property tax on the distribution pipelines?

 

Holko: No. Tax on the pipe to first sell — the first point where we receive revenue — is included in the unit of production. If a separate company were to come in and build the gathering lines, they would be taxed separately.

 

LCN: Will the fact that we will be buying natural gas produced closer to home give us a price break?

 

Holko: Yes. Every commodity has its value as itself and its value after getting it to market. The closer the commodity can be to the market, the lower the separation between the two values.

 

New York natural gas used in New York will be a great resource. Energy costs in New York have been historically high because we have always been very far from the source.

 

LCN: What will happen to the waste products after you refine fracking fluid for reuse?

 

Holko: The aquifer remediation facility in Cuylerville has developed a process to handle and remove the various [undesirable] materials that are in the fluids they bring up. They are one of the companies interested in working with the oil and gas producers in recycling the fracking fluids.

 

And Lake County Frack Water Specialists of Lakeville have created an extraction process to remove heavy metals — barium and strontium — which show up in the fluid. At this point it is simply an inert byproduct, but it would be valuable if obtained in quantity.

 

LCN: Will these solid waste products be hazardous or costly to dispose of?

 

Holko: What is waste material to one person is valuable to another. Waste is only waste to the person who doesn’t want it. Just about everything that is refined out of the fluids that come out of wells has a value.

 

If we can recover some of the heavy metals — lithium and manganese — from waste refining processes, we could make batteries without being dependent on China.

 

LCN: Will the fluids brought up from wells contain any naturally occurring radioactive elements in hazardous concentrations?

 

Holko: No. Levels of radiation will remain at background-or-below levels. A waste management firm has taken drill cuttings from the Marcellus Shale for landfill disposal. The single incident of a high radiological sampling turned out to be from medical radioactive tracers the truck driver had taken for a heart test.

 

Marcellus shale comes to the surface in Marcellus where people drink well water from the shale each and every day with no harmful effects. Radioactivity is in the ground and can be moved around, but it can’t be concentrated. It is naturally occurring, and ends up dissipating naturally.

 

LCN: What about the criticism that the jobs hydrofracking will bring will be taken by outside specialists, not by the folks who are here now?

 

Holko: When something comes in, it will come in as a whole, but as it develops, local people will become involved and gain understanding. SUNY Geneseo geology graduate perhaps, instead of moving to Texas, might be able to find work in New York and Pennsylvania.

 

Over the past five years in Pennsylvania, local employment in gas drilling went from zero to almost three percent of the working population.

 

And is it such a bad thing if someone moves from Louisiana and buys a house in Geneseo?

 

Economic growth has to start somewhere. That’s how the evolution of industry works.

 

LCN: In your opinion, how are the opponents mistaken?

 

Holko: So far this process has been poorly understood, but it’s a tremendous opportunity.

 

The reality is we are not going to work New York out of its fiscal problems building wineries around the Finger Lakes. We need industry.

 

The other side has created a fear factor. But you can’t look at everything new as bad. Instead look at it as opportunity.

 

If you do have environmental concerns, you create the focus. New York has a regulatory structure second to none. The contrast with other states is like night and day. The stuff that’s been done in Wyoming and North Dakota isn’t going to happen in New York.

 

The DEC will tell you that since its implementation of drilling and cementing practices in the 1980s, there has been no water contamination from hydraulic fracturing and drilling.

 

Under the new SGEIS, there will be no flowback which is not contained within a tank or a pipe. This industry will be safe and controlled.

 

I’ve done pre- and post-drilling water sampling all over New York and Pennsylvania. The three biggest issues I find, outside of cases where someone just always has had naturally occurring bad water — are pollution from septic tanks, agriculture fertilizer spills, and drainage off of farm waste.

 

The amount of water the industry will be using in total is minuscule in comparison to the amount of water that flows through just one New York State river. Mother nature does its own cleansing — and contaminating — on scales much greater than the industry would be capable of.

 

We have the knowledge to prevent just about any environmental issue — and we have an opportunity which I believe is once in a lifetime.

 

People really have bigger problems they should be focusing on: their schools’ financing, for example. That should be more of a concern than a well, which if it comes, might pay $300,000 a year in property tax.

 

LCN: When hydraulic fracturing is permitted, are we likely to see an abundance of wells in Livingston County?

 

Holko: Truthfully, the likelihood of this type of drilling being above the southern point of Livingston County is pretty limited. If it comes to Livingston County at all it will be the southern edge, and it’s definitely not going to start there.

 

The New York counties which are the focus areas are Chemung, Tioga and Broome. The typical industry map doesn’t have Livingston County on it.

 

Could there be Utica Shale development even deeper? Maybe, but it’s not going to happen today.

 

LCN: What about the concern that industry trucks will ruin our roads?

 

Holko: The road supervisor for Bradford County, Pa. reported that the industry just spent $353 million building roads in his county. In contrast, the most the local and state government have spent is $60 million, and they take three years to start a project.

 

LCN: It would seem there is at least some gas or oil potential almost everywhere below western New York.

 

Holko: There are petroleum products under most of the United States. It’s a matter of finding, drilling and recovering.

 

LCN: Share your thoughts on the positive social aspects of well drilling.

 

Holko: There is the drilling phase and, yes, there are more people and there is more truck traffic. But if you’re running the local gas station and convenience store, that’s hardly a negative. Your cash register is ringing.

 

There use to be a lot of ‘for sale’ signs along Route 6 in Pennsylvania. You can’t find one today, but they’re still everywhere in New York.

 

You can’t have good things happen if you don’t create wealth.

 

I grew up in Johnstown, Pa. when it was still mills and coal mines. It may have been a bit smokier, but it was a lot busier and a lot nicer. Everybody was friendly. Everybody cared. When good things are happening, everybody is in an upbeat mood.

What's going on in nearby Chemung County. At the New York Times:
 

HORSEHEADS, N.Y. — ...At the two Holiday Inns here in Chemung County, occupancy has been at or near capacity for months at a time. And in the nearby town of Big Flats, the regional airport has added flights, parking spaces and restrooms, and is extending a runway to accommodate larger jets.

 

This new base of customers — workers from Oklahoma, Texas and other parts of the country with long experience in drilling natural gas wells — are drawn to the region by jobs just across the state border in rural Pennsylvania, where a kind of drilling known as horizontal hydraulic fracturing, or hydrofracking, has vastly expanded over the last two years...

ATHENS — In a move to ensure a steady supply of adequately trained workers for its natural gas drilling operations, Chesapeake Oilfield Services has launched a hands-on training program at its Eastern Housing Center and Training Facility in Athens Township...

 

...The Athens facility will provide a training site for local gas field workers hired by Chesapeake, said Kimberlee Smithton, director of training for Chesapeake Oilfield Services. New employees will receive instruction on the drilling rigs in a controlled learning environment before experiencing live situations in the gas fields.

 

"When operations began in this area, we had to rely on our existing work force from other parts of the country to ensure that our operations were safe," Smithton said.

 

But as Chesapeake's local gas drilling operations grew — the company is Bradford County's largest leaseholder in the Marcellus Shale play and employs more than 1,000 Pennsylvanians — it saw the need to develop a skilled local work force to complement those transferring from out-of-area worksites....

...In the same period, New York State environmental officials have been weighing whether such drilling should be allowed here. Until it does, Chemung County is savoring a hydrofracking boom without the hydrofracking.

 

The workers stream across the Pennsylvania border in search of amenities that are relatively scarce at the rural drilling sites. “Places are jammed,” said Thomas J. Santulli, the Chemung County executive...

 

...the spillover from Pennsylvania is giving the county’s 88,000 residents a taste of how life might change, for better and worse, if the state gives a green light to the far more powerful method of extraction. County workers are busy surveying roads, training law enforcement personnel and visiting drilling centers in northeastern Pennsylvania to learn how their neighbors have dealt with traffic and an influx of thousands of workers.

 

Some downsides are anticipated in New York State.

 

A report commissioned this year by the State Department of Environmental Conservation, for example, predicts local housing shortages and a rise in rents as workers migrate to New York to take jobs in well construction and production that cannot initially be filled with local labor.

 

Some residents are already feeling pinched. “I was looking to spend $600 to $800, and it’s hard to find a decent place for that,” said Mark Stedge, 53, a resident who said he found most rents were more than double what he could pay. “The drillers are willing to pay anything because they need a place to stay”...

...Nonetheless, the report said that Chemung and other counties in the state’s Southern Tier where shale gas is assumed to be plentiful can expect a surge in retail sales and tax revenue from those workers once drilling begins...

Couple questions: Would you describe this as a "heavy industrial" site? Can you identify the location? (hint: it's in Tompkins County)

By Jon Entine at AEI:

An anti-fracking philanthropist has turned environmentalists into precautionary conservatives. How did this happen?  

 

Environmentalists are not playing it straight on natural gas. Until recently, they have been amongst its most aggressive promoters, even coining the phrase “bridge to the future.” 

 

“Natural gas is inherently cleaner than coal or oil,” wrote the DC-based NGO, Renewable Energy Policy Project, in 1997, in a typical analysis. “Since renewables will be unable to meet most energy needs for some time, gas is an essential bridge to a renewable energy era.” 

 

As recently as 2008, progressive environmentalists, such the Pew Center on Global Climate Change, heralded its promise. “We also need to consider … how to better support natural gas as a bridge fuel to a more climate-friendly energy supply,” said president Eileen Clausen in a widely circulated speech. Natural gas was seen as a marriage of enlightened capitalism and pragmatic progressivism—a fossil fuel, whose reserves would gradually diminish, as the price of alternative energy became cost competitive.

 

Now, many activists call natural gas a “bridge to nowhere,” as Earth Island Journal recently headlined. Inexpensive comparatively clean natural gas is portrayed as a Trojan horse that will bring “water contamination, air pollution, global warming, and fractured communities.” The morphing of natural gas from ‘a necessary alternative to dirtier energy’ to ‘worse than oil and coal’ happened, metaphorically, almost overnight. What’s behind this seismic turnaround?

 

There are two factors, one widely reported and the other ignored: (1) advances in gas exploration and extraction fracking technology; and (2) a below-the-radar outpouring of funding by connected, wealthy anti-shale gas antagonists—and one activist philanthropy in particular, the Park Foundation headquartered at the epicenter of the US shale gas boom in Ithaca, New York. It’s also the home of Cornell University, which has become the academic face of the anti-shale gas movement...

Phony fracking fears for NY

By ROBERT BRYCE

Opponents of gas drilling and hydraulic fracturing in New York got a boost last week when the EPA issued a draft report that found that chemicals used in gas wells may have contaminated a shallow-water aquifer in Pavillion, Wyo. With the state Department of Environmental Conservation having extended the comment period on its proposed rules for drilling and “fracking” to Jan. 9, the critics will surely point to the Wyoming case as cause for New York to just ban drilling.

 

In fact, the EPA report gives no reason for doing so. The situation in Wyoming bears little resemblance to how drillers would tap the Marcellus Shale, the vast formation that stretches from New York to Ohio and West Virginia.

 

Right off the bat, the report notes the many decades-old oil and gas wells around Pavillion that would never pass muster today; in some, the surface casing (which is used to protect groundwater) was “as shallow as 110 meters below ground surface,” even though water wells in the area ran “as deep as 244 meters below ground surface.” In other words, the shoddy old oil and gas wells may have allowed some of the fracking fluids to migrate into drinking-water supplies.

 

That factor simply isn’t present in New York. Furthermore, the report cites “at least 33 surface pits previously used for storage/disposal of drilling wastes” near the Pavillion site — pits that the researchers found had contaminated nearby groundwater.

 

Thus, the lack of proper casing in the old wells, combined with the presence of numerous pits that were badly managed, were the likely source of the contamination that the EPA found. It is thus a mystery why the report nonetheless insisted that, in Pavillion, “data indicates likely impact to ground water that can be explained by hydraulic fracturing.”

 

Another key difference: The shale being targeted in the Marcellus is usually a mile or more below the surface; the area around Pavillion is unusual in that commercial quantities of natural gas were located at depths as shallow as 1,100 feet, in rock strata relatively close to groundwater resources...

An Otsego County woman is fighting for her right to allow natural gas drilling on her property. It's an unlikely test case for the issue of hydrofracking and whether municipalities have the right to ban the new method of drilling.

Read the rest of the story here and also watch the video here.