Boom and BUST

GreenWatch

Boom and BUST

The Lies About Jobs

The legacy news media has a lot to say about the positive impacts of natural gas development in New York State. Like many others, you may be convinced that the economic upside of shale gas includes many jobs and a resurgent economy.

You are very wrong if you believe this. Most of the economic projections come from industry oriented propaganda. Industry that stands to profit dramatically if New York State allows hydrofracking. Not by creating jobs, not by building local economies, but by extracting wealth and leaving behind a legacy of destruction.

Last summer the New York State DEC published a draft generic supplemental environmental impact statement that was paid for by taxpayer dollars. A local WNY company, Ecology and Environment (E&E), which has extensive ties to the oil and gas industry produced an economic assessment that was contained in the publically funded document.  In it E&E stated that an average NYS shale gas development scenario would bring 53,969 jobs.  Food and Water Watch, an organization opposed to hydrofracking published an independent analysis last November entitled “New York State Exaggerated Potential Job Creation from Shale Gas Development.”  It states that the E&E projections are “deeply flawed“ and that “in the first year of an average scenario only 195 new jobs would be created for NYS residents and that “after 10 years only 600 jobs”. After the 10^th year there would be almost no more new jobs created”.

The E&E analysis mirrors industry claims and has been repeated over and over while the Food and Water Watch report, and many other independent assessments that support the critical analysis have been ignored by legacy media. “Truth” and fair and balanced information is a commodity bought and sold to the highest bidder and delivered into your living room by uncritical “news” operations that have a bottom line that does not often include investigation, analysis, or even critical thinking.

Boom

Generally speaking, the gas boom can be characterized as a short term accelerated production cycle. The initial development activities are massive and carry many real and environmental costs that are borne by the local communities.  Impacted communities are always unprepared to adjust to increased and cyclic populations. North Dakota experienced a significant boom due to natural gas operations in 2011 and has also experienced a dark side.

Williston ND saw its population grow from 14,500 people in 2010, to over 20,000 in late 2011. According to a Bloomberg report published this last January, “North Dakota Oil Boom Brings Blight with Growth as Costs Soar” the sudden boom created a housing shortage.  Rents for a two-bedroom home without utilities skyrocketed from $350 a month to over $2,000.  Five hotels and 1,200 new apartments are being built.  Meanwhile some workers and their families are living in their cars, while others are gathering in what are being called “man-camps” – temporary shelters including tents and trailers. Some counties have banned these man camps citing lack of sewer, electrical, and water systems, increased crime rates, and increased prostitution among other social issues.

While the Oil and Gas industry provided Williston with $1.5 million “oil extraction tax”  in 2011, infrastructure costs continue to soar.   The community is looking at spending $87 million to provide three new schools for the approximate 1,500 new students this year. This is an approximate 57% increase in what the local schools were designed to hold. Roads designed to handle 10 tractor trailer trucks a day now are being used by over 800 a day. Montrail County’s road system which has been so completely overburdened by the enormous truck traffic needs $600 million just to keep the roads open. Calls to Montrail County volunteer ambulance and fire services has tripled since 2009.

Bust and Despair

Imagine a ghost town with its ruined and abandoned buildings and streets inhabited by the wretched ghosts of its former residents.  This well-known scenario is based on oil and mineral extractions.  The rush and boom is always followed by collapse. Collapse stays forever. Whatever residents remain pay for the boom with expansive poverty and the inability to maintain basic services and infrastructure. The resultant cultural collapse is a Santorum (google it) scenario that we should all be prepared for if NYS allows fracking.

The long-term bust is characterized by broken and impoverished rural communities. According to Chris Burger of the Sierra Club Atlantic Gas Task Force one of the principle downsides of economic impacts in a fracking area is a loss of diversity of jobs.  Tourism and recreation jobs almost completely disappear as those industries are devastated by the blight caused by gas drilling sites and infrastructure.  Agriculture is seriously impacted by drilling activities and studies have shown that in communities that allow fracking up to 50% of family owned farms are put out of business.

A Cornell University report “Marcellus Shale Gas Drilling: What does it mean for Economic Development concludes that short term boom is always followed by long term bust. Good long-term jobs are not created in drilling communities. Other good jobs migrate away.  Economic diversity declines, as communities cannot attract investment from non-extraction industries.

Add these economic development lies on top of the catastrophic environmental issues created when the waters that we depend on become contaminated, and undrinkable. Your drinking water will be affected. Add this to the costs of the remediation, the lack of remediation, and the to costs of the consequences of human health impacts. Add these inevitable consequences of the depravation and predation by the few that will gain economically to the many that will suffer long term economic consequences and you have to wonder how on earth, we has a culture can have the political, social, or moral will to allow hydrofracking.

Why Western New York needs to have a public hearing about Hydrofracking

By Jay Burney, GreenWatch

In case you have not heard about it, New York State is currently evaluating whether or not to allow a controversial natural gas drilling process called hydrological fracking to take place across the state. This process allows extracting of natural gas from certain shale formations that lie underneath N.Y, including Marcellus and Utica Shale, both which are found below parts of WNY.  NYS is accepting public comments on the matter until January 11.  You can submit your comment by going here:

http://www.dec.ny.gov/energy/76838.html

The NYS Department of Environmental Conservation has held several public hearings on the issue across New York State. But not in Buffalo or Niagara Falls.  Our proximity to the shale, and the potential social, economic, and environmental impacts of this process on WNY should be a compelling reason for the NYS DEC to hold public hearings on this matter here. They have chosen not to. It is very likely that unless the DEC extends its public comment period on the process beyond the January 11^th deadline and opts to hold a public hearing in or near Buffalo, a coalition of concerned citizens and groups may very well hold a “peoples hearing” to better alert the local press and to inform the DEC of the “opinions” of citizens in the WNY region.

One of the many reasons that the process of hydrofracking is controversial because it uses toxic chemicals which are injected into the ground under high pressure and at high volume. There is widespread concern and growing evidence that these chemicals will enter water supplies and aquifers and render the freshwater unusable and toxic to life, including humans. This is important to the people of WNY as it could effect our drinking water and the Great Lakes which are an increasingly valuable global resource representing about 20% of the earths fresh surface water and about 100% of our regions sustainable future.

Only some of the at last 300 chemicals that are used are known to the public.  They include  methanol, ethylene glycol, formaldehyde, naphthalene, benzene, toluene and xylene. They are known to be endocrine disrupters, cancer-causing agents, or cause other negative human health impacts including respiratory ailments and birth defects. These chemicals have been found widely in drinking water and in aquifers near gas fields and wells.

The drilling companies consider other chemicals used as secret proprietary formulas and they will not release these formulas to the public for scrutiny. This is of some consequence.

According to a local anti-fracking group, Re-Energize Buffalo (http://renewnrg.blogspot.com/2011/03/radioactivity-in-wastewater-from-shale.html)

 In 2009, NYSDEC analyzed 13 samples of fracking wastewater from gas drilling sites in the Marcellus Shale and found levels of radioactive radium as high as 267 times the safe limit for discharge into the environment and thousands of times the limit safe for people to drink. Studies conducted in Pennsylvania confirm those findings an have revealed some drinking water near fracking operations to contain radium at over 1,000 times higher than federal safe drinking water standards. In addition

Environmental and health professionals, as well as citizen activists around the United States share concerns that fracking with these contaminates will destroy the fresh water that life depends on, that we drink, and that our food supply requires. They are asking for more scientific analysis and that NYS proceed with great caution until there is more quantifiable information. The U.S. EPA is still engaged in evaluation of the safety of fracking and will not publish its findings until at least 2013. The potential multiplier effects of introducing known and unknown toxins into our water could be catastrophic for us and for future generations.

Proponents of the drilling process, mostly energy companies, engineering firms and law firms that will benefit from the extraction, argue that proposed regulations in New York mandate that the companies disclose proprietary formula’s to the DEC for appropriate review and that all well sites and associated water sources will be appropriately monitored and tested. Opponents including some DEC staff members say that the DEC is not equipped to oversee the number of wells that may be drilled, and that it is unlikely that enough money will every be appropriated to handle the regulatory oversight needed to insure even a modicum of safety for water sources.

Apparently New York State shares these concerns albeit at this time on a limited basis. The NYSDEC has already determined that they will not allow hydrofracking to proceed in the areas that make up both the New York City and Syracuse watersheds. WNY watersheds are not protected by the same rules.

Another reason that WNY deserves a public hearing is that when Governor Cuomo appointed an advisory panel early last summer to help the state evaluate economic and environmental consequences of hydrofracking, he neglected to appoint a single member from WNY.

Robert Knoer, Chair of the WNY Environmental Alliance which is comprised of 80 WNY environmental organizations, writing on behalf of the alliance noted in a letter to Gov. Cuomo in July:

“I must however express our concern that there are no representatives of the Western New York region on the panel.  While acknowledging that this is not a "regional" panel I note that there has been a natural dichotomy created by the proposed SGEIS.  The current proposed course of action distinguishes among watersheds: Disturbance around the New York City and Syracuse watersheds from hydrofracking activities is unacceptable within a 4000 foot buffer.  However when addressing the Primary aquifers that dominate upstate non-filtered water supplies the DEC determined that "Horizontal extraction of gas resources underneath the Primary Aquifers from well pads located outside this area (500 feet) would not significantly impact this valuable water resource" (dSGEIS Executive Summary pg. 18).

There appears to be a distinction, albeit perhaps unintentional, of the impact of the state policy between Western New York and downstate aquifers.  As such, we feel it is appropriate that the Western New York environmental concerns be fully and thoroughly vetted as this discussion proceeds.”

As of January 1, 2012, there has been no response to this letter.

Another reason for concern to WNY’ers is the proposal to accommodate fracking wastewater at the Niagara Falls N.Y. reprocessing plant. A portion of the hydrofracking fluid injected into wells is recoverable. This fluid needs to be treated before it is released. This fall the Niagara Falls  N.Y. Water Board which oversees the city’s wastewater treatment facilities decided to explore the financial benefits of taking fracking wastewater, treating it, and discharging it into the Niagara River.  There are serious and fundamental questions about whether or not the Niagara Falls facility can handle the known and unknown toxins and these are issues that citizens are demanding to be aired in a public hearing.  Dumping fracking wastewater into the Niagara River where it will eventually flow into the Atlantic Ocean is an issue that needs intense scrutiny. 

Last week (December 27), a coalition of 82 Mayor’s from around the Great Lakes called on provincial, state, and federal governments to hold public hearings for “utmost transparency and disclosure” when it comes to the potential impact of fracking waste on Great Lakes waters.  http://niagaraatlarge.com/2011/12/27/great-lakes-mayors-raise-concern-about-proposed-fracking-waste-discharge-to-niagara-river/

The Niagara Falls Water Board has recently hired a PR firm to handle “questions” about the issue. Great.

False Jobs and Real Economic Consequences

Advocates of fracking including politicians, lobbyists, the energy industry and the engineering and law firms that will benefit economically from hydrofracking have used a “jobs” as the principle public argument to allow hydrofracking in New York State. Food & Water Watch, a national organization dedicated to safe food and water issued a challenge to the “jobs creator” theory in a November 2011 report entitled “New York State Exaggerated Potential Job Creation from Shale Gas Development.”

http://documents.foodandwaterwatch.org/NewYorkJobCreationFromShaleGas.pdf

The report states:” The oil and gas industry, industry-funded academics, and ideological think tanks have promoted shale gas development as a sure-fire job creator in difficult economic times. Proponents of shale gas development have benefited from media and U.S. government reports in which the supposed economic benefits have gone unquestioned. Food & Water Watch recently analyzed one industry-backed job projection and found that it overstated shale gas job creation potential in New York by a factor of about 900 percent.

The report states that the NYS economic analysis report originally produced by Ecology and Environment, a Buffalo based engineering firm with strong ties to the oil and gas industry, predicted that an average NYS shale gas development scenario would bring 53,969 jobs.  Food and Water Watch says that these projections are “deeply flawed”.  For instance, close inspection of the footnotes revealed that that projection was based on a 30-year production scenario. According to the Food and Water Watch report, 30 years of production is an inflated scenario.  Currently the U.S Securities and Exchange Commission is investigating whether or not shale gas companies have overestimated the productivity of shall gas wells.

Under the Food and Water Watch recalculated the New York analysis and concludes that in the first year of an average scenario only 195 new jobs would be created for NYS residents, and that after 10 years only 600 jobs. After the 10^th year there would be almost no more new jobs created. The first year scenario would impact one fortieth of one percent of New Yorkers currently on unemployment.

The report says that the E&E report misuses the multiplier effects and the indirect job creation scenarios in ways that exaggerate the economic spillover from the jobs. The report also points out that E&E has close ties to the oil and gas industry.

In addition the F&W report states that the NYS analysis fails to account for the negative impacts that drilling and fracking would have on employment in other industries such as tourism and agriculture. These kinds of multiplier effects are shoved under the rug.

The report states: “Close examination of this job projection shows that allowing for such extensive shale gas development in New York would actually have a minimal impact on employment in the near term, primarily because most jobs would go to employees from out-of-state. Shale gas development would not provide the broad- based economic growth that New York now needs and that the industry has promised they could deliver. Instead, shale gas development would primarily benefit the oil and gas industry while bringing significant costs to public health, public infrastructure, and the environment.”

These costs presumably would be borne by the taxpaying public.

The Food and water Watch report concludes “The New York socioeconomic impact analysis, conducted by E&E Inc., fails to provide an accurate projection of the potential benefits of opening up the state to drilling and fracking for shale gas. By exaggerating the potential benefits, New York has failed to serve the public interest. In reality, current residents of New York can only expect intensive shale gas development to create several hundred new shale gas industry jobs for each of the first 10 years, followed by far fewer production jobs created for the next 20 years.

http://www.legislativegazette.com/Articles-Main-Stories-c-2011-12-19-81139.113122-Economists-say-fracking-study-is-flawed.html

In late December, the Legislative Gazette, an Albany based newspaper covering NYS government, reported that three economists Jannette M. Barth, Senior economist at the Pepacton Institute LLC; Edward C Kokkelenberg, a research fellow at the School for Industrial and Labor Relations at Cornell, and Timothy Mount, Economics Professor at Cornell sent a letter to Governor Cuomo that also detailed why the E&E economic survey provided to the State is flawed. The letter reads in part:

"The state's economic focus should be the realistic identification and estimation of the present value of all costs and benefits to the state and its citizens.” "The state should be concerned with maximizing the present value of the benefits to the State and minimizing the present value of all costs to the State and its citizens. The gas industry will strive to maximize the present value of the benefits to themselves and postpone costs, or more likely, make others pay the costs."

The Gazette interviewed Jannette Barth, one of the authors of the letter.

"(The E&E report) didn't take into account costs of wear and tear of roads and infrastructure,"  She said that the state's Department of Transportation circulated a memo from July detailing the potential damage fracking and well construction could do to roads and other infrastructure, especially from truck traffic.

"The research findings done by independent studies are vastly different from industry research," Barth said, saying that any study of fracking should be done not by any single agency, but a team of individual experts on all the ways that fracking could impact the economy and the environment.

"What we really, really need is the state DEC to insist on a comprehensive unbiased peer-reviewed environmental impact statement, based on data that is either published, or carefully scrutinized or verified because the industry has a bias in this," Barth said.

It is important that the DEC extend the public comment period beyond the current January 11 deadline, hold a public hearing in WNY, and extend the moratorium on issuing drilling permits until at least after the USEPA finishes its ongoing study about the safety and health impacts of hydrofracking.  If this is not done, there will be a public hearing in Buffalo, conducted by citizens, and you will be invited to say your piece.