Published on June 27th, 2011 | by Tina Casey3
Financial Analysts Say Natural Gas Fracking Ain’t So Great – Wait, What?
June 27th, 2011 by Tina Casey
Environmentalists and local residents have been casting the stinkeye on the pollution caused by natural gas fracking for a number of years, but the issue hasn’t gained much traction. The sticking point, of course, is money: there is a huge amount of it to be made from exploiting newly discovered natural gas deposits, particularly in the Marcellus shale formation that extends through New York, Pennsylvania, and down into the Appalachian states…or could the Marcellus and other fracking hotspots turn out to be the next big Ponzi scheme?
The Case for Fracking
Until now, the case for fracking has been based largely on ignorance. Anecdotal evidence of drinking water pollution from fracking has been treated as just that – anecdotes – and there has been no systematic analysis of the potential impacts on U.S. water supplies, mainly because the industry gained a series of exemptions from the Clean Water Act and other regulations that would have required disclosure of the chemicals used in fracking brine. That is all beginning to change. Under the Obama Administration, the EPA has set the wheels in motion for disclosure, and earlier this year the minority party in Congress issued a report on fracking brine based on available data.
The New York Times Gets Cracking on Fracking
Just a few months ago, an op-ed in The New York Times touted natural gas fracking as the greatest thing since sliced bread, but over on the reporting end there has been some great coverage of the downside. Water pollution is one major concern (fracking involves pumping chemical brine underground to jar natural gas out of shale formations). The Times also recently covered a report from Cornell University, which revealed that fracking releases copious amounts of methane gas into the atmosphere, making it worse than coal in terms of greenhouse gas emissions.
Follow the Money
The latest report from The Times cuts to the heart of the matter: the money. Times writer Ian Urbina got his hands on hundreds of industry emails and documents related to fracking that question “whether companies are intentionally, and even illegally, overstating the productivity of their wells,” raising serious questions about the industry’s long term profitability – unless of course, we taxpayers make up the difference with an increase in federal and state subsidies.
Canary in the Fracking Coal Mine
Aside from the issue of gas well productivity, which Urbina covers in detail, here’s just one small indicator of how much help the fracking industry is going to need: road repair. In Pennsylvania alone, the industry has had to pay more than $411 million since 2008 to repair the damage caused by thousands of trucks hauling fracking brine, wastewater, and equipment. Not all of the repairs have been up to snuff (to say nothing of repair-related inconveniences that impact local economies), and in some cases operators have had their permits revoked. Last year the state estimated that its taxpayers were still on the hook for about $35 million in repairs that could not be recovered from fracking companies. That could be the tip of the iceberg, so hold on to your hats. The industry’s “Enron moment,” as Urbina reports, could be just around the corner.
Image: Natural gas by D.H. Parks on flickr.com
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