Plentiful oil, natural gas can be extracted safely

In a guest column on NKY.com Dr. Robert W. Chas, Chair and Professor in the Department of Petroleum Engineering & Geology at Marietta College in Marietta, Ohio writes - “During the national debate on the utilization of hydraulic fracturing to produce natural gas and/or oil from shale formations, at least five fallacies seem to have been purveyed to the public as truths. What is disturbing is that, at a time when America can’t afford to foreclose on more than a hundred years’ worth of inexpensive, environmentally attractive energy, untruths could become an excuse for obstructionist foot-dragging on shale drilling. To that end, I offer the following five myths and the realities with regard to “fracking.”

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The Hill (2/5, Restuccia) reported that in order to counter the Republican push to approve the Keystone XL pipeline, Democrats in both the House and the Senate “revived long-standing concerns this week that oil from the project will be exported to other countries.” The Hill adds that Democrats, “keenly aware of recent polls showing that a majority of Americans support the pipeline…are trying to change the Keystone narrative and blunt GOP attacks on Obama for rejecting the project last month.”

Jon Campbell, on the Democrat and Chronicle blog, wrote about the debate between business and environmental groups over a proposal that would require utilities to purchase solar renewable energy credits. A recent report by the New York State Energy Research Development Authority (NYSERDA) recommended that the state invest in solar energy. Campbell writes:

“The report, which was released late Tuesday by the New York State Energy Research Development Authority, showed a mixed bag for both environmental and business groups. It recommends the state invest in solar energy and found a goal of 5,000 megawatts of solar power by 2025 would have significant environmental benefits, but found it would cost anywhere from $300 million to $9 billion to achieve.

‘The NYSERDA study confirms that (Solar Renewable Energy Credits) will cost the people of New York jobs and will increase rates,’ Heather Briccetti, President and CEO of The Business Council, said in a statement today. ‘At a time when New Yorkers are paying some of the highest energy costs in the nation, the State does not need to adopt a mandate that could increase the cost to consumers by as much as $9 billion.’”

To read more click here.

The New York State Energy and Research Development Authority (NYSERDA), in consultation with the Public Service Commission (PSC), completed a benefit-cost study (including job creation and economic development impacts) of installing 2,500 MW of PV by 2020, and/or 5,000 MW by 2025.

“The NYSERDA study confirms that SolarRECs will cost the people of New York jobs and will increase rates,” said Heather Briccetti, President and CEO of The Business Council of New York State, Inc. “At a time when New Yorkers are paying some of the highest energy costs in the nation, the State does not need to adopt a mandate that could increase the cost to consumers by as much as $9 billion.”

The study strongly supports the position that a New Jersey-style SolarRec (SREC) program will adversely impact the State’s employment and Gross State Product (GSP). The study concluded that:

• Economy-wide jobs would be reduced by 750 through 2049 because of a loss of discretionary income that would have supported employment in other sectors in the economy;
• The Gross State Product (GSP) would be reduced by $3 billion through 2049, representing an annual decrease in GSP of less than 0.1 percent;
• The Low Cost scenario would lead to a creation of 700 jobs economy-wide through 2049, while the High Cost scenario would lead to a loss of 2,500 jobs;
• The consumer impact under a High Cost scenario would be approximately $9 billion; and
• The maximum annual net impact could be as high as 5 percent.

New York State has already adopted an aggressive goal of obtaining 30 percent of its electricity from renewable sources by 2015. New York ratepayers have committed to pay $2.998 billion to obtain this goal through the establishment of the Renewable Portfolio Standard (RPS).

The majority of the RPS dollars are administered by NYSERDA using competitive solicitations. All forms of renewable generation — wind, solar, hydroelectric, biomass, tidal/ocean and fuel cell generation — compete fairly for the same funds. Solar has not won under the main tier portion of the RPS because it cost more than other renewables.

“Now is the time for the solar industry advocates and those representing large electric customers to come together and support economically sustainable, transparent and predictable market options to encourage greater deployment of solar technology in New York,” added Briccetti.

The U.S. Energy Information Administration has released new data that shows NY ranks third (behind Hawaii and Connecticut) in average retail price for electricity. The national average is 9.83 cents/kWh; New York’s average for 2010 was 16.41 cents/kWh.

To view data for all states click here.

Matthew Cordaro of Crain’s New York Business (a subscription-based publication) writes:

“Gov. Andrew Cuomo wants New York to construct an energy superhighway to bring power, including renewable sources, from upstate and western New York to the city and downstate. Comparing it to Dwight Eisenhower’s call for the interstate highway system in the 1950s, the governor proposes having private companies finance and build $2 billion in energy infrastructure for New York.

Conceptually, the proposal has many desirable features, including the potential to create jobs and provide additional sources of energy. But to achieve those, it first would have to overcome a series of technical and financial obstacles. Whether the rewards are worth the risks and costs must be intensely scrutinized. After all, New York has a generally stable, reliable supply of electric power. Is Mr. Cuomo seeking to give New York’s transmission system a heart transplant when diet and exercise might do the job?

For maximum benefits, especially in job retention and creation, any such “highway” should support current and new in-state power generation. If we rely too much on out-of-state energy sources, we risk losing many jobs and eventually would pay a lot more for imported power.

An energy superhighway will take us into new territory by forcing electric power to flow over far greater distances. That introduces challenges in reliability and power losses through energy dissipation along the route.

One way to address this is to have electricity “re-pumped” by power plants along strategic lines. Downstate plants including the Indian Point nuclear-power facility—35 miles north of midtown Manhattan—would be especially important for ensuring a reliable transmission network and providing most power on a typical day. But remember: Transmission lines, like power plants, can generate vigorous community opposition and legal actions.”

To read more click here.

The surge in domestic natural gas production can lower energy costs, reduce pollution and drive investment in the industries that supply equipment the natural gas sector and those that use natural gas as an input to production, like the chemical industry. … The discovery of new natural gas reserves, such as the Marcellus Shale, has led to rapidly growing domestic production and relatively low domestic prices for households and downstream industrial users. Appropriate care must to be taken to ensure that America’s natural resources are extracted in a safe and environmentally responsible manner with the safeguards in place to protect public health and safety. Provided these precautions are taken, the potential benefits to theU.S. economy are substantial. (WhiteHouse.gov, 1/12)

“Obama Discovers Natural Gas”

Last week the White House issued its latest report on jobs and it includes a section on “America’s Natural Resource Boom.” The report avers that a few years ago there were widespread “fears of a looming natural gas shortage,” but that“the discovery of new natural gas reserves, such as the Marcellus Shale, and the development of hydraulic fracturing techniques to extract natural gas from these reserves has led to rapidly growing domestic production and relatively low domestic prices for households and downstream industrial users.” … To the best of our knowledge, this is the first time the White House has favorably mentioned the Marcellus Shale, the natural gas reservoir below Pennsylvania, West Virginia and other Northeastern states. … It’s certainly smart politics for Mr. Obama to distance himself from the anti-fossil fuels obsessives, and no doubt his political advisers are hoping it helps this fall in the likes of Ohio and Pennsylvania. (Wall Street Journal, Editorial, 1/17/12)

An article by Steve Reilly of Gannett News chronicles the ongoing debate between two groups of Cornell scientists over the environmental impact of methane released by shale gas drilling. Reilly writes:

“…Howarth and his co-authors wrote, the greenhouse gas footprint of shale gas is ‘perhaps more than twice as great as coal’ when you compare the two energy sources over a 20-year time frame and ‘comparable’ to coal over a 100-year time frame.

But a rival group of Cornell scientists, led by professor Larry Cathles, sought to rebuke the original study with a commentary published in this month’s issue of the academic journal Climatic Change. Cathles and his co-authors claimed that the greenhouse gas impact of shale gas is ‘half, and perhaps a third, that of coal.’

Now, that response is getting a response of its own.”

To read more click here.

Ryan Whalen reports on YNN in Jamestown - “With the public comment period closing Wednesday, opponents of hydrofracking in Western New York gathered outside the DEC office in Buffalo. They are urging state leaders to listen to what they say is the will of the people.

Rita Yelda, of consumer group Food and Water Watch asked, “Who is going to win? Is it going to be a large industry that maybe has billions to spend on campaign contributions and advertisements, or is it going to be the true voice of the people?”

…Many business leaders say they support fracking.

“Hydraulic fracturing represents high paying job in a part of the state where it has suffered severely during this economic recession,” said Heather Briccetti, president of the Business Council of NY.

Bans on fracking in the Syracuse and New York City watersheds are recommended by the DEC , but not in Western New York. Opponents say that could mean the area gets hit the hardest, noting past mishaps like Love Canal and toxic hotspots in the Great Lakes.”

To read more click here.

A piece in yesterday’s New York Times (1/10/12) speaks of the divide in the environmentalist community regarding their opposition to horizontal drilling and hydraulic fracturing in New York State. It seems that some more enlightened environmentalists understand that drilling is inevitable and they advocate for strengthened regulations. The more radical arm of the movement won’t be satisfied until drilling is banned in the state and it appears to be causing dissention in the ranks. These energy hypocrites want to ban all fossil fuels and rely on highly subsidized renewables such as solar and wind which only supply a fraction of the energy needed to meet power demands.

The opposite is true for drilling supporters. In November, members of the business community and landowners came together to form Clean Growth Now to advocate for safe responsible development of Marcellus gas in New York. Members include the Business Council of NYS, the Joint Landowner Coalition of New York, National Federation of Independent Businesses, builders’ associations, chambers of commerce and more. Under a united front, they hope to educate leaders and the public that safe drilling will lead to job creation and economic development that is so desperately needed in upstate communities. It was recently reported that Chemung County is experiencing a significant economic uplift from drilling activities just across the southern border in Pennsylvania. Imagine the economic impact if drilling were permitted in our own state.

The environmental opposition is loud and sometimes overshadows the hardworking business owners and landowners in this state who advocate for the opportunity to develop their natural resources, grow their businesses and create jobs. Comments on the DEC’s sGEIS are due today and now begins another round of waiting during which time we can expect a flurry of opposition bills limiting/banning fracking and/or imposing unreasonable drilling restrictions essentially making drilling economically unfeasible for drillers. They may not share precisely the same goal but the splintered opposition hopes to implement a death to Marcellus drilling by a thousand cuts.

The march toward Marcellus development has been long and hard. Drilling supporters must continue to stand united. We have only one message: Allow us to safely develop New York’s natural gas resources under strong DEC regulations. We encourage DEC Commissioner Martens and Governor Cuomo to finalize the regulations as soon as possible. Environmentally safe and responsible Marcellus drilling will revitalize the upstate economy while providing cheap New York natural gas to our citizens.