Tag Archives: energy supply

Fracking, environmental justice in central PA, and its implications in NC

Lengthy story here about environmental justice in central Pennsylvania.

Barry Yeoman report on environmental justice in heavily-fracked central Pennsylvan

What I find revealing about this investigative piece from central Pennsylvania is something that Yeoman observes at the opening of the second page:

Few Places in the United States are tougher ground for building an environmental-justice movement than the Appalachian counties of central Pennsylvania—politically conservative, temperamentally reticent, and historically reliant on resource extraction. “We’re family-oriented. We’re white. We don’t bother people. We take care of our own,” [a local minister] told me.

The dispersed nature of fracking with the remote, isolated, small-scale industrial sites come with the promise of quick riches in mineral leases, changing the use of that land. The pride of taking care of our own leads to self-protective decisions, swayed by the gas man’s push to boost his bottom line, ensure painless and profitable access for the industry. The very residents sitting upon unproductive soils, a lost and contractually confining poultry industry offering loosing returns, and what seems like a budding American revival combine to turn a blind eye – a willful ignorance – to banking on the short-sighted hope of pulling the last drop of liquid from an already squeezed source while not investing in very real outputs to stretch our personal incomes and create real jobs and industry.

See my previous post about finding energy efficiency programs throughout the southeast, but these underlie the whole energy debate. Use less energy, diminish the demand for the supply, and utilities slow their push to extract every last drop of oil and gas. We can all play a role in reducing our consumption, while at the same time appreciating the developed economy in which we live that affords us the option.

On the bigger picture of jobs and industry, there is vast more opportunity to develop manufacturing facilities for wind and solar energy production here in North Carolina. In fact, North Carolina recently opened a manufacturing facility in Cleveland County for Schletter, a German company, to produce state-of-the-art photovoltaic panels and associate machinations for more efficient capture of solar energy. This facility has a workforce of around 300, I believe. Why chicken farmers are not leasing the rooftops of their chicken houses for solar panels to sell energy to utilities is beyond question. Dare I say that single-use commercial/agricultural facilities should be a thing of the past? Lee County is situated very well for manufacturing, especially in industry building for tomorrow’s economy. Its proximity to the Research Triangle and the growing markets of the state (and the whole southeast) is advantageous. For central North Carolina to get into the energy production industry solely through extracting natural gas is really selling its workforce and residents short. The long-term effect of fracking won’t burden the drillers or the utilities that purchase the gas, but it will linger in the community, both in the personal realm and in the civic and social infrastructures. Extraction of gas has not begun, but division is rampant: elected leaders have slandered their own constituents in the public square! This is a time for planning, and all stakeholders need to be at the table and respected in the process.

BT

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Bill to repeal renewable energy standards discussed today

House Bill 298, the “Affordable and Reliable Energy Act,” will be discussed this morning in the House Commerce Committee. I think this is a shame if it passes. The state has seen substantial job growth in alternative energy, and the 12.5% goal put upon the energy providers has spawned investment in the development of solar technologies.

I googled the bill this morning and the search results included WRAL’s slated coverage of the discussion, news articles from such places as the Charlotte Observer, appeals from groups like the Sierra Club to rally against this, and then a rally cry to support HB 298 from the Crystal Coast Tea Party’s blog. Out of curiosity, I read through their argument, that tax payers are subsidizing these investments in renewable energy. This statement is quite plainly wrong.

The requirement for energy utilities to purchase 12.5% of their produced energy from renewable sources by 2018 (I’m not 100% sure of that date, but we are on target) puts the onus on those energy utilities. Of course, the utilities will transfer the cost to their customers, but Duke is seeking clearance for their rate hikes to help address foreseen capital costs, ie., construction of new energy production facilities. Renewable energy sources have helped delay those huge capital improvements that a new power plant presents, it is creating jobs, and it is not making a mess. One of the reasons energy companies support home and office energy audits and weatherizing is that it will stretch existing resources and delay that new power plant construction. As NC Policy Watch points out, the renewable energy requirement has been a win-win policy – and I haven’t even touched the need to steer away from fossil fuels.

BT

100-year supply and 100s of thousands of jobs: it’s a gas!

One of the recurring themes I read while researching fracking is the incredible supply of natural gas contained in the shale plays across the country. The President mentioned the 100-year supply of natural gas during the State of the Union last month. Even North Carolina’s supply is touted as enough to supply the state with 40 years’ worth of energy. Well, the New York Times tracked communications and calculations of principle staff in these energy companies and several agencies to discover they question the high estimates. Please read the article and associated series (multimedia: documents) that includes copies of email correspondence among energy executives, geologists, financial analysts expressing their question of forecasts:

NYTimes series on natural gas supply doubters from the inside

Discovery of the NYTimes piece is due to finding the presentation included below from financial analyst Deborah Rogers, who served on the Advisory Council for the Federal Reserve Bank of Dallas since 2008. She presents very succinctly what gave her great pause in reading the estimates of the “game changer” that shale gas will provide the energy sector and the corresponding number of jobs to be created. She draws particular attention to the misleading total increase in gas supply that is actually due to an increase in number of wells drilled rather than sustained production from existing wells. She presents documentation to support her concern:

Within the context of creating a market overseas for natural gas, as Deborah Rogers alludes to in her presentation, Bloomberg cites the former CEO of Exxon as questioning the actual supply of gas in the shale plays in the country:

“There is going to be a big debate in the U.S. as to whether or not they’re going to permit the export of liquefied natural gas,” [former Exxon Mobil chief Lee] Raymond said in an interview in Oslo yesterday. “Even if you get past the politics, you have to test whether or not the resource base is sufficient.”

Estimates suggest fields in Pennsylvania, Ohio and Texas may contain as much as 862 trillion cubic feet of the fuel, enough to supply the U.S. for over thirty years at current consumption.

Remember that the Department of Energy just last month updated their calculation on the amount of natural gas to be dramatically less than the original estimate. What makes the updated calculation telling is the fact that it includes data from wells in production.

The concerns expressed by Deborah Roger and Lee Raymond are echoed by Chris Nelder in Foreign Policy aptly titled: “Is there really that much shale gas in the ground?“. He actually calls attention to previous hyped energy solutions that failed to deliver to the extent promised. He states that the estimates of gas supply in shale plays are significant, but really would only supply energy needs for 11 years based on current consumption. Based on the current low price of gas, existing production wells are simply not profitable.

Supporters of the development of gas extraction through hydraulic fracturing accuse citizens and scientists concerned about protecting water quality as spreading fear by exaggerating or overstating the threat. It looks like industry has been spreading their own exaggeration and overstating the situation. There is more that needs to be said on the subjects raised in this post, but they will come at another time.

BT

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Reactions to the Congressional hearing (or Casting doubt, part 2a)

I wrote yesterday about the Congressional Sub-committee on Energy and Environment hearing held February 1st on the EPA Pavillion study. I’ve come across some follow up pieces on the hearing, including an interview with John Fenton, a resident of Pavillion, WY, who was featured in Josh Fox’s Gasland film and is chair of the Pavillion Area Concerned Citizens. I missed their response in January to the attacks on the EPA Pavillion study, which is very worthy read. Fenton’s name was mentioned, but to further frustrate locals, no testimony from any residents of Pavillion was included during the hearing.

Josh Fox in the Democracy Now piece makes a great point in how science and observation and free press are being compromised, and that practice is rather scary. Though similar tactics of publicly refuting of science eventually failed in regards to the link of tobacco to lung cancer, it has eerily spread doubt in the public about climate change.

An op-ed piece from central Florida offers another interesting perspective on the hearing:

The people of the United States of America deserve better. The focus should not even be on lessening our dependence on foreign oil, but rather should be on lessening our dependence on (and addiction to) oil in general. It doesn’t take a weatherman to know which way the wind blows, just as it does not take more than a three-year investigation to know that hydraulic fracturing has severe side-effects and detrimental impacts to water supplies within proximity of fracking sites. The fracking process is a slap in the face to all of those who support renewable and clean energy standards for the future…

The author has a compelling point: we can debate the integrity of the science until we run out of fossil fuels and it will not change the fact that no matter how much of this natural gas we extract, we are only putting off a shift to depend on other resources. I believe that the process of extracting natural gas through horizontal drilling is an incredible feat, but we must continue to invest in alternative resources. Perhaps the widespread concern over water will actually raise the value of that most basic of commodities – water – and in order to protect it, we in turn pay more for energy that threatens our water resources. The arguments at the hearing centered on this EPA study at the Pavillion as if energy production and water protection is an either-or discussion, when in fact we need both.

-BT

Summary of ‘To Frac, or not to Frac’ at UNC-CH, 1/31/2012

Tuesday afternoon, a hydrogeologist from Clemson, Larry Murdoch, came to the UNC Chapel Hill campus to speak about hydraulic fracturing. The talk was organized by the UNC Institute for the Environment. The presentation was from the perspective that no one in the audience is an expert, and therefore was a good, thorough overview of the subject. He explained the process of hydraulic fracturing, the access to resources the technique provides that we had not had before, and the risks associated with the practice, particularly due to the volume of the materials.The Reese Felts Digital Newsroom at the UNC School of Journalism & Mass Communication published a summary of the talk:

Summary of ‘To frac, or not to frac’ talk at UNC

Of great interest to me, is the estimate of the value of the natural gas contained in the Cumnock Formation – the main gas-rich formation within the Sanford sub-basin of the Triassic Basins. Murdoch calculated the value of natural gas in the formation based on known variables: the extent of the formation, the thickness of the formation, the geochemistry (data is from Reid and Milici, 2008), and the price of gas. The thickness, chemistry, and price each have a range of values, and using the ranges, and the average figure in those ranges, he had some useful numbers to consider in the discussion for North Carolina:

…this formation could hold between $0.2 billion and $5 billion of natural gas.

The calculation based on the averages for the total value of natural gas is $2.5 billion. After the presentation, I overheard an official at DENR report that their preliminary findings on the amount of gas in the shale are quite similar to the calculation Murdoch made, and added that this is a drop in the bucket compared to other gas-rich shale in the country. Note that these figures are the estimated value of the gas and do not include the costs associated with extraction.

BT

Supply and demand, prices, and, well, supply…

President Obama highlighted the issue last night in the State of the Union address, so it is curious to see the report this morning that the amount of natural gas projected in the Marcellus Shale has been adjusted.

Marcellus Shale gas estimate lowered… significantly.

Meanwhile, there’s a story on NPR this morning stating that the spread of hydraulic fracturing has been so wide that it has basically saturated the market.

NPR story on over-production of natural gas

A market perspective on Cabot Oil & Gas efforts to continue production during the 10-year low for price of natural gas while competitors are scaling back appeared on the Bloomberg website yesterday. Note that the price for natural gas right now is $2.53/million BTU’s, and panelists at the Duke forum January 9th agreed that the minimum price to recover costs from developing a well is around $6.50/million BTU’s.

There is certainly a curious mix of drilling proliferation causing a shift in prices, which in turn is causing a slow down in well development, yet a simultaneous push to open new areas and quashing of any requests to slow down in order to develop safer techniques and regulations.

-BT