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Category — Environmental Policy

Fracing, Freedom to Trade, and Global Prosperity (George Mitchell’s Ultimate Contribution)

The recent death of George P. Mitchell has revived the discussion of shale gas and brought the extraordinary life of Mitchell into the limelight.

Son of poor Greek immigrants, he embodied the prototypical “rags-to-riches”. His development of hydraulic fracturing (“fracking”) has been his highlighted attribute and brought justified recognition for his contribution to the global energy supply.

When considering the economic benefits that shale gas production through fracking bring about, it is no wonder why Mitchell continues to win awards, such as “Houstonian of the Century,” even posthumously.

The Bigger Picture

What appears to be absent from most of Mitchell’s praise is his growing contribution to strengthening the global position of the United States. The prodigious supply of U.S. natural gas already has weakened energy-dominate regions, which include Russia and OPEC, and has created a greater potential for foreign partnerships.

Armies and weapons have always been utilized as strategic assets in regional or global positioning. Today, guaranteed access to abundant sources of energy is equivalent to large standing militaries and destructive weaponry as a process of preserving self-existence.

Unlike the threat of war and nuclear bombs, however, the surge in shale gas exploration has abundant benefits. Mitchell’s early push and innovation has allowed the U.S. to employ its energy production as a diplomatic tool, in almost the same manner as the atomic bomb has, but through much more harmonious terms.

Due to hydraulic fractionation (fracking), the U.S. has recently become the fastest growing natural gas producing area in the world–and the most important marginal source for gas. The U.S. boasts some of the cheapest natural gas production in the world, and its transport-to-market costs are low due to developed infrastructure.

Fracking could not only permit the U.S to become energy self-sufficient, but also allow the U.S. to become a major exporter of natural gas. The International Energy Agency has recognized this influx of unconventionally recovered gas and has predicted a monumental shift in global energy production through 2030.

Cheap Power as Soft Power

Increasing. global exports of shale gas in the form of liquefied natural gas to more receptive nations, including energy-starved European markets, diminishes Europe’s dependence on Russian gas. This will likely have considerable geopolitical implications in preventing Russia’s ability to exercise an “energy” weapon or to overtly influence political outcomes on the continent, a practice Russia has conducted on several occasions.

By providing European buyers with sufficient alternatives to Russian supplies, the U.S. market would thereby reduce Moscow’s political leverage. This enhances U.S. interests by strengthening Europe’s ability to resist Russian interference in European affairs and help border states in the Balkans and Eastern Europe assert greater foreign policy independence from Moscow.

U.S. coalitions with European nations are an important element to U.S. national security, including efforts to combat international terrorism and prevent humanitarian crises.

Recently, Saudi Prince Alwaleed bin Talal revealed his concern that the kingdom’s oil-dependent economy is increasingly vulnerable to rising U.S. energy production and noted that the North American, shale boom will reduce demand from members of the OPEC. In the 1970’s the cartel imposed two separate oil embargos against the U.S. and its various allies that ultimately rattled an energy-dependent economy. By reducing OPEC’s power on the market, shale boom levels the playing field and forces OPEC to play by all-encompassing rules, rather than by its own self-interests.

China’s economy is a key driver of the increase in energy consumption, but gas only meets about 5 percent of China’s current energy needs. However, some experts predict China will transition to a gas-dominated energy system, especially in more urban locations. Natural gas is seen as a solution to cut carbon emissions and China is eager to lower the pollution that chokes some of its most populous cities. Consumption of natural gas is expected to reach 55 to 60 billions of cubic feet per day in China, close to what the U.S. consumes today.

With China’s proximity to Russia, the launch of a Sino-Russian relationship based on energy dependence seems likely to evolve.. Although this partnership would not be directly against U.S. interests, it would make a possible U.S.-China energy cooperation in the future more unlikely.

Also, stronger relationships between China and Russia could have overall effects on the balance of power in Northeast Asia in a way that could disadvantage U.S. allies in that region. If U.S. shale gas became economically viable to the growing Chinese economy, an energy relationship intertwined with national security and economic implications is possible.

While many countries continue to explore and discover potential sources of unconventional gas and oil, most lag behind the U.S. in their extraction capabilities, transportation infrastructure, and proven reserves. Another factor that denies access to shale resources is the unconfirmed notion of environmental degradation.

Although science has failed to provide reasonable evidence linking fracking and rampant pollution, countries such as Bulgaria, France, Germany, and Ireland have banned all fracking operations. These countries have consequently put the carriage before the horse and prevented their ability to exploit resources that will allow for greater distribution of power.

Texas, on the other hand, understands the role shale gas plays on a global market, and allows the U.S. to better position itself in an energy-reliant market by quelling fears and minimizing governmental interference in the form of imperious regulation.

Conclusion

It wasn’t long ago that the idea of energy independence was considered an unattainable goal. What George Mitchell has done shrinks the gap between achievable and impossible, and makes U.S. energy security objectives more reachable.

If trends in energy exploration and extraction continue, the U.S. will have the option of being less involved in volatile and dangerous areas such as the Middle East. Although natural gas, which is more abundant in America, cannot entirely replace petroleum, its inclusion in global open markets will allow the U.S. to better position itself, strategically and geopolitically.

George Mitchell has laid the foundation, now U.S. policymakers need to have the courage to resist environmental groups and allow states to implore the necessary practices to sensibly utilize their own resources without the restrictive hand of the federal government.

August 19, 2013   1 Comment

Harvard Eco-Activist vs. FracFocus: Duping the Media

A new study from researchers at Harvard University alleges that FracFocus “fails as a regulatory compliance tool.” Those of us who are actually familiar with the issues involved in fluid disclosure know that’s not true, but it seems the media saw a narrative too enticing to question: another alleged “failure” regarding hydraulic fracturing.

Here are a few examples:

  • Bloomberg News: “FracFocus Fails as Fracking Disclosure Tool, Study Finds”
  • Associated Press: “Report highlights problems with fracking database”
  • Dallas Morning News: “Fracking disclosure site contains ‘serious deficiencies,’ Harvard study says”
  • Denver Post: “Colorado fracking database questioned by Harvard study”
  • FuelFix/Houston Chronicle: “Harvard report slams fracturing chemical website”
  • E&E News: “FracFocus has ‘serious flaws,’ Harvard study says”

The problem is, most of these stories were essentially press releases describing publication of the study. Had the reporters done a little bit of investigation and research – like, say, what they do every darn time a study is released that finds hydraulic fracturing to be safe – their reports may have been much different. At the very least, the general public would have actually been able to weigh the claims in the study against the broader context in which it was released.

Here are four items that, for some reason, went underreported or completely unreported.

Lead Author Background

Think back to every study that had funding or assistance from industry. Can you think of any that were reported on without that affiliation mentioned? [Read more →]

April 26, 2013   No Comments

Market Investment Outpace/Outperform Federal ‘Clean Energy’ Investment (GHG reductions without social cost)

“Over the 2000–10 period, the U.S.-based oil and natural gas industry invested $71 billion in technologies that reduce greenhouse gas emissions, far more than the federal government ($43 billion) and almost as much as the rest of private industry combined ($74 billion).”

“The United States has failed to create a comprehensive energy policy that provides robust and consistent support for innovation,” the familiar complaint goes.

Although the Recovery and Reinvestment Act of 2009 stimulated public investments in energy innovation, many of these programs and incentives have since expired or concluded, leaving the energy innovation ecosystem underfunded and skewed towards supporting deployment incentives over technology R&D, demonstration, and manufacturing.

Such comes from Breaking Down Federal Investments in Clean Energy (March 2013), published in Energy Innovation Tracker, a website devoted to providing data on U.S. energy-innovation spending. Authors Megan Nicholson and Matthew Stepp bemoan the state of innovation funding in the U.S., defined as federal spending on greenhouse gas (GHG) emission reductions.

Funded by The Nathan Cummings Foundation, this project’s taxonomy of “innovation investments” aims wrong and misses even that target. [Read more →]

March 20, 2013   6 Comments

Are ‘Fractivists’ Promoting Global Warming? (unintended consequences of a futile crusade

“Privately, scientists and analysts within national environmental organizations are appalled that celebrity fractivism could get in the way of the coal-to-gas shift. They say the fractivists undermine green credibility, and are disturbed by the failure of their movement’s leadership.”

Mainstream environmental groups used to support natural gas, which offers significant public health and climate benefits over coal and is a “bridge fuel” to a clean energy future. But celebrity activists like Mark Ruffalo, who has a house in the Catskills, and Robert F. Kennedy Jr. have led the movement astray with NIMBY opposition to fracing in areas such as upstate New York.

Over the last year, celebrities such as Yoko Ono, Sean Lennon, Robert Redford, Mark Ruffalo, Mario Batali, Scarlett Johansson, Alec Baldwin, and Matt Damon have spoken out against the expansion of natural gas drilling. “Fracing kills,” says Ono, who has a country home in New York. “It threatens the air we breathe,” says Redford.

In fact, “gas provides a very substantial health benefit in reducing air pollution,” according to Daniel Schrag, director of Harvard University’s Center for the Environment. There have been “tremendous health gains” from the coal-to-gas switch, MIT economist Michael Greenstone told The Associated Press. Indeed, air pollution in Pennsylvania has plummeted in recent years thanks to the coal-to-gas switch. “Honestly,” added Greenstone, “the environmentalists need to hear it.” [Read more →]

March 7, 2013   7 Comments

Entertainment Meets Energy: Yoko’s Magical Mystery Frac Tour

“[Sean] Lennon fancifully likened drilling and gas production to awakening a sleeping dragon. His mother said later of the comparison, ‘That’s beautiful,’ but, thinking on it some more, suggested ‘it’s a sign of a devil, actually. In my mind it’s more like a snake. A dragon is too big; you’re giving too much respect for this thing.’”

- Eric Roston, “On New York Shale Gas, Yoko Ono and Sean Lennon Say Let It Be,” Bloomberg.com (January 23, 2013).

That’s Sean Lennon and his famous mother, Yoko Ono, speaking to reporters taking a tour of Susquehanna County, Pa., in an effort to highlight the supposed dangers of natural gas development. They were accompanied by Susan Sarandon, Josh Fox (producer of Gasland) and Ghandi’s grandson, not to mention a bevy of local anti-development celebrities.

But the real story was the long list of folks not invited on the tour, which was billed as an “informational” affair but, as you could expect, was anything but.

The luxurious Mercedes bus wasn’t hard to find in the Montrose Price-Chopper parking lot, so a few colleagues and I tagged along behind, watching as entertainment intersected with energy policy. (I’m the “white haired” guy with the nice jacket in the Bloomberg story, and I was accompanied by Rachael Colley, our Field Director, who captured some great video to memorialize the tour and wrote about it.)

A Day to Remember–or Forget

It was an utterly bizarre day, as might be expected when the star of the event is the woman who made “bed-ins” famous, supposedly broke up the Beatles, and has launched a crazy clothing line conceivable only by someone with $500 million of inherited wealth to throw around. [Read more →]

January 30, 2013   2 Comments

Hollywood’s Fractured Logic

One of the most hilarious – if not tragic – events that we as Americans witness is when Hollywood attempts to “inform” the public about energy issues, which often takes the form of fanatical opposition to oil and natural gas development.

During a staged protest against the Keystone XL pipeline this past summer, for example, Daryl Hannah and Margot Kidder were arrested while voicing their disapproval of U.S. infrastructure development. The protest also featured a large, inflatable black tube that was intended to represent the pipeline, although none of the protestors – including Hannah and Kidder – were able to explain the fact that petrochemicals are used to produce both the plastic and the paints used throughout the event.

The reason these events are so laughably absurd is that, in addition to the rank hypocrisy, Hollywood “stars” are attempting to drive the public debate on complex engineering processes, about which they have little to no actual expertise. Instead, the celebrity of their names is leveraged to secure headlines, and the public is left with the impression that there are significant technical concerns – all based on the words and deeds of multi-millionaire actors and actresses.

To be sure, there’s nothing wrong with acting or making films. We all love to go to the movies, and then argue at dinner afterwards about which of the previews were the best. And certainly no one is suggesting these individuals don’t have a right to protest. But we should all be concerned that the fact-based conclusions of engineers, geologists, and other technical experts can all be wiped away by what’s essentially a loudest-voice-wins mentality.

This brings us to the latest Hollywood foray into complex energy issues: the movie Promised Land. [Read more →]

December 28, 2012   2 Comments

Environmental Battles Under Obama 2

“America can continue paying billions in subsidies annually to finance “green” technologies and agenda-driven science. Or we can generate hundreds of billions a year in royalties and taxes, create millions of jobs, and rejuvenate our economy by applying commonsense regulation to the Big Three consumer-chosen energies–oil, gas, and coal.”

The United States is now Balkanized into five distinct voting blocs, notes Joel Kotkin (two blue, two red, one blue?red). Other political analysts see the nation bifurcating along “makers” and “takers” lines, while still others say 50.6% of the popular vote is hardly a mandate.

In any event, when American voters reelected President Obama, they also returned his wide-ranging agenda at the EPA, Interior, Energy, and Justice departments for “fundamentally transforming” our nation from its limited-government roots. And not in the name of sound science and realistic tradeoffs between market failure and government failure. 

This won’t mean just ObamaCare, higher taxes on businesses and families, deficit spending, and tens-of-thousands of pages of new regulations. It will also bring more disputes over energy and environmental policies, the vanguard of Mr. Obama’s determined campaign to substitute so-called “green” energy for hydrocarbon energy.

Six-Front Interventionism

This conflict will be fought primarily on six battlegrounds.

1. Carbon taxes

Hurricane Sandy presented another pretext for regulating and taxing hydrocarbons. No respectable climatologist or meteorologist believes atmospheric carbon dioxide conjured up the destructive storm, but climate alarmism has always been about political science, not real science. [Read more →]

November 19, 2012   3 Comments

Hydraulic Fracturing: A Threat to Public Health? (Earthworks vs. the scientific method)

A new report from the environmental group Earthworks suggests that shale gas development, including hydraulic fracturing, “risks public health” in the state of Pennsylvania. In addition to the numerous problems with the report itself, a larger issue is passing anecdotal evidence off as hard science.

This trick has clearly emerged among opponents as a way to “counter” what most would consider a conclusive body of evidence confirming the safety of developing oil and natural gas from shale.

Study Problems

Uni Blake, a toxicologist who studies health issues relating to shale development, has fleshed out the main problem with Earthworks’ latest report (which could also be applied to a Cornell veterinarians’study” from earlier this year): findings of a subjective nature that rely on individuals’ recollections of symptoms. According to Blake, such “should not be allowed to take the place of quantitative measures and physical findings.”

Blake also identifies another significant problem with studies that rely on anecdotal evidence: confirmation bias. Organizations like Earthworks and researchers at Cornell (funded by anti-shale groups, including the Park Foundation) have a vested interest in painting oil and natural gas development in the worst possible light. Thus, they will “seek out information that confirms what they already believe, want to believe or want to avoid,” according to Blake – which in this case means talking to individuals who may be predisposed to provide negative feedback about development. [Read more →]

October 26, 2012   10 Comments

Environmentalism’s Sword: Protectionism

Josiah Neeley

Economists are famous for disagreeing among themselves. Yet on the subject of free trade, economic opinion speaks almost with one voice. In a recent survey, 87.5 percent of PhD members of the American Economic Association agreed that “the U.S. should eliminate remaining tariffs and other barriers to trade.”

As Paul Krugman (not exactly a proponent of laissez-faire) has stated, “if there were an Economist’s Creed, it would surely contain the affirmations ‘I understand the Principle of Comparative Advantage’ and ‘I advocate Free Trade’.”

Indeed. Since the days of Adam Smith and David Ricardo, economists have been tireless in demonstrating the role free trade plays in promoting prosperity and harmony for all nations.

Yet the economic consensus in favor of free trade has not always been heeded. Still, it has led to a pronounced reduction in tariffs over the last two centuries. Recently, however, there has been a growing trend among environmentalists to use the tools of protectionism as a means of limiting energy production.

If successful, these efforts could not only threaten some of America’s core industries, but also risk sparking retaliation that could unravel much of the progress made on this front in the last several decades.

An Internal Embargo

Consider, for example, the case of natural gas exports. The United States is currently in the midst of an unprecedented oil and gas boom made possible by the innovative use of technologies like horizontal drilling and hydraulic fracturing.

Increased production has led to a sharp fall in American natural gas prices. Given that natural gas prices remain much higher in Europe and Japan, gas companies are eager to increase exports of liquefied natural gas (LNG). Yet as Evan Soltas recently noted, the Department of Energy is using a Bush-era executive order to impose a “de facto moratorium” on LNG export: [Read more →]

August 30, 2012   5 Comments

America’s Bounty vs. Federal Frac Rules: Will We Lead or Lag the World?

Articles on this blog have consistently made the point that shale gas in the U.S. represents an unprecedented pathway to abundant, low-cost, clean energy supplies. In previous posts it was noted that unconventional gas resources, combined with new production technologies, could potentially break the global oil-natural gas price bond, just as has happened in the U.S.

Shale gas is now subject to active exploration in England, Australia, Poland, Ukraine, China, India, and to a lesser extent, South America. Canada has already moved to the development stage with its shale formations in British Columbia (Montney and Horn River). Mexico shares the prolific Eagle Ford shale formation with Texas, but its state-owned PEMEX has done little to develop that resource yet.

Other nations have rejected the gift of unconventional gas. Romania and Bulgaria, both heavily dependent on Russian gas, have said “no” to shale gas production, as has France. [1]

Even with the dropouts and the laggards the International Energy Agency (IEA) sees unconventional gas comprising more than 30% of total world gas output, up from today’s 11%, by 2035:

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Source: IEA, “WEO 2012 Golden Rules Report, Table 2.4

However, IEA stresses the need to adhere to its ‘Golden Rules” so as to achieve the golden age of gas. [Read more →]

June 29, 2012   No Comments