Jobs and Opportunity: Stories from the Bakken
Brian Carpenter
EID Guest Columnist; Sturgis, S.D.
Sturgis, South Dakota sits on the northern end of the Black Hills, about 30 miles from Rapid City and an hour north of Mount Rushmore. It’s probably best known for the Sturgis Motorcycle Rally held each August. This event is internationally renowned with up to half a million motorcyclists from all over the world attending the rally for a week of fun and entertainment.
But the rest of the year Sturgis is a quiet town with a population of 6,500. Like many small towns across America, economic opportunities can be hard to come by, especially in recent times. Good paying jobs here are scarce, and many young people find it necessary to move away to pursue a future filled with promise. It is a sad realization when one discovers they must travel away from their home and family; sometimes long distances, to make an honest and successful living. That’s why many people here see the economic activity generated by North Dakota’s Bakken play as a tremendous opportunity. Even though the Bakken formation itself is about a five hour drive north of Sturgis, it’s having a dramatic impact on the lives of many people in this area.
One such individual is Bailey Cleland. Bailey is a 21 year old native of Sturgis. He had planned on going into the Navy after high school, but a knee injury disqualified him from service. After some searching he found a good job with Paragon Water Solutions, a North Dakota based company. Paragon treats both the salt and fresh water used in the oil and natural gas development process, removing the drill cuttings from the water and allowing it to be re-circulated throughout well development. They pioneered the use of a vacuum filtration device to clean rig water. During the three or four days it takes them to clean the water in a rig’s reservoir, Cleland and his crew live in trailers at the well site.
Paragon pays $17 per hour to start, with a raise usually offered after three months. The crew works twelve hours per day, eighty-four hours per week. They work for two weeks and then get two weeks off, during which time Cleland returns to Sturgis. Workers get overtime pay for every hour after forty hours. You can see how this compensation can add up quickly or in Cleland’s words “That’s how you really make your money.”
When asked about his opinion regarding oil and natural gas development in North Dakota Cleland said:
“This is an opportunity to change your life. It’s an opportunity to make a lot of money and get ahead and save for your future.”
Cleland said that he enjoys the hard work, the mechanical experience he is gaining, and the problem solving skills he is developing as part of his job. He realizes the work may not last forever and he hopes to work in the industry for approximately five years or just long enough to save up enough money to start his own welding shop.
Jacob Evans tells a similar story. Evans, also a 21 year old Sturgis native, used to work for a local pizza restaurant. Now he works for Marquis Alliance Energy Group. He is responsible for waste material disposal and centrifuge operations. His job involves stabilizing the solid waste material from the well development process. The cuttings recovered are mixed with fly ash and other substances which render them safe for disposal. This mixture is then trucked away to a central site for burial. When asked how he likes his job he said, “I love it! I get to work with heavy equipment, and I make really good money.”
While Evans likes his job he will be the first to tell you the hours are long and the work is hard. He works twelve hours per day and seven days per week during his time on the rig. He says the hard work and long hours are worth it. Evans stated that after less than three months of employment he is making $3,600 per month, plus $50 per day in per diem pay as well as a $100 per day rig bonus for every day he is on the rig. When asked how this new opportunity has shaped his life Evans had some profound and reflective words to share:
“I kind of got into some trouble before,” he said. “This has enabled me to pay off some things and make a new start. It’s a golden opportunity to make a future for yourself. There are more jobs than people, and you can make more money than anything else in the area.”
Evans also brought up a point that is often overlooked. The Bakken Shale does not discriminate and provides good jobs for all citizens. In fact, Evans said it was an especially good opportunity for those who did not plan, or are unable, to go to college.
Jenn Tobin’s husband, Wade, also works in the North Dakota oil and gas fields. The Tobin’s have been married for thirteen years and have three children. They moved to Sturgis from Clear Lake, SD in August of this year. Wade has a degree in industrial engineering. He had worked for a company in Watertown, SD for several years, but a bad business climate led to layoffs and he lost his job. After a couple of other engineering jobs, Wade took a job with Halliburton. Using the knowledge he gained at Halliburton he recently left to open his own business as an independent contractor.
The Tobin family places a high priority on Jenn being able to stay at home with her children during their most formative years. They also wanted to send the kids to a Christian school. The good salary that Wade earns through his employment in the oil and gas industry enabled this to come true with Jenn at home and the children being enrolled at a Christian school in a nearby town. In this case it is clear that the oil and gas industry’s presence here allowed the Tobin’s to reach important goals they set for their family. Jenn is excited about the situation and the opportunity it presents her family.
“I love being at home,” Jenn says. “There are some challenges to being alone sometimes, like when the snow blower is broken and the sidewalk needs to be shoveled. But I am the only child of a single mother. I’ve always been independent and been able to manage. I appreciate the sacrifice my husband is making for his family and the opportunity the natural gas and oil industry has provided us. This is a much needed stepping stone to achieve our long-term goals and provide for our family.”
*Update II* Fracturing Technology Lowering Energy Prices – Even In Areas It’s Not Used
Try as some folks might, it’s just getting tougher and tougher to avoid/ignore/deny the reality of responsible shale development qua massive creator of jobs, revenue and American opportunity. Just this week, the Associated Press highlighted the significant employment gains being made right now in the Buckeye State — where natural gas development is re-invigorating the U.S. steel industry and pumping literally billions of dollars back into communities that could sure use the lift right now.
Of course, you could also look west to North Dakota, where the state is enjoying a nation leading 3.5% unemployment rate thanks to the development of the Bakken. And as those development activities have continued across the country, another benefit is making itself known to the American consumer: significant cost savings in the form of lower energy bills.
In a recent article in the Buffalo News, Gary Marchiori, President of Energy Mark, a local energy services firm in upstate New York, summed this up quite succinctly stating:
Whether they realize it or not, consumers in the Buffalo Niagara region are benefiting from natural gas production in the Marcellus Shale every time they turn their furnace on.
Here, he’s talking about how the responsible development of the Marcellus Shale – and other tight reservoirs in the east – has had the effect of driving down natural gas prices across the entire country, reducing the cost of heating homes, cooking your food and manufacturing just about anything in the world that matters.
In New York, this trend is borne out in estimates for heating costs this year put forward by the National Fuel Company. The company declared that the typical residential household will have winter heating costs of approximately $719 which is a $350 decrease from prices paid just two years ago.
Sounds nice right? Just to make sure, we thought we’d give Mr. Marchiori a call ourselves, having never spoken to the man previous to seeing him quoted in the newspaper. And guess what? Turns out Gary’s a great guy who knows a great deal about energy markets in western New York, and beyond. According to Gary:
Due to excess surplus from shale, you should have [natural gas] stored and retained throughout the year, keeping prices low well through next year. Adding to this stability is presence of major natural gas producers, whose additional exploration and production can be expected to lead to a more predictable supply, thus removing significant market volatility and also helping to keep prices low for the consumer.”
Of course, these benefits are not limited to New York. In fact, the UGI corporation, one of the largest utilities on the east coast providing natural gas to approximately 56,000 customers, also announced that it would be lowering its natural gas prices resulting in cost savings on average of 13.5% to residential customers. While a rate decrease of this magnitude may not seem significant, with this decrease natural gas costs for UGI customers will be about 27% less than they were just three short years ago. This good news may just end up meaning an extra present or two below the Christmas tree this year in many homes thanks to cost savings brought about by shale development.
According to Vicki O. Ebner, Senior Vice President, Customer & Government Relations at UGI, this all attributable to the safe and responsible development of our nation’s shale resources:
The increase of supplies of natural gas from Marcellus Shale has helped create continued downward price pressure on natural gas. We are pleased to pass this cost savings on to our customers as we approach the winter heating season, especially in the midst of extreme price volatility for other energy sources. Now more than ever, natural gas is an affordable, efficient and reliable American fuel, and the energy source of choice for homes and businesses.
All of this comes on top of news released earlier this year from the Energy Information Administration (EIA). EIA stated earlier this year that throughout the northeast, wholesale natural gas prices were down between 2% and 15% over the summer, reflecting both lower regional demands and growing natural gas production from the Marcellus Shale.
Benefits like these can’t be trivialized easily by those opposing natural gas development as it means the chance to breathe a bit easier for our nation’s neediest families. After all with announcements earlier this year indicating that 16 million U.S. children are living below the poverty level this year (highest level since 1962) we are pretty sure that many families appreciate cost savings wherever they can be found. Thanks to natural gas development one place to look is your monthly utility bill.
Update 1- December 1, 2011
Today, the Scranton Times Tribune also featured the cost-savings brought about in northeast Pennsylvania thanks to Marcellus development. The paper adds to this already great story, stating:
- Those who heat their homes with natural gas will get a big break this heating season as rates plunge to their lowest level in more than a decade thanks largely to Marcellus Shale development
- “The state’s Marcellus Shale production, still considered by many to be in it’s infancy, “can in 13 days meet UGI customers needs for an entire year” and “the shale gas has pulled down wholesale natural gas prices nationwide“
- One energy analyst interviewed for the article stated, “a few months ago I would have said prices couldn’t go much lower, but here we are with still lower prices”
Update II- December 2, 2011
The hits just keep on coming. Today, the Des Moines Register confirmed that shale gas is significantly bringing down consumer prices of natural in the Hawkeye State and across the continental United States. The article, titled “Natural Gas Story Warm and Fuzzy” highlighted the benefits shale development is bringing to folks in Iowa, among many other places. Specifically informing Iowans that while they may be preparing for their first sub-freezing temperatures of the year staying warm may be just a bit less costly as:
the price of natural gas, the prime heating fuel in the state, is running at a five-year low thanks to expanded domestic production.
Iowa joins Pennsylvania, New York, Rhode Island (and just about all of New England for that matter) and countless other states enjoying reduced utility bills this winter thanks to the safe and responsible development of our natural gas resources. As our nation continues to struggle with stubbornly high unemployment rates for many Americans struggling to make ends meet it is likely comforting to know that staying warm will cost less and that continued production should keep this the case for some time.
The Amazing Energy Future that the Federal Government Wants to Prevent
Shale oil development in places like North Dakota means ‘OPEC’s days are numbered,’ but federal regulators pursue alternative future with potentially devastating results.
In 2004, North Dakota was the ninth largest oil producing state in the country, producing less than half as much oil per year as the state of New Mexico. In 2010, a mere six years later, North Dakota had climbed to the fourth largest, surpassing energy rich Oklahoma and Louisiana. What happened?
Two words: shale oil. The Bakken formation in the western part of the state, which the U.S. Geological Survey predicted in 1995 had only 151 million barrels of oil, turned out to be one of the largest onshore oil fields ever discovered in the United States — in 2008 the USGS famously revised its estimate upward by an amazing 25-fold, projecting that the Bakken could hold more than four billion barrels of oil.
This incredible story was told in detail this weekend in the Wall Street Journal‘s weekend interview, ” How North Dakota Became Saudi Arabia,” which focused on Harold Hamm, the oil man credited with discovering the massive energy potential in the Bakken:
[S]ince 2005 America truly has been in the midst of a revolution in oil and natural gas, which is the nation’s fastest-growing manufacturing sector. No one is more responsible for that resurgence than Mr. Hamm. He was the original discoverer of the gigantic and prolific Bakken oil fields of Montana and North Dakota that have already helped move the U.S. into third place among world oil producers.
How much oil does Bakken have? The official estimate of the U.S. Geological Survey a few years ago was between four and five billion barrels. Mr. Hamm disagrees: “No way. We estimate that the entire field, fully developed, in Bakken is 24 billion barrels.”
Of course, none of this would have been possible were it not for horizontal drilling and hydraulic fracturing, both of which are needed to unlock the vast deposits of oil and natural gas in shale deposits across the country.
Yet even with this amazing success story, the America’s ability to reduce its reliance on OPEC is far from written in stone, and indeed seems to be under attack by federal regulators whose actions could undermine this renaissance just as its getting started. As the WSJ further explains:
[Hamm's] only beef these days is with Washington. Mr. Hamm was invited to the White House for a “giving summit” with wealthy Americans who have pledged to donate at least half their wealth to charity. (He’s given tens of millions of dollars already to schools like Oklahoma State and for diabetes research.) “Bill Gates, Warren Buffett, they were all there,” he recalls.
When it was Mr. Hamm’s turn to talk briefly with President Obama, “I told him of the revolution in the oil and gas industry and how we have the capacity to produce enough oil to enable America to replace OPEC. I wanted to make sure he knew about this.”
The president’s reaction? “He turned to me and said, ‘Oil and gas will be important for the next few years. But we need to go on to green and alternative energy. [Energy] Secretary [Steven] Chu has assured me that within five years, we can have a battery developed that will make a car with the equivalent of 130 miles per gallon.’” Mr. Hamm holds his head in his hands and says, “Even if you believed that, why would you want to stop oil and gas development? It was pretty disappointing.”
Washington keeps “sticking a regulatory boot at our necks and then turns around and asks: ‘Why aren’t you creating more jobs,’” he says. He roils at the Interior Department delays of months and sometimes years to get permits for drilling. “These delays kill projects,” he says. Even the Securities and Exchange Commission is now tightening the screws on the oil industry, requiring companies like Continental to report their production and federal royalties on thousands of individual leases under the Sarbanes-Oxley accounting rules. “I could go to jail because a local operator misreported the production in the field,” he says.
The impact of the “regulatory boot” and federal delays have a greater cost than hamstringing America’s capacity to produce energy. They also undermine the type of job creation and economic growth that a struggling economy so desperately needs:
Mr. Hamm believes that if Mr. Obama truly wants more job creation, he should study North Dakota, the state with the lowest unemployment rate in the nation at 3.5%. He swears that number is overstated: “We can’t find any unemployed people up there. The state has 18,000 unfilled jobs,” Mr. Hamm insists. “And these are jobs that pay $60,000 to $80,000 a year.” The economy is expanding so fast that North Dakota has a housing shortage. Thanks to the oil boom—Continental pays more than $50 million in state taxes a year—the state has a budget surplus and is considering ending income and property taxes.
Less reliance on OPEC. More high-paying jobs. Budget surpluses. Lower tax burdens for everyone. These are undeniable benefits of responsible oil and gas production — particularly in states with significant shale resources such as Pennsylvania (Marcellus shale), Texas (Eagle Ford shale), Louisiana (Haynesville shale), and now Ohio (Utica shale) — that the federal government should be encouraging. Instead, members of Congress are pushing for the Environmental Protection Agency to ban hydraulic fracturing, thereby cutting off at the knees America’s energy revolution. The President, meanwhile, is threatening to curb domestic oil and gas production through higher taxes.
Instead of trying to shut down North Dakota’s model of more American energy production, more jobs, and more public revenue, maybe the federal government should be taking lessons from it.
Just The Facts: University of Pitt. Prof. Sets the Record Straight on Hydraulic Fracturing
Just The Facts: University of Pitt. Prof. Sets the Record Straight on Hydraulic Fracturing
Positive benefits created by fracture stimulation technology continue to pour in from coast to coast
In an interview with KDKA radio’s Mike Pintet, Professor Radisav Vidic of the University of Pittsburgh’s Department of Civil and Environmental Engineering, sets the record straight on hydraulic fracturing – the 60 year-old energy stimulation technology that has been safely used to produced domestic oil and gas over 1.1 million times. Dr. Vidic, who holds a Ph.D. in environmental engineering, underscores hydraulic fracturing’s tight regulations and long and clear record of environmental safety.
On Hydraulic Fracturing’s Clear, Long Record of Protecting Groundwater: “There hasn’t been any proven case”
- “There hasn’t been any proven case that shows that the hydraulic fracturing itself causes contamination to groundwater. First of all, the well casing — the way it’s designed to be used — there’s multiple barriers there through the aquifer so there’s really no communication between the material that’s injected into the well and a groundwater aquifer. … This water is injected at a 8,000 feet depth so the chances of this water coming up all the way to the surface is very small simply.”
On Hydraulic Fracturing Fluid Disclosure: “Go on the DEP’s website”
- “You can go on the DEP website, and there is a list chemicals that are being used in hydro fracturing operation. This list contains a total of I think about 78 chemicals. But you have to understand not all of them are used on every well, every time. This is a list of all the chemicals that are ever being used in the hydrofracturing operation. A subset of those chemicals are used on each well depending on which company is doing it and what is their technology, and approach to hydro fracturing the well. The industry is required to disclose this information, and the DEP has a list of all the chemicals that are being used for hydro fracturing operations.”
On GasLand Claims About Flaming Faucets: “It’s not caused by drilling”
- “It’s not caused by the drilling, it’s caused by the methane that’s coming from some place.”
What are others saying about domestic oil and natural gas production enabled by hydraulic fracturing? We’re glad you asked.
- Without fracture stimulation, ND’s economic boon wouldn’t be happening: “Hydraulic fracturing — or frac’ing — also is used for natural gas, and it’s controversial. The fluid is mostly water, but it also contains about one-half percent chemicals. Despite industry assurances, environmental groups worry frac’ing is polluting groundwater, and they want more regulation. Some even want an outright ban. But without this technology, the boom in North Dakota wouldn’t be happening.” (NRP, 8/18/10)
- Hydraulic fracturing helping to create hundreds of jobs in rural Pa.: “New York State lawmakers made a grand show of Pennsylvania’s Marcellus Shale gas drilling procedures last week. They held our state up as an example of what not to do in a recession and inferred the state is selling its environment out so that it can generate the economy the gas drilling brings. To our friends to the north we would say that sword holds a double edge. … This past week the Sun-Gazette reported on the rapid growth of the cement mixing Halliburton plant off Route 405 in Clinton Township, where ground was broken a year ago. By year’s end there will be about 100 jobs, and there are projections that the plant will eventually employ 400 people. Plants with 400 jobs especially new ones aren’t plentiful in our region. (Williamsport Sun-Gazette Editorial, 8/15/10)
- Shale drilling could become an economic gusher for Michigan: “The $1.2 billion-a-year oil and gas industry is a modest player in Michigan’s economy, but the situation could change because the shale-rich Great Lakes State could be sitting atop the next in-demand natural resource, experts said. Advances in technology and $3-a-gallon gasoline have made deep-seated shale oil more accessible and desirable, they said. … The industry’s fortunes took a turn for the better when the state sold $178 million in leasing fees in a single auction in May. That equaled the total amount of money the state has collected in leasing fees since the 1920s, a telltale sign that interest in shale drilling is heating up. (Detroit News, 8/18/10)
- Roustabouts wanted as companies rush to drill for gas: “Workers looking for jobs in the region’s booming natural gas industry may try their hand as a “roustabouts” — general laborers who work physically grueling 12-hour shifts for 14 consecutive days in all kinds of weather to build and remove drilling pads and assist production. “It’s demanding labor, working long stretches without days off. You have to be ready to do quality work and do it a long time. Once they start production, they don’t stop,” said Richard Guenther, an employee relations specialist with Chesapeake Energy Corp. in Mt. Morris, Greene County. Pay can range from $10 to $20 an hour, plus overtime. (Tribune-Review, 8/18/10)
- 1 million wells have been fractured without a single case of documented harm to groundwater: “Water is mixed with sand and some chemicals and then pumped at high pressure into the well bore to shatter the Bakken shale formation, which can be as hard as a driveway. The “fracking” creates fissures that free up trapped oil and natural gas to flow up to the well bore. … Increasingly refined hydraulic fracturing and horizontal drilling techniques have doubled Montana’s oil-and-gas production, Richmond said. In the United States, approximately 35,000 wells are “fracked” each year and 1 million wells have been developed without documented harm to groundwater, he said. … Oil in the Bakken lies well below groundwater supplies. (Billings Gazette, 8/14/10)
- Marcellus Shale’s economic impact is growing: “Marcellus Shale drilling is still in its infancy in West Virginia, but the industry is already contributing millions of dollars to the state’s economy. It may be awhile before the gas industry’s economic impact rivals that of coal in West Virginia. Mike Shaver, clad in a hard hat and muddy boots, surveys a gas drilling rig on a site in Upshur County. As a crew drills towards the Marcellus Shale, a pipe pumps water and dirt out of the hole in the earth and into a huge pit of muddy, rock-filled water. Shaver looks at the water, trying to determine how much farther the drill has to go before reaching shale gas. (Huntington Herald Dispatch, 8/14/10)
- Fracturing enabling a “transformative opportunity”, says. fmr. Gov. Ridge: “Former Gov. Tom Ridge this afternoon called Marcellus Shale gas production a “transformative opportunity” for Pennsylvania during an appearance Downtown in his new role as a strategic adviser to an industry group. Still dressed in the jeans and checkered shirt that he wore to inspect production operations in Washington County earlier in the day, Mr. Ridge hailed the industry’s economic potential but also stressed the need to manage environmental concerns. (Pittsburgh Post-Gazette, 8/17/10)
- Director of N.D. Dept. of Mineral Resources: “If [the FRAC Act] happens, I can tell you that our Bakken and Three Forks drilling will have to stop for two to three years,” he said. He said when it happened to Alabama for coalbed methane, “they completely had to shut the door” for two years.
- Pomeroy to Pelosi: “Imposing new regulations now will do nothing to protect drinking water and will only serve to slowdown development resulting in the loss of thousands of jobs …”
EPA may halt oil activity
Pomeroy asks to turn down regulations
By Eloise Ogden
Minot (N.D.) Daily News
July 17, 2010
Rep. Earl Pomeroy, D-N.D., is asking House leadership to turn down any new regulations on hydraulic fracturing.
A state minerals expert also says any new regulations on hydraulic fracturing would have a catastrophic impact on the oil development in North Dakota.
Pomeroy sent a letter Friday to Speaker Nancy Pelosi urging her to reject any proposals that would place burdensome, new regulations on hydraulic fracturing in legislation
aimed at responding to the Gulf oil spill.
Some members of Congress have discussed attempting to attach new regulations on hydraulic fracturing to legislation aimed at addressing that tragedy, according to Pomeroy.
Lynn Helms, director of the N.D. Department of Mineral Resources, during a presentation in Minot in May, spoke about if the Environmental Protection Agency decides to regulate hydraulic fracturing.
“We really have got to stop that from happening,” he said. He said his department put together a document which tells how North Dakota regulates it and has gone to EPA headquarters and Gov. John Hoeven.
“If this happens, I can tell you that our Bakken and Three Forks drilling will have to stop for two to three years,” he said. He said when it happened to Alabama for coalbed methane, “they completely had to shut the door” for two years.
“By the time they got the rules written, the play had moved on and it has never been what it was before,” he said. “So that’s a huge cloud sitting over our industry a major impact. It would just reduce our activity to almost zero for two to three years.”
In his letter to Pelosi, Pomeroy said, “I believe that this would be a mistake and would find little support in the Senate. The EPA is currently undergoing a congressionally mandated study into hydraulic fracturing that is expected to be completed in 2012.”
Pomeroy called it “irresponsible” for Congress to enact new regulations
before the results of that study are known.
“Imposing new regulations now will do nothing to protect drinking water and will only serve to slow down development resulting in the loss of thousands of jobs and more imported oil. It is critical that any legislation related to the Gulf oil spill focus on responding to that tragedy and not include additional burdens on hydraulic fracturing,” he said.
Pomeroy pointed out that over the past two years, North Dakota has significantly increased its oil production, rising from the ninth largest oil producing state to the fourth. “This increase in production has resulted in a significant state budget surplus and the nation’s lowest unemployment rate,” he said.
Pomeroy toured oil-field operations in the Stanley area last week. “During these visits I saw firsthand the significant safeguards that are put into place to protect groundwater during hydraulic fracturing operations,” he said.
He said North Dakota currently has strong regulations on oil and gas development that more than adequately protect groundwater.
“These requirements include strict safety requirements on the storage and disposal of hydraulic fracturing fluid and on encasing the well to avoid leaks. The initial phases of wells are encased in several layers of cement from the surface to below the level of the deepest potable water source and below that level, wells are encased in an additional layer of cement to ensure that groundwater is in no danger of contamination,” he said.
Pomeroy said the regulation of hydraulic fracturing is best left to the states
. “Regulators in each individual state have a better idea of what steps are necessary to protect their residents and environment. Additionally, they are better equipped to implement commonsense regulations that fit their states unique needs than a catchall Environmental Protection Agency regulation,” he said.
NOTE: Click HERE to view this article online and HERE to view Rep. Pomeroy’s letter to Speaker Pelosi.
Unable to pass the bill in the previous two sessions of Congress, or secure even a single committee hearing during that time, proponents of the so-called FRAC Act re-introduced legislation earlier this week that seeks to fundamentally re-write a 37-year-old federal statute – with an eye on assigning the Environmental Protection Agency (EPA) direct authority over the regulation of hydraulic fracturing for the first time in the history of the Act, the technology, or the agency itself.
In a statement, Energy In Depth’s Lee Fuller underscored the potential impact this far-reaching, Washington-knows-best policy could have on America’s economy and job creators, as well as our nation’s energy security:
“Hydraulic fracturing is one of the most critical processes that occurs at the wellsite; it’s also among the most stringently regulated. With this technology, it’s possible that literally quadrillions of cubic feet of clean-burning natural gas can be rendered available for American consumers in the future, resources that would otherwise be too deep and diffuse to access. It’s a technology that’s been around a long time, stretching all the way back to the Truman administration. But it’s also a technology that’s never been more important to our nation’s economic and environmental future than it is today. Unfortunately, somewhere along the way, it became a victim of its own success. If hydraulic fracturing weren’t as patently effective as it is, it’s tough to imagine it’d be as strangely controversial as it has become.”
And today’s Wheeling News-Register reports this on the misguided legislation:
Lee Fuller, executive director of Energy In Depth, went further than Klaber, saying the FRAC Act is “based on fundamentally incorrect information,” noting the Safe Drinking Water Act was never used to regulate fracking. “Its backers say it’s about forcing companies to disclose the composition of the … solution that’s not water and sand, even though just about every state regulatory agency in the country will attest that such information is already available,” Fuller added.
Those responsible for regulating oil and natural gas development, and fracture stimulation technologies, are in agreement with energy producers on the facts: this 60 year old technology has never impacted groundwater, thanks in large part to the industry’s commitment to protecting the environment and the common sense state regulations and laws in place. This from Oklahoma’s News On 6 (also on EID’s YouTube page):
Chesapeake Energy’s Chairman and CEO, Aubrey McClendon, said he welcomes the study. “I think the EPA will do a good job of examining it,” McClendon stated, “and if we’re doing something wrong…somehow hurting the environment and we don’t know about it, then we want to fix what we’re doing wrong.”
But McClendon said Chesapeake has hydraulically fractured formations 14,000 times since 1989, and the record shows there isn’t anything wrong.
Larry Nichols, Devon Energy Executive Chairman, agrees. “Show us one single well where hydraulic fracturing has caused any problem,” Nichols said. “I’ve said that in testimony before Congress, and no one has yet to come up with one single well where hydraulic fracturing has caused a problem, that anyone can document with any scientific accuracy.”
The Oklahoma Corporation Commission has oversight of all drilling in the state, including fracking. Commissioner Bob Anthony believes the EPA study is a political scare tactic. “The facts are,” Anthony said in a written statement, “that hydraulic fracturing has been used in Oklahoma about 100,000 times in the last 60 years, with no documented cases of groundwater contamination.”
Nichols worries that the Obama administration’s goal, through the EPA study, is to wrest control of onshore drilling from the states. His fear is that they would then do to onshore drilling what they’ve done to offshore — “Shut it down,” he said.
A quick look around the U.S. at the overwhelmingly positive impacts that hydraulic fracturing – which is tightly and aggressively regulated by energy-producing states – continues to have, all of which would be jeopardized if the FRAC Act were to become law:
MT Gov. Brian Schweitzer, Western Governors Association chair, and fmr. Democratic Governors Association chair: “We’re increasing in Montana by thousands of jobs in drilling in what’s called the Bakken (Shale Formation) in eastern Montana,” the state’s Governor Brian Schweitzer told Fox News. “It is the richest geologic structure in all of the United States. Recent estimates are that there’s about 25 billion barrels of recoverable oil in the Bakken in North Dakota and Montana. To put that in perspective we import about 4 billion barrels a year. We use about 6 billon barrels a year. So this one structure in North Dakota and Montana could be one of the keys to energy independence in the short term.” (Fox News, 3/17/11)
Louisiana Association of Business and Industry (LABI) President Daniel Juneau: The second factor that can greatly expand economic activity in the state is for the federal government to stay out of regulating shale oil and gas drilling activities. In 2004, the EPA concluded a 5-year study that concluded that the hydraulic fracturing process used in shale drilling was safe. Now the current EPA wants to go back and revisit the issue. If the EPA outlaws hydraulic fracturing, it will be the death-knell for shale oil and gas production. There is currently a tremendous amount of economic activity going on in northwest Louisiana from shale gas drilling in the Haynesville Shale play. Across central Louisiana, there is a potential for as much as 70 billion barrels of crude oil from the Tuscaloosa Shale play. Production from these shale plays can be a real shot in the arm to jobs and investment in our state. (Bastrop Daily Enterprise Op-Ed, 3/16/11)
“Penn State study shows sales tax revenue higher in Marcellus counties”: A new Penn State University publication examines state tax collection data and specifically compares counties where there is drilling and production activity in the Marcellus shale play with that of non-Marcellus counties. … The data indicates that local spending has increased in counties with major Marcellus activity. State tax collections of the personal income tax and realty transfer tax show similar differences between Marcellus and non-Marcellus counties. (Oil & Gas Journal, 3/16/11)
“Why North Dakota Is Booming: They’re drilling for oil, attracting high tech, and keeping the tax burden moderate. Result: 3.8% unemployment.” Living on the harsh, wind-swept northern Great Plains, North Dakotans lean towards the practical in economic development. Finding themselves sitting on prodigious pools of oil—estimated by the state’s Department of Mineral Resources at least 4.3 billion barrels—they are out drilling like mad. And the state is booming. Unemployment is 3.8%, and according to a Gallup survey last month, North Dakota has the best job market in the country. Its economy “sticks out like a diamond in a bowl of cherry pits,” says Ron Wirtz, editor of the Minneapolis Fed’s newspaper, fedgazette. (Wall Street Journal Op-Ed, 3/15/11)
PA State Rep.: Marcellus Shale’s “powerful [economic] ripple effects are spreading throughout the commonwealth”: And in those once-depressed counties where clean natural gas trapped in the deep shale rock is now being reached for energy consumers through high-technology horizontal drilling and hydraulic fracturing, residents are enjoying a dramatic rebirth of jobs, business growth, and income. And, as a result, the Pennsylvania state treasury and the municipal governments in those regions are already receiving significant boosts in tax revenue … Pennsylvania natural gas is creating jobs, generating income, and boosting tax revenues. And while much of the economic activity remains concentrated in the Marcellus Shale regions, powerful ripple effects are spreading throughout the commonwealth. (The Sentinel Op-Ed, 3/12/11)
“Increased Drilling Creates Jobs”: An oil drilling boom across the American West is creating a wealth of job opportunities at a time when most segments of the economy remain sluggish. The boom is the result of new and updated technologies allowing companies to go after oil reserves that until recently were trapped in shale formations, making them too expensive and difficult to tap even five or ten years ago. “This is solid rock, so it’s not like a conventional resource where you just drill a well and the oil starts to flow,” Kathleen Sgamma, Director of Government and Public Affairs for The Western Energy Alliance, explained. “We have to crack that rock through a process that we call hydraulic fracturing where we pump high pressure water and a mixture, and sand down into the formation to crack the rock and create micro-fissures in the rock and prop it open with sand.” (Fox News, 3/17/11)
“This is an employment opportunity for the region. It’s going to provide a new workforce opportunity”: This summer, Clarion University’s Venango Campus will begin offering a natural gas technology program. “Obviously the Marcellus Shale industry is emerging in Pennsylvania and beyond, and it is going to be requiring a huge workforce,” said Christopher Reber, Executive Dean of Clarion University-Venango Campus. “There’s already been a phenomenal investment in Pennsylvania.” … “This is an employment opportunity for the region. It’s going to provide a new workforce opportunity, and certainly we’re committed to promoting economic development for the whole area,” Reber said. (WYFX-TV, 3/16/11)
ND’s Oil Boom Has “has created a $1 billion state budget surplus”: North Dakota, the state with the nation’s lowest unemployment rate, capped a decade of economic prosperity with dramatic population growth in its biggest cities. … North Dakota is enjoying an oil boom in the western part of the state, drawing workers from across the country. Williston, in oil country, grew 17.6% to 14,716. The oil windfall has created a $1 billion state budget surplus. … “We feel extremely fortunate for the position we’re in,” says North Dakota Commerce Commissioner Paul Govig. (USA Today, 3/17/11)
Hydraulic Fracturing, American Oil Production Creating Blue Collar Jobs: Increased drilling in the Niobrara Shale Formation in eastern Wyoming and Colorado is also creating job opportunities. “Currently, Noble Energy has over 60 jobs that are available in this area,” according to Stephen Flaherty, Director of Government Relations for Noble Energy. “The opportunities range from field pumpers, which just require a high school degree and no oil field service all the way up to petroleum engineers and everything in between; information technology services and accounting, just about every discipline.” (Fox News, 3/17/11)
From Williamsport to Watford City: Thanks to HF, “Anyone in the region who wants a job can find one”
Thanks to advancements in horizontal drilling and hydraulic fracturing technology, America’s oil and natural gas industry is doing its part to put folks back to work by leveraging our nation’s vast energy reserves into jobs, revenue and opportunity for those who need it. Whether it’s natural gas from the Marcellus or oil from the Bakken, thousands of jobs are being created, local economies are suddenly flourishing and America is strengthening its energy security by the day.
At a public hearing yesterday (click HERE for video) in Williamsport, Pa., members of the state senate heard from local economic and workforce development officials on the economic impact that the natural gas industry is having on the state’s economy. Larry Michael, executive director of Penn College’s Workforce & Economic Development program, summed it up best in this morning’s Williamsport Sun-Gazette:
“We believe that the economic and workforce opportunities are huge,” he said. “The magnitude of this opportunity will not only transform this region of the state but will provide the foundation resources to greatly enhance the overall economic health and job creation opportunities of the commonwealth.”
Industry representatives testifying at the hearing laid out in detail the number of jobs being created:
Perry Harris, northeast U.S. district manager of Halliburton, said the company has 750 state residents on its payroll and is looking for new workers every day. He noted recent development by the company with its facility near Montgomery, where 181 people are employed, and more will be hired.
Michael Narcavage, manager of corporate development for the Chesapeake Energy Corp., said… In the past year, the company has expanded its statewide workforce from about 250 full-time personnel to more than 1,100, many of those jobs in Bradford County, where the majority of the company’s operations are located.
Just to the west of Williamsport in Clinton County, the Lock Haven Express reports today that hundreds of new jobs have arrived in their community as well, thanks entirely to the responsible development of shale gas:
The Marcellus Shale natural gas play dominated Wednesday’s Clinton County Economic Partnership meeting. Partnership President and CEO Mike Flanagan reported about a dozen Marcellus gas-related companies have located in Clinton County, resulting in 200 new direct jobs and having a positive, indirect impact on trucking and construction-related companies in the area.
So what’s at stake if Washington moves to halt or restrict the use of HF?
U.S. Sen. Byron Dorgan (D-N.D.), senior member of the Energy and Natural Resources panel, summed it up best yesterday on the Senate floor: Domestic oil and gas development “will stop very quickly if we can’t continue what is called hydraulic fracturing”
Click HERE to watch this speech
“There is up to 4.3 billion barrels of recoverable oil using today’s technology [in the Bakken formation], according to the U.S. Geological Survey. That, plus the gas shale plays in much of the country and others, we’re beginning to produce a bit more oil and gas at this point in the country. That will stop very quickly if we can’t continue what is called hydraulic fracturing. That’s a big problem that we have to deal with.”
He went on to defend the safety record of 60-year-old fracturing technology, citing its importance to all states that rely on the successful production of our nation’s natural resources:
“I think most of us in this Senate who come from areas where we produce this fossil energy believe that [hydraulic fracturing] has been done for 50 years without a problem and now it is under some siege. … But we need to continue — and we will — with the production of oil in this country and natural gas.”
Clean Meets Green: U.S. Natural Gas Production Helping to Slash CO2, Create American Jobs
How does the United States start down the path of seriously addressing its nation’s energy crisis, reduce its deep and growing dependence on unstable regions of the world for energy, and at the same time maintain our competitive edge in the global marketplace? And oh, how do we put tens of thousands of Americans back to work who are struggling during one of the most drawn out economic downturns in a generation?
Keep Reading »
EID Reinforces the Imperative to Continue to “Let states handle fracking” Effectively
As the debate over responsible oil and natural gas development continues, particularly as it relates to the 60 year old process called hydraulic fracturing – the critical technology used more than 1.1 million times nationally in energy-producing states without ever impacting groundwater – Energy In Depth remains at the tip of the spear. In a Casper Star-Tribune letter to the editor today, EID’s executive director Lee Fuller writes this under the headline “Let states handle fracking”:
Tom Doll, supervisor of Wyoming’s Oil and Gas Conservation Commission, understands that hydraulic fracturing is an effective, environmentally sound and critical energy production technology. “The Commission has regulated hydraulic fracturing since 1954,” Mr. Doll, a petroleum engineer, has said. “Contrary to what has recently been in the press, the Commission has no documented cases of hydraulic fracturing negatively impacting ground water.”
What does Mr. Doll think about a one-size-fits all Washington, D.C., takeover of hydraulic fracturing currently being pursued by some in Congress? “We feel that we should administer our rules and regulate [fracturing] and we don’t need the help of the federal government in this regard,” Doll says, adding that states are “doing a good job.”
Wyoming, and a host of other energy-producing states, are doing a good job of regulating fracturing. Fracturing has been used to stimulate oil and natural gas production in more than 1.1 million wells since it came into commercial use in 1949 and it has never impacted or contaminated groundwater. The EPA, top state environmental regulators and a host of independent academics and energy experts have also confirmed this fact.
Mr. Fuller’s comments follow similar comments from the top energy production watchdog in North Dakota. This from the Minot Daily Times over the weekend:
“The Industrial Commission and the Department of Mineral Resources have made it no secret that we don’t think the EPA should regulate hydraulic fracturing. This is a way for the average citizen of North Dakota, if they feel that way or if they feel the opposite way, to voice their opinions to EPA,” Lynn Helms [director of the Department of Mineral Resources] said.
You see, individual states are best positioned and situated to regulate fracturing, as state regulators have the best ‘know-how’ of local and regional geology. And energy-producing states are taking commonsense steps to ensure that this process is tightly and effectively regulated. This from the Associated Press under the headline “Arkanasas board set to create rule on fracking”
Commission Director Larry Bengal says under the Arkansas rule, the operator would report the specific names and concentrations of the chemicals used during fracking. That information would be on the commission’s website. The rule also would require operators to provide information before starting the fracking process to prove that well casings can withstand pressure and won’t leak.
The hydraulic fracturing process uses millions of gallons of water, mixed with chemicals and sand, which are pumped at high pressure thousands of feet underground to create fissures in the rock — known as shale — and release the gas. According to the Oil and Gas Commission’s website, 99.5 percent of fracking fluid is sand and water. But small amounts of chemicals also are used to reduce bacteria buildup in the well, reduce friction and prevent corrosion.
This is a story of American ingenuity, driven by technological advancements. The results? Expanded access to reliable supplies of homegrown oil and natural gas and tens of thousands of good-paying American jobs at a time when they’re most needed. Here’s what they’re saying:
- Bakken used as model for other oil plays. Associated Press. “Know-how gained from North Dakota’s once-perplexing Bakken shale formation is being used to exploit other onerous oil plays across the globe. Pushed by high crude prices, companies in just four years have nearly perfected technology to tap oil trapped in a thin layer of dense rock nearly two miles beneath the surface in western North Dakota. Unlocking the Bakken using advanced horizontal drilling and hydraulic fracturing techniques has propelled the state from the nation’s ninth-largest oil producer in 2006 to its fourth-largest today. A record number of rigs are piercing the state’s oil patch.
- New firm opens, plans to employ 140 people. Williamsport Sun-Gazette. “Meadville-based Universal Well Services Inc., a natural gas and oil well services company, has opened a new facility on Arch Street and has plans to hire 140 people within the next 12 months. Already on staff here are 70 employees, according to Bob Garland, senior technical adviser at Universal’s corporate office. The company brought some employees from its existing facilities, but most of the individuals hired here are locals, he said. “We are attempting to hire locals as much as we can because that is important,” Garland said.
- Marcellus Shale Brings Promise Of New Jobs To Region. WPXI-TV. “Experts are predicting the Marcellus Shale industry will be around in western Pennsylvania for at least the next 50 years and thousands of people will be needed to work here. On Friday, educators met at Waynesburg University to figure out how to give students the education they need to get those jobs. “We are talking to the superintendents of schools and counselors about an energy education looks like,” said Barbara Kirby of Waynesburg University. … The Marcellus Shale is booming. … A recent Penn State University study shows the impact of Marcellus drilling jobs in Pennsylvania. The numbers have increased every year and will reach an estimated 107,000 jobs in 2010.
- DeSoto library pays off bond two years early. Shreveport Times. “The Library Board of Control recently authorized the payoff of a 2002 property tax that funded construction of new library branch buildings in Pelican and Stonewall. Paying the slightly more than $1 million left in the bond issue saved taxpayers $410,000 in interest. The bonds officially will be paid Nov. 15. “We have saved a lot of money,” board President Katherine Freeman said. Construction is under way on a new branch location in Logansport. But it’s being paid with cash on hand. The library board, like other governing entities in the parish, has the extra money because of the development connected to the Haynesville Shale.
