*UPDATE* Fox, ABC, and Truth in “Journalism”
During yesterday’s House Energy and Environment Subcommittee hearing on EPA’s draft Pavillion report, things got off to a circus-like start when New York filmmaker and Gasland producer Josh Fox deliberately violated committee rules to get himself arrested. But there's another story involving Mr. Fox and the Gasland crew that suggests his PR stunt may have involved something deeper and more disturbing...
UPDATE (see bottom of page)
During yesterday’s House Energy and Environment Subcommittee hearing on EPA’s draft Pavillion report, things got off to a circus-like start when New York filmmaker and Gasland producer Josh Fox deliberately violated committee rules to get himself arrested. The stunt worked, and news of the hearing largely focused on Fox’s arrest. The hearing itself actually should have made significant headlines, especially when the EPA backpedaled from its own accusation in the draft report about hydraulic fracturing causing water contamination.
But there’s another story involving Mr. Fox and the Gasland crew that suggests his PR stunt may have involved something deeper and more disturbing.
As the hearing officially began, ranking member Rep. Brad Miller (D-NC) stated that ABC News had also been denied the opportunity to film the hearing, and the subcommittee should allow for greater access. Miller challenged the standing rule that no outside unaccredited filming was allowed, in part by stating:
“…it’s clear we have space in this room to film this hearing. If you claim that rule does not allow them to film, or allows you the discretion to turn them away, I move the rules be suspended so the fella who wanted to film for HBO be allowed to film this hearing and that ABC be allowed to film this hearing and all God’s children be allowed to film this hearing until the room is too full for us to conduct our business.”
The fact that even ABC had been turned away showed an unwillingness to allow public access at all, Miller suggested. The congressman’s motion to allow ABC (and Josh Fox) to return and film the hearing required a vote, which requires a quorum, so the hearing was suspended for 45 minutes until enough members could be rounded up to enter the room and vote (the motion was ultimately rejected).
Had ABC not been one of the outlets trying to film, it’s unlikely that such a spectacle would have occurred. Would a sitting member of Congress really hold up a major public hearing to accommodate the demands of a non-credentialed, camcorder-wielding activist? In that sense, ABC provided a convenient cover.
But after the hearing ended, an interesting revelation was made: As it turns out, ABC didn’t send a film crew to the hearing at all. As POLITICO reported, the videographer who had been turned away was actually hired by Gasland producer Trish Adlesic to film the hearing, not by ABC. It looked, at least for the moment, like the situation was nothing more than staffers receiving conflicting (and bad) information.
Or was it more deliberate?
Adlesic, the Gasland producer, and Matthew Sanchez – its editor – both attempted to film the hearing, and both were turned away. All of this demonstrates a broader and more coordinated effort on the part of Josh Fox’s crew — something beyoned what Fox later referred to as an act “done in an impromptu fashion.” The hearing, it should be noted, was broadcast live and in its entirety on C-SPAN and via live stream on the subcommittee’s webpage.
But how did ABC News play into this?
Last night, after seeing the countless news stories about Fox’s arrest, the Energy and Environment Subcommittee released a statement about Josh Fox and the reason Capitol Hill police removed him from the room. That statement also referenced ABC:
It has been misreported that the Committee turned away an accredited ABC News crew prior to the hearing. While a film crew arrived at the hearing claiming to be with ABC News, the ABC News Washington bureau confirmed to the Committee it was unaware of sending any crew to tape the hearing.
It appears, then, that the videographer in question was not only hired by a Gasland producer, but had also falsely claimed to be representing ABC in order to gain access to the hearing.
Of course, by then, the stories had already been written. Not only had reporters already submitted stories referencing ABC News being kicked out, but activist groups were already creating petitions citing the “unlawful” act of denying “journalists” access to the hearing. As one such group, Water Defense, wrote in a plea sent out only hours after the hearing:
Josh [Fox] was charged with unlawful entry. An ABC News crew was also asked to leave. Since when is it unlawful for filmmakers and news organizations to document a hearing of major public importance?
With his efforts to uncover the truth about fracking and the natural gas industry, Josh Fox helped give our movement a huge boost and educated millions of Americans about this important issue. He and others should be allowed to film all Congressional hearings on fracking in order to better inform the public on this important issue.
All of this raises important questions. Did Josh Fox and his crew tell other activist groups that ABC had been denied entry? Did those organizations know the ABC angle was merely a foil? How many other times has Fox’s crew used false identities and pretenses to gain access to the places they seek?
And above all, if a group of people is willing to be dishonest about something like this, what won’t they be dishonest about?
Gasland 2 is scheduled to be released later this year.
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UPDATE (Feb. 2, 4:28 p.m. ET): Josh Fox just appeared on MSNBC’s “News Nation” with Tamron Hall to talk about his arrest yesterday, and his contention that he’s so important now that Republicans in Congress have decided to essentially “blacklist” him from entering the Capitol complex. Fox delivered his usual screed against developing natural gas from shale, but Ms. Hall, the anchor, also recited some misleading talking points about Gasland that Fox himself may as well have written for her.
Here are a few of the biggest errors in the segment:
Tamron Hall (0:22): “But instead of letting him [Fox] in, Capitol Hill police hauled him off in cuffs.”
FACT: Josh Fox was not arrested for merely being in the room. He, like everyone else there, had every right to attend, observe, and report on the proceedings. He was let into the room, but was asked multiple times to take down his camera equipment, which he refused to do. This was not, as Hall suggested, about Fox being able to attend the hearing, but rather his deliberate decision to violate the rules relating to filming a hearing — a hearing that was being broadcast live on C-SPAN and via live-stream on the subcommittee’s webpage.
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Hall (0:42): “Did you have the proper credentials?”
Josh Fox (0:44): “Yes.”
FACT: No, he did not. As the Committee’s rules clearly state: “Personnel providing coverage by the television and radio media shall be currently accredited to the Radio and Television Correspondents’ Galleries.” Fox was not. He admitted just seconds after this, however, that “there is proper protocol” and that his crew “went through the proper channels,” but they did not receive credentials because they were attempting to gain them late in the evening before the hearing.
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Hall (1:51): “Literally, the drinking water coming from the faucet in people’s homes lights up on fire due the [gas] drilling practice…”
FACT: This is actually one of the biggest falsehoods of the entire film (and Josh Fox knows it). Colorado regulators debunked the claim that the infamous “flaming faucet” was due to gas production. In fact, the state of Colorado determined conclusively that it “was not related to oil and gas activity,” but rather naturally-occurring methane. Fox, predictably, continues to claim the opposite, despite the facts.
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Hall (2:02): “It is stunning, saddening, and sickening I believe to watch this [Gasland].”
FACT: We actually agree, but it’s because the movie is full of misinformation, not because the film is an accurate portrayal of what happens when you drill and complete a natural gas well, something industry has done in this country more than 1.2 million separate times.
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Fox (2:13): “This was the Republicans holding a hearing with a panel full of gas lobbyists…” Seconds later (2:40) he again accuses the Republicans of “loading up the panel with gas lobbyists” to question the EPA’s findings in its draft report on Pavillion.
FACT: Here is who was actually on the panel: Jim Martin, EPA Region 8 administrator; Tom Doll, State Oil and Gas Supervisor for the Wyoming Oil and Gas Conservation Commission; Kathleen Sgamma, Vice President of Government and Public Affairs for the Western Energy Alliance; and Dr. Bernard Goldstein, Professor and Dean Emeritus of the Graduate School of Public Health and the University of Pittsburgh. If that list doesn’t sound like a line-up “full of gas lobbyists” to you, it’s because it is not.
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Fox (3:12): “[Y]ou have the journalists trying to report on this situation being hauled away in handcuffs.”
FACT: There was an entire section of the room filled with journalists using their computers, cell phones, and notepads to report on the hearing (I was there, and talked to a number of them). Many filed their stories while seated in the committee room. The hearing was also broadcast online and on C-SPAN, so many more were likely reporting on the hearing from the comfort of their own home or office desks.
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Fox (3:43): “[T]he campaign for fracking has backfired because what it does is contaminate ground water.”
FACT: No, it does not. As EPA administrator Lisa Jackson has admitted, there is no evidence that the hydraulic fracturing process contaminates ground water. State regulators from across the country have similarly affirmed its safety record, and even EPA’s Jim Martin (who testified at the hearing yesterday) has stated that, despite EPA’s careless statements in the draft report on Pavillion, “the causal link [of water contamination] to hydraulic fracturing has not been demonstrated conclusively.”
Natural Gas Saves U.S. Consumers Billions
If you had the ability to have clean, reliable energy delivered to your house at an affordable price, would you do so? Of course you would. And the good news for millions of Americans who use natural gas is that their monthly bills are about to get even easier to pay...
If you had the ability to have clean, reliable energy delivered to your house at an affordable price, would you do so? Of course you would. And the good news for millions of Americans who use natural gas is that their monthly bills are about to get even easier to pay. Thanks to increased natural gas development from shale, the average consumer will save more than $145 on his or her household gas bills this year. Indeed, according to an economist at the U.S. Federal Reserve, lower natural gas prices will save U.S. consumers a total of more than $16 billion in home energy costs in 2012.
Clearly, the use of hydraulic fracturing and horizontal drilling to access our nation’s vast natural gas reserves from shale is paying enormous dividends, not just in terms of job creation – 600,000 jobs, to be more specific – but also in consumer savings. As Hank Linginfelter, executive vice president of AGL Resource Inc., noted, “I think of shale gas as a real game-changer for consumers of natural gas. It’s having a significant impact on prices.”
Looking forward, natural gas consumers can expect to see an average annual household savings of $926 between 2012 and 2015. But today — whether is a new pair of shoes, a Valentine’s Day gift not made out of chocolate, or just a nice chunk of change in your pocket — the benefits of natural gas development from shale are being felt by millions of consumers across the nation.
As today’s Bloomberg article noted,
“Natural gas prices that slumped to a 10-year low this month could save U.S. consumers $16.5 billion on home energy bills over the course of a year, according to a senior economist at the U.S. Federal Reserve. U.S. households might see total savings from lower gas prices of as much as $113 billion a year through 2015, including tack-on effects such as lower product prices and higher wages generated by cheaper fuel, according to energy industry consultants IHS Inc…
Consumers will likely spend about 95 percent of the direct savings they see from their gas bills, said Bernard Weinstein, associate director of the Maguire Energy Institute at Southern Methodist University in Dallas. While that amount is a fraction of the $10.245 trillion in consumer spending for 2010, ‘it’s a step in the right direction,’ Solow said.” (1/26/12)
To date, natural gas production has stimulated our economy, catalyzed job growth, and increased our domestic energy base. Now it is providing real and tangible benefits to our pocketbooks. As production continues to grow—with 1.2 million wells hydraulically fractured to date—it seems evermore clear that it is in the best interest of our nation and our consumers to support the safe and responsible development of natural gas from shale.
*UPDATE* The President’s Big Shout Out to Shale
According to most geologists, shale has been a natural geological feature of the earth’s outermost crust for about two billion years now, give or take a couple hundred million. But would you believe it? In all that time, the word "shale" had never been mentioned in a State of the Union address...
UPDATE (Jan. 26, 10:26am ET): A document on the White House website (found here) entitled “Blueprint for an America Built to Last” reiterates the President’s support for natural gas development and the hundreds of thousands of jobs it will create. It is indeed telling (and little wonder) that developing natural gas from shale plays so prominently in a plan to create jobs while also reducing environmental impacts.
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According to most geologists, shale has been a natural geological feature of the earth’s outermost crust for about two billion years now, give or take a couple hundred million. But would you believe it? In all that time, the word “shale” had never been mentioned in a State of the Union address delivered by an American president (in fairness, the office of U.S. president hasn’t been around quite that long).
Well, it had to happen eventually. And last night, that two-billion-year-long-no-mention streak finally came to an end, with President Obama devoting a significant segment of his nationally (and internationally) televised address to touting the promise and potential of developing America’s enormous natural gas resources — particularly those in “shale rock” — as the foundation for an energy policy that’s “cleaner, cheaper, and full of new jobs.” From the speech:
“We have a supply of natural gas that can last America nearly 100 years,” the President stated, “And my administration will take every possible action to safely develop this energy. Experts believe this will support more than 600,000 jobs by the end of the decade.” The President went on to say that expanded natural gas development will “create jobs and power trucks and factories that are cleaner and cheaper, proving that we don’t have to choose between our environment and our economy.”
But unlike the numerous throwaway lines in all too many political speeches and presidential statements, the president’s words about natural gas were clearly a major component of his address, and news outlets from across the country took notice. Below is a snapshot of what major media had to say about the speech, specifically the president’s endorsement of the responsible development of natural gas from shale:
- Reuters, “Obama backs shale gas drilling”
President Barack Obama on Tuesday pledged support for the U.S. shale gas boom, but said government must focus on safe development of the energy resource.
In his State of the Union address, Obama called for government to develop a roadmap for responsible shale gas production and said his administration would move forward with “common-sense” new rules to make sure drillers protect the public.
“America will develop this resource without putting the health and safety of our citizens at risk,” Obama said.
- UPI, “Obama heralds domestic natural gas”
Obama, in his State of the Union address Tuesday, said natural gas was one of the foundations for U.S. energy security. He said there’s enough natural gas in the country to meet domestic demand for 100 years but companies working to exploit those reserves must do so responsibly.
- Washington Post,”In State of the Union Address, Obama says he will push forward with fracking”
In his State of the Union address Tuesday night, Obama spoke optimistically about the bounty of unconventional natural gas under the eastern United States. “We have a supply of natural gas that can last America nearly 100 years,” Obama said, “and my administration will take every possible action to safely develop this energy.” This is good news, pretty much no matter where you land on the political spectrum.
- Bloomberg, “Obama Pushes Natural-Gas Fracking to Create 600,000 Jobs”
President Barack Obama pushed drilling for gas in shale rock and support for cleaner energy sources to boost the economy in his final State of the Union address before facing U.S. voters in November.
Hydraulic fracturing, the process of injecting water, sand and chemicals underground to free gas trapped in rock, could create more than 600,000 jobs by the end of the decade, Obama said yesterday. The process, called fracking, is among a list of energy policies Obama said would fuel economic growth.
“We have a supply of natural gas that can last America nearly 100 years, and my administration will take every possible action to safely develop this energy,” Obama said.
- POLITICO, “Obama steals GOP’s ‘all of the above’ energy slogan”
Obama also highlighted the economic potential from tapping into the nation’s natural gas supplies, citing independent reports showing the industry could support about 600,000 jobs over the next decade…”This country needs an all-out, all-of-the-above strategy that develops every available source of American energy — a strategy that’s cleaner, cheaper and full of new jobs,” Obama said to rousing applause from Republicans in the House chamber.
Cleaner. Cheaper. More affordable. And insanely abundant. At a time when most folks on Capitol Hill today can’t even agree on what they disagree on, responsible development of American energy resources represents that rarest of ideas in Washington that appear to make sense to just about everyone across the political continuum. Heck, even Sen. Bob Casey (D-Pa.), previously (and currently?) a critic of Marcellus development in his state, told reporters after the speech that he “was glad for the focus on natural gas. It’s a big benefit to Pennsylvania. We’ve got a great natural resource with lots of jobs.”
And he wasn’t the only one talking shale last night. Click around below to see what other folks had to say:
Virginia “Gigi” Lazenby, Chairman, Independent Petroleum Association of America (IPAA):
“Our industry, made up of mostly very small- and medium-sized businesses, applauds the president for his stated commitment to expanding the responsible development of job-creating American oil and natural gas. As the president made clear this evening, job creation and the restoration of the American dream is a shared goal that exceeds political boundaries. As the president underscored, our nation continues to increase its domestic oil and gas production, creating thousands of well-paying, private sector jobs, providing much-needed relief and savings for struggling consumers and stimulating an otherwise anemic economy.”
Jack Gerard, President and CEO, American Petroleum Institute:
“The administration has an opportunity to turn energy policy in a direction that could provide huge benefits to our economy. And if the President is sincere in this, our industry will work very hard with him to make it happen.” (NOTE: Gerard also added, “If the President is serious about creating more jobs and more energy, allow America’s oil and natural gas companies to produce more of our energy at home, and we’ll put people to work and deliver more revenue to the government. That’s what the American people want.”)
Statement from America’s Natural Gas Alliance (ANGA):
“Tonight’s speech builds on the White House report earlier this month documenting the broad impact that natural gas production can have on investment and job creation across leading sectors of our economy. A range of U.S. industries and their workers are more competitive today thanks to our nation’s vast, affordable natural gas supplies. Along with these opportunities come lower energy costs for consumers and cleaner air.”
Kathryn Klaber, President, Marcellus Shale Coalition:
“We are encouraged that President Obama recognizes the tremendous energy security, environmental, and economic benefits associated with job-creating American shale gas development fueled overwhelmingly through private investment on privately-owned lands. And while presidents of both parties have made a clarion call for more American energy over the past four decades, it is our genuine hope that President Obama’s remarks tonight are reflected in his Administration’s policies that are rooted in sound science and move forward with an aim of leveraging our nation’s abundant natural gas resources on behalf of consumers, families, and small businesses. American natural gas will continue to make our nation stronger and more secure.”
Dave McCurdy, President and CEO, American Gas Association:
“If there was ever a fuel in the right place at the right time, it is natural gas in 2012 and beyond. We’re glad to see the President acknowledge the many benefits natural gas provides for our energy future, not just in the State of the Union Address but also in his latest jobs report…By continuing to increase the use of natural gas, we can make progress on our national priorities of helping to improve our economy, reduce environmental impacts and secure our nation’s energy future.”
Brad Gill, Executive Director, Independent Oil and Gas Association of New York (IOGA of NY):
“In his State of the Union Address Tuesday, President Obama spoke of the important role domestic oil and natural gas will have in securing the nation’s energy future and economic recovery. Using newer technologies to harvest homegrown energy is a vital component in job creation and commerce by powering businesses and ‘factories that are cleaner and cheaper’… The President’s energy policy acknowledges the 600,000 jobs that natural gas production will help create over the next decade. His messages must be heard and considered in New York as the state moves toward allowing safe natural gas development in the Southern Tier.”
Dan Fitzsimmons, President, Joint Landowners Coalition of New York (JLCNY):
“In tonight’s SOTU address, President Obama affirmed that we don’t have to choose between our economy and the environment in developing shale gas. The president committed the Administration to taking ‘every possible action to safely develop this energy.’ The landowners of NY state stand ready to support this call to action.”
There They Go Again: Latest Cornell Paper Just More of the Same
It was touted by their PR consultants in a media advisory sent around this week as “a major new paper” in response to the mountain of criticism that has accumulated since the release of their initial study last April (that is, after the first one the year before was retracted).
It was touted by their PR consultants in a media advisory sent around this week as “a major new paper” in response to the mountain of criticism that has accumulated since the release of their initial study last April (that is, after the first one the year before was retracted). But read through the “new” document released by Cornell professors Robert Howarth and Anthony Ingraffea on Thursday, and you quickly come to the following realization: Not only don’t these guys offer a credible response to any of their critics, they don’t even acknowledge that they exist.
Last April, EID took the lead on pointing out some of the more obvious errors in the Cornell GHG report, eventually (and happily!) making way for the cavalcade of academics, government agencies and even environmental groups that followed – each one successively identifying a new and seemingly more obvious and/or egregious miscalculation that, taken on its own, would render the entire thesis unacceptable.
Of course, because none of those basic errors were either corrected or acknowledged in the latest iteration of the Howarth paper, there’s just not a whole lot of new material for us to rebut. Still, a couple of points are probably worth making for those genuinely interested in understanding what’s going on here.
Point #1: The “new” Howarth paper attempts to justify its previous conclusions based on what it says are “new” emissions data from EPA.
The problem?
- Howarth et al. are correct that EPA issued new emissions estimates for natural gas systems in late 2011 – that document is here for anyone who would like to give it a look. Unfortunately for the Cornell researchers, though, those new estimates don’t even approach the same stratosphere of the high-end methane leakage rate of 7.9 percent that Howarth and his colleagues manufactured to arrive at their conclusions. According to EPA, the actual rate is closer to 2.2 percent – a figure that recent studies suggest is far too high in its own right.
- According to Cornell professor Larry Cathles in a response paper published this month in the journal Climatic Letters: “While their low-end estimate of total leakages from well drilling through delivery (3.6%) is consistent with the EPA (2011) methane leakage rate of ~2.2% of production, and consistent with previous estimates in peer reviewed studies, their high end estimate of 7.9% is unreasonably large and misleading.” (page 2)
- Of course, the other problem is with the EPA estimates themselves. According to a report issued in August 2011 by the respected energy consulting firm IHS-CERA: “EPA’s [new] analysis relies on assumptions that are at odds with industry practice and with health and safety considerations at the well site. IHS CERA believes that EPA’s methodology for estimating these emissions lacks rigor and should not be used as a basis for analysis and decision making. … EPA derived the emissions factor from two slide presentations at Natural Gas STAR technology transfer workshops, one in 2004 and one in 2007. These two presentations primarily describe methane that was captured during “green” well completions, not methane emissions. EPA assumes that all methane captured during these green completions would have been emitted in all other completions. This assumption does not reflect industry practice.” (page 5)
Point #2: Just like last time, Howarth et al. assume that virtually all methane produced during the “flowback” phase of operations is simply vented into the atmosphere – not captured or burned.
The problem?
- For starters, it’s not even close to being correct. According to that IHS-CERA report: “Compounding this error is the assumption that all flowback methane is vented, when industry practice is to capture and market as much as possible, flaring much of the rest. Vented emissions of the magnitudes estimated by Howarth would be extremely dangerous and subject to ignition. The simple fact that fires are rare in all gas-producing areas suggests that this analysis grossly overestimates the quantities of methane that are leaking uncontrolled into the atmosphere at the well site.” (page 9-10)
- Even more problematic, Howarth et al. rely on flowback data they say comes from the Haynesville Shale to make their claims, simply extrapolating that out to account for and characterize all wells everywhere in the country. But according to Dr. Cathles of Cornell: “The numbers they use to represent fugitive emissions for the Haynesville Shale cannot be found in the references they cite.” (page 6) Added Cathles: “If a sales pipeline is not available, the gas captured by REC technologies could be easily be (and are) flared and the GHG footprint thereby minimized.” (page 3)
- Finally, Howarth et al. again cite EPA emissions data to support their contention that as much as 85 percent of the methane produced during the flowback stage is vented into the atmosphere. Interestingly, EPA’s actual estimates of vented methane come in at 49 percent – which, according to industry data, is itself wildly off the mark. According to Cathles: “Based on Howarth et al’s own references … we believe the losses during drill out and well completion for unconventional shale gas wells are not significantly greater than those cited by Howarth et al. for conventional gas wells. …This is supported by some of the examples cited by the EPA and Howarth et al. The Williams Corp (EPA 2007, p 14) shows, for example, that [greater than] 90 percent of the flowback gas is captured and some of the remainder flared (George 2011, p14).” (page 7)
Point #3: Howarth and his team refuse to acknowledge that their previous assumptions on lost-and-unaccounted for gas were incorrect, even in the face of a direct response/refutation by the U.S. Department of Energy.
The problem?
- As we highlighted in our initial rebuttal last year, Howarth, et al. estimate that between 1.4 percent and 3.6 percent of all natural gas produced over the life of a well leaks off into the atmosphere during the transmission process, a hypothesis that relies heavily on “lost and unaccounted for gas” (LUG) figures reported in a non peer-reviewed Texas trade magazine that went out of circulation in December 2010.
- CFR’s Michael Levi, reporting on a presentation produced last year by the National Energy Technology Laboratory (NETL), explains why that’s a bad idea: “The NETL documents don’t address the Howarth study explicitly, but if you flip to page 25, you’ll see a big part of the discrepancy explained. Some readers will recall that Howarth found a large fraction of produced gas from unconventional wells never made it to end users, assumed that all of that gas was vented as methane, and thus concluded that the global warming impacts were huge. As the NETL work explains, though, 62% of that gas isn’t lost at all – it’s ‘used to power equipment.’” (CFR blog, “Rebutting the Howarth Shale Gas Study,” May 20, 2011)
Given the lack of substantive response to these and several other important points highlighted in the Cathles paper, it’s understandable that Howarth and his team didn’t receive quite the same volume and intensity of press coverage this time around relative to their first effort back in April.
Unfortunately, though, much of the coverage they did get seeks to advance the simple narrative that this whole thing is just a friendly dust-up among faculty at Cornell – with Howarth and Ingraffea on one side, and Cathles, Larry Brown and Andrew Hunter on the other. This Bloomberg lede is typical of the approach: “Two groups of Cornell University researchers have split over the contribution to global warming by rising extraction of natural gas from shale beds through a process known as fracking.” (Bloomberg, Jan. 20, 2012)
Of course, the reality of the situation is quite a bit different. Actually, it’s Howarth and Ingraffea on one side, and the rest of the intelligent world on the other. In the nine months since their initial paper was published, detailed responses have been compiled and released by no fewer than a dozen separate academic, government and non-governmental institutions (a quick list of those is available here and here). In a study commissioned by the Sierra Club, one researcher even went so far as to call the Howarth data biased: “We don’t think they’re using credible data and some of the assumptions they’re making are biased. And the comparison they make at the end, my biggest problem, is wrong.”
Of course, over on Planet Ithaca, not only don’t any of these criticisms hold merit – according to the Cornell research team, they don’t even exist. In an online chat hosted by the Syracuse Post-Standard in September, Prof. Ingraffea provided the following answer when asked how he’s dealing with the all the controversy that his paper has engendered: “We have not received any of what we would consider intense peer criticism.” Which we guess is true. Just so long as you continue to believe it.
Shale Continues to Drive U.S. Manufacturing Renaissance
By now we all know that the development of American energy resources from shale remains a major economic engine for our country, responsible for hundreds of thousands of jobs across the nation. But another important (and under-told) benefit of the "shale revolution" is its role in resuscitating America's previously declining manufacturing base...
By now we all know that the development of American energy resources from shale remains a major economic engine for our country, responsible for hundreds of thousands of jobs across the nation. But another important (and under-told) benefit of the “shale revolution” is its role in resuscitating America’s previously declining manufacturing base.
Last month, a report from PricewaterhouseCoopers highlighted how affordable, domestic supplies of natural gas will save U.S. manufacturers more than $11 billion per year over the next decade, in addition to creating a million new jobs during that same period. This affordable energy supply is also projected to increase disposable income for each household in the United States by as much as $2,000 per year.
So it should be no surprise, although still worth highlighting, that a new report from the White House shows how domestic manufacturing, after years of stagnation and decline, is finally on the rebound. From that report:
The manufacturing sector has recovered faster than the rest of the economy, supporting growth and job creation. Over the past two years, the economy has added 334,000 manufacturing jobs — the strongest two-year period of manufacturing job growth since the late 1990s. Manufacturing production has surged 5.7% on an annualized basis since its low in June of 2009, the fastest pace of growth of production in a decade.
And what, according to the White House, is driving that recovery?
A boom in natural gas production has supported manufacturing: 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. Recent data from the Energy Information Administration indicate that by the end of 2011 natural gas extraction increased by over 24% since 2006.
Later in the report, under the heading “America’s Natural Resource Boom,” the White House report describes how expanded natural gas production, particularly from shale, has “led to rapidly growing domestic production and relatively low domestic prices for households and downstream industrial users.”
The Washington Post echoed the good news about America’s energy-led manufacturing rebirth in an editorial that ran yesterday:
The White House briefing paper that accompanied the “insourcing” event attributes much of the rebound in manufacturing to the boom in domestic natural gas production, made possible by new “fracking” technologies. The federal government didn’t do much specifically to promote fracking. Yet the process has dramatically cut the price of gas, a key industrial input, and led to spinoff employment in related industries. The White House notes that more of such development, appropriately regulated, could have “substantial” benefits to the U.S. economy. Even in a polarized Washington, everyone should be able to agree on that.
Candidly, we’re not all that interested in the specific politics of the matter, but it’s worth noting the Post’s observation that the federal government “didn’t do much” to promote developing natural gas from shale — and yet, voila!, here we are. Opponents of shale have for years labored under the delusion that the EPA should be in charge of directly regulating the process of hydraulic fracturing, calling for heavy-handed federal control on the misguided assumption that only such a system will guarantee the broadest possible benefits.
But as this White House report makes clear, shale development and hydraulic fracturing (which has been tightly regulated by the states for decades) is creating jobs and revitalizing one of America’s proudest and most critical industries. And as ANGA points out, the natural gas production at the center of this manufacturing renaissance is being done in a “safe and responsible manner,” thereby removing any need to choose between a strong economy and a clean environment.
With these facts clearly established, the question for critics is: Why should we jeopardize this bright spot in an otherwise troubled economy — facilitated by responsible, state-based rules and regulations — with a one-size-fits-all, Washington-centered regulatory regime?
Landowners Deliver More than 11,000 Letters of Support to DEC
On Tuesday, over 500 people attended five separate press conferences held throughout New York State with a single purpose—to support the development of natural gas from shale in New York. The lead press conference was held at the Capitol Building in Albany, where the Joint Landowners Coalition of New York presented over 11,000 letters of support to the state Department of Environmental Conservation (DEC).
Jim Willis
Editor, Marcellus Drilling News
On Tuesday, over 500 people attended five separate press conferences held throughout New York State with a single purpose—to support the development of natural gas from shale in New York. The lead press conference was held at the Capitol Building in Albany where Dan Fitzsimmons, president of the Joint Landowners Coalition of New York, presented over 11,000 letters of support to the state Department of Environmental Conservation (DEC). The deadline for submitting written comments on the latest version of draft drilling regulations, known as the SGEIS, is today (Jan. 11th).
In addition to Albany, press conferences were held in the state’s Southern Tier region—Binghamton, Oneonta, Candor and Corning. Speakers included landowners and coalition representatives, government officials, business owners, and a film maker (no, not Josh Fox!). Drilling supporters turned out in large numbers, with standing room only at some locations.
- Landowners Gather at Oneonta Meeting
At the Binghamton press event, Ron Szymanski of the Dryden Safe Energy Coalition introduced six speakers from the Greater Binghamton area, including Neil Guiles, president and owner of Vestal Asphalt. Even though Marcellus development has not yet started in New York, Neil recounted how his business has rapidly expanded because of Marcellus-related activity just across the border in Pennsylvania (see the video highlight below).
Vestal Asphalt repairs and resurfaces roadways. Siting, grading and ultimately developing a wellsite requires truck trips to and from the well. The increase in traffic sometimes takes a toll on the roads, but contrary to what you may have heard, operators are responsible for – and invest millions of dollars a year in — fixing the roadways. Companies like Chesapeake and Williams, with operations in Northeastern Pennsylvania, contract with Vestal Asphalt to handle road repairs.
Neil said in the past three years he’s hired 80 new employees, added millions of dollars per year to his payroll, and that the money he’s paying those 80 new employees stays in the Southern Tier. Homes are purchased, new and used vehicles, groceries—a long list of economic benefits that ripple throughout the local economy from just one business. According to Neil, “Absolutely everyone benefits economically when gas comes to New York.”
After Neil spoke, Chris Lacey addressed the crowd. Chris is a housewife, a landowner, grandmother of five, and as she said, “apparently, now, an activist.” Chris spoke of the highs and lows she’s seen since moving to the Southern Tier in the 1970s—and of the region’s desperate need for jobs. Her recommendation? Let’s not look a gift horse in the mouth any longer. Let’s responsibly develop our God-given resources.
Also speaking in Binghamton was Aaron Price, an independent film maker and director of the documentary Gas Odyssey; Enzo Olivieri, owner of Nathanael Greene’s Pub in Greene, NY; Julie Lewis, a member of the Broome County Legislature; and Vic Furman, a landowner and representative from the Joint Landowners Coalition of New York, which collectively represents over 70,000 people and 800,000 acres of land.
httpv://www.youtube.com/watch?v=bySxz_mLr0Q
Fidel Castro Speaks: Opposes Shale Revolución
As you might recall, news reports over the past year have highlighted how once and future Russian president Vladimir Putin, a former KGB agent, is trying to undermine the development of oil and natural gas from shale, rightly regarding these massive new supplies of energy as a direct and growing threat to his hegemony in the region. And now it appears that the revolutionary offspring of the Soviet Union -- Fidel Castro's Cuba -- is also joining the ranks of opposition to shale development.
As you might recall, news reports over the past year have highlighted how once and future Russian president Vladimir Putin, a former KGB agent, is trying to undermine the development of oil and natural gas from shale, rightly regarding these massive new supplies of energy as a direct and growing threat to his hegemony in the region.
And now it appears that the revolutionary offspring of the Soviet Union — Fidel Castro’s Cuba — is also joining the ranks of opposition to shale development. Reuters reports that Castro, in a recent column that he penned over the holidays, suggests that shale development will lead to an “inexorable march toward the abyss.” The Cuban dictator arrived at this position after digesting what we here in the States refer to as “debunked talking points.” From the Reuters piece:
Shale gas production is criticized in some quarters because it requires extensive “fracking,” which uses water, sand and chemicals to fracture the rock where the gas is trapped to allow it to flow out of the well. Fracking, opponents say, contaminates groundwater sources and can cause other problems.
Castro sided with the critics, quoting reports on the negative effects of fracking and research that said shale gas emits more greenhouse gases than gas produced from conventional wells.
Statist regimes are known for their isolation and reluctance to accept facts and data from other parts of the world, especially information that would undermine the regime’s ideological, often plutocratic bent. In this case, though, it appears the Bearded One is involved in a little bit of cherry-picking — grabbing talking points off opposition websites without taking the time to research the issue the whole way through.
To wit: Castro makes reference in his column to the GHG profile of the development of energy from shale, a direct reference to a study issued last year by the Park Foundation-funded “scientists” at Cornell — a paper that has been debunked more thoroughly than geocentricity. Had Castro done his homework, he would’ve known that report rests on such shoddy ground that the authors’ own colleagues took issue with its findings, noting that Howarth and Ingraffea use “implausibly high leakage rates” and “dismiss the impact of existing technology” for reducing emissions.
Castro also expresses concern about water contamination from oil and natural exploration — perhaps forgetting that his country has leased thousands of onshore acres out to foreign companies over the past five years to help the regime develop its own resources domestically. But the facts clearly show that hydraulic fracturing is safe and does not present a credible risk for water contamination. Regulators from nearly a dozen states have affirmed the safety of hydraulic fracturing, as has the U.S. Environmental Protection Agency on numerous occasions.
For nearly forty years, Cuba and the Soviet Union joined hands across the Atlantic to oppose western civilization. The private sector became the bête noire for both countries, with Cuba and the USSR consistently looking for evidence that would undermine economic freedom (they failed). But with the fall of the Soviet Union, the legitimacy of communism also crumbled under the weight of a superior economic model: the market economy. The ideological link between Russia and communist Cuba was strained, if not completely severed.
But shale development represents a new bond between Cuba and Russia, a source of joint opposition that is, once again, premised on nothing more than flawed logic and a commitment to undermining a superior (and safer) economic system.
As they say, the more things change the more they stay the same.
READ MORE
- EID Blog: Shale Puts Russia, Saudis on the Defensive
- Reuters: “Fidel Castro says world marching into abyss with shale gas” (Jan. 5, 2012)
- WSJ: “Russia Sounds Alarm on Shale Gas” (Nov. 30, 2011)
- EID Fact Check: Five Things to Know about the Cornell Shale Study
Getting to the Bottom of NYT’s Latest Story on Leases
Jerry Simmons
Executive Director, National Association of Royalty Owners
As the Executive Director of an organization that represents the rights and interests of millions of mineral and royalty owners across this country, you can bet your bacon that I’ve been following closely The New York Times’ ongoing series on natural gas development – and in particular, the stories about leasing, lending and mineral owners in some areas crying foul.
The story posted by NYT reporter Ian Urbina last week fits into this final category. Its basic thesis goes something like this: as shale exploration has continued to ramp-up, land- and mineral owners are increasingly being fooled (or forced) into bad leases – bad because they don’t protect the environment, bad because they don’t protect them in case of an accident; bad because they’re too low on the financial end. I should note here that I actually reached out to Mr. Urbina before he ran this story; none of the information I provided made it into the article. In light of that, I thought I’d take just a few minutes to lay out a few facts, and maybe set straight a few of the things that the Times didn’t quite get right in its story.
For starters, let me say that its clear an awful lot of research went into this piece — Urbina and his crew say they reviewed 110,000 individual leases before putting pen to pad. Yes, critics will point to the fact that more than 100,000 of those leases came from only one county (Tarrant) in one state (Texas), but sorting through them all is still a pretty big project, so at least give them some credit for that. I also appreciate the fact that people like Ron Staments, Jack Richards and Dave McMahon – all friends and/or professional acquaintances of mine – were interviewed for and quoted in the story.
To my eye, the biggest problem with this latest piece is that the Times attempts to manufacture a narrative in which land-owners at every turn are pitted against energy producers. In reality, it’s a partnership – with the lease document representing the statement of terms under which that partnership will be pursued. It’s true that some statements are tilted more toward one party’s interests than the other’s. Should we be surprised by that? Should we be aghast? As was pointed out in the article by Mr. Knapp: “There are bad leases out there, and, as with any industry, there have also been some unscrupulous opportunists.” But is that a basis to shut down an entire industry? Reading the Times’ story, it’s tough not to get the impression that the reporter wouldn’t mind if we did.
As I’ve said many times before, leasing your minerals for development is more of an art than a science. You make the best deal you can with the best information and advice you can find – and if you find out later that your neighbor did better than you, you walk across the lawn, shake his hand, and let him know that lunch next time is on him. Often, in the early days of a play, the discrepancies between lease deals can be significant – a natural function of uncertainty. Higher risks when it comes to the question of commercial viability have to be offset by lower upfront costs.
But as I’ve seen literally thousands of times over the years, as areas are proved up, and resources start flowing, mineral owners find themselves in a much better position to negotiate a better deal — at least for the few who may have been unhappy with the original one. Remember: it often takes years, even decades, for operators to fully tap these reservoirs, and lease and royalty payments often represent only a fraction of the costs they’ll encounter over that time. Used to be drilling a well was a 10-year commitment – now it’s a 40-year one. With the proliferation of electronic media, the incentive to cut-corners on the environment or get away with low-ball lease offers (for very long) is simply no longer there. And even if all of us don’t use Twitter yet, believe me, us mineral owners can be a pretty persuasive bunch.
The article had four bullet-points in the first few paragraphs that I will attempt to address here:
NYT: “Fewer than half the leases require companies to compensate landowners for water contamination after drilling begins. And only about half the documents have language that lawyers suggest should be included to require payment for damages to livestock or crops.”
- The amazing thing about this point is that, if you follow the links embedded in the body of the Times piece, the information provided appears to directly contradict the point made in the text.
- Take a look for yourself: “If a gas company causes property damage or goes beyond what is ‘reasonably necessary’ to drill for oil or gas, the company may be held liable for damages. In many states there are also laws or regulations that govern the extent to which the surface must be returned to its original condition, including rules that require the company to remove unnecessary equipment or repair any damage. Some leases include addenda that specify how and when any wells will be plugged. They also sometimes include language that establishes how the company will handle specifics, like the removal of roads or restoration of the landscape.”
- In other words, all the protections that the Times laments aren’t included in a standard lease are included in a different kind of contract – called the law. No oil and gas lease I’ve ever seen includes a stipulation banning a producer from, let’s say, hitting me in the face with a shovel. According to the Times’ logic, though, I guess that means it would be legal for him to do it — since it wasn’t in my lease. Can you see why this entire premise is flawed?
NYT: “Most leases grant gas companies broad rights to decide where they can cut down trees, store chemicals, build roads and drill. Companies are also permitted to operate generators and spotlights through the night near homes during drilling.”
- Again, in most cases a surface use agreement is required by the state, but if not, we’ve always recommended that the mineral owner (even if not surface owner) include one as part of the deal. In that agreement, you will negotiate compensation for roads, tree removal, crops, livestock, etc. But drilling itself is permitted by the state, and proximity to structures is determined by the appropriate state regulatory agencies. Distances may differ, but the principle does not.
NYT: “In the leases, drilling companies rarely describe to landowners the potential environmental and other risks that federal laws require them to disclose in filings to investors.”
- As stated above, mineral and surface landowners are protected from liability by state and federal regulations. If you believe a lease clause or addendum is needed to spell out potential risks and liabilities, then you should negotiate that into your lease – as most folks have done for years.
NYT: “Most leases are for three or five years, but at least two-thirds of those reviewed by The Times allow extensions without additional approval from landowners. If landowners have second thoughts about drilling on their land or want to negotiate for more money, they may be out of luck.”
- Oil and gas leases for decades (perhaps always) have allowed for the option to extend at the end of a primary term. The reason is that the company may not get to all drilling locations within the primary term and wants the ability to maintain its acreage position in an area.
- If you sign a lease with an option to extend, you have given your approval to extend the lease if certain stipulations are met. Once a well is producing, your acreage is “Held-By-Production” (HBP) for as long as the well is capable of production. As mentioned, this could be decades — so leases are serious contractual instruments that one should not enter into without proper knowledge and professional advice.
- That’s our position as mineral owners – and guess what? It’s industry’s position as well. According to Kathryn Klaber, president of the Marcellus Shale Coalition: “The most educated landowner is going to be this industry’s best business partner, and that means legal review.” (Associated Press, 7/23/11)
It is too bad this article did not attempt to emphasize the need for mineral and surface land owners to accept their responsibility and become educated on the process of mineral leasing and mineral/royalty income. If it had, the Times could have done a real service to the citizens facing decisions on leasing instead of trying to generate fear in a process that could pay off a mortgage; send kids or grandkids to college; keep elderly folks off state assistance; keep the family farm in the family; build new fences, barns, houses; supplement retirement; and on and on.
The point is, of the millions of oil and gas leases in effect the vast majority are held by folks who are very happy with the process and benefit greatly from the income that this partnership produces. Too bad the Times doesn’t consider that much of a story.
*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.
