Sierra Club: We Need and Oppose Natgas
Last year at the Wall Street Journal ECO:nomics conference, Paul Gallay of Riverkeeper stood up and proclaimed a litany of falsehoods about shale development, ranging from claims about smog to benzene concentrations – all of which he said were “facts,” even though they were not. Perhaps in keeping with that tradition, another prominent anti-shale voice – Michael Brune, Executive Director of the Sierra Club – appeared at the conference this year.
Last year at the Wall Street Journal ECO:nomics conference, Paul Gallay of Riverkeeper stood up and proclaimed a litany of falsehoods about shale development, ranging from claims about smog to benzene concentrations – all of which he said were “facts,” even though they were not. Perhaps in keeping with that tradition, another prominent anti-shale voice – Michael Brune, Executive Director of the Sierra Club – appeared at the conference this year, choosing to make his own series of incorrect (albeit less inflammatory) claims about natural gas.
Before we look at Mr. Brune’s claims, however, it’s worth reminding everyone: The Sierra Club’s position on natural gas is based on ad hoc expediency, not environmental principle. What the national chapter says about natural gas or hydraulic fracturing could be (and often is) the exact opposite of what a state affiliate says to the local news media. In that sense, we all should take Mr. Brune’s latest pronouncements with a grain of salt, lest the Sierra Club’s position tomorrow contradict its Executive Director’s statements today (or yesterday, as is the case here — you get the picture).
BRUNE: “We acknowledge that gas is playing — or will play a role in the future as we begin to de-carbonize the power sector…If you had had, and you probably did have folks up on stage five, six, seven years ago you would have had most environmentalists arguing that gas is an important transition fuel, a bridge fuel. And that was based on the assessment that gas, when it’s burned, burns with about half the greenhouse gas emissions compared to coal. And that is still true when gas is burned.” (1:10)
FACT: As odd as it may sound, we’ll admit it: Michael Brune of the Sierra Club is correct. That he’s so forthright about the fact that, just a few years ago, environmentalists were pro-gas is laudable – though it also underscores the problem that today’s opponents of natural gas face. We know credible science still maintains that life-cycle greenhouse gas emissions from natural gas are about half those of coal, so what gives? We’ll get to that in a minute.
BRUNE: “But what we’ve learned over the past five, six, seven years is that the process of extracting natural gas through fracking is much more carbon intensive than previously thought.” (1:30)
FACT: Interestingly, in the course of his remarks, Brune said the most comprehensive study to date on the greenhouse gas impact of natural gas is from the EPA, which estimates that methane leakage is 2.4 percent (in the public discussion about the relative GHG impact of natural gas systems, the topic has primarily been about methane, not carbon).
However, Brune did acknowledge – and rightfully so – that EPA’s data is old and unreliable. What he did not acknowledge is that, based on EPA’s latest GHG inventory, the leakage rate is only about 1.2 percent, or 50 percent less than the EPA estimated. That matches the findings of a study done last summer by URS Corporation, which had a sample size ten times larger than EPA’s and found that emissions were “at least 53 percent lower” than what EPA said they were. Other studies from the U.S. Department of Energy and MIT (and even a study funded by the Sierra Club) have observed that the life-cycle GHG profile of natural gas is roughly half that of coal, which means it’s still in line with what we knew about the relative benefits of natural gas back when environmental groups were singing its praises.
So what has changed? Well, for one, the price of natural gas is a fraction of what it was a half-decade ago, and folks at the Sierra Club want us all to think that’s a threat to the growth of renewables. But since it clearly is not, they have to inflate fears and manufacture storylines about “new science” on environmental impacts. Although, in the case of the Sierra Club, even they have funded studies that contradict their own (new) position. But we repeat ourselves.
BRUNE: “So the fact that we are developing an energy transition that is relying on a fuel – natural gas – about which we have incomplete information about the climate impacts should scare everybody.” (2:50)
FACT: We don’t have incomplete information. The EPA, the Department of Energy (on multiple occasions, including the National Renewable Energy Laboratory), the IPCC, MIT, Carnegie Mellon (paid for by Sierra Club), the University of Maryland, and countless other experts have all observed the life-cycle GHG impact of natural gas is 50 percent less than coal. The only thing “incomplete” is the justification that folks at the Sierra Club are using to suggest the science isn’t settled.
In addition, it’s fitting that Brune chose to say his claim should “scare everybody,” because that’s the essence of the anti-shale playbook. If the public isn’t scared, then they won’t handcuff themselves to the White House gates, and they certainly won’t listen to the Sierra Club when it invents terms like “LNG Fracking.”
BRUNE: “There are some technologies – green completions at the wellhead can do a great to minimize the amount of methane leakage. We can repair and replace natural gas pipelines all across the country and significantly reduce the amount of leakage coming from the transmission system.” (3:22)
FACT: Once again, we have to admit that we agree with Michael Brune here. Problems can and indeed should be fixed. The good news is that the technologies Brune outlined are already being adopted at a much faster rate than what most folks previously thought, according to researchers at MIT.
It’s also good to hear that the Sierra Club recognizes the ability to fix problems instead of merely declaring their existence as a justification to do something else, such as a radical and taxpayer-funded shift away from base load power sources.
BRUNE: “Every billion dollars that’s invested in new gas, fracking, oil pipelines, coal plants is a billion dollars better invested in solar and wind and energy efficiency.” (3:59)
FACT: First of all, the companies investing in natural gas and hydraulic fracturing are unlikely to surrender that capital to another entity to invest in technologies in which they have little or no expertise. Telling a company that it cannot proceed with development doesn’t mean the money that would have been invested goes into some public treasury fund to be dispersed by the bureaucrats – or even worse, the Sierra Club. It simply means the jobs and economic opportunity that development would have facilitated will instead be sacrificed for good.
Second, the premise of Brune’s statement – investing in natural gas means not investing in renewables – simply isn’t true. The reality is that renewables need available, base load power to grow, so investing in natural gas provides the conduit for technologies like wind and solar to flourish. Don’t believe us? Ask the solar and wind industries – which Brune ironically wants to promote at the expense of the industry they both need to grow!
BRUNE: “Our primary goal, from a climate perspective, should be to use as little gas as possible while we’re also phasing out of coal.” (5:35)
FACT: In a world where cause and effect do not exist, the “phasing out of coal” can be achieved without natural gas. In the real world – where most of us reside – the reason coal is losing market share is because of natural gas. Brune is pretending that the cause for the recent shift away from coal is unimportant, and that the effect – less coal use – is some sort of organic, random occurrence that creates a void to be filled.
In classic Sierra Club fashion, Brune’s statement also directly contradicts what happened in Wisconsin, where a switch from coal to natural gas was called “long overdue” by the Sierra Club, and something that would yield significant benefits in terms of public health and reduced emissions.
In conclusion, we’ll just caution our readers one more time: Everything Mr. Brune said at the ECO:nomics conference about natural gas should be viewed with skepticism — not just because it was so often at odds with the facts, but because the Sierra Club has an evolving — or perhaps devolving — position on natural gas.
U.S. Steel’s Shale Gas Comeback
We spend a good bit of time at EID documenting how some folks are willing to do, say and write just about anything – however misleading or flat-out wrong – to try to scare the public about responsible oil and natural gas development. So it’s always fun to turn the tables by discussing a subject that makes professional energy activists nervous: paychecks.
We spend a good bit of time at EID documenting how some folks are willing to do, say and write just about anything – however misleading or flat-out wrong – to try to scare the public about responsible oil and natural gas development. So it’s always fun to turn the tables by discussing a subject that makes professional energy activists nervous: paychecks. The paychecks, jobs, revenues and new opportunities made possible by oil and natural gas production from shale are fueling an economic revival in America, and as people see the benefits of this abundant energy source, they are demanding those critics back up their rhetoric with facts. And the critics know, as we do, the facts are against them.
For this reason, today’s Wall Street Journal report on natural gas and Pennsylvania’s steelmaking industry, “Steel Finds Sweet Spot in the Shale,” caught our eye:
The rising fortunes of a massive U.S. Steel Corp. plant here has much to do with what sits below: massive deposits of cheap natural gas.
Shiny coils roll off the line destined for energy companies drilling in the Marcellus Shale natural-gas formations that rest below much of southwestern Pennsylvania. Production for so-called tubular goods used for pipes, tubes and joints in gas drilling has doubled in two years, says Scott Bucksio, the general manager of the plant in the sprawling Mon Valley Works, as drillers have raced to extract ever-larger amounts of gas from the shale deposits.
As significant, or more so for energy-intensive steelmakers, is that newly plentiful natural gas “is also keeping costs down” said Mr. Bucksio of U.S. Steel.
The Journal notes that increased production of shale gas came “just in time” for America’s biggest steelmaker, after posting losses in recent years, and now the company’s fortunes are rebounding. CEO John Surma expects shale oil and gas development “to make significant, positive contributions to U.S. Steel” in the years ahead. In other words, more paychecks:
That is good news for the U.S. Steel plant in the Mon Valley Works south of Pittsburgh, where 800 unionized workers take steel slabs made at the company’s Edgar Thomson Mill in Braddock, founded by Andrew Carnegie in 1875, and roll them into thin coils that are turned into pipes at another nearby company location.
PGT Trucking, a Pennsylvania trucking company, said revenue related to transporting steel tubular goods like those made at the Mon Valley Works plant soared to $10 million in 2011 from $1 million in 2010.
CEO Patrick Gallagher has 500 employees and wants to add another 50 to 100 over the year. “And we’re investigating a new fleet of trucks that run on liquid natural gas for 2013 and beyond,” he said. “We’re on a paradigm shift with natural gas becoming our main energy source.”
U.S. Steel is just one example of existing jobs becoming more secure and new jobs being created because of the oil and gas industry. Another is Shell Oil Co.’s planned ethane cracker in southwestern Pennsylvania, which would use locally produced ethane from gas production in the Marcellus Shale. According to Pennsylvania Governor Tom Corbett, the project could create 10,000 construction jobs and 10,000 permanent jobs and has the potential to be “the single largest industrial investment in the region in at least a generation.”
As EID has noted before, the economic benefits of oil and gas development are being felt across the country, and are winning international acclaim. According to the Switzerland-based World Economic Forum, nearly 1 in 10 new jobs in the U.S. last year were created by the oil and gas sector. Looking ahead, the WEF says the U.S. economy will create 1 million more jobs in 2014 than would otherwise be the case thanks to increases in natural gas production alone. That’s unquestionably good news, unless you’re in the business of fabricating bad news to try to bring American oil and gas development to a screeching halt.
Shale Boosts U.S. Economy from Coast to Coast
We all know that responsible oil and natural gas production has been an economic boon to regions across the country, and as the Wall Street Journal highlights this week, the economic growth emanating from developing natural gas from shale is not limited solely to those areas lucky enough to have the formations underneath them.
We all know that responsible oil and natural gas production has been an economic boon to regions across the country, from communities throughout Pennsylvania benefiting from Marcellus Shale development to the rapidly expanding housing business in south Texas. And, of course, North Dakota boasts the lowest unemployment rate in the country, thanks in large part to the development of the Bakken Shale.
But the story doesn’t end there. Indeed, as the Wall Street Journal highlights this week, the economic growth emanating from developing natural gas from shale is not limited solely to those areas lucky enough to have the formations underneath them:
The economic benefits of rising energy production are spreading far beyond the traditional oil patch, to Ohio and Pennsylvania, Nebraska and New York, North Carolina and Idaho. Truck drivers from pretty much anywhere can find work related to the surging energy business. Private-equity firms completed $24.8 billion of energy deals of all types last year, up from $8.5 billion in 2010, according to data tracker Preqin. Manufacturing plants are returning to the U.S. to take advantage of cheap natural gas, spurring major investments in petrochemical and steel production in the Gulf Coast and Midwest.
Landowners in huge swaths of the country where shale is found are raking in money for leasing their mineral rights. Consumers throughout the U.S. are paying lower bills for heating and electricity because of cheap natural gas. Even the U.S. balance of payments with other countries is improving because of the new energy economy.
“This is probably the biggest stimulus we have going,” says Michael Lynch, president of Strategic Energy & Economic Research, a consultant based in Amherst, Mass. Some $145 billion will be spent drilling and completing U.S. wells this year, up from $13 billion in 2000, estimates Spears & Associates Inc., an oil-field market research firm.
The growth in energy exploration and production is due to the widespread use of horizontal drilling and hydraulic fracturing, or fracking. Horizontal drilling allows energy companies to extract gas and oil up to a mile away from the actual well. Meanwhile, fracking—which involves pumping millions of gallons of water, sand and chemicals to break open dense rocks and release hydrocarbons—has enabled the industry to tap into energy-rich shale formations once overlooked by petroleum geologists.
In Nancy County, Nebraska — a largely agricultural county west of Omaha — demand has picked up so much for the area’s sand deposits that a local company has expanded its workforce by nearly ten-fold. As a member of the county board of supervisors described the situation, “This deal here is like winning the lottery.” Similarly, in western Wisconsin, the number of sand mines has increased substantially, creating over 1,000 jobs in just the past four months.
Of course, as the Journal also highlights, areas that have a long history of oil and natural gas development are also reaping significant benefits. (Houston became the first major metropolitan area to regain all of the jobs it lost during the recession, thanks to increased exploration for oil and natural gas in shale.) But these benefits extend beyond job creation and (enormous) economic growth:
Beyond simply adding jobs, communities from Pennsylvania and Ohio to Colorado and Texas that are home to this energy boom are experiencing a new emotion: optimism. Jeff Dahl, chief executive of MTR Gaming Group Inc., which operates a casino and resort in Wheeling, W.Va., says he is seeing consumer confidence rising as landowners get leasing bonuses of thousands of dollars and companies compete for workers.
“People are beginning to believe this is a game changer for the region,” says Mr. Dahl. The result is more spending on dining out and entertainment.
Of course, this economic revival is also paving the way to increased energy security, as domestic output of oil and natural gas reach new highs and reliance on OPEC becomes less necessary. Turns out we’re producing so much that energy prices are falling, which means consumers pay less for utility bills and manufacturers can invest more in the United States … all of which, in turn, means more capital to invest in U.S. businesses and the ability to create even more U.S. jobs.