Mayors Willing to Let Economy and Health Go Up in Smoke in Place of Natural Gas
Many people against natural gas development claim adverse health impacts. Interestingly enough, now some of these same public officials have come out in support of legalizing marijuana as an industry. A review of economic and health impacts of marijuana production and use compared to natural gas development indicates these officials ought to reconsider.
Many people opposed to natural gas development in New York State, including Binghamton Mayor Matt Ryan and Ithaca Mayor Svante L. Myrick, have demanded a health impact study on natural gas development in New York. Against all evidence save deeply flawed modeling studies, the two mayors have suggested New York would be risking public health if the DEC approves high-volume hydraulic fracturing.
Yet, both Mayor Ryan and Mayor Myrick have now said they support legalizing, growing and selling marijuana. This virtually begs for a comparison of the economic and health impacts of marijuana use compared to natural gas development.
Is it possible hydraulic fracturing is really more dangerous to health than smoking marijuana? Would marijuana production do more for New York’s economy than natural gas development? The answers would seem to be obvious but given the positions of these two elected officials, a review is in order.
Here’s what Ithaca Mayor Svante L. Myrick said earlier this month in an Albany Times-Union piece on the subject of marijuana:
I believe that New York should seriously consider legalizing marijuana; taxing it, and regulating it. That’s also why I have directed the Ithaca Police Department to focus on other issues that will more effectively protect the public. Between dealers of hard drugs and stopping violent crime, our officers have more important things to be focusing on than low-level marijuana offenses.
Then came the Mayor of Binghamton, upping the ante by offering this statement:
We can make a lot of revenue off it, right now it causes a lot of crime because a lot of drug dealers deal pot and other drugs. We’ve arrested over 40 million people in the last 40 years in this country and a lot of them went to jail and we spent a lot of money on them being in jail.
Now, we don’t focus on drug policy here at Energy In Depth, so these statements by themselves don’t trouble us that much. But considering the Mayors, on June 4, signed a letter asking Governor Cuomo for a “comprehensive health impact assessment of the entire shale gas extraction process,” you would hope they would want the same regarding the approval of growing and using an illegal drug. Which raises another question. How are these two mayors able to conclude marijuana should be legalized, and even viewed as an economic opportunity, without a comprehensive health assessment noting any negative impacts that may occur as a result of their proposed policy? Why the double-standard?
A brief history of hydraulic fracturing
Consider this, hydraulic fracturing has been used in over 30 states (including New York) for over 60 years. The biggest change that has occurred is the addition of horizontal boring and the fact the fracturing is done in stages. The materials and pressures utilized haven’t changed and the water treatment and collection systems have advanced significantly. Due to this, there is no evidence of health problems associated with the activity and studies suggest health actually improves with development for one very simple reason – it generates increased community wealth, which is one, if the not greatest, factor in ensuring access to good health care. Put simply, more people can afford insurance and have the funds to take care of themselves. The natural gas industry also has a record of supporting local health care institutions financially, allowing them to expand and improve.
A closer look at marijuana’s health effects
There is also a record with respect to the impact of marijuana use on health and it’s not very good. It is, of course, a drug and some users, for example, begin by first experimenting with marijuana, which is, itself, addictive. Here, in fact, are some excerpts from the National Institute on Drug Abuse (part of the National Institutes on Health) website:
The main psychoactive (mind-altering) chemical in marijuana is delta-9-tetrahydrocannabinol, or THC.
When marijuana is smoked, THC rapidly passes from the lungs into the bloodstream, which carries the chemical to the brain and other organs throughout the body.
Marijuana over activates the endocannabinoid system, causing the high and other effects that users experience. These include distorted perceptions, impaired coordination, difficulty with thinking and problem solving, and disrupted learning and memory.
Research from different areas is converging on the fact that regular marijuana use by young people can have long-lasting negative impact on the structure and function of their brains.
A large prospective study (following individuals across time) showed that people who began smoking marijuana heavily in their teens lost as much as 8 points in IQ between age 13 and age 38; importantly, the lost cognitive abilities were not restored in those who quit smoking marijuana as adults.
Marijuana use can have a variety of adverse, short- and long-term effects, especially on cardiopulmonary and mental health.
Marijuana raises heart rate by 20-100 percent shortly after smoking; this effect can last up to 3 hours. In one study, it was estimated that marijuana users have a 4.8-fold increase in the risk of heart attack in the first hour after smoking the drug.
A recent analysis of data from several studies found that marijuana use more than doubles a driver’s risk of being in an accident.
A series of large prospective studies also showed a link between marijuana use and later development of psychosis.
Marijuana smoke is an irritant to the lungs, and frequent marijuana smokers can have many of the same respiratory problems experienced by tobacco smokers, such as daily cough and phlegm production, more frequent acute chest illness, and a heightened risk of lung infections.
As the marijuana plant contains hundreds of chemical compounds that may have different effects and that vary from plant to plant, its use as a medicine is difficult to evaluate.
So marijuana involves hundreds of chemical compounds in unmeasurable quantities that interfere with health in myriad known and unknown ways, and has clear cumulative impacts. Moreover, this product is consumed directly into the human body and delta-9-tetrahydrocannabinol, the primary active ingredient, is classified as a hazardous component with these MSDS cautions:
Poisoning may also affect the respiratory, cardiovascular and immune systems.
Sniffing marijuana may cause an ulcerated or perforated nasal septum. Repeated smoking may result in cough, laryngitis, bronchitis. other respiratory effects as in acute inhalation and pulmonary function impairment. Long-term use by humans and experimental animals has lead to squamous metaplasia of the tracheal mucosa. Systemic effects may occur as detailed in chronic ingestion. Regular chronic use may result in reproductive effects in males including decreased testicular size, testosterone levels, sperm count and motility and abnormalities in sperm. Gynecomasta may develop with heavy use. Females may experience a high frequency of abnormal periods, less ovulation and decreased prolactin levels. Reproductive effects have also been reported in animals.
Mayor Matt Ryan is fine with legalizing this, as this video demonstrates:
Now, let’s compare what’s actually happening in a shale gas region where there has been activity for an extended period of time with what we know about marijuana. Take a look at this table:
It’s pretty clear marijuana use has definitive cumulative impacts on human health while the evidence against hydraulic fracturing is not only based on pure anecdotes, but is also countered by the real world observations. Yet, the two mayors come down on the side of legalizing what we know to be a problem to health while fighting what scientific data and experience indicates is not.
Then there are the economic questions.
Economic review of natural gas development and marijuana use
Natural gas development brings jobs, lots of jobs as an IHS CERA study recently noted, providing employment opportunities to people from many walks of life (but especially the middle class). There are over 150 different occupations with roughly 450 different workers for each work site according to a study by ShaleTec. The types of jobs stem from office jobs, educational advocacy, construction, development, hydraulic fracturing jobs, engineering jobs, data entry, manual labor, sales, storage, and many more. What’s more? According to data from the same study these jobs provide nearly twice the average salary in places where they exist. For example, the study noted the average job supported by shale development in Pennsylvania had an average salary of $81,000, nearly double the average Pennsylvania salary of $44,000
This is only the beginning. Natural gas development could have profound economic impacts in Broome County, where Mayor Ryan serves. A study focused on this question found:
Assuming that 2,000 wells will be developed in Broome County, drilling expenditures will total $7 billion generating $7.6 billion in local economic activity. This level of economic activity will support over 8,100 person-years of employment. If the drilling activity is evenly spaced over a ten-year period, spending at this level would support 810 (8,100/10) new jobs lasting 10 years. These 8,100 person-years of employment will pay almost $400 million in salaries, wages, and benefits for an average of almost $49,000 per job. In addition, drilling activity will create more than $605 million in property income in the form of rents, royalties, dividends, and corporate profits. Finally, gas well drilling activity in Broome County will produce $42.7 million in state and local tax revenues from property taxes, sales and use taxes, and fees for permits and licenses. About $20.5 million of these tax revenues will go to Broome County taxing entities.
Granted, this study is admittedly optimistic given the slow pace at which DEC now indicates it will proceed, but the upside potential is enormous, even if the number of wells developed is far lower.
How many jobs are created from marijuana growth and sales? An article last year on medical marijuana job statistics suggest it could be a rising industry, potentially creating jobs in about 14 different positions, mostly for professionals such as physicians, physician’s assistants, lawyers, lab technicians, marketing specialists and insurance agents. Where’s the help for out-of-work blue collar middle-class employees?
Natural gas in New York also generates ad valorem taxes, as we have reported several times. The money from one well could create millions of dollars in revenue for one municipality, school district and county each year. Multiply the one well by a couple dozen and the numbers are astronomical.
Marijuana sales would bring in sales taxes but in Colorado, where marijuana was recently legalized, the Colorado Center on Law and Policy conducted a study of the potential revenue generated from excise and sales taxes:
According to an Amendment 64 study by the Colorado Center on Law and Policy, it is estimated that nearly 13% of Colorado residents aged 21 and older (between 500,000 and 600,000 individuals) use marijuana, of which nearly 100,000 are medical marijuana card holders. But since it is illegal, the state spends money enforcing the law rather than making money off sales that are happening anyway. According to research featured at HuffPo, the state spends about 4% of its combined police, judicial, and correctional budgets on marijuana-related offenses; legalization can be seen as part of prison/judicial reform.
By legalizing a retail market that already exists, the state puts itself in prime position to financially benefit from the sale and production of marijuana. Between excise and sale taxes, regulation is expected to generate $46 million dollars in combined state and local revenue while simultaneously saving more than $12 million in law enforcement expenditures. The revenue number could be even greater if legality increases marijuana’s customer base. Read more.
So, authorizing the ability of people to purchase and consume an unhealthy product, which is what would be required to achieve any financial rewards, would, when all is said and done, only have the potential to produce $58 million of economic impact. Compare that economic impact to the one provided by Colorado’s very successful natural gas and oil industry:
The economic activity that is generated by Colorado’s oil and natural gas development produced more than $3 billion in total government revenue in 2010. (Source: Rocky Mountain Energy Forum)
If pro-development policies are employed, it is estimated that total government revenue form the industry could increase to more than $9.1 billion by 2030. (Source: American Petroleum Institute)
The Colorado oil and gas industry pays about 95% of all severance taxes levied on the extraction of oil and gas that are part of Colorado’s TABOR revenue base (Source: Colorado Department of Local Affairs). Taxable oil and gas property in 2009 was assessed at $11.9 billion, or about 12.1% of the state total. (Source: Colorado Department of Local Affairs – Colorado Assessed Values Manual 1995-2009)
Therefore, using Colorado as a model, natural gas would still come out as a clear winner in terms of job creation and revenue, meaning the suggestions from the mayors of Binghamton and Planet Ithaca are more about appeasing political interests than improving the health or economies of the region.