Fracking Companie$ are Drilling More and Enjoying it Less?

by S. Tom Bond on May 12, 2018

Natural Gas is now driving Climate Change

For Frackers, Hope Springs Eternal in the Human Breast

Essay by S. Tom Bond, Retired Professor & Resident Farmer, Lewis County, May 12, 2018

You’ve got to hand it to the folks in the fracking industry (and their investors), they aren’t discouraged by the mountain of evidence that fracking isn’t in the public interest. They ignore the effect of too much carbon dioxide in the atmosphere, they ignore the health and property effects caused their neighbors, and they even ignore the fact the industry is not providing what they are (presumably) in business for: profit!

That last one is a shocker. According to a report in a December Wall Street Journal titled “Wall Street Tells Frackers to Stop Counting Barrels, Start Making Profits,” the fracking industry has lost an amazing $280 billion since it began. Two things make it go, huge estimates of the amount of oil and gas bound in certain shale rock series, and the willingness of the banking industry to lend. Why do bankers lend? The reason they have in the past is explained in an article in Desmogblog.

In simplest terms, the banker gets his off the top – he gets his interest back, year by year, whether anyone else gets anything or not. “Easy Wall Street cash is leading U.S. shale companies to expand drilling, even as most lose money on every barrel of oil they bring to the surface.” Another Wall Street Journal article agrees. The same article quotes Anadarko CEO Al Walker, “Wall Street has become an enabler that pushes companies to grow production at any cost, while punishing those that try to live within their means.” Both of these articles are well worth the read.

What about the jobs claim? Highly inflated. For a few months from cutting trees (largely wasted, not removed for timber and no firewood, even) until backfilling the ditches and “reclamation” makes the big numbers. When things have settled down for the long term there are a few jobs for well tenders and pump station operators. It is a mature industry and capital intensive and low labor. No chance that will change.

Health effects continue to be documented. In December the journal Science Advances pubished a study showing within about 2 miles, “Negative health impacts include a greater incidence of low–birth weight babies as well as significant declines in several other measures of infant health.” However, the requirement of law is that a “direct connection” must be shown and statistics don’t count by that measure. The report is couched in very careful language to avoid being sued by the industry.

The consensus among health experts is there is evidence that many of the chemicals used in fracking can damage the lungs, liver, kidneys, blood, and brain. Material Safety Data Sheets are results of studies required by OSHA of manufacturers to accompany their products. One study of MSDS for 41 chemicals commonly used in fracking found 71% had “between 6 and 14 different adverse health effects including skin, eye, and sensory organ damage; respiratory distress including asthma; gastrointestinal and liver disease; brain and nervous system harms; cancers; and negative reproductive effects. These are frequent complaints from people living near fracking operations and gas pumping stations, all through the literature, too.

The last cited paper is about endocrine disrupters. These are chemicals that in very small quantities can interfere with the function of the ductless glands of the body. They are difficult and expensive to study, but have profound effects on biological function. The industry is terrified of them, and treats them as a nonentity, as though they didn’t exist.

A few industry professionals, such as A. R. Ingraffea, Ph.D., and Robert W. Howarth, Ph. D., both high ranking Engineering professors at Cornell, and Ecology and Environmental professors in general, are quite open about the health hazards of fracking. Many in the health industry, doctors and nurses as well as researchers are thoroughly convinced. But it takes high status to be insulated from the pugnacious industry. There are now over 1700 articles about health effects of fracking, with about 20% suggesting the effects are insignificant.

As renewables replace burning hydrocarbons as a source of energy, the big loss to coal, oil and gas is their investment in reserves and equipment. Parts of the Northeast, Appalachia in particular, see what happens when decline of an industry happens. When we look around, we see the mess left behind. It has happened to coal in our area previously. Old tipples, orange water draining from mines, old train rights of way abound. There are lots of unplugged oil and gas wells in some areas that you come across walking through the countryside. They have little effect on the forest around them if left alone, but many are effected by fracking below, becoming a vehicle for escaping fracking liquids. And several communities have the remains of old pump stations. It will happen again with fracking, only bigger and worse.

What else invades the fracker’s hope? The biggest one is global warming. It could exterminate not only the human race, but much of animal and plant life, too. If you work in an air-conditioned office that is heated in the wintertime, and don’t have much of an education beyond that domain, or if you are a religious type who thinks God wouldn’t destroy his “highest” creation, let alone most of the rest of it, it might be hard to accept.

But if you are a product of the thinking that has elevated understanding so much since the Renaissance, when observation of phenomena and reason came to displace tradition and fanciful tales, it isn’t so hard. There is plenty to observe: photographs of change with time, measurements of temperature, shorelines, thickness of ice on the sea and on land, observation of early spring and late fall, movement of animal habitat North and up mountainsides, changes is rainfall, changes in the jet stream, melting of permafrost in the North, changes in ocean currents, low snow pack on mountains that supply water in summer, droughts, and other phenomena. These fit into a reasonable whole explained by warming of the whole earth.

How certain wavelengths of sunlight are changed into heat we feel can easily be explained by anyone with certain higher degrees in Physics and Chemistry. We emphasize competition as a source of motivation in our society, but acceptance of expert opinion, what is understood by those who have studied a situation is the key to advancing our common understanding and our common good.

If you prefer to rely on “common sense” or the leadership of the wealthy and thus powerful, you wind up confused by all the observable phenomena. Recent research shows ideological barriers to accepting science don’t emerge from people spontaneously critiquing scientific consensus through the lens of their world views. Instead, climate denialism is encouraged in high emitting countries by organizations or individuals with a vested interest in maintaining the profitability of fossil fuels. And it is “distinctive about the United States and a few others, rather than being an international phenomenon.

Already people near the Equator and in the rapidly warming cold areas are hurting. The Philippines had a storm with the highest speed winds ever observed recently. A city in Pakistan had the highest temperature ever recorded on earth in the month of April, 122.4 F. The anomalous heat extended over a large part of the country. In the far North, heat is causing the shorelines of Eskimo villages to retreat and the villages to move back. It is making it hard for them to get to the water to get food.

It will come to temperate zones, too. And it will get us all, if we continue as at present. The money going into infrastructure for burning gas and oil is being misspent.
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World May Hit 2 Degrees of Warming in 10-15 Years Thanks to Fracking, Says Cornell Scientist

{ 3 comments… read them below or add one }

Michael Schroeder May 15, 2018 at 12:32 am

I posted this DeSmogBlog piece on my FB page (https://www.desmogblog.com/2018/04/18/finances-great-american-fracking-bubble) and a sympathetic reader responded:

“This article misses the main point. The price of oil is set by Saudi Arabia, not anyone in the United States. If the Saudis want fracking to be economical, they can make it so with one phone call. However, the Kingdom decided several years ago that the United States, not the Kingdom, will become the swing producer. That decision allowed the price of oil to fall below the $80/bbl economic threshold that spurred fracking in the first place. At $80, fracking makes money. At $50, it does not. It’s really that simple.”

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S. Tom Bond May 16, 2018 at 8:21 am

Saudi vs Shale: The Breakeven Myth

Keep in mind that those figures are to get oil out of the ground.

To be used, crude oil must be transported to a refinery, converted into useful products, and the products transported to the point of use.

Increased efficiency of fracking is marginal. The improvement per well results from longer laterals. No secondary recovery is in sight, since fracking results in source rock broken by pressure, which goes in all directions following the weakest leads. The recovery is very small compared to conventional. Present yields are from sweet spots chose for the best yield.

The mess we are due in Appalachia involves gas, however, where the situation is somewhat different. Russia has about a quarter of the world reserve, Iran about one sixth, Qatar about one eighth and the United States somewhat less than one twentieth. Over seas reserves are largely conventional and low technology and cost to recover. Russia and Iran would be the natural suppliers of Europe and China.

Big pipelines are in the works from Russia to China. This wonderful article in the Financial Times, tells much about the gas line:

https://ig.ft.com/gazprom-pipeline-power-of-siberia/

It will cost $55B and is now over half done. It is 56 inches diameter. Compare that with 42 inches for the ACP and MVP! As much capacity as both. 1700 miles in length, compared to the MVP at 303 miles and about 600 for the ACP.

Russia is also exporting oil to China. The second pipeline recently completed puts it ahead of Saudi Arabia in shipping oil to China.

See the Breakeven Myth here:

https://oilprice.com/Energy/Energy-General/Saudi-vs-Shale-The-Breakeven-Myth.html

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Dan Kelly June 15, 2018 at 11:14 pm

http://www.readingeagle.com/news/article/reading-based-ugi-cuts-natural-gas-rate

Reading-based UGI cuts natural gas rate in Penna.

Customers will see their monthly bills drop by an average of $1.81 beginning July 1.

Written by Dan Kelly, Reading Eagle, June 15, 2018

Reading, PA — Residential heating customers of UGI Utilities Gas Division will see their monthly bills decrease by an average of $1.81 beginning July 1 due to a tax credit contained in the federal tax cut.

UGI officials said the latest cut comes on the heels of a 2.8 percent rate cut credited to the reduced cost of buying natural gas and also set to go into effect July 1. The new rate is effective June 1, so the average monthly bill for June will drop from $71.38 to $69.36.

Adding the $1.81 across the board tax credit, the average monthly bills in the mailbox July 1 will drop from $69.36 to $67.55 per month.

UGI still is predicting an early Christmas present for ratepayers in the form of an almost 10 percent rate cut that would become effective December 1.

UGI spokesman Joseph Swope confirmed forecasts for a big December rate drop first predicted in May are holding steady as of Friday. The proposed cut would lower average monthly residential bills from almost $70 per month to about $60.

If the price of purchasing natural gas continues to trend downward, Swope said, the projected Christmas cut could lower average monthly bills from $69.36 to $60.95 after December 1.

“It’s a prediction right now, but we were just talking about December’s rate and it is still looking good for a roughly 9.5 percent cut,” Swope said. “It could go up, it could go down.”

Swope said the Pennsylvania Public Utility Commission directed utility companies to provide a credit to customers based on the decrease in federal corporate tax rates and other tax changes under the Tax Cuts and Jobs Act of 2017.

The main reason for the price drops is the abundance of natural gas in the Marcellus shale formation under much of western and central Pennsylvania.

Swope said UGI customers haven’t seen a $10 per month rate cut for about a decade. He said the big cuts started happening in 2008 when fracking wells tapping Marcellus natural gas began to go online.

UGI’s Gas Division is headquartered in Reading and serves about 400,000 customers in 16 southeastern Pennsylvania counties, including 85,000 households and businesses in Berks County.

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