AN IMPORTANT ISSUE YOU NEED TO KNOW ABOUT

Fracking creates jobs and cheap energy, as well as environmental concerns.  Let’s explore.

A report by the International Energy Association says the U.S. will become the world’s largest oil producer by 2017, overtaking current leaders Saudi Arabia and Russia.  Energy policies initiated by the Bush administration and implemented by President Obama have moved the U.S. toward energy independence as U.S. oil production has risen rapidly since 2008 and oil imports are at their lowest level in two decades.

North America is at the forefront of a sweeping transformation in oil and gas production because of the new technologies used in “hydraulic fracking.”  This is happening primarily on private land as the current administration has been reluctant to issue new permits for drilling or approve the Keystone Pipeline to bring oil from Canada.

Oil and petroleum imports has fallen an average of more than 1.5 million barrels per day and domestic crude oil production has increased by an average of more than 720,000 barrels per day since 2008.  As domestic drilling has expanded so has the number of oil and gas production jobs.  According to the Federal Reserve Bank of St. Louis, job growth in these industries has risen 25% since January 2010.

The fracking revolution creates lots of jobs and cheaper energy with environmental concerns that proponents feel can be managed and controlled.

President Obama says natural gas production could support 600,000 jobs by the end of the decade.  Most of these positions are highly desirable from a financial standpoint.  Drilling and support jobs pay about $34.50 an hour, 50% more than the national average, according to The New York Times.

Cheap natural gas and the administration’s eagerness to expand U.S. energy production has shifted resources away from green energy technologies like solar and wind, whose costs are not competitive without major subsidies.

The fracturing method of extracting natural gas from shale rock formations has come under intense scrutiny.  A few local cities and communities have banned the practice.

High-volume hydraulic fracturing involves shooting million of gallons of water, sand and chemicals underground to crack shale formations and unlock oil and gas.  The sand props open the fissures, and hydrocarbons flow through the porous sand up the well.  The upper Midwest’s round, hard sand makes it ideal for fracking, and a fracked well could use anywhere from two to five million pounds of sand.

Critics say the fracking process produces millions of gallons of waste water that contain highly corrosive salts and carcinogens.  These radioactive elements could pollute water sources such as rivers and underground aquifers and pose serious dangers to the environment and individuals.

Daniel Yergin, author of The Quest, has studied the fracking process extensively with his team at HIS Cambridge Energy Research Associates and concluded that the method is safe, “if it is done right.”

“The likelihood of chemicals that are used in fracking actually getting into the water supply is very unlikely because the depth [of the drilling] is so shallow,” says Yergin, who advised President Obama on shale gas while serving on a Department of Energy advisory board last year.
“The environmental issues are:  how do you manage the waste water that is produced with drilling and what do you do about maintaining air quality because you have a lot of diesel engines pumping away.”

There is also the community impact with additional truck traffic and other heavy equipment that can damage infrastructure and clogs local roadways.

Yergin acknowledges the seriousness of these concerns, but says they are all very manageable.  The report he and the panel submitted to Obama outlined roughly 20 “pragmatic solutions” on how to minimize the aforementioned risks, involving “new technologies, best practices, regulation on water,” air quality controls and community development plans to address increased traffic issues.

Another aspect of the fracking process is the need for large amounts of a particularly kind of sand found mostly in the Midwest.  In Wisconsin, for example, in 2010 there were five industrial sand mines.  Today there are 60 functioning or in the permit process.

The rapid expansion of sand mining has raised fears among some residents and hope in others, often pitting neighbors against one another, just as fracking has done elsewhere.

To get to the sand, companies must blast and strip-mine fields and ridges.  Their trucks ply the two-lane country roads nonstop to haul the sand to processing plants and railheads, where it is shipped to far-flung oil and gas fields.  Residents worry that when strong winds lift the fine, washed sand from outdoor piles, the dust could lead to respiratory problems.

Those who lease their land get royalties.  Locals work at the mines and drive the trucks.  When the companies build plants that wash, sift and dry the sand, they pay tens of thousands of dollars in property taxes.  A trade-off is needed, mining’s supporters say, if Wisconsin wants jobs and the country wants cheap energy.  “Everyone wants the country to be more self-sufficient, but no one wants the effects of it.  We can’t have our cake and eat it too.”

Wisconsin was built on mining, mainly lead and iron, but sand mines were usually small and supplied local construction.  Now, the sand mining boom has attracted big oil and gas companies, local large landowners and entrepreneurs and hedge funds.

After a site has been mined, the area has to be reclaimed according to the landowner’s directives.  Near the entrance to one plant, a tract has been replanted with native grasses and pine, which the landowner hopes to turn into a Christmas tree farm.

The earth blasted from the ridge is taken to a facility on site where it is washed and sifted to extract the sand.  Piles of washed sand stand at the site, fine as brown sugar.  Sprinklers loom over the piles to keep down dust when the wind picks up.

Local residents worry that airborne dust, or crystalline silica, as it is known, can lead to a potentially deadly respiratory ailment called silicosis.  Research has shown the dangers crystalline silica poses on the job to miners and even to workers at fracking sites.  But little is known about its effect on people who live near mine sites.

Critics want the air around mines monitored, but so far, little government money is available to do much monitoring.

Someone said, “It’s like the difference between mainstream smoke and secondhand smoke.”

The bottom line is sand mines and fracking sites owners have to pay the costs of monitoring air and water quality as well as developing steps to control the degradation of these vital ingredients.  This is similar to the utility companies who had to pay and control their emissions.

Fracking is exempt from key federal environmental guidelines, i.e., the Clean Water Act, the Clean Air Act and the Safe Drinking Water Act.  Fracking is also exempt from state water use regulations.  These exclusions have to be reversed so that we can take advantage of the enormous opportunity which fracking offers.

ArtSchwartzSig

2 Comments

Filed under Blog

2 responses to “AN IMPORTANT ISSUE YOU NEED TO KNOW ABOUT

  1. Gin Miller

    Hi Art,
    After reading this I am sure John would love to have lunch with you and talk about the industry in ND. He is there today talking care of the big sandwich business! Greet your lovely wife.
    Virginia

  2. Dan

    Great fracking blog. Nicely done.

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