Fracking....It's Good For You

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Cosima___J
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Fracking....It's Good For You

Post by Cosima___J » Mon Jun 04, 2012 10:55 am

Here's a good article from The Economist magazine. We are lucky to have such an abundant resource at hand. And the dangers that the anti-fracking crowd cite can be mitigated, according to The Economist.

Shale gas
Fracking great
The promised gas revolution can do the environment more good than harm
Jun 2nd 2012 | from the print edition



THE story of America’s shale-gas revolution offers hope in hard times. The ground was laid in the late 1990s, when a now-fabled Texan oilman, George Mitchell, developed an affordable way to extract natural gas locked up in shale rock and other geological formations. It involves blasting them with water, sand and chemicals—a technique known as hydraulic fracturing, or “fracking”. America’s shale-gas industry has since drilled 20,000 wells, created hundreds of thousands of jobs, directly and indirectly, and provided lots of cheap gas. This is a huge advantage to American industry and a relief to those who fret about American energy security.

The revolution should continue, according to a report published this week by the International Energy Agency (IEA). At current production rates, America has over a century’s supply of gas, half of it stored in shale and other “unconventional” formations. It should also spread, to China, Australia, Argentina and Europe. Global gas production could increase by 50% between 2010 and 2035, with unconventional sources supplying two-thirds of the growth (see article).

A number of things could prevent this, however. Many of the factors behind America’s gas boom, including liberal regulation of pipelines (which encouraged wildcat exploration by small producers), a well-aimed subsidy and abundant drill-rigs, do not exist elsewhere. Its sheer rapidity is therefore unlikely to be matched. A greater threat stems from environmental protests, especially in some European countries, which could kill the shale-gas industry at birth. France and Bulgaria have banned fracking. Greens in America and Australia (see article) are also rallying against the industry.

The anti-frackers have reasonable grounds for worry. Producing shale gas uses lots of energy and water, and can cause pollution in several ways. One concern is possible contamination of aquifers by methane, fracking fluids or the radioactive gunk they dislodge. This is not known to have happened; but it probably has, where well-shafts passing through aquifers have been poorly sealed.

Another worry is that fracking fluids regurgitated up well-shafts might percolate into groundwater. A graver fear is that large amounts of methane, a powerful greenhouse-gas, could be emitted during the entire process of exploration and production. Some also fret that fracking might induce earthquakes—especially after it was linked to 50 tiny tremors in northern England last year.

But the risks from shale gas can be managed. Properly concreted well-shafts do not leak; regurgitants can be collected and made safe; preventing gas venting and flaring would limit methane emissions to acceptable levels; and the risk of tremors, which commonly occur as a result of conventional oil-and-gas activities, can be contained by careful monitoring. The IEA estimates that such measures would add 7% to the cost of the average shale-gas well. That is a small price to pay for environmental protection and the health of a promising industry.

For as well as posing environmental risks, a gas boom would bring an important environmental benefit. Burning gas emits half as much carbon dioxide as coal; so where gas substitutes for coal, emissions will fall. America’s emissions have fallen by 450m tonnes in the past five years, more than any other country’s. Ironically, given its far greater effort to tackle climate change, the European Union has seen its emissions rise, partly because of an increase in coal-fired power generation in response to Europe’s high gas price.

Cleaner, but not clean enough

By itself, switching to gas will not reduce emissions to anything like the levels required to avoid a high risk of serious climate change. This will take much crunchier policies to boost renewable-energy sources and other clean technologies—starting with a strong price on carbon emissions, through a market-based mechanism or, preferably, a carbon tax. Governments are understandably unwilling to take these steps in straitened times. Yet they should plan to do so; and in the coming years cheap gas could help free cash for more investment in low-carbon technologies. Otherwise the bonanza would be squandered.

from the print edition | Leaders

BWV 1080
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Re: Fracking....It's Good For You

Post by BWV 1080 » Mon Jun 04, 2012 11:13 am

the big issue now is that this technology stands to also boost US petroleum production by 3-4 million barrels a day - a number that will mean the US will exceed current Saudi production levels by the end of the decade

combined cycle gas is now the cheapest source of new power generation - cheaper than coal, cheaper than nuclear. Because of infrastructure, private ownership of mineral rights and technological expertise, the US has a competitive advantage that will take the rest of the world years to catch up on. The much touted renaissance of US manufacturing and "reshoring" of jobs formerly shipped to emerging markets, notably China, is driven by this energy cost advantage.

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Re: Fracking....It's Good For You

Post by jbuck919 » Mon Jun 04, 2012 12:11 pm

Cosima wrote:And the dangers that the anti-fracking crowd cite can be mitigated, according to The Economist.
BWV 1080 wrote:the big issue now is that this technology stands to also boost US petroleum production by 3-4 million barrels a day - a number that will mean the US will exceed current Saudi production levels by the end of the decade

combined cycle gas is now the cheapest source of new power generation - cheaper than coal, cheaper than nuclear. Because of infrastructure, private ownership of mineral rights and technological expertise, the US has a competitive advantage that will take the rest of the world years to catch up on. The much touted renaissance of US manufacturing and "reshoring" of jobs formerly shipped to emerging markets, notably China, is driven by this energy cost advantage.
Oh, I do so want to believe it. I so SO want to believe it. :wink:

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Re: Fracking....It's Good For You

Post by living_stradivarius » Mon Jun 04, 2012 2:00 pm

Is it any more risky than that posed by offshore drilling and what BP has already done? I don't think it is. And being able to outproduce Saudi Arabia would solve a ton of problems.
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Re: Fracking....It's Good For You

Post by jbuck919 » Mon Jun 04, 2012 2:14 pm

living_stradivarius wrote:Is it any more risky than that posed by offshore drilling and what BP has already done? I don't think it is. And being able to outproduce Saudi Arabia would solve a ton of problems.
And push the oil companies over the top as our plutocratic masters.

Look, I want this to be the goose that laid the golden egg as much as the next guy, and I don't automatically conclude that it is bad for the country because the oil companies want it without regard for whether it is good for the country or not. But if something is too seductively good to be true, all sorts of alarms should go off. I don't want the green faction which thinks we should all stop driving cars anyway to preempt all this (fat chance, but apparently they have been a hindrance based only on their predictable protests), but let's make sure that this is not going to do environmental damage at the level of contaminating drinking water or worse (it is not quite enough that nothing worse can happen than an offshore rig blowout), and that the benefits to Americans are not an illusory con game perpetrated by the oil companies who will pocket all the real benefits for themselves.

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Re: Fracking....It's Good For You

Post by living_stradivarius » Mon Jun 04, 2012 2:43 pm

jbuck919 wrote:
living_stradivarius wrote:Is it any more risky than that posed by offshore drilling and what BP has already done? I don't think it is. And being able to outproduce Saudi Arabia would solve a ton of problems.
And push the oil companies over the top as our plutocratic masters.

Look, I want this to be the goose that laid the golden egg as much as the next guy, and I don't automatically conclude that it is bad for the country because the oil companies want it without regard for whether it is good for the country or not. But if something is too seductively good to be true, all sorts of alarms should go off. I don't want the green faction which thinks we should all stop driving cars anyway to preempt all this (fat chance, but apparently they have been a hindrance based only on their predictable protests), but let's make sure that this is not going to do environmental damage at the level of contaminating drinking water or worse (it is not quite enough that nothing worse can happen than an offshore rig blowout), and that the benefits to Americans are not an illusory con game perpetrated by the oil companies who will pocket all the real benefits for themselves.
Still better than letting the Saudis pocket it.
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Re: Fracking....It's Good For You

Post by jbuck919 » Mon Jun 04, 2012 2:51 pm

living_stradivarius wrote:
jbuck919 wrote:
living_stradivarius wrote:Is it any more risky than that posed by offshore drilling and what BP has already done? I don't think it is. And being able to outproduce Saudi Arabia would solve a ton of problems.
And push the oil companies over the top as our plutocratic masters.

Look, I want this to be the goose that laid the golden egg as much as the next guy, and I don't automatically conclude that it is bad for the country because the oil companies want it without regard for whether it is good for the country or not. But if something is too seductively good to be true, all sorts of alarms should go off. I don't want the green faction which thinks we should all stop driving cars anyway to preempt all this (fat chance, but apparently they have been a hindrance based only on their predictable protests), but let's make sure that this is not going to do environmental damage at the level of contaminating drinking water or worse (it is not quite enough that nothing worse can happen than an offshore rig blowout), and that the benefits to Americans are not an illusory con game perpetrated by the oil companies who will pocket all the real benefits for themselves.
Still better than letting the Saudis pocket it.
No, it's not.

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BWV 1080
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Re: Fracking....It's Good For You

Post by BWV 1080 » Tue Jun 05, 2012 10:15 am

Given that 2 key electoral states, Ohio and Pennsylvania are becoming significant oil and gas producers I wonder what the political ramifications will be

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Re: Fracking....It's Good For You

Post by RebLem » Tue Jun 05, 2012 10:50 am

Cosima___J wrote:Here's a good article from The Economist magazine. We are lucky to have such an abundant resource at hand. And the dangers that the anti-fracking crowd cite can be mitigated, according to The Economist.
They can't be mitigated until after the energy companies acknowledged there is a problem, which they have so far refused to do. Ranchers and homeowners all over the West, where fracking is being done, are saying their lives are ruined. The gas has leaked into their water supply. Humans can get bottled water at some considerable expense, especially when its needed even for bathing and not just drinking and cooling, but the cost is absolutely prohibitive for cattle, pigs, and sheep. A way of life is being destroyed. And the energy companies just say that the ranchers have all been contacted by tort lawyers and are just lying about it to try to extort money from them. Its all a massive conspiracy involving tens of thousands of conspirators all over the West and Midwest.
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Re: Fracking....It's Good For You

Post by John F » Tue Jun 05, 2012 12:38 pm

The Economist wrote:the risks from shale gas can be managed. Properly concreted well-shafts do not leak; regurgitants can be collected and made safe; preventing gas venting and flaring would limit methane emissions to acceptable levels; and the risk of tremors, which commonly occur as a result of conventional oil-and-gas activities, can be contained by careful monitoring. The IEA estimates that such measures would add 7% to the cost of the average shale-gas well. That is a small price to pay for environmental protection and the health of a promising industry.
This would be fine if the energy companies took all these precautions scrupulously, spending whatever it takes to protect the environment. But they may cut corners to maximize their profits - cf BP and the Deepwater Horizon oil spill - and what then? The oil spill occurred out at sea, but fracking endangers the ground water on which we directly rely for drinking, farming, surviving. Does anybody want to bet their lives on the energy companies doing their part perfectly? Recent history shows that this would be a losing bet, and a stupid one.
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Re: Fracking....It's Good For You

Post by absinthe » Tue Jun 05, 2012 2:01 pm

Some also fret that fracking might induce earthquakes—especially after it was linked to 50 tiny tremors in northern England last year.
Yeah? And a couple of not so tiny ones that shook the ground a little and, so I understand, fractured water supply pipes to individual houses - which will cost those on metered water expensively, if you know what crooks our water companies are: they charge the household for all the water allegedly supplied from meter to house - then sell the water a second time, perhaps many times as that water leaks back into the aquifers. More to the point, a few million people can no longer sleep easy, wondering how many tiny earthquakes it'll take simultaneously enough to made a big one. Ah, but it's commerce. It's the economy. People don't count.

Anyway, one asks how all this energy will be used. Making things? Umm, that suggests that others will be expected to buy them. With what? With unskilled jobs disappearing fast; with two-tier wage systems... who can afford them? Well, the wealthier who own the plant and the techno-boys who design and build the robots but will that be enough?

Not believing that humanity is the ultimate stage of evolution I wonder what the successors will make of what's left?

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Re: Fracking....It's Good For You

Post by jbuck919 » Tue Jun 05, 2012 2:06 pm

absinthe wrote:Well, the wealthier who own the plant and the techno-boys who design and build the robots but will that be enough?
Unfortunately, spell check doesn't catch it when one leaves out the "e" in "planet."

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Re: Fracking....It's Good For You

Post by absinthe » Tue Jun 05, 2012 8:37 pm

Thanks, but it's ok! I meant plant as in industrial machinery, factories and such. Though I suppose the two are interchangeable in a way.

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Re: Fracking....It's Good For You

Post by jbuck919 » Tue Jun 05, 2012 8:46 pm

absinthe wrote:Thanks, but it's ok! I meant plant as in industrial machinery, factories and such. Though I suppose the two are interchangeable in a way.
And I was making a little joke, though I'm not sure it's very funny.

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Re: Fracking....It's Good For You

Post by Dennis Spath » Sat Jun 09, 2012 4:03 pm

We've had three 4.5 Earthquakes in East Texas in the past four months, and no likely source of the tremors other than fracking. The politics of the economics is quite obvious.....profits trump pollution problems, and that's going to be very evident in the runup to the Presidential Debates.

The Republicans have an effective "Jobs" argument this election cycle by promoting Natural Gas and the Oil Sands Pipeline from Canada, knowing that many folks who are out of work prize a job more highly than the kind of environment their grandchildren will inherit after our Congress and their money is dead and buried.

When I was born (1934) the world population was roughly 2.4 Billion....by 1960 3 Billion, and today about 7.3 Billion....with subsequent demand increases in raw materials required to fuel increasingly industrialized economies. While birth rates are slowing dramatically in some countries (in spite of the Vatican), there will be roughly 8.7-9.1 Billion clamoring for goods and services by 2050 per demographers.
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Re: Fracking....It's Good For You

Post by BWV 1080 » Sun Jun 10, 2012 11:09 am

Shale Gas Supports More Than 600,000 American Jobs Today; by 2015, Shale Gas Predicted to Support Nearly 870,000 Jobs and Contribute $118.2 Billion to GDP, IHS Study Finds

"Shale gale" will also blow in lower natural gas, electricity costs, and boost tax revenue
Category: Country & Industry Forecasting, Country & Industry Forecasting Media, Economics, Energy & Power
Tuesday, December 6, 2011 12:01 am EST
Dateline:
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"Shale gas combines a capital-intensive industry with a broad domestic supply chain..."
WASHINGTON--(BUSINESS WIRE)--The natural gas "shale gale" that has dramatically transformed the outlook for U.S. energy supplies is also having profound economic impacts -- creating jobs, reducing consumer costs of natural gas and electricity, stimulating economic growth and bolstering federal, state and local tax revenue, according to a new IHS Global Insight study. The study found that shale gas production supported more than 600,000 jobs in 2010, a number that is projected to grow to nearly 870,000 by 2015.

The study, The Economic and Employment Contributions of Shale Gas in the United States, is the most definitive study to date tracking the long-term economic impact of U.S. shale gas production. It presents the economic contributions of shale gas in terms of jobs, economic value and government revenues through 2035, as well as the broader macroeconomic impacts on households and businesses. The report is the first of three on the economic effects of unconventional gas and oil development in North America.

“The rapid growth in shale gas production—currently 34 percent of total U.S. production—is one of the most significant energy developments in recent decades and is having a significant impact on the nation's economy in terms of stimulating job creation and economic growth,” said IHS Vice President John Larson, the lead author of the study. “This study further informs the discussion with a greater understanding of the economic potential from this vast American energy source.”

Among the study's key findings:

Shale gas had grown to 27 percent of U.S. natural gas production by 2010; it is currently 34 percent and will reach 43 percent in 2015 and more than double by 2035 to 60 percent
In 2010, the shale gas industry supported more than 600,000 jobs; by 2015 the total will likely grow to nearly 870,000 and to more than 1.6 million by 2035
Nearly $1.9 trillion in cumulative capital investments are expected to be made between 2010 and 2035
Annual capital expenditures, especially strong in the early years, will grow to $48.1 billion in 2015
The shale gas contribution to the U.S. gross domestic product (GDP) was more than $76.9 billion in 2010; in 2015 it will be $118.2 billion and will triple to $231.1 billion in 2035
Over the next 25 years, the shale gas industry will generate more than $933 billion in tax revenues for local, state and the federal governments
Savings from lower gas prices, as well as the associated lower prices for other consumer purchases, equate to an annual average addition of $926 in disposable income per household between 2012 and 2015, and increase to more than $2,000 per household in 2035 on an annual basis
The report’s findings reflect the dramatic impact of shale gas production in the United States. As recently as 2007, it was believed that the country would soon need to import large volumes of liquefied natural gas (LNG) for domestic consumption. Instead, shale gas production has more than doubled the size of the discovered natural gas resource in North America—enough to satisfy more than 100 years of consumption at current rates.

A key reason for the shale gas industry’s profound economic impact is its high “employment multiplier”—the indirect and induced jobs created to support an industry. For every direct job created in the shale gas sector, more than three indirect and induced jobs are created, a rate higher than the financial and construction industries, the report finds.

“Shale gas combines a capital-intensive industry with a broad domestic supply chain,” Larson said. “The United States is a leader in all parts of the shale gas industry which means that most of its suppliers are domestically based, and that means a larger portion of the dollars spent are supporting domestic jobs in trucking, steel fabrication, aggregates, heavy equipment manufacturing, hotels, and restaurants, among others.”

The study also found that shale gas and related jobs pay higher wages on average – currently $23.16 per hour – than those paid to workers in manufacturing, transportation and education.

The IHS Global Insight study measured the broader impact of lower natural gas prices, finding that over the 2010-2035 period prices on average would be at least two times higher absent shale gas production. This impact is even greater now and over the next few years when prices would have been two-and-a-half to three times higher. The lower natural gas prices have resulted in a 10 percent reduction in electricity costs nationally and that flows through the economy to lead to lower prices for many other consumer purchases.

Lower gas prices also boost the international competitiveness of domestic manufacturers, resulting in 2.9 percent higher industrial production by 2017 and 4.7 percent higher production by 2035.

“Absent the added supply from shale gas production, large volumes of LNG imports would be required and U.S. consumers would be paying European or even Asian prices which are two to three times what they are today here in the U.S.,” Larson said. “The benefits of that savings reverberate through the wider economy.”

The Economic and Employment Contributions of Shale Gas in the United States was commissioned by America's Natural Gas Alliance (ANGA). IHS Global Insight offers an independent assessment and is exclusively responsible for all of the analysis, content, and conclusions contained in the study.

In measuring the economic contribution of shale gas, the study fully "sized" the economic influence of the industry by capturing all the supply chain and income effects associated with shale gas activity in the U.S. The results of the production and capital expenditure profile analysis were integrated into a customized modeling approach developed by IHS Global Insight. This approach links Input-Output modeling techniques – similar to those used by the U.S. Department of Commerce and the Congressional Budget Office– with the dynamic modeling capabilities of proprietary IHS models to capture the industry's comprehensive contribution and impact on the economy. The results represent a conservative estimate as the study:

Constrained future production and capital expenditures by realistic market demand as well as technical and economic feasibility of developing shale gas plays.
Did not consider production or investment activities from additional gas plays that have yet to be discovered.
Independently evaluated each play to reflect regulatory environments in each region and adjusted production profiles to reflect little or no development if there was uncertainty as to regulation and access.
Did not consider the economic benefits accruing to the U.S. suppliers who are supplying the Canadian shale gas industry.
Did not quantify the job creation in industries that would refocus investment back to the United States (for instance, petrochemicals).
IHS Global Insight established the modern economic forecasting industry nearly 50 years ago and provides the most comprehensive economic and financial information available on countries, regions, and industries, using a unique combination of expertise, models, data, and software within a common analytical framework. Among those who developed IHS Global Insight's expertise in this area was Nobel laureate in Economics Lawrence Klein.

To download The Economic and Employment Contributions of Shale Gas in the United States complete report and methodology, visit www.ihs.com/EconomicContributionofShaleGasintheUS.

About IHS (www.ihs.com)

IHS (NYSE: IHS) is the leading source of information and insight in critical areas that shape today’s business landscape, including energy and power; design and supply chain; defense, risk and security; environmental, health and safety (EHS) and sustainability; country and industry forecasting; and commodities, pricing and cost. Businesses and governments around the globe rely on the comprehensive content, expert independent analysis and flexible delivery methods of IHS to make high-impact decisions and develop strategies with speed and confidence. IHS has been in business since 1959 and became a publicly traded company on the New York Stock Exchange in 2005. Headquartered in Englewood, Colorado, USA, IHS employs more than 5,500 people in more than 30 countries around the world.

IHS is a registered trademark of IHS Inc. All other company and product names may be trademarks of their respective owners. Copyright © 2011 IHS Inc. All rights reserved.

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Re: Fracking....It's Good For You

Post by Dennis Spath » Sun Jun 10, 2012 1:55 pm

A very wordy industry puff piece glorifying economic growth, and with no mention whatsoever of the most important issue: The environmental impact costs to our nation of the various forms of energy production.
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