3 PA Economics Profs Predict When Marcellus Employment Will Peak
A favorite pastime for people who support and for people who oppose fossil fuels is to throw around estimates of how long the Marcellus Shale will be around. How long will there be enough gas in the ground that drillers will actively pursue getting it out of the ground? On the anti-fossil fuel side you have discredited peak oil theorists like Art Berman who says we’re going to run out of gas in the next 10 years (see Peak Oil Theorist Art Berman Says Shale Gas is Peaking Too), and discredited “reporter” from the New York Times Ian Urbina who tries to make the case that shale drilling is nothing but a house of cards, a Ponzi scheme, ready to collapse at any time (see Unnamed Source in New York Times Anti-Gas Articles was…an Intern?!). On the pro-drilling side, we’ve personally heard Marcellus drillers state that they expect to still be drilling at least 40 years into the future, and possibly longer. Three economic professors from Indiana University of Pennsylvania recently published a research paper (copy below) in which they model employment in the coal industry to determine “peak employment” for coal and when it started to decrease–and they then applied the same model (with tweaks) to the Marcellus natural gas industry to predict when the industry will start to decline. What did they find?…
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Our favorite government agency, the U.S. Energy Information Administration (EIA), published an article on Friday that appears to “take sides” in the Pennsylvania debate over whether or not to institute a severance tax. Which is a disappointment. Until now the EIA has stayed above the fray in such issues. The EIA article from Friday offers a grossly misleading side-by-side comparison of where states get their primary source of revenue to feed their voracious appetites to transfer wealth from those who earn it to those who don’t–and how much is contributed by oil & gas severance taxes. The EIA compares tax revenues from five major fossil fuel generating states–Alaska, North Dakota, Wyoming, Texas and Pennsylvania. The graphic they use is powerful (and misleading) and appears to support calls to increase a severance tax in Pennsylvania. We disagree–strongly–with that position. Here is the EIA post from Friday, followed by MDN’s explanation of how it is grossly flawed…
If you’re a Big Green group, like THE Delaware Riverkeeper, you have millions of dollars to a) launch lawsuits against the natural gas industry, and b) buy yourself research studies that support your twisted viewpoints. It is the latter that happened yesterday. CNA, a not-for-profit organization once called the Center for Naval Analyses, sells itself to the highest bidder (the oldest profession in the world). Most recently they sold themselves to THE Delaware Riverkeeper (we certainly hope they used protection). CNA and THE Delaware Riverkeeper held a press briefing yesterday to release a “study” by CNA titled “The Potential Environmental Impacts of Fracking in the Delaware River Basin” (full copy below). What did the “researchers” at CNA, which is based in Arlington, VA just outside the DC orbit, find? If the moratorium is lifted and shale drilling is allowed in the Delaware River Basin–essentially Wayne and Pike counties in Pennsylvania–CNA says it will lead to “land cover disturbance” in “core forest areas”, extreme water withdrawals from poor little creeks and streams, nasty wastewater polluting everything, erosion everywhere, multiple compressor stations and untold ill health impacts for 75,000 people who live close to all of this mess. See what $320,444 (the actual cost of this study) can buy you? We hope it felt good for Riverkeeper…
On Friday Baker Hughes, which is being forced into a merger with Halliburton by the end of this year/early next year, issued a summary of rig counts last Friday. At first blush it appears to be good news, but when you dig under the surface, it’s not–at least for the Marcellus/Utica. The international rig count was 1,118, down 28 from the 1,146 counted in June 2015. However, the average U.S. rig count for July 2015 was 866, up 5 from the 861 counted in June 2015. It appears we’ve turned the corner on how low rig counts will go–we’ve bottomed and are either holding steady (in the U.S.), or perhaps every so slightly gaining ground again. But then we ran the numbers for the Marcellus/Utica and found rig counts continue to decline month over month…
What could of been a valuable research project by a Stanford University researcher is, instead, just more “fracking maybe/might/could/possibly affect groundwater” headline grabber. Stanford environmental scientist Dr. Rob Jackson, a seasoned researcher, set out to determine at what depths is fracking safe and does not affect groundwater (“The Depths of Hydraulic Fracturing and Accompanying Water Use Across the United States” — abstract below). The press release describing the research attempts to redefine any shale well drilled and fracked at less than one mile down as a “shallow” well. This is an inaccurate characterization. From the release: “The most recent such study, published in Environmental Science & Technology, finds that at least 6,900 oil and gas wells in the U.S. were fracked less than a mile (5,280 feet) from the surface, and at least 2,600 wells were fracked at depths shallower than 3,000 feet, some as shallow as 100 feet. This occurs despite many reports that describe fracking as safe for drinking water only if it occurs at least thousands of feet to a mile underground, according to Jackson.” If a well was drilled at 3,000 feet down, that’s still 2,000-2,500 feet below water aquifers–a quarter of a mile of solid rock between the two! Not to mention that 2,600 wells out of 44,000 wells Dr. Jackson studied is a puny 6% of the total–a very small percentage. In other words, the vast majority of shale wells drilled are a mile or more under the surface. Interestingly, for all of the talk about “shallow” wells and the potential dangers of fracking, Dr. Jackson’s study “has not found evidence that frack water contaminants seep upward to drinking-water aquifers from deep underground”…
This sounds like something out of a Jules Verne novel. You may recall from school that Verne wrote some of the earliest sci-fi adventures ever, like 20,000 Leagues Under the Sea and Journey to the Center of the Earth. In Journey, Verne wrote about strange and mysterious critters that live deep in the earth–in rock caverns. Turns out Verne may not have been so far from the truth after all. And there’s a tie-in with the Marcellus Shale and with fracking. In November West Virginia University and Ohio State University received an $11 million grant by the federal government to study the Marcellus and Utica Shale (see