Posted by: bmeverett | February 23, 2013

New York State and Fracking


New York Governor Andrew Cuomo, apparently buoyed by last November’s Democratic election victory, is testing how far he can go in implementing the Left’s economic and social agenda. One part of the push is Cuomo’s effort to expand late-term abortion rights, an issue dear to the Left that makes the public at large distinctly queasy. The Governor has also placed a de facto ban on natural gas development in his state. At first glance, blocking an opportunity to develop a clean, low-carbon energy source with all the accompanying jobs and tax revenue would seem like a strange decision.

Traditionally, the northeastern states have imported their energy from other states or other countries. According to the Energy Information Administration, in 2010 (the last year for which full data are available), New York State consumed 3.7 quadrillion Btus (Quads) of energy and produced only 0.9 Quads, almost entirely in the form of nuclear and hydroelectricity. The rest has to be brought into the state from somewhere else. New York has a share of the Marcellus Shale, a huge natural gas deposit extending from West Virginia and Eastern Ohio across Pennsylvania and the southern tier of New York Counties from Chautauqua and Erie Counties in the West to Ulster, Greene and Albany Counties in the East. Although Pennsylvania has allowed extensive drilling, proving up over 10 trillion cubic feet of natural gas, New York has done nothing. What’s the hang-up?

According to Governor Cuomo, we still don’t know if shale gas produced through hydraulic fracturing (“fracking”) is safe. Is that a reasonable position? Fracking has been very controversial of late, but the fracking opponents have been rather hysterical. There are some activities in life that are inherently dangerous and offer no discernible benefits. Drunk driving or firing guns into the air in crowded areas fall into this category, and we often restrict or even outlaw these things. Other activities, like air travel, involve substantial risks but also bring huge benefits. We have been spectacularly successful in mitigating the risks of 100 ton machines hurtling through the air at over 500 miles per hour, but the risk will never be zero. Every once in a while we are going to have a spectacular plane crash with lots of fatalities. Our risk mitigation approach is to find out what went wrong in that specific case, and then take appropriate action to make sure it doesn’t happen again. Still, the risk will never be zero.

Is fracking so dangerous that we can never bring the risks down to acceptable levels? Are the benefits of shale gas so small that it’s not even worth trying? Hydraulic fracturing is not new, and we have a substantial amount of experience with shale gas drilling in Texas, Pennsylvania, the Dakotas and other states. The US currently fracks about 35,000 wells per year. There have been occasional issues of ground water contamination, but always in the context of wells that were not drilled and managed properly. On balance, this is a very safe and well understood industry.

New York’s state government doesn’t seem to have any objection to natural gas per se, since 36% of the state’s electricity is produced from natural gas – almost all of it imported from outside the state. Nobody in New York has seen fit to question the environmental impacts of natural gas produced elsewhere.

The basis for the fracking ban lies entirely in politics and in the unusual demographics of New York state. Andrew Cuomo, like his father before him, is a purely political animal. He knows how to assess the various constituencies in New York and assemble the votes to keep himself and his allies in power. New York has a population of about 20 million but it’s heavily concentrated. The five counties of New York City are home to 8.2 million people and the two adjacent counties of Westchester and Nassau to another 2.3 million. Thus, New York City and its immediate environs account for 10.5 million people or over half the state.

The Marcellus shale gas resources lie predominantly under 26 upstate counties with the thickest and potentially most productive part of the shale concentrated in 16 counties from Steuben County in the West to Greene County in the East. These counties have a total population of 1.7 million or only about 9% of the state. To these counties, natural gas development represents an extraordinary opportunity. This region has not fared well in the recent economic downturn, with average unemployment of 8.5% – well above the national average. If Pennsylvania’s experience is any guide, natural gas development will bring a flood of money, jobs and tax revenue into this area. Naturally, there will be disruptions: noise, traffic, too many people. On balance, however, these communities should be allowed to decide the proper trade-offs through local zoning and other regulations. History shows that people always choose economic growth, with all its problems, to stagnation. Governor, Cuomo, however, insists that these decisions be made in Albany, which means made in New York City.

Manufacturing companies are often very sensitive to energy costs and see the development of a clean, low-cost local energy source as a big plus. New York City employs about 3.7 million people, but they are concentrated overwhelmingly in the services sector. Manufacturing in New York City employs only 2% of the work force – and that number has fallen in half in the last 10 years. Unemployment in New York City is slightly above the national average at 8.2%, but the problem is concentrated in Brooklyn (9.5%) and the Bronx (11.9%). The people of Manhattan, Queens and the suburbs are doing much better, with unemployment rates below the national average. The residents of New York City do not see their economic condition as linked to energy supplies nor do they see natural gas production as adding anything of particular value to the economy of New York City. Their main energy concern is that the power stays on during storms. They do, on the other hand, have large numbers of people on the political left who are sympathetic to environmental causes, including the anti-fracking crowd. In essence, people in New York City see natural gas development as an abstraction, rather like global warming. It’s not fashionable in New York City to oppose any environmental cause or to talk about economic trade-offs. Economic life-and-death issues for the upstate counties are just coffee shop conversations in Manhattan.

In the 2012 election, New York State supported President Obama almost two-to-one (4.5 million votes to 2.5 million votes). The huge Democratic vote from New York City and the adjacent suburbs accounted for 80% of the difference. The rest of the state was much more balanced, with many of the small counties overlying the Marcellus shale voting solidly Republican. So here’s the answer to the question. Governor Cuomo can reign supreme in Albany if and only if he makes the people of New York City happy. Not only does the rest of the state not really matter, but the Democratic establishment is happy to let a few small Republican counties suffer economically. This situation may be realistic in a political sense, but it’s rather hypocritical from the “party that cares.”

The situation is different in Pennsylvania. Philadelphia has about 1.5 million people – only about 12% of the population of the state. Pittsburgh, the second largest city, has only 0.3 million people. In other words, statewide politicians in Pennsylvania have to appeal to the entire state to stay in power. Hence the shale gas boom. The people of upstate New York are not being protected by King Andrew the Wise with his constant demands for further study. They are in fact getting royally screwed.

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Responses

  1. Today over 100 billion gallons a year of fresh water is turned into toxic fracking fluid. The technology to transform it back to drinkable water does not exist. And, even if it did, where will we put all the radioactive substances we capture from it? This figure will double in the next five years if this crazy policy continues
    We need a united nations ban on turning fresh water into fracking fluid now.
    The gas millionaires will have nothing to spend their money on because they are drowning our green earth with fracking fluid.
    Jesus turned the water into wine but Satan turns it into fracking fluid.
    If you can help to get this message out please do.
    How long will it take to turn all the fresh water on Planet Earth into Toxic Fracking fluid, its just a matter of time.
    Crazy or what?
    The united nations have made a resolution that everyone is entitled to fresh drinking water and sanitation Fracking contradicts this resolution and must stop now.
    My calculations are confirmed by world leading prize winning ecologist Sandra Steingraber
    Peter Baxter

    • I’m approving this comment so my readers can see a bad anti-fracking argument first-hand. First of all, fracking fluid is not toxic. It generally consists of 90% water, 9.5% sand and 0.5% other chemicals. These additive,s including table salt, sodium carbonate, ethylene glycol, citric acid and guar gum, are found in many household products and some are even used as food additives. There are no radioactive materials in fracking fluid except for natural background radiation. It is simply not true that we cannot treat fracking fluids. Some treatment facilities would need to be upgraded or increased in size, but this is a simple fix. Furthermore, there are other, often cheaper, methods of disposing of these fluids, including recycling and reinjection into deep wells where the water remains sealed. Mr. Baxter is appealing to emotion rather than fact. Not a good way to form policy in my view.


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