High-volume horizontal drilling and fracking for shale gas is a dangerous method of drilling for natural gas that threatens our health, communities, and environment. Governor Andrew Cuomo is considering allowing fracking in New York. The research, however, is showing that fracking is an unsustainable economic driver that will actually threaten so many of the gains toward a strong and sustainable economy that we have made in New York State.
The Truth About Fracking and the Economy: Exposing Industry-Funded Science
Extreme energy development is not the key to long-term health and sustainable economies
- Extractive industries create a boom and bust cycle: A rapid increase in economic activity is followed by a rapid decrease upon depletion of the recoverable resource.
- The profits and jobs created by fracking are as mobile as the drill rigs. Local businesses in the once-bustling Fayetteville Shale region of Arkansas have experienced a sharp decline in revenue as it has become more profitable to drill in Pennsylvania and Texas;
- Areas with the highest levels of long-term poverty tend to be found in places that were once the site of thriving extractive industries.[i]
Studies funded by the oil & gas industry have exaggerated benefits and ignored significant costs
- The gas industry claims that fracking creates numerous jobs; however, they neglect to publicize the long-term result of widespread job losses in non-gas related sectors that are incompatible with shale gas development, such as tourism, agriculture, food and beverage, and outdoor recreation.[ii]
- An independent study concluded extractive energy-focused counties are doing worse economically compared with peer communities and are less well-prepared for growth in the future, due to a less-diversified economy, a less-educated workforce, and greater disparities in income.[iii]
- Local employment created during the initial drilling and construction stages – especially in hospitality, trucking, construction and retail – are primarily short-term, low-wage and part-time. After the bust phase, most of the remaining positions are held by out-of-state workers already employed in the extraction industry.
Burdens on Business & Communities
Fracking threatens the viability of industries not compatible with industrialized landscapes
- Sustainable economic drivers, such as tourism, agriculture, food and beverage, and outdoor recreation, are especially vulnerable to the threats of shale gas development.
- Communities that engage in drilling for natural gas experience an increase in heavy traffic, loss of natural habitat, land fragmentation and noise pollution. Substantial development changes pristine rural landscapes into industrial wastelands.
- Fracking can compromise existing businesses because of increased competition for resources such as labor, transportation, and water.[iv] In many states, the vast majority of the counties where fracking is occurring are also suffering from drought causing prices to rise as industries compete for limited water resources.
- Quality industries may be deterred from investing in a local resource extraction economy because of higher housing costs, labor competition, and social and environmental issues associated with fracking.[v]
Fracking imposes both immediate and long-term burdens on communities through its heavy use of infrastructure and heavy demand for public services
- This includes increased pressure on road repairs and maintenance, emergency responders, social services and health care systems.
- A regional transportation study found that because of increased traffic from shale gas development, state and local governments would have to repave roads every 7 to 8 years instead of every 15 years.[vi]
- After the boom phase, the local community will be left with the financial burden of the expanded infrastructure.[vii]
There are numerous health and environmental risks connected to fracking
- An independent and comprehensive study of the health impacts of fracking is desperately needed before the process expands anymore. It is imperative that costs to public health are considered when industry hypes up projected economic benefits.
- Businesses will be directly impacted if workers or patrons are sickened by nearby gas development. In some areas with heavy development, residents have moved away to escape the harmful health impacts.
- Shale gas is touted as being cleaner than coal because of the decreased carbon dioxide emissions when it is burned. However, if the entire life cycle is considered, the methane emissions released during the hydraulic fracturing process are a much more potent greenhouse gas than carbon dioxide.[viii]
- Consumer confidence is essential for the success of any food or beverage producer. There are serious implications for producers, whether contamination occurs or not, if the public learns their food or drink is produced in close proximity to drilling operations.
Fracking impacts the real estate market in unforeseen ways
- Because of the influx of transient gas-industry workers, there is an increased demand for limited housing stock resulting in higher rents which has displaced local lower-income residents by forcing them out of the market. Businesses would be harmed if their low-wage earners or customers can no longer afford to live in the community.[ix]
- Non-gas industry related employers may find it difficult to recruit workers to the area because the increase in housing costs outpaces growth in salaries.
- In some areas, increased drilling has reduced property values. [x] One study found that as a result of the potential for groundwater contamination, reductions in home prices outnumber any gains to the property owners made by leases or economic benefits from fracking.[xi]
- Mortgage provisions prohibiting gas drilling are becoming more common. The Federal Housing Administration refuses to finance a home within 300 ft of an active drilling site. Fannie Mae, and Freddie Mac prohibit homeowners from signing a gas lease or the mortgage will be put in “technical default.”
Unfair Advantages for the Oil & Gas Industry
A level playing field is the hallmark of a competitive economy
- In 2005, the process of hydraulic fracturing was specifically exempted from crucial national safeguards, known as the “Halliburton Loophole,” which creates an unfair advantage for the gas industry.
- Fracking is exempted from the Safe Drinking Water Act, Clean Air Act, Clean Water Act, National Environmental Policy Act, Hazardous Waste Management and Superfund Statutes, and Comprehensive Environmental Response, Compensation, and Liability Act
- In 1988, oil and gas waste was exempted from the hazardous waste provisions of the Resource Conservation and Recovery Act even if the waste is toxic and despite EPA reports demonstrating toxicity of waste. Since it is not categorized as hazardous, fracking waste or “flowback” is currently being disposed of by being injected deep underground into disposal wells causing increases in seismic activity, spread untreated onto roads as a de-icing agent and for dust control purposes, and process by water treatment facilities unequipped for handling such toxic materials
- The oil and gas industry should be subject to the same requirements and stipulations as other industries. Assessing shale production honestly and accurately requires that all externalities be examined to consider the full costs – to the economy, environment and public health.
Bipartisan Support for Cleaner, Safer and More Efficient Energy
Small business owners support more stringent regulations
According to two independent polls of small business owners (SBOs) across party lines commissioned by the American Sustainable Business Council:
- 80% of small business owners support requiring disclosure of chemicals used in hydraulic fracturing.
- 72% of small business owners think incentives for clean energy are a priority.[xii]
- 92% support regulations to protect air and water from pollution by toxic chemicals.
- 78% percent of SBOs support government regulations to reduce air pollutants linked to environmental and health problems.[xiii]
Uneven regulatory framework endangers public and environmental health
- Numerous state and federal agencies have archaic regulations that are inadequately focused on conventional drilling and do not apply to practices recently discovered and combined. Many states lack the technical expertise and resources to update their regulatory framework, as well as enforce existing regulations as the industry has swiftly expanded.
- The variation in disclosure requirements among states hampers the ability of researchers to study the impacts of fracking on health and the environment and complete comparative studies. This patchwork of state regulations demonstrates the critical need for strong federal safeguards to provide minimum standards.
Clean energy and safer chemicals can boost our economy
- The priority should be to incentivize investment and innovation in truly clean energy technology and renewables, and put an end to exemptions and subsidies for the gas and oil industry. The shale gas and oil boom cannot distract us from the ultimate bust cycle and from advancing a sustainable economic and energy policy.
- Numerous studies demonstrate the rising interest by the investment community in – as well as the job creation and economy boosting opportunities provided by – clean energy sources and safer chemicals.
- Renewables provide significantly more jobs per kilowatt capacity than oil and gas: In 2011, the oil and gas industry reported ~181,000 direct industry jobs to the Bureau of Labor Statistics. Oil and gas accounted for approx. 45% of total energy generation capacity. During the same year, the renewable industry (AWEA, Solar Foundation and GEA) reported ~183,200 to BLS. Renewables account for approx. 15% of total energy generation capacity.
Sources:
[i] “Testimony of Jannette M. Barth, PhD., presented before the New York State Senate Democratic Conference Public Forum on Hydrofracking, (July 8, 2012), http://www.scribd.com/doc/100844703/Testimony-of-Jannette-M-Barth-Ph-D-Pepacton-Institute-LLC-at-Hydrofracking-Public-Forum-7-18-12
[ii] Jannette M. Barth, “Critique of PPI Study on Shale Gas Job Creation,” Pepacton Institute LLC, (January 2, 2012), http://www.catskillmountainkeeper.org/wpcontent/uploads/2012/01/JMB+Critique+of+PPI+Jan+2+2012 .pdf, 4.
[iii] Headwaters Economics, “Fossil Fuel Extraction as a County Economic Development Strategy: Are Energy-Focusing Counties Benefiting?”
[iv] Christopherson and Rightor, 16.
[v] Christopherson and Rightor, 23.
[vi] Northern Tier Planning and Development Commission, “Marcellus Shale Freight Transportation Study,” (November 2011).
[vii] Environment America Research and Policy Center, 24.
[viii] Howarth, Robert W., et al. “Methane and the Greenhouse-Gas Footprint of Natural Gas from Shale Formations.” Climatic Change (March 13, 2011) http://www.sustainablefuture.cornell.edu/news/attachments/Howarth-EtAl-2011.pdf
[ix] Christopherson and Rightor, 22.
[x] Environment America Research and Policy Center, 35.
[xi] Lucija Muehlenbachs, Elishiba Spiller and Christopher, “Shale Gas Development and Property Value: Differences Across Drinking Water Sources,” Resources for the Future (July 2012), http://www.rff.org/RFF/Documents/RFF-DP-12-40.pdf, 30.
[xii] “Poll Report: Small Business Owners’ Views on Energy & Environmental Policy Reform.” American Sustainable Business Council (June 2013): http://asbcouncil.org/sites/default/files/library/docs/asbc_energy-enviro_poll_report_final_june_2013.pdf
[xiii] “Poll of Small Business Owners on Toxic Chemicals.” American Sustainable Business Council (September 2012): http://asbcouncil.org/toxic-chemicals-poll