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Less Harmful Shale Development: Ohio’s Big Experiment

Neal Peirce / Jun 14 2013

For Release Sunday, June 16, 2013
© 2013 Washington Post Writers Group

Neal PeirceCan a state do “fracking” right?

Can it use the new shale gas drilling technology to deliver thousands of jobs, revive depressed industrial zones, spark new high-tech industries, feed state coffers – and still not mess up its countryside, imperil water supplies and possibly release dangerous amounts of methane gases?

It’s a big order, and environmental concerns remain real. But a strong cross-section of Ohio’s leadership – political (Gov. John Kasich), business investors and respected think tanks like Cleveland State University’s Levin College of Urban Affairs – see smart exploitation of shale reserves as key to a strong, opportunity-rich future.

By historic and geographic accident, the action is focused on northeast Ohio, anchored in Cleveland, Akron, Youngstown and Canton. This was an early center of U.S. steel and birthplace of John D. Rockefeller’s Standard Oil Co. in the 1880s. But the economic action shifted south and west, and the area has been in or near recession since the 1950s – forever yearning for a new break.

Could shale be the answer? Just maybe. Massive reserves of so-called Utica shale – a source not just of natural gas but also liquid petroleum products that can be feedstuffs for specialized fuels and chemical manufacturing – have been discovered in this area (including a swath running east and southeast to the Pennsylvania and West Virginia borders).

The claims are stupendous. Though actual start-up on wells in Ohio has been slow, the soon-to-come statewide impact could easily reach $10 billion a year, plus $500 million in tax revenue, with oil and gas field development creating 65,000 jobs with average income over $50,000 a year, according to a Cleveland State study released last year by energy expert Andrew Thomas and colleagues.

The “fit” could hardly be better for a region with an industrial heritage, a big reserve of unemployed or under-employed blue-collar workers, a related polymer industry focused in Akron, and significant scientific expertise (especially in its universities) to develop the shale for new, chemical-based processes as well as fuel.

But environmental concerns are real. The technology digs wells thousands of feet deep, but then branches out underground with horizontal drilling, with processes requiring millions of gallons of highly pressurized water. Faulty well casings or surface spills raise concerns of risks to ground and drinking water.

The industry also brings heavy truck traffic through towns, requires land clearance for several wells on each “pad,” and without scrupulous oversight can mean the potential of release of methane gas – a powerful CO2 emitter.

Aware of the ferocious opposition that fracking has generated in New York and Pennsylvania, the Ohio-based operators seem to be taking precautionary measures. Most supported the state’s shale development control rules – hailed by some as the nation’s toughest – passed last year. Critics also praise Kasich, a conservative Republican, for deciding to hire several hundred environmental regulators to track the new activity and for pressing (despite opposition) for a state severance tax on shale production.

Now there’s apparently broad support in Ohio for the remarkable new agreement between drilling interests and environmentalists, embodied in 15 model standards for safe fracking production. Developed through two years of negotiations, the accord ranges from limits on methane emissions to careful rules on wastewater disposal and seismic testing before drilling can commence. It will be enforced by a new, Pittsburgh-based Center for Sustainable Shale Development.

The agreement is not universally popular. The Sierra Club has harshly attacked the Environmental Defense Fund, a major player in forging the agreement, for its supporting role. But there’s little doubt about the integrity of the pact’s oversight board, including such figures as Christie Todd Whitman, former New Jersey governor and Environmental Protection Agency chief.

Realistically, the real question in America today may not be whether to use shale extraction but how. In just six years, natural gas has grown from less than 1 percent to 23 percent of U.S. energy supplies, notes John Banks of the Brookings Institution. Natural gas prices have hit historic lows, speeding retirement of coal power plants. U.S. fracking, Citigroup reports, could make U.S. petroleum output rival Saudi Arabia and Russia within a decade.

The good news, says Edward “Ned” Hill, dean of Cleveland State’s College of Urban Affairs, is that the low cost of natural gas “is pushing coal out of the marketplace.” Coal is the most toxic of fuels, and its defenders, says Hill, talk about coal gasification, but “that doesn’t make any sense if you have gas!”

What about renewables such as wind and solar power? Gas advocates agree they’re on their way – but still far more expensive. Near-term, they argue, natural gas – and the fracking used to free it from the earth – is our future.

Meantime, Cleveland State experts have been dispatched as far as Poland, the Ukraine and Colombia to coach other world regions on the “hows” of safe, community-sensitive shale development.


Neal Peirce’s e-mail is npeirce@citistates.com.

For reprints of Neal Peirce’s column, please contact Washington Post Permissions, c/o PARS International Corp., WPPermissions@parsintl.com, fax 212-221-9195. For newspaper syndication sales, Washington Post Writers Group, 202-334-5375, wpwgsales@washpost.com. (c) 2013, The Washington Post Writers Group

3 Comments

  1. Posted June 15, 2013 at 9:00 am | Permalink

    They still need 1 million gallons of water per well and generate endless amount of truck track, among other negatives, that make fracking anything but clean energy. See my Citiwire articles of several months ago.

  2. Neal Peirce
    Posted June 16, 2013 at 3:28 pm | Permalink

    Comments received from Richard Averett – Upstate NY

    If the politicians spent a few hours looking closely at shale plays, they would be less inclined to concede everything to the oil & gas industry when it comes to drilling anywhere-and-everywhere, and would be far less enthusiastic about embracing the “shale bubble” as anybody’s economic salvation – with the exception of the oil & gas industry.

    Various energy analysts, like Art Berman at The Oil Drum, or Deborah Rogers from Energy Policy Forum, have been warning that all shale plays share the same characteristics: like all bubbles, all the shale plays have been hyped-up by the oil/gas industry in order to bring investors in with misleading information like claims involving the large amount of geography included in the particular play (i.e., the Marcellus stretches from W.Va to upstate NY…), whereas in reality there are only a few “sweet spots” that once developed leave far less desirable places to drill thereafter (far less profit). Thus, investors are NOT being told the reality of every play’s limited sweet-spots. Nor are investors being informed that the typical shale gas well has a very steep production decline curve, such that over 70-90% is typically used up after ONLY 3 years of production, whereas investors hear numbers that range from 15-20+ years for a well’s production life. This may have been so for a “conventional” gas well in years past, but NOT for the typical shale gas well today that requires millions of gallons to frack but that reaches full maturity in 5-7 years and is abandoned or “shut-in”.

    In the case of Ohio, the hype from the gas industry has driven up speculation and hopes of economic prosperity across the state, whereas in reality only a very few landowners in a few specific locations may realize huge profits while many more and their communities will suffer the aftermath (and legacy) of a ruthless and reckless industry. (SEE: “Economics, technology drive Utica Shale decisions” – http://www.vindy.com/news/2013/jun/15/technology-costs-factor-into-utica-decis/?fracking).

    Furthermore, if the politicians spent a few more hours looking at the long list of health and environmental risks – from chemical spills, fracks that go “out of zone” (it happens occasionally, just not as far as the general public is concerned), radioactive waste (in flowback water and in drill cuttings), well blow-outs, toxic compounds (VOCs) released into the air around drill pads (and compressor stations, de-watering facilities, etc.), flowback water too toxic to treat in a conventional waste plant, etc., the risk to the general public is far too great to allow this sort of industry in populated and/or agricultural areas.

    Lastly, in your piece you surmise that IF shale can be developed in a “safe and responsible” manner (to borrow the gas industry’s misleading terminology), it could mean an economic boom for Ohio. The nature of the “Boom-Bust Cycle” suggests that places that participate in the boom times fall harder when the monies & revenues stop flowing (along with the gas or oil) during the “bust” years. But, the sad fact is, there is NO WAY TO GET OIL OR GAS FROM SHALE without harming people and the environment – and this is the “ground truth” that the petroleum industry wants to keep everyone from understanding. Simply put, the very act of drilling a well that penetrates the aquifer and bores through it, using heavy petroleum-laden mud to lubricate the bit and bring up cuttings, means that local ground water WILL become negatively impacted (i.e., contaminated).

    And, paying off their many victims to remain quiet cannot erase the sight of so many plastic water containers (water buffalos) sitting out in peoples’ yards across Americas’ gaslands – people whose well water is now contaminated and who must must rely on weekly water deliveries to a 500-gallon plastic container. This is the oil & gas industry’s legacy, and it will become that too for many Ohioans if the industry is allowed to operate across the state. NO AMOUNT OF REGULATION CAN KEEP PEOPLE OR THE ENVIRONMENT SAFE from shale O&G development.

    Go see Gasland II if you think I am exaggerating the situation hundreds of communities across the US currently face, and remember the critics (PI) have MUCH to lose if enough people see the film and heed the message, so don’t be fooled by their debunking Gasland ‘mythology’ that you are bound to hear sooner-or-later.

  3. Caitlin
    Posted June 19, 2013 at 1:55 pm | Permalink

    Hate to nitpick, but it’s Center for Sustainable *Shale* Development, not Shell.