For Release Sunday, June 16, 2013
© 2013 Washington Post Writers Group
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 email@example.com.
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