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August 03 2012

12:00

Delaware Tax Haven: The Other Shale Gas Industry Loophole

Most people think of downtown Houston, Texas as ground zero for the oil and gas industry. Houston, after all, serves as home base for corporate headquarters of oil and gas giants, including the likes of BP America, ConocoPhillips, and Shell Oil Company, to name a few.

Comparably speaking, few would think of Wilmington, Delaware in a similar vein. But perhaps they should, according to a recent New York Times investigative report by Leslie Wayne.

Wayne's story revealed that Delaware serves as what journalist Nicholas Shaxson calls a "Treasure Island" in his recent book by that namesake. It's an "onshore tax haven" and an even more robust one than the Caymen Islands, to boot.

The Delaware "Island" is heavilized utilized by oil and gas majors, all of which are part of the "two-thirds of the Fortune 500" corporations parking their money in The First State.

Delaware is an outlier in the way it does business,” David Brunori, a professor at George Washington Law School told The Times. “What it offers is an opportunity to game the system and do it legally.”

The numbers are astounding. "Over the last decade, the Delaware loophole has enabled corporations to reduce the taxes paid to other states by an estimated $9.5 billion," Wayne wrote

"More than 900,000 business entities choose Delaware as a location to incorporate," explained another report. "The number…exceeds Delaware's human population of 850,000."

Marcellus Shale Frackers Utilize the "Delaware Loophole" 

The New York Times story also demonstrated that the shale gas industry has become an expert at utilizing the "Delaware Loophole" tax haven to dodge taxes, just as it is a champion at dodging chemical fluid disclosure and other accountability to the Safe Drinking Water Act, thanks to the "Halliburton Loophole." The latter is explained in great detail in DeSmogBlog's "Fracking the Future."

Utilization of the "Delaware Loophole" is far from the story of a few bad apples gone astray for the industry. As Wayne explains, the use of this "onshore tax haven" is the norm.

More than 400 corporate subsidiaries linked to Marcellus Shale gas exploration have been registered in Delaware, most within the last four years, according to the Pennsylvania Budget and Policy Center, a nonprofit group based in Harrisburg that studies the state’s tax policy.

In 2004, the center estimated that the Delaware loophole had cost the state $400 million annually in lost revenue — and that was before the energy boom.

More than two-thirds of the companies in the Marcellus Shale Coalition, an industry alliance based in Pittsburgh, are registered to a single address: 1209 North Orange Street, according to the center.

These fiscal figures, as Wayne points out, predate the ongoing shale gas "Gold Rush" in the Marcellus. SEIU of Pennsylvania has calculated $550 million/year in lost tax revenue in the state from the shale gas industry due to the loophole.

The Pennsylvania House of Representatives set out to tackle the "Delaware Loophole" quagmire in the spring of 2012, but merely offered half-measure legislation that would have allowed corporations - including the frackers - to continue gaming the system. Coryn S. Wolk of the activist group Protecting Our Waters summarized the bill in a recent post:

In March, 2012, the Pennsylvania House of Representatives created a bipartisan bill, HB 2150, aimed at closing corporate tax loopholes. However, as the Pennsylvania Budget and Policy Center noted in their detailed opposition to the bill, the bill would have cost Pennsylvania more money by soothing corporations with major tax cuts and leaving the loopholes accessible to any clever accountant.

Tax cheating in Delaware goes far above and beyond the Marcellus Shale. All of the oil and gas majors, with operations around the world, take full advantage of all Delaware has to offer.

"Piping Profits"

If things in this sphere were only limited to shale gas companies operating in the Marcellus Shale, the battle would seem big. Big, but not insurmountable.

Yet, as the Norway-based NGOPublish What You Pay points out in a recent report titled, "Piping profits: the secret world of oil, gas and mining giants," the game is more rigged than most would like to admit.

How rigged? Overwhelmingly so.

The report shows that ConocoPhillips, Chevron, and ExxonMobil have 439 out of their combined 783 subsidiaries located in well-known tax havens around the world, including in Delaware. All three companies maintain fracking operations, as well, meaning they benefit from both the Halliburton and Delaware Loopholes.

Adding BP and Shell into the mix, Publish What You Pay revealed that the five majors have 749 tax haven subsidiaries located in Delaware out of a grand total of 3,632 global tax haven subsidiaries. This amounts to 20.6-percent of them, to be precise.

These figures moved Publish What You Pay's Executive Director, Mona Thowsen, to conclude, “What this study shows is that the extractive industry ownership structure and its huge use of secrecy jurisdictions may work against the urgent need to reduce corruption and aggressive tax avoidance in this sector."

Tax Justice Network: $21-$32 Trillion Parked in Offshore Accounts

A recent lengthy report titled "The Price of Offshore Revisited" by the Tax Justice Network reveals just how big of a problem tax havens are on a global scale, reaching far beyond Delaware's boundaries.

As Democracy Now! explained,

[The] new report…reveals how wealthy individuals and their families have between $21 and $32 trillion of hidden financial assets around the world in what are known as offshore accounts or tax havens. The conservative estimate of $21 trillion—conservative estimate—is as much money as the entire annual economic output of the United States and Japan combined. The actual sums could be higher because the study only deals with financial wealth deposited in bank and investment accounts, and not other assets such as property and yachts.

The inquiry…is being touted as the most comprehensive report ever on the "offshore economy." 

The Democracy Now! interview below is worth watching on the whole, as oil and gas industry "offshoring" is but the tip of the iceberg.

Photo CreditGunnar Pippel | ShutterStock

Exhaustive Study Finds Global Elite

December 11 2011

23:32

"Raising Elijah": An Interview With Ecologist and Author Sandra Steingraber

Q: In light of your new book Raising Elijah: Protecting Children in an Age of Environmental Crisis, which raises the specter of raising children in troubled times, both environmentally and ecologically, are you surprised that natural gas corporations have been producing public relations and propaganda materials like coloring books (recall Talisman Energy's Terry the Fracasaurus, and Chesapeake Energy's coloring books), going into schools and giving scholarships, etc.? 

A: Not at all. This is an attempt at deflection and drawing attention away from the bad public relations problems the industry has. It is hypocritical and cynical to go into communities, do fracking (see DeSmogBlog's Fracking the Future: How Unconventional Gas Threatens our Water, Health, and Climate), and then do these types of things.

For example, there are increased rates of crime, drug abuse, and motor vehicle accidents in areas in which fracking takes place. Roads in areas in which fracking is taking place are full of 18-wheelers hauling around toxic chemicals. It is a stunning move, based on all of these things.

For the Pennsylvania Breast Cancer Coalition and Chesapeake Energy’s corporate sponsorship of it, it is the ultimate case of cynicism, based on what they do on a daily basis. For them to get involved shows that they’re trying to deflect attention away from what they’re actually doing to cause these things in the first place.

The idea that they’re aligning themselves with the breast cancer movement is creepy and is like cigarette companies getting involved in fighting against cancer, while they are the ones also causing it.

Q: Why do you think these corporations are stooping so low, and why now? What type of reputation do these natural gas corporations have, at-large, in an area like the Marcellus Shale, for example?

A: Public opinion is deeply opposed to gas drilling in the Marcellus Shale in upper state New York and the anti-fracking resistance movement is solidifying and growing there. Therefore, partnerships with chartiable organizations are an attempt to alter public opinion.

That said, doing this is expensive for corporations, so it is a sign of desparation on their side of things to make fracking look like a warm and fuzzy and friendly thing. They want a different kind of association. When you hear name of their company, they hope you have warm, fuzzy feelings about them, when, in actuality, they’re actually going to come in and destroy the community.

Q: Can you explain a bit more about your book, Raising Elijah, and in particular, what role you see your new book playing in combating this benevolent role the gas industry ruthlessly tries to portray for itself? Also, can you explain what personally motivated you to write such a book?

A: Benevolent is the perfect adjective. These new partnerships are like an abusive spouse who’s trying to deflect attention away from his actual crime by funding a home for people who’ve suffered domestic abuse. The best way to solve the problem of carcinogens in the air is not to put them in the air in the first place. The best way to prevent children from being abused is to create an actual sustainable community and healthy ecosystem.

My book has been in the works for 8 years and I wanted to continue where I left off in the last book. This one takes a look at how exposure to environmental toxics impacts childhood development.

Fracking was not originally on my radar, but it was hard to ignore come 2007 and 2008. I learned more and more about it and was eventually asked to speak on panels on the topic. It is the biggest threat to childrens’ health that I’d ever encountered. The final chapter in book is entirely devoted to fracking.

Beating fracking is the environmental cause of our time. We are standing at a cross-roads — easy fuels are gone, and energy extremism is all that’s left. Mountain top removal is one, tar sands crude is another, offshore drilling is the third, and fracking is the fourth.

Fracking hits home the closest. It is occurring in 34 states, often in densely populated areas. The possibility of it exposing people to these toxins is immediate and the possibility that we’ll contaminate water, air, and food are also great.

Air contamination is also a guarantee, via compressors. Chances are, we’ll blanket the northeast in smoggy air, which already was dirty air to begin with, with regular ozone alerts. Surface and ground water and food resources are now also all at risk. The dairy industry is huge in New York, but now that is also at risk.

The Marcellus Shale basin is now a radioactive place, and thus, all of this stuff is now in peril. There needs to be a public conversation about this, if only because of the costs of helping children from cradle to grave. Asthma, for example, is a very expensive problem and leading cause of absenteeism in schools. It will become more common with fracking - much more common.

The Environmental Impact Statement done by the New York Department of Environmental Protection was also a sham, with public health impacts not even discussed. There was nothing in it on any of the scores of environmental and ecological costs associated with fracking that will arise in the future.

All of this is the explanation for why I wrote the book. The secrecy the industry enjoys makes it hard for researchers to go as deep as they possibly could if there were no veil of secrecy. It is hard to say exactly what kind of chemicals people are inhaling and consuming.

Q: You recently won the Heinz Award, given for significant achievements benefiting the environment, which earned you a $100,000 award and afterward, you wrote that you would devote that money to fighting fracking in upstate New York.

Bearing that in mind, can you explain, based your own experiences and personal convictions, as well as the lessons taught in your book, what type of activism is best geared toward defeating fracking?

Put another way, what form of activism gets the movement to ban fracking the best bang for its buck and do you see more nonviolent direct action and civil disobedience in the anti-fracking movement’s future?

A: $100,000 is NOTHING to the big boys in the corporate natural gas world. The only way money will work if it will also embolden others to do big things. The only reason I’m even going public with the fact that I’m investing money in the fight against fracking is to inspire other people to start fighting back.

We’re at the 11th hour now. The moratorium was here before, but now that’s over. Now is the time if you don’t want to be fracked. As a cancer survivor, whatever money I have ends up going into paying medical bills. When you live in an area surrounded by frackers, what point is it to even try to do that if the water, air, community, etc., will be gone and destroyed and the area becomes a toxic wasteland?

So, what better use of money than to defend and protect this place? I couldn’t think of better thing to do, with even more of a public platform, to highlight lunacy of fracking. I want others to feel that they shouldn’t give up before they start the fight. Self-defeatism is what’s beating us — learned helplessness — beats us even more than the formidable power of natural gas industry.

Whatever I can do to get people out of that place — if you want to be the hero, now’s your chance. I hope to use the money to open up space for speech, and not silence.

One suggestion is to put all eggs in one basket, but it is probably better to spread it around. The fight of townships to ban fracking locally — see Dryden case study — is one option. There’s also fight at state level with regards to Cuomo. 

The international human rights movement is also against dependence on fossil fuels. There is also the example of the civil disobedience that was used to stop the tar sands pipeline. There are fights everywhere, which go from the global level all the down to village level.

I am, in short, still in the thinking stage about funding and where it’ll all end up.

December 09 2011

18:24

Fracking Ohio's Utica Shale to "Boost Local Economy"? A "Total" Sham

It is a well-known fact that the unconventional gas industry is involved in an inherently toxic business, particularly through hydraulic fracturing ("fracking"), which the EPA just confirmed has contaminated groundwater in Wyoming. The documentary film "Gasland," DeSmogBlog's report "Fracking the Future: How Unconventional Gas Threatens our Water, Health, and Climate," and numerous other investigations, reports, and scientific studies have echoed the myriad problems with unconventional oil and gas around the globe.

What is less well-known, but arguably equally as important, is who exactly stands to benefit economically from the destruction of our land, air, and water in the gas industry's rush to profit from the fracking bonanza. The U.S oil and gas industry would have us believe that they are principally focused on ushering in American energy independence. But their claims are increasingly suspect as the real motivation of this industry becomes clearer by the day.

A hint: it's not the small "mom and pop," independent gas companies, but multinational oil and gas corporations. Another hint: it's often not even American multinational oil and gas corporations, but rather, foreign-based multinational oil and gas corporations who stand to gain the most.

France's Total S.A. Enters Ohio's Utica Shale, as well as Uganda, South Sudan and Kenya

On December 7, Bloomberg's Businessweek reported that Total S.A. is positioning itself to acquire 25 percent of Chesapeake Energy’s stake in Ohio's Utica Shale, valued at $2.14 Billion

Total S.A., the largest oil and gas producer in France, is a multinational corporation perhaps most notorious for its involvement in Iraq's "Oil-For-Food" scandal. In 2010, Total S.A. was accused of bribing former Iraqi dictator Saddam Hussein's officials to secure oil supplies. 


Total SA also brokered another big deal on December 7, this one in Uganda, a place I recently wrote about on AlterNet in a piece titled, "Did Obama Just Kick Off Another Oil War — This Time in Africa?" It appears the question raised and answered in my article is being confirmed more and more with each passing day.

Explaining the terms of the deal, Reuters wrote, "French oil major Total said it could build a pipeline from South Sudan to Uganda that would continue to Kenya’s coast, potentially solving the fledgling state’s headache about how to export its oil."

These announcements comes on the heels of a December 1 announcement by another foreign corporation, Norway's Statoil, stating that it "would like to add to its acreage position in the Eagle Ford Shale in South Texas as it looks to grow its unconventional oil and gas position in North America."

Speaking of corruption, by the way, Ohio is a natural landing spot for Total S.A.

Ohio: Home to Big Gas Money

Common Cause of Ohio, in a recent report titled "Deep Drilling, Deep Pockets," revealed that from 2001 through June 2011, Republican Governor John Kasich received $213,519 in campaign contributions from the gas industry. The Republican Senatorial and House Campaign Committees took another $210,250 from the gas industry during that same time period.

Not to be outdone, on the other side of the aisle, former Democratic Governor of Ohio, Ted Strickland, received $87,450 during that time frame. 

Top donors included the following:

  • Ohio Oil & Gas Producers Fund - $820,285
  • British Petroleum PAC & Employees - $215,438
  • Marathon Oil PAC & Employees - $207,054

Summing things up, Common Cause wrote,

Companies engaged in fracking contributed $2.8 million to state candidates, political committees, and parties in Ohio from 2001 through June 2011, helping the natural gas industry preserve what are some of the nation’s most lenient fracking regulations. Ohio does not require full disclosure of chemicals used in the fracking process, has stripped from local governments the power to regulate fracking, and allows fracking as close as 100 feet to a residence.

All in all, this is a bad deal for the people of Ohio, but a great deal for global multinational oil corporations, a pattern all too familiar in the American political fray.

Any way one slices it, the claim that the gas industry first and foremost is a "good neighbor" who will "benefit the local economies," is a total sham. 

 

December 02 2011

21:34

Smeared But Still Fighting, Cornell's Tony Ingraffea Debunks Gas Industry Myths

Cornell University Professors Robert Howarth and Anthony Ingraffea made waves in April 2011 when they unveiled what is now known simply as the "Cornell Study."

Published in a peer-reviewed letter in the academic journal Climatic Change Letters, the study revealed that, contrary to the never-ending mythology promulgated by the gas industry, unconventional ("natural") gas, procured via the infamous hydraulic fracturing (fracking) process, likely emits more greenhouse gas pollution into the atmosphere during its life cycle than does coal. DeSmogBlog documented the in-depth details of the Cornell Study in our report, "Fracking the Future: How Unconventional Gas Threatens our Water, Health, and Climate."

Since the report was published, the Cornell Study has receieved serioius backlash from the gas industry, in particular from Energy in Depth, the industry's go-to front defensive linebackers on all things fracking related. DeSmogBlog revealed earlier this year that Energy in Depth is an industry front group created by many of the largest oil and gas companies, contrary to its preferred "mom and pop" image. 

Dr. Anthony Ingraffea wrote a must-read piece this week for CBC News, "Does the natural gas industry need a new messenger?

In his article, Dr. Ingraffea discusses and debunks many key gas industry myths, which he explained "always have at least a kernel of truth, but you have to listen to the whole story, carefully, not just the kernel."

"With decades of geopolitical influence and billions of dollars on the table, it is not surprising that the gas industry has perpetuated…myths to keep the public in the dark, regulators at bay, and the wells flowing," Ingraffea writes.

Let's review four of the myths exploded by Dr. Ingraffea:

Myth One: "Fracking is a 60-year-old, safe, well proven technology"

Dr. Ingraffea writes:

Yes, fracking is 60 years old. But using this shorthand obscures the truth that what’s at issue here isn’t really just fracking. It's the entire process of coaxing gas from shale using high-volume, slickwater fracking with long laterals from clustered, multi-well pads.

Myth Two: "Fluid migration from faulty wells is rare"

Ingraffea dismantles this one:

Fluid migration is not rare. For example, industry researchers Watson and Bachu, in a Society of Petroleum Engineers paper in 2009, examined 352,000 Canadian wells and found sustained casing pressure and gas migration…Most recently, the U.S. Environmental Protection Agency found benzene, methane and chemicals in water-monitoring wells in Pavilion, Wyoming…

Myth Three: "The use of clustered, multi-well drilling pads reduces surface impacts"

Ingraffea:

Such pad sites are large and growing, up to 10 acres or more. Newer sites, in Canada, are bigger than 50 acres, and each will leave behind clusters of wellheads and holding tanks for decades.

Cluster drilling facilitates and prolongs intense industrialization and leaves a larger, more concentrated, and very long-term footprint, not a smaller and shorter one.

Myth Four: "Natural gas is a 'clean' fossil fuel"

This one would be laughable if so many people did not believe it. As the old adage goes, "A lie can travel halfway 'round the world while the truth is putting on its shoes."

Ingraffea on this whopper:

NASA climate scientist Drew Shindell’s work, published in the prestigious journal, Science, shows that methane – natural gas – is 105 times more powerful than carbon dioxide as a global warming contributor over a 20-year time horizon, and 33 times more powerful over a century.

He proceeds to explain that methane gas is prone to leakage, which is not taken into account when proponents tout gas as a "clean" source of energy:

Leaks happen routinely during regular drilling, fracking and flowback operations, liquid unloading, processing, and along pipelines and at storage facilities.

The rate of leakage is anywhere from 3.6 per cent to 7.9 per cent of the lifetime of production of a shale gas well, which means from three to 200 per cent greater leakage rate than from conventional gas wells.

Exposing Other Mythology, Making a Plea For Truth 

Dr. Ingraffea also discusses other myths the gas industry relies upon on a daily basis, including "jobs created," "gas for energy independence," gas as a "bridge fuel" toward renewable energy, among others. All of these lies and misdirections have been debunked on multiple occasions, by numerous sources.

Concluding where he began his article, Ingraffea makes a plea to his readers: "keep asking questions, dig for the truth, and you’ll get the whole story."

June 16 2011

22:15

The Case for a Ban on Gas Fracking: Food and Water Watch Report

 

Last month, DeSmogBlog released Fracking the Future, an in-depth report on the threats posed by unconventional gas drilling and the efforts of the gas industry to limit state and federal oversight of the process. A review of independent scientific research showed that under no conditions can unconventional gas drilling be considered safe, nor can the oil and gas industry’s army of PR front groups and apolgists be trusted to give an accurate portrayal of the true risks associated with the fracked gas boom.

The report concluded that current state oversight is inadequate to hold the rapidly growing gas industry accountable and, given the dangers associated with unconventional gas production, an immediate moratorium on hydraulic fracturing is necessary and overdue.

In its new report, the nonprofit Food and Water Watch renewed these claims, calling for a reinstatement of federal statutes like the Safe Drinking Water Act and the Clean Air Act over unconventional drilling and, more forcefully, calling for a nationwide fracking ban. 

Entitled The Case for a Ban on Gas Fracking, the new report details the rapid growth of the risky unconventional gas fracking frenzy gaining momentum across the U.S. In the four-year span from 2004 to 2008, gas wells in America increased by 41 percent, to over 52,000. This steady increase of drilling across the country is accompanied by an unsettling encroachment of gas wells into residential areas. The report cites Pennsylvania as an example, where over 3000 unconventional wells and future well sites sit within two miles of 320 day care centers, 67 schools, and 9 hospitals. <!--break-->

The report finds that despite industry suggestions to the contrary, fracking is inherently dangerous. The opportunity for irreparable damage to drinking water supplies, air quality and human health presents itself at nearly every stage of the process. 

Food and Water Watch catalogues numerous well-documented instances of air pollution, water contamination and negative effects on human health due to fracking operations. Some of the worst dangers are associated with the heavy chemicals used throughout the process and toxic wastewater, which post-fracking is laced with additional toxic contaminants from the underlying rock. The report details how nearly no water treatment facilities can cope with the billions of gallons of wastes produced in the process.

Compounding the hazards associated with fracking are the underfunded, overextended and often industry-friendly state enforcement agencies. Even where existing laws were updated to more effectively reflect the risks associated with unconventional drilling, there is little to indicate that state regulators are prepared to monitor and enforce these laws adequately. 

States stand to profit too much by maintaining the current backslapping culture of industry appeasement. The report draws on the connection between state revenue and insufficient regulation. In Pennsylvania, for example, where $1.1 billion in gas drilling related revenue accrued between 2006 and 2011, officials are twice as likely to issue warnings than impose fines. Officials often have the conflicted responsibility of both fostering and moderating the industry.

Beyond the state level, there is significant pressure to limit federal oversight. Although a growing consensus is rallying for the restoration of federal environmental statutes like the Safe Drinking Water Act and the Clean Air Act over unconventional drilling, little progress has been made on this issue. The report outlines how industry lobbying has steadily increased, combatting measures to protect public health and safety. The fracking moratorium in New York, for example, has caused a surge of lobbying activity, over $1.2 million dollars worth in 2010 alone.

Despite the reticence of lawmakers on the issue, Food and Water Watch lists ten studies and investigations from the last 18 months, each of which point to the dangers associated with fracking, especially to human health, and the inability of officials to capably monitor the process. While officials levied several injunctions against drilling companies, the report notes that because of weak oversight, nearby communities remain vulnerable.

The rush to produce unconventional gas is putting the public at an unacceptable risk, the report concludes. A nationwide ban on fracking is the only measure that can truly secure public air and water against industry contamination.

Read the full report, The Case for a Ban on Gas Fracking

 

June 11 2011

20:15

Post Carbon Institute Debunks False Hope Of Gas As ‘Bridge Fuel’

Touted by industry as a “clean energy” panacea, unconventional gas is widely heralded as deliverance from air pollution to global warming to foreign energy dependence. It is clean, the drillers say, and there is plenty of it. Descriptions like ‘trillions of cubic feet’ and ‘more than a century’s worth’ are becoming commonplace, used to prop up the vision of a clean, affordable and homegrown unconventional gas future.

But like most things that sound too good to be true, unconventional gas is no exception, as DeSmogBlog pointed out in our own recent report “Fracking the Future.”

Now, continuing to dispel some of the most egregious misconceptions regarding the future of gas, Post Carbon Institute Fellow David Hughes recently released a new report entitled Will Natural Gas Fuel America in the 21st Century?

In his report, Hughes takes on three myths undergirding our gas ambitions: that hydraulic fracturing and horizontal drilling have guaranteed our access to a century’s worth of fuel; that the price of natural gas, which has been historically volatile, will remain low; and that, from a global warming and public health perspective, natural gas is a clean and safe alternative to other fossil fuels.<!--break-->

These assumptions, Hughes writes, are what agencies like the U.S. Energy Information Administration are relying on when it forecasts an increased reliance on shale gas in the coming decades, up to 47 percent of all domestic gas production by 2035. They are also what lies behind President Obama’s recent endorsement of natural gas as “clean” in his “Blueprint for a Secure Energy Future” and the new incentives for transforming America’s vehicle fleet. Other well-regarded environmental organizations like the Worldwatch Institute also joined the gas chorus, suggesting the potential for gas to act as a ‘bridge fuel’ during the transition away from other disastrous energy sources like coal and tar sands oil.

However, the somber lessons of the last decade’s worth of unprecedented drilling across the continent have demonstrated that the ideals behind our burgeoning commitment to gas are unfounded, if not outright nonsensical. If the growing archive of first hand accounts of toxic water and air pollution haven’t made us rethink industry claims, then the steady stream of independent scientific research questioning the fuel’s availability, affordability, safety and cleanliness might do the trick.

Another integral aspect of Hughes’ take-down of the shale gas dream is the impracticable wholesale transition of the nation’s fuel systems to gas. The scope of such a transformation – which would require the dismantling of old energy plants, vehicles, fueling stations and pipeline infrastructure and their subsequent retrofitting or replacement on a nationwide scale – is beyond any realistic economic means, especially with the fragility of the current U.S. economy. 

To support such a costly overhaul, domestic gas production would have to increase by over 100 percent, far above even the most optimistic projections. To retrofit one existing vehicle with a natural gas system currently costs approximately $10,000 in the U.S. And while fueling stations across the country could be switched to compressed natural gas (CNG) to supply smaller vehicles, only liquefied natural gas (LNG) is sufficiently dense to supply larger vehicles like long-haul trucks. LNG must be stored at -162 degrees Celsius and so would require a separate fueling infrastructure. 

In effect, beyond the troubling aspects of its production via fracking, the very notion that unconventional gas has the capacity to provide the nation with a ‘bridge fuel’ is completely misguided. In the first place, there simply is not enough of the fuel to support such deep dependence. 

Secondly, such a switch would also require tremendous amounts of additional resources to carry through, which introduces the additional concern of collateral emissions. And this doesn’t even touch on the equally laborious and resource-intensive replacement of coal-fired power plants. 

When considering the costs associated with committing to unconventional gas as an ‘interim’ fuel, it seems an absurdity, especially when the capital required could be directly invested in the production of truly clean renewable energy. 

Perhaps some were willing to shrug off the unfortunate environmental impacts of gas drilling to somehow usher in a clean energy future, one that held the promise of domestic energy security. But if we cannot rely upon the viability of gas as a clean, bountiful or secure energy alternative, then we must begin to consider, and invest in truly clean energy.

Hughes puts it well in his conclusion: “when it comes to fossil fuels there is no such thing as a free lunch.”

May 10 2011

21:37

Scientists Confirm Fracking Link To Flammable Drinking Water

A new peer-reviewed study from Duke University shows that drinking water in areas within a half-mile of fracking wells can become contaminated with dangerous levels of methane - enough to catch on fire if lit. The report says that the levels of methane in some areas of Pennsylvania and New York are so great that they pose a significant fire and explosion hazard.

The study was published this week in the Proceedings of the National Academy of Sciences. One of the study’s authors, Duke environmental science professor Robert Jackson, says that the threat of explosions in this drinking water are real and need to be dealt with. From a CNN report:

“The study said about half of the 68 drinking water wells tested in Pennsylvania and New York located within a half a mile from natural gas wells had high levels of methane -- the prime ingredient in natural gas fuel…The gas, which is usually located thousands of feet below the water table, appears to be entering the water wells either through cracks in the bedrock or, more likely, the casing in natural gas wells... Casings are steel and concrete barriers natural gas companies use to line a well where it passes through the water table.”

<!--break-->
There is currently not any evidence to suggest that ingesting methane in drinking water poses a significant threat to human health, but the threat of having explosive drinking water is inherently bad news.

Explosive water isn’t the only problem these areas could be facing. The researchers at Duke also warn that the numerous chemicals used in the fracking process could easily seep into the water supply as the methane has.

DeSmogBlog released our "Fracking The Future" report last week outlining the many dangers of fracking, as well as the concerns amongst those in the scientific community over the continued practice of hydraulic fracturing. In addition, we have repeatedly posted information on the dangerous chemicals that are used in the fracking process, as well as the warnings from Congress on the dangers associated with the procedure.

The Duke study adds another negative mark on the unconventional gas industry's tarnished record, and further exposes that this high cost energy poses serious risks to health and water quality.  The Duke study vindicates the many property owners who have reported flammable or tainted water near fracking operations at unconventional gas wells. The burden of proof is now firmly on the gas industry to demonstrate whether fracking can ever be done safely.

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