Quantcast
Environmental News for a Healthier Planet and Life

Fracking Economics Revealed as Shale Gas Bubble, Not Silver Bullet

Energy

Earthworks

With several bills pending in the New York legislature related to natural gas development in the state, elected officials were briefed today on research revealing its economic limitations.

Hosted by Citizens Campaign for the Environment, Earthworks, Energy Policy Forum, Environmental Advocates of New York, Frack Action and the Post Carbon Institute, the briefing focused on two groundbreaking reports released this spring. In sum, scientific and financial analyses show that the medium- to long-term benefits of shale fracking may be illusory and more similar to the housing bubble than the economic silver bullet promised by the gas industry.

The reports, Drill Baby Drill by veteran coal and gas geologist David Hughes and Shale and Wall Street by financial analyst Deborah Rogers, assess the economic sustainability of the tight oil and shale gas booms that are sweeping America—and could come to New York through fracking in the Marcellus and Utica Shale formations. They comprise a thorough and up-to-date analysis of data on more than 60,000 oil and gas wells and a comprehensive review of the financial status of the companies leading the charge to expand domestic fossil fuel development.

Together, the authors conclude that rather than offering the nation a century of cheap energy and economic prosperity, fracking will provide only a decade of gas and oil abundance, at most, and is creating a fragile new financial bubble that is already starting to deflate. Additional research conclusions discussed at the briefing included:

  1. The shale gas and tight oil booms have been oversold. According to actual well production data filed in many states, shale gas and shale oil reserves have been overestimated by operators by as much as 400-500 percent.
  2. Wall Street has played a key behind-the-scenes role in hyping the fracking boom through mergers and acquisitions and transactional fees, similar to the pattern seen in the housing boom that led to the financial crisis.
  3. High productivity shale plays are not common. Just five gas plays and two oil plays account for 80 percent of production of those energy sources, while the most productive areas constitute relatively small “sweet spots” within those plays.
  4. Production rates are already in decline in many shale plays. The high rates of per-well investment required to maintain production mean U.S. shale gas production may have already peaked and maintaining production will require high rates of potentially unsustainable, high-cost drilling.

“The fracking debate in New York and nationwide has been consistently framed as a way to generate economic benefits and job creation, with limited risk of environmental and public health impacts,” says Deborah Rogers. “But data don’t lie. In every region where shale gas development occurs, economic stability has proven elusive—yet environmental degradation and peripheral costs have proved very real.”

“Based on our research and what is increasingly evident in gas and oil fields, a new energy dialogue is clearly needed nationally and in states like New York,” says David Hughes. “Given the true potential, limitations, and both financial and environmental costs of the energy panaceas being touted by industry and government proponents, it will simply not be possible to drill and frack our way to ‘energy independence.’”

Visit EcoWatch’s FRACKING page for more related news on this topic.

——–

Sign the petition today, telling President Obama to enact an immediate fracking moratorium:

EcoWatch Daily Newsletter

Migrating barn swallows rest on electricity cables in Heraklion, Crete, Greece. Patricia Fenn Gallery / Moment / Getty images

Thousands of swallows and other migratory birds have died in Greece trying to cross from Africa to Europe this spring.

Read More Show Less
A ringed seal swims in a water tank at the Osaka Aquarium Kaiyukan on July 26, 2013. Kazuhiro Nogi / AFP / Getty Images

Ringed seals spend most of the year hidden in icy Arctic waters, breathing through holes they create in the thick sea ice.

But when seal pups are born each spring, they don't have a blubber layer, which is their protection from cold.

Read More Show Less
Sponsored
A volunteer sets up beds in what will be a field hospital in the Cathedral Church of St. John the Divine on April 8, 2020 in New York City. The cathedral has partnered with Mount Sinai Morningside Hospital and is expected to have more than 400 beds when opened. Spencer Platt / Getty Images

New York state now has more confirmed coronavirus cases than any single country save the U.S. as a whole.

Read More Show Less
Moroccan patients who recovered from the novel coronavirus disease celebrate with medical staff as they leave the hospital in Sale, Morocco, on April 3, 2020. AFP / Getty Images

By Tom Duszynski

The coronavirus is certainly scary, but despite the constant reporting on total cases and a climbing death toll, the reality is that the vast majority of people who come down with COVID-19 survive it. Just as the number of cases grows, so does another number: those who have recovered.

In mid-March, the number of patients in the U.S. who had officially recovered from the virus was close to zero. That number is now in the tens of thousands and is climbing every day. But recovering from COVID-19 is more complicated than simply feeling better. Recovery involves biology, epidemiology and a little bit of bureaucracy too.

Read More Show Less

Trending

Reef scene with crinoid and fish in the Great Barrier Reef, Australia. Reinhard Dirscherl / ullstein bild / Getty Images

By Elizabeth Claire Alberts

The future for the world's oceans often looks grim. Fisheries are set to collapse by 2048, according to one study, and 8 million tons of plastic pollute the ocean every year, causing considerable damage to delicate marine ecosystems. Yet a new study in Nature offers an alternative, and more optimistic view on the ocean's future: it asserts that the entire marine environment could be substantially rebuilt by 2050, if humanity is able to step up to the challenge.

Read More Show Less