Big Oil Lies

Those festive sounds you hear are the rejoicings of people here in New York State over the decision of the Cuomo Administration to ban high-volume fracking. Both policital commentators and environmental activists have written about this decision and its effects, but the Associated Press reports this week have the Oil Industry attempting to mitigate the “loss” of New York’s potential fracked natural gas.

The AP reports that the amount of commercially viable natural gas in New York’s Marcellus shale is 16 trillion cubic feet, of which only 5 trillion cubic feet would be available because of zoning restrictions and proposed permit rules. These figures come from Penn State geologist Terry Engelder, on whose data New York State relied. He claims that this amount would only serve New York’s needs for five years.

This flies directly in the face of the 2011 Manhattan Institute report that ballyhooed 15-18,000 new jobs and an $11.4 Billion economic impact if New York’s then-moratorium had been allowed to expire. In reality, these 5 trillion cubic feet are worth, according to the US Energy Information Administration, more like $1.88 Billion, using 2012 figures, the latest available. If the extraction is not worth $2 Billion in product to the industry, how could its economic impact be almost six times as much?

Still, you might think, even a smaller reserve might still be worth the investment. Using the Manhattan Institute’s figures, 5 trillion cubic feet of gas are equivalent to 387 jobs (based on Pennsylvania/West Virginia production spread over 5 years). That’s a far cry from 15,000 for sure. Given environmental impacts (wastewater disposal, groundwater contamination, etc.) stretching into decades and affecting our children’s health, I don’t see how fracking is worth several hundred jobs.

And what of Texas-based Crestwood Midstream’s plan to store LPG and expand methane (natural gas) storage in disused salt mine caverns along the shore of Seneca Lake in Schuyler County? The industry website NYPropaneAdvocacy.com touts Crestwood’s plan to add $25 Million to the tax base, pouring $650,000 of critically-needed taxes into the public coffers the first year alone. Additionally, the plan will create “at least” 50 temporary construction jobs and 12 — yes, a whole dozen — permanent jobs. Considering that the webpage decries the status of Watkins Glen’s temporary resort-season jobs, they’re hopping right into that boat with 50 more.

The reality is that these unlined salt caverns are both seismically unstable and a potential source of unhealthy salinity in the drinking water of 100,000 people. The group We Are Seneca Lake warns that “Since 1972, there have been 11 instances of catastrophic failure of underground gas storage facilities and each one has been a salt cavern facility.”

New York’s wine economy is $4.8 Billion per year, creating the equivalent of 25,000 jobs and paying $408 Million per year in taxes. Over 100 wineries, breweries, cideries and distilleries rely upon Seneca Lake’s clean water to produce these beverages for public consumption. Are 12 jobs worth the risk of a gas leak or explosion (independently assessed at greater than 40% chance within 25 years) that would destroy this agricultural bounty?

Given the recent economic difficulties and the continuing drain of jobs affecting New York State, we should be taking a serious look at attracting companies to be our neighbors. But Big Oil lies, as we see, and this $650,000-a-year tax revenue and 12 permanent jobs are sure to follow the industry’s burst hype-balloon and be closer to the fracking truth.