From Australia and China to South Africa and Eastern Europe, the global economy is being transformed by the extraction of huge amounts of natural gas from shale rock. The United States has played a major part in this revolution; new “plays,” as fields of shale gas are known, are now producing in Texas, Louisiana, Illinois, Arkansas, Colorado, West Virginia, and other states. In the last three years, more than 3,000 gas wells have been drilled in western Pennsylvania’s share of the huge Marcellus shale formation. With more and more producers in the business, the price of natural gas has dropped steadily, and the U.S. has become the world’s leading producer of natural gas. A new age of clean, cheap shale-gas energy is about to begin—except, perhaps, in New York State, where influential environmental groups seem to be winning their struggle against shale.
One might expect a no-drill agenda to find few friends in New York, which desperately needs the revenue and economic growth that shale gas has brought to other states. The Empire State faces a $3 billion budget gap for fiscal year 2013. According to State Budget Solutions, a nonpartisan think tank, New York’s deficits, long-term debt, and pension obligations total $305 billion. High taxes, unemployment, and a burdensome cost of living make New York Number One in emigration to other states. Governor Andrew Cuomo has described the state’s financial outlook as “grim.”
Shale gas development would help turn things around, especially in rural areas where jobs are scarce. Much of upstate New York sits directly on top of geological features that hold the promise of an economic bonanza—including the Marcellus, one of the largest shale-gas formations in the world, and the Utica, an even larger formation beneath the Marcellus that extends from Kentucky to Ontario. The Marcellus and Utica formations represent an extraordinary opportunity for New York. Various studies agree that for decades to come, shale-gas development in the state could create billions of dollars in new economic activity and tens of thousands of jobs.
But in 2008, former governor David Paterson imposed a moratorium on shale-gas drilling in New York. Paterson had been pressured by environmental groups claiming that hydraulic fracturing, or “fracking”—a drilling method that shatters shale formations with a mixture of high-pressure water, sand, and chemicals—polluted aquifers and water tables and perhaps caused earthquakes. A year later, Robert F. Kennedy, Jr., the president of the environmentalist Waterkeeper Alliance, seemed to signal a change of heart within New York’s green community when he wrote an op-ed for the Financial Times extolling the virtues of natural gas and hailing it as an energy source much cleaner than coal. The moratorium, however, remained in effect. When Governor Cuomo took office last January, he likewise left the moratorium in place but appointed an 18-member advisory panel to make recommendations about it.
For a while, there was widespread speculation in the natural-gas industry that the panel would recommend that Cuomo give fracking the green light in 2012. Last October, however, that optimism faded when Kennedy—a member of the panel—published a lengthy article in the Huffington Post renouncing his earlier support for shale gas. The industry’s “worst actors,” Kennedy wrote, “have successfully battled reasonable regulation, stifled public disclosure while bending compliant government regulators to engineer exceptions to existing environmental rules. Captive agencies and political leaders have obligingly reduced already meager enforcement resources and helped propagate the industry’s deceptive economic projections.” Kennedy then switched from rhetoric to saber-rattling: “As a result, public skepticism toward the industry and its government regulators is at a record high. With an army of over 40,000 highly motivated anti-fracking activists in New York alone, popular mistrust of the industry is presenting a daunting impediment to its expansion.”
Coming as it did in the middle of Occupy Wall Street’s intimidation tactics, Kennedy’s rhetorical deployment of an “army” of activists sent an unmistakable warning. The day Kennedy’s article appeared, costumed demonstrators marched from the Occupy encampment in downtown New York City to a Federal Energy Regulatory Commission (FERC) hearing in Greenwich Village. “The whole world is watching!” one demonstrator shouted. The hearing was about Spectra Energy’s plan to build a 30-inch natural-gas pipeline from New Jersey to the lower west side of Manhattan, via Staten Island. Though the streets of Manhattan have been piped for gas since 1825, anti-fracking activists and public officials told the FERC hearing that a new source of natural gas meant trouble: possible radioactivity, terrorism, pollution, accidents, and explosions. Manhattan borough president Scott Stringer warned that the pipeline could be used to transmit natural gas from fracked wells in Pennsylvania.
Coal and oil are obvious targets for environmentalists, but why does a clean and useful commodity like natural gas make greens see red? The risks are small: last summer, MIT issued a report on fracking that found that “the environmental impacts of shale development are challenging but manageable. . . . The newly realized abundance of low-cost gas provides an enormous potential benefit to the nation, providing a cost-effective bridge to a secure and low carbon future.” In October, at a panel discussion on shale gas sponsored by the New York Policy Forum (NYPF), Terry Engelder, a professor of geosciences at Penn State and an expert on the Marcellus formation, told the audience that the natural-gas industry was getting smarter about addressing environmental concerns. After a slow start, he said, drilling companies were moving toward nontoxic fracking fluids and state inspectors were making sure that jobs were done right.
Fracking brings enormous economic opportunities. Natural gas heats homes and commercial buildings, fuels vehicles, powers factories, provides raw materials for chemical industries, and—because it has the lowest carbon content of any fossil fuel—can replace coal- and oil-fired generating plants and heating systems with cleaner technologies. Natural gas is produced inside the U.S.—great for America’s balance of payments—and it’s quickly and cheaply distributed by pipeline to consumers around the country.
Perhaps what motivates the environmentalists’ attack on shale gas is worry about the survival of their movement. The green movement gave up on hydrocarbons years ago: it has already announced the arrival of “peak oil,” and the imminent demise of petroleum power—despite many recent discoveries of large oil and gas fields around the world—is a fundamental article of green faith. Environmentalists see shale gas as a relapse, a return to destructive habits, an end run around their self-appointed role as judge and jury for energy policy in America. And they understand that natural gas is a much harder target than dirty coal or imported oil. Further, an acceptably green technology that can compete with natural gas doesn’t exist yet, so once consumers enjoy the benefits of the shale-gas revolution, it will be almost impossible to wean them away from hydrocarbons and steer them to more expensive and less reliable technologies, such as solar and wind.
What will New York do? Governor Cuomo and the commissioner of the state’s Department of Environmental Conservation, Joe Martens, are keeping an eye on the economic boom in Pennsylvania, where shale-gas production has created tens of thousands of new jobs. They are well aware that economic activity and prosperity are spilling across the border from the gas fields of Pennsylvania into the southern tier of New York. They’re also watching Pennsylvania’s efforts to implement and enforce environmental safeguards, regulate drilling, and prevent fracking accidents. However, in the spoken version of his January 4 State of the State address—while hundreds of anti-fracking activists demonstrated outside—Cuomo praised solar and wind power but did not mention shale gas. The text version of his speech simply says that the state will continue to study the situation. There is no indication that shale-gas development in New York will begin in 2012. That’s a shame for the Empire State, because that anti-fracking demonstrator in Manhattan was wrong. The whole world isn’t watching. What the whole world is doing is fracking.