Pennsylvania Watersheds at Risk: Water Supply Decline

Watersheds in Pennsylvania are at risk for water supply issues in the coming years as a result of fracking activities that are threatening the quality and quantity of fresh water.

Proof-of-Work Cryptocurrency Mining: Environmental BOMB, Not Balm, for the Planet

Since late 2021, FracTracker has been collecting information on cryptomining operations around the United States, and has partnered with Global Energy Monitor to further research, document, and map many more of these cryptocurrency mining operations.

Map of potential carbon capture technology

An Insider Take on the Appalachian Hydrogen & CCUS Conference

Reflections on the Appalachian Hydrogen and Carbon Capture conference, and how companies hope to use new tech to prolong fossil fuel dependence

8 Maps to Strengthen Environmental Justice Policy in Pennsylvania

Pennsylvania’s environmental justice policy is an important tool for protecting marginalized communities from harm – but it needs your input!

TedAuch_Infrastructure-Compressor_Cryogenic_Complex-MarkWest_EnergyTransfer-WashingtonCounty-PA_Sept2021 feature

2021 Production from Pennsylvania’s Oil and Gas Wells

FracTracker has released an analysis of Pennsylvania’s 2021 oil and gas production totals and the impacts of orphaned and abandoned wells.

Russia Ukraine Energy Map

Mapping Energy Systems Impacted by the Russia-Ukraine War

This story map explores how the West’s failure to transition from fossil fuels to renewable energy is funding Russia’s invasion of Ukraine

The world is watching as bitcoin battle brews in the US

If Gov. Cuomo wants to lead the nation on climate, he has to address the impacts of proof of work cryptocurrency mining industry in New York.

Los Angeles, California skyline

California Oil & Gas Setbacks Recommendations Memo

 

Kyle Ferrar, Western Program Coordinator for FracTracker Alliance, contributed to the December 2020 memo, “Recommendations to CalGEM for Assessing the Economic Value of Social Benefits from a 2,500’ Buffer Zone Between Oil & Gas Extraction Activities and Nearby Communities.”

 

Below is the introduction, and you can find the full memo here.

Introduction

The purpose of this memo is to recommend guidelines to CalGEM for evaluating the economic value of the social benefits and costs to people and the environment in requiring a 2,500 foot setback for oil and gas drilling (OGD) activities. The 2,500’ setback distance should be considered a minimum required setback. The extensive technical literature, which we reference below, analyzes health benefits to populations when they live much farther away than 2,500’, such as 1km to 5km, but 2,500’ is a minimal setback in much of the literature. Economic analyses of the benefits and costs of setbacks should follow the technical literature and consider setbacks beyond 2,500’ also.

The social benefits and costs derive primarily from reducing the negative impacts of OGD pollution of soil, water, and air on the well-being of nearby communities. The impacts include a long list of health conditions that are known to result from hazardous exposures in the vulnerable populations living nearby. The benefits and costs to the OGD industry of implementing a setback are more limited under the assumption that the proposed setback will not impact total production of oil and gas.

The comment letter submitted by Voices in Solidarity against Oil in Neighborhoods (VISIÓN) on November 30, 2020 lays out an inclusive approach to assessing the health and safety consequences to the communities living near oil and gas extraction activities. This memo addresses how CalGEM might analyze the economic value of the net social benefits from reducing the pollution suffered by nearby communities. In doing so, this memo provides detailed recommendations on one part of the broader holistic evaluation that CalGEM must use in deciding the setback rule.

This memo consists of two parts. The first part documents factors that CalGEM should take into account when evaluating the economic benefits and costs of the forthcoming proposed rule. These include factors like the adverse health impacts of pollution from OGD, the hazards causing them and their sources, and the way they manifest into social and economic costs. It also describes populations that are particularly vulnerable to pollution and its effects as well as geographic factors that impact outcomes.

The second part of this memo documents the direct and indirect economic benefits of the proposed rule. Here, the memo discusses the methods and data that should be leveraged to analyze economic benefits of reducing exposure to OGD pollution through setbacks. This includes the health benefits, impacts on worker productivity, opportunity costs of OGD activity within the proposed setback, and the fact that impacted communities are paying the external costs of OGD.

 

 

Please find the full memo here.

 

 

 

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Straight Talk on the Future of Fracking Jobs in Pennsylvania

Fracking has been raised as an issue that could determine the outcome of the 2020 US presidential election. Republican candidates have cited erroneous figures of how many fracking jobs exist in Pennsylvania, and have falsely claimed that Democratic presidential candidate Joe Biden and running mate Kamala Harris seek to ban fracking. And while the Democratic candidates have made suggestive comments in the past, they have made their position clear. As Senator Harris stated in the vice presidential debate: “I will repeat, and the American people know, that Joe Biden will not ban fracking. That is a fact.”

The debate around this issue is not on whether or not fracking should be banned– something neither party advocates– but rather around the facts. Republican candidates have inflated the extent of fracking jobs by up to 3500 percent. But the natural gas industry and the fracking boom have failed to deliver the job growth and prosperity that was predicted by proponents a decade ago. In reality, the total number of jobs in the natural gas industry in Pennsylvania never reached more than 30,000 over the last five years and is now less with the industry’s economic decline.

The total number of jobs in the natural gas industry in Pennsylvania never reached more than 30,000 over the last five years and is now less with the industry’s economic decline.

The debate should not be around the facts- those are already firmly established. The debate should be around how to best support fossil fuel workers in the inevitable transition to cleaner energy. What does a just transition that supports workers and the climate look like?

FracTracker Alliance and The Breathe Project have compiled a fact sheet to help us answer this question based on where Pennsylvania currently stands.

 

 

Breathe Project
Energy Innovation Center – Suite 140
1435 Bedford Avenue
Pittsburgh, PA 15219

breathe@breatheproject.org

 

Straight Talk on the Future of Jobs in Pennsylvania (September 2020)

 

The Breathe Project and FracTracker Alliance have crafted the following messaging for refuting the conflated job numbers being touted by pro-fossil fuel organizations and political candidates regarding fracking and jobs in Pennsylvania that, in some cases, has inflated natural gas jobs in the state by 3500 percent.

The natural gas industry and the fracking boom have failed to deliver the job growth and prosperity that was predicted by proponents a decade ago. The total number of jobs in the natural gas industry in Pennsylvania never reached more than 30,000 over the last five years and is now less with the industry’s economic decline.

 

FACTThe Pa. Dept. of Labor and Industry (DLI) reported that direct employment in natural gas development totaled 19,623 in 2016. This was down from 28,926 total natural gas development jobs in 2015. This includes jobs in drilling, extraction, support operations and pipeline construction and transportation. (StateImpact, 2016)

Pa. DLI  calculated the employment figures using data from six data classifications at the U.S. Bureau of Labor Statistics — specifically, the North American Industry Classification System (NAICS) codes for cured petroleum and natural gas extraction, natural gas liquid extraction, drilling oil and gas wells, support activities for oil and gas operations, oil and gas pipeline and related structures and pipeline transportation of natural gas. (Natural Gas Intel, 2016)

Inflated estimates of fracking-related jobs in Pennsylvania under previous Gov. Tom Corbett included regulators overseeing the industry as gas jobs, truck drivers, and those working in highway construction, steel mills, coal-fired power plants, sewage treatment plants, and others. Pa. Gov. Tom Wolf’s administration revised the way gas industry jobs were calculated to reflect a more accurate depiction of jobs in the sector.

 

FACT: Food & Water Watch calculated that there were 7,633 jobs pre-boom (2001 – 2006), which rose to 25,960 oil and gas industry jobs post-boom (2016 – 2018). (FWW, March 2020)

 Food & Water Watch created a more accurate model using a definition that encompasses only jobs directly involved with domestic oil and gas production, specifically: oil and gas extraction; support activities for oil and gas operations; drilling oil and gas wells; oil and gas pipeline construction; and pipeline transportation.

FACT:  The Food & Water Watch analysis also reports that misleadingly broad definitions in industry-supported job reports overstated the industries’ scope. The industry analysis included broad swaths of manufacturing industries including “fertilizer manufacturing,” convenience store workers, and gas station workers, which accounted for nearly 35 percent of all oil and gas jobs in their analysis. (FWW, PwC at 5 and Table 4 at 9, 2019)

FACT: As a point of comparison, in 2019, close to 1 million state residents were working in healthcare, 222,600 in education, and over 590,000 in local and state government. (Pennsylvania Bureau of Labor Statistics, July, 2020)

FACT: To forecast fracking-related job growth, the American Petroleum Institute used a model with exaggerated multipliers and faulty assumptions, such as the amount of purchases made from in-state suppliers, and it double counted jobs, leading to wildly optimistic estimates. (Ohio River Valley Institute, August 2020)

FACT: In addition, many of the jobs claimed in a 2017 American Chemistry Council Appalachian petrochemical economic impact study would arise in plastics manufacturing, which raises two concerns. First, both the ACC study and subsequent reports by the U.S. Department of Energy assume that 90% of the ethylene and polyethylene produced by imagined Appalachian cracker plants would be shipped out of the region to be used in manufacturing elsewhere in the country and the world. Of the 10% that would presumably stay in the region, much or most of it would serve to replace supplies that the region’s plastics manufacturers currently source from the Gulf Coast. (Ohio River Valley Institute, August 2020)

 

The fracking and petrochemical industries create unsustainable boom and bust cycles that do not holistically improve local economies.

FACT: Economic analyses show that the oil and gas industry is a risky economic proposition due to the current global oversupply of plastics, unpredictable costs to the industry, a lower demand for plastics, and increased competition. The analyses call into question industry’s plans to expand fracking and gas infrastructure in the region. (IEEFA, August 2020)

FACT: Plans to build petrochemical plants in Beaver County, Pennsylvania and Belmont, Ohio, for the sole purpose of manufacturing plastic nurdles will not be as profitable as originally portrayed. (IEEFA Report, June 2020)

 

A clean energy economy is the only way forward.

FACT: The Dept. of Energy’s U.S. Energy and Employment Report (2017) and E2 Clean Jobs Pennsylvania Report (2020) shows that clean energy jobs in Pennsylvania employ twice as many people as the fossil fuel industry prior to the pandemic.

FACT: The 4-state region of Ohio, West Virginia, Kentucky and Pennsylvania has formed a coalition of labor, policy experts and frontline community leaders called Reimagine Appalachia. This coalition is in the process of addressing the vast number of jobs in renewable and clean energy industries in a report that will be published this fall.

Reimagine Appalachia seeks major federal funding packages that will create jobs, rebuild infrastructure and addresses climate change that will ensure that no one is left behind going forward.

 

Sources

O’Leary, Sean. “The Not-So-Natural Gas Boom,” Westvirginiaville.com, Aug. 10, 2020.

O’Leary, Sean. “Lies, damned lies, and economic impact studies,” Ohio River Valley Institute, Aug. 31, 2020.

O’Leary, Sean. “Game Unchanged . . . But, Not Unchangeable,” Ohio River Valley Institute, Aug. 11, 2020.                                                                                                                                                 Food & Water Watch. “Phantom Jobs: Fracking Job Creation Numbers Don’t Add Up,” March 2020.

Natural Gas Intel

Pa. Dept. of Environmental Protection Energy Programs. 2020 Pennsylvania Energy Employment Report,

Institute for Energy Economics and Financial Analysis (IEEFA). “IEEFA report: Financial risks loom for Shell’s Pennsylvania petrochemicals complex,” June 4, 2020.

IEEFA. “Petrochemicals may be another bad bet for the oil industry,” Aug. 19, 2020.

E2. “Clean Jobs Pennsylvania 2020,” April 15, 2020.

Natural Gas Intel. “Direct Employment in Natural Gas Development Declines by One-Third in Pennsylvania,” Dec. 23, 2016.

PennLive. “How many jobs has Marcellus Shale Really Created?” Jan. 5, 2019.

StateImpact, “Pa. oil and gas jobs down 32 percent since last year,” Dec. 23, 2016.

 

The Breathe Project is a coalition of citizens, environmental advocates, public health professionals and academics using the best available science and technology to improve air quality, eliminate climate pollution and make our region a healthy, prosperous place to live.

FracTracker Alliance is a 501(c)3 organization that maps, analyzes, and communicates the risks of oil, gas, and petrochemical development to advance just energy alternatives that protect public health, natural resources, and the climate.

 

Feature image of construction of the Royal Dutch Shell cracker plant in Beaver County, Pennsylvania, October 2019. Ted Auch, FracTracker Alliance.

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COVID-19 and the oil & gas industry

COVID-19 and the oil and gas industry are at odds. Air pollution created by oil and gas activities make people more vulnerable to viruses like COVID-19. Simultaneously, the economic impact of the pandemic is posing major challenges to oil and gas companies that were already struggling to meet their bottom line. In responding to these challenges, will our elected leaders agree on a stimulus package that prioritizes people over profits?

Health Impacts of COVID-19 and Oil & Gas 

People living in areas with poor air quality may be more vulnerable to COVID-19, a disease that affects the lungs. Poor air quality is linked to higher rates of asthma and chronic obstructive pulmonary disease (COPD), even without a pandemic.

Air pollution from oil and gas development can come from compressor stations, condensate tanks, construction activity, dehydrators, engines, fugitive emissions, pits, vehicles, and venting and flaring. The impact is so severe that for every three job years created by fracking in the Marcellus Shale, one year of life is lost due to increased exposure to pollution. 

Yes, air quality has improved in certain areas of China and elsewhere due to decreased traffic during the COVID-19 pandemic. But despite our eagerness for good news, sightings of dolphins in Italian waterways does not mean that mother earth has forgiven us or “hit the reset button.”

Significant environmental health concerns persist, despite some improvements in air quality. During the 2003 SARS outbreak, which was caused by another coronavirus, patients from areas with the high levels of air pollution were twice as likely to die from SARS compared to those who lived in places with little pollution.

On March 8th, Stanford University environmental resource economist Marshall Burke looked at the impacts of air quality improvements under COVID-19, and offered this important caveat: 

“It seems clearly incorrect and foolhardy to conclude that pandemics are good for health. Again I emphasize that the effects calculated above are just the health benefits of the air pollution changes, and do not account for the many other short- or long-term negative consequences of social and economic disruption on health or other outcomes; these harms could exceed any health benefits from reduced air pollution.  But the calculation is perhaps a useful reminder of the often-hidden health consequences of the status quo, i.e. the substantial costs that our current way of doing things exacts on our health and livelihoods.”

This is an environmental justice issue. Higher levels of air pollution tend to be in communities with more poverty, people of color, and immigrants. Other health impacts related to oil and gas activities, from cancer to negative birth outcomes, compromise people’s health, making them more vulnerable to COVID-19. Plus, marginalized communities experience disproportionate barriers to healthcare as well as a heavier economic toll during city-wide lockdowns.

Financial Instability of the Oil & Gas Industry in the Face of COVID-19 

The COVID-19 health crisis is setting off major changes in the oil and gas industry. The situation may thwart plans for additional petrochemical expansion and cause investors to turn away from fracking for good.

Persistent Negative Returns 

Oil, gas, and petrochemical producers were facing financial uncertainties even before COVID-19 began to spread internationally. Now, the economics have never been worse

In 2019, shale-focused oil and gas producers ended the year with net losses of $6.7 billion. This capped off the decade of the “shale revolution,” during which oil and gas companies spent $189 billion more on drilling and other capital expenses than they brought in through sales. This negative cash flow is a huge red flag for investors.  

“North America’s shale industry has never succeeded in producing positive free cash flows for any full year since the practice of fracking became widespread.” IEEFA

 

Plummeting Prices

Shale companies in the United States produce more natural gas than they can sell, to the extent that they frequently resort to burning gas straight into the atmosphere. This oversupply drives down prices, a phenomenon that industry refers to as a “price glut.”

The oil-price war between Russia and Saudi Arabia has been taking a toll on oil and gas prices as well. Saudi Arabia plans to increase oil production by 2 – 3 million barrels per day in April, bringing the global total to 102 million barrels produced per day. But with the global COVID-19 lockdown, transportation has decreased considerably, and the world may only need 90 million barrels per day

If you’ve taken Econ 101, you know that when production increases as demand decreases, prices plummet. Some analysts estimate that the price of oil will soon fall to as low as $5 per barrel, (compared to the OPEC+ intended price of $60 per barrel). 

Corporate welfare vs. public health and safety

Oil and gas industry lobbyists have asked Congress for financial support in response to COVID-19. Two stimulus bills in both the House and Senate are currently competing for aid.

Speaker McConnell’s bill seeks to provide corporate welfare with a $415 billion fund. This would largely benefit industries like oil and gas, airlines, and cruise ships. Friends of the Earth gauged the potential bailout to the fracking industry at $26.287 billion. In another approach, the GOP Senate is seeking to raise oil prices by directly purchasing for the Strategic Petroleum Reserve, the nation’s emergency oil supply.

Speaker Pelosi’s proposed stimulus bill includes $250 billion in emergency funding with stricter conditions on corporate use, but doesn’t contain strong enough language to prevent a massive bailout to oil and gas companies.

Hopefully with public pressure, Democrats will take a firmer stance and push for economic stimulus to be directed to healthcare, paid sick leave, stronger unemployment insurance, free COVID-19 testing, and food security. 

Grasping at straws

Fracking companies were struggling to stay afloat before COVID-19 even with generous government subsidies. It’s becoming very clear that the fracking boom is finally busting. In an attempt to make use of the oversupply of gas and win back investors, the petrochemical industry is expanding rapidly. There are currently plans for $164 billion of new infrastructure in the United States that would turn fracked natural gas into plastic. 

Belmont Cracker Plant - Potential Petrochemical Infrastructure in the Ohio River Valley

The location of the proposed PTTGC Ethane Cracker in Belmont, Ohio. Go to this map.

There are several fundamental flaws with this plan. One is that the price of plastic is falling. A new report by the Institute for Energy Economics and Financial Analysis (IEEFA) states that the price of plastic today is 40% lower than industry projections in 2010-2013. This is around the time that plans started for a $5.7 billion petrochemical complex in Belmont County, Ohio. This would be the second major infrastructural addition to the planned petrochemical buildout in the Ohio River Valley, the first being the multi-billion dollar ethane cracker plant in Beaver County, Pennsylvania.

Secondly, there is more national and global competition than anticipated, both in supply and production. Natural gas and petrochemical companies have invested in infrastructure in an attempt to take advantage of cheap natural gas, creating an oversupply of plastic, again decreasing prices and revenue. Plus, governments around the world are banning single-use plastics, and McKinsey & Company estimates that up to 60% of plastic production could be based on reuse and recycling by 2050. 

Sharp declines in feedstock prices do not lead to rising demand for petrochemical end products.

Third, oil and gas companies were overly optimistic in their projections of national economic growth. The IMF recently projected that GDP growth will slow down in China and the United States in the coming years. And this was before the historic drop in oil prices and the COVID-19 outbreak.

“The risks are becoming insurmountable. The price of plastics is sinking and the market is already oversupplied due to industry overbuilding and increased competition,” said Tom Sanzillo, IEEFA’s director of finance and author of the report.

 

 

The Show’s Over for Oil & Gas 

Oil, gas, and petrochemical companies are facing perilous prospects from demand and supply sides. Increasing supply does not match up with decreasing demand, and as a result the price of oil and plastics are dropping quickly. Tens of thousands of oil and gas workers are being fired, and more than 200 oil and gas companies have filed for bankruptcy in North America in the past five years. Investors are no longer interested in propping up failing companies.

Natural gas accounts for 44% of electricity generation in the United States – more than any other source. Despite that, the cost per megawatt hour of electricity for renewable energy power plants is now cheaper than that of natural gas power plants. At this point, the economy is bound to move towards cleaner and more economically sustainable energy solutions. 

It’s not always necessary or appropriate to find a “silver lining” in crises, and it’s wrong to celebrate reduced pollution or renewable energy achievements that come as the direct result of illness and death. Everyone’s first priority must be their health and the health of their community. Yet the pandemic has exposed fundamental flaws in our energy system, and given elected leaders a moment to pause and consider how we should move forward.

It is a pivotal moment in terms of global energy production. With determination, the United States can exercise the political willpower to prioritize people over profits– in this case, public health over fossil fuel companies.

Top photo of petrochemical activity in the Houston, Texas area. By Ted Auch, FracTracker Alliance. Aerial assistance provided by LightHawk. 

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