Special Report

Inhibiting an Oil and Gas Boom

The fossil fuel shale extraction industry is under attack.

By 7.22.11

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The fossil fuel shale extraction industry, where technological advancements and discoveries of huge reserves of oil and natural gas hold great promise for the nation's future energy needs, is under attack.

In June the New York Times ran a dubiously sourced series of stories that sought to show the bullishness on natural gas is overblown. The National Legal and Policy Center exposed how reporter Ian Urbina seemed to rely heavily on a Texas-based shale gas critic for his stories (others just called it "shoddy reporting"), and asked the Times' ombudsman Arthur Brisbane to address the stories' credibility. He did, writing, "My view is that such a pointed article needed more convincing substantiation, more space for a reasoned explanation of the other side and more clarity about its focus."

Then there is the obsessed, Herb and Marion Sandler-funded ProPublica, which has published 120 stories almost entirely dedicated to alleged problems with the gas industry -- mostly about hydraulic fracturing (called "fracking"), the process used to break open the shale to access the natural gas. Some environmentalists allege the practice harms drinking water, an unfounded claim. Former Rocky Mountain News columnist Dave Kopel discovered ProPublica reporter Abrahm Lustgarten's prejudice in 2009. In an email, Wyoming groundwater regulator Mark Thiesse told Kopel, "I spent several hours on the phone and around a dozen follow up emails to try and help [Lustgarten] write a factual article. Unfortunately he seemed to have his own agenda." ProPublica's exuberance for attacking natural gas is highlighted in their music video titled, "The Fracking Song."

But media distortions are less of a problem than excessive government regulation and panic by environmental extremists. Earthjustice, amidst hysteria over fracking and other normal activities that have been safely employed to access gas, recites from Reuters: "A widening shale gas revolution is killing the economics of renewable energy, even as falling costs allow wind and solar to overtake fossil fuels in niche areas." They think this is bad and ignore the facts that wind and solar costs are artificially "low" (but still not low enough) thanks to taxpayer subsidies.

Tired of the beating, members of the oil and gas industry last week issued a report about the promising future of energy in the U.S. -- if government and Earth perfectionists don't successfully impede. The Western Energy Alliance's "Blueprint for Western Energy Prosperity" cites projections by respected analysts ICF International, which assert:

• "The West is projected to generate 1.3 million barrels of domestic oil and condensate production a day by the year 2020, an amount that exceeds the current daily oil imports from Russia, Iraq and Kuwait combined."

• "The West has the potential to produce 6.2 trillion cubic feet (Tcf) of natural gas annually by 2020, an additional one Tcf from 2010 levels."

• "Combined, western oil and natural gas is projected to produce more energy on a daily basis than the total U.S. imports from Saudi Arabia, Iraq, Kuwait, Venezuela, Colombia, Algeria, Nigeria, and Russia."

• "The number of direct, indirect and induced jobs in the oil and natural gas sector is projected to increase by 16 percent to 504,120 by 2020."

Impressive, but there are many hitches and glitches -- namely, litigation-happy environmental groups who thwart affordable fossil fuel energy that actually works, while instead promoting inefficient, expensive wind (dirty and unconstitutional, as revealed by my organization, American Tradition Institute) and solar (also unconstitutional, in certain states). Worse, EPA and other government agencies often go along with the extremist groups and invite litigation, and then (nudge, nudge, wink, wink) "settle" their "dispute" at the expense of taxpayers.

As solutions, the WEA Blueprint recommends comprehensive reform of federal leasing, permitting and environmental analysis processes. The group also calls for a moratorium on any new or expanded regulations, in favor of "a more efficient, predictable means than the current and ever expanding maze of haphazard federal regulation." And they also seek relief from unreasonable litigation that only seeks to obstruct and delay, rather than constructively and cooperatively seek best solutions to protect people and the environment they live in.

WEA also seeks for states to amend their renewable energy standards to allow natural gas to compete to provide electricity on "fuel-neutral performance criteria" such as cost and emissions. I mildly disagree as the renewables mandates are anti-freedom, anti-consumer, extremely costly and as I mentioned earlier, unconstitutional. Open the electricity market to true competition for power generation and gas will do just fine.

It's not a coincidence the unemployment rate in North Dakota is 3.2 percent, where most land is privately owned and the Bakken formation is producing oil, gas and jobs. Private equals liberty, and less meddling by government and outsiders, so there is where the energy and work flows more freely.

(Author disclosure: I spoke at the annual meeting of the Western Energy Alliance in Beaver Creek, Colo. in June. The group paid for one-night's hotel stay and gave me (and all attendees) a golf shirt and a nice pen and pencil set (which all speakers received), while my organization, American Tradition Institute, paid for the rest of my travel expenses. There was no honorarium.)

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About the Author

Paul Chesser publishes CarolinaPlottHound.com, a news aggregator for North Carolina, and is a contributor of articles, research and investigative reports for both national and state-level free-market think tanks.