Saturday, March 26, 2011

FRAC ATTACK: RISKS, HYPE, AND FINANCIAL REALITY

It is disappointing to see more businesses and Towns that are located within the Lake Otsego Watershed attempt to pass local ordinances to ban natural gas development in the area. If they did so based on well researched information, it would not be as disappointing; it would be more like an informed choice.  However, we all know that information in our county is lacking.
Mistrust of the gas industry is one of the reasons why people seemingly prefer to listen to the other message and the other reason has to do with the public perception of what hydraulic fracturing is or what it is not.  While we cannot change the mistrust that the majority of the public has for the industry; however, we can work hard at disseminating information that is balanced.
Frac Attack Report is a document that deals with the misconceptions from both sides of the debate that is playing out in public. It is definitely worth a read if you really have no idea what the hoopla is all about in the first place, or even if you think you know what it is all about.

Summary
Public debate about the safety of hydraulic fracturing, a gas‐drilling technique that has unlocked vast new sources of domestic energy, has escalated dramatically in recent months. We set out to push through the noise, inspect claims on both sides of the gas‐drilling boom, and give investors a road map to the risks that producers may face. We start with the headline.

Hydraulic fracturing or fracing is unlikely to be banned. Given the scientific evidence available today and the economic impact of shutting down shale gas drilling, we don’t see an outright ban sticking federally, nor in New York or Pennsylvania, and certainly not in the energy patches of the Gulf Coast and the West. The job losses, higher energy prices and landowner‐rights challenges that would result are too unpalatable for Democrats, even those that don’t like the energy business. PA has literally bet its budget on drilling by leasing state land – a nut that’s hard for a financially troubled state to make up elsewhere.
The likely passage of PA’s much‐anticipated new production tax will make it even more reliant on drilling. This report addresses the regulatory climate in pivotal fracing regions.

Find the document here

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