Can Environmentalists, Shale Gas Producers Get Along?

It was serendipitous that I read about a collaboration between environmentalists and unconventional gas drillers while attending Wharton’s Initiative for Global Environmental Leadership’s conference on the nexus of energy, food and water. The goal of the gathering was to engage the business community in a conversation on how to build business value by embedding sustainability.

I was tweeting about Neil Hawkins’ call for collaboration when a Google alert about the new center popped up. Hawkins is Vice President of Sustainability and Environment, Health & Safety for the Dow Chemical Company.

The Center for Sustainable Shale Development is breaking down silos. The participating partners include Chevron, CONSOL Energy, Environmental Defense Fund, EQT Corp., Pennsylvania Environmental Council, Shell and William Penn Foundation.

Robert Vagt, President of the Heinz Endowments, said in a statement:

CSSD is the result of an unprecedented effort that brought together a group of stakeholders with diverse perspectives, working to create responsible performance standards and a rigorous, third‐party evaluation process for shale gas operations. This process has demonstrated for us that industry and environmental organizations, working together, can identify shared values and find common ground on standards that are environmentally protective.

Bruce Niemeyer, President of Chevron Appalachia, added:

Raising the bar on performance and committing to public, rigorous and verifiable standards demonstrates our companies’ determination to develop this resource safely and responsibly. Throughout the development of CSSD, the collaborative effort of environmental organizations, foundations and energy companies has been the key to achieving consensus on regional performance standards.

Energy companies seeking certification must meet 15 performance standards that address air quality, water resources and climate. The data-driven performance measures will build trust and break through the myths and unfounded fears.

Indeed, the Washington Post editorialized:

Last week brought a heartening breakthrough in the war over fracking: A handful of major green groups and big drillers agreed on environmental standards… These new rules are a large step toward striking the right balance, and everyone involved deserves credit.

But not all environmentalists are singing “Kumbaya.” Deb Nardone, the Sierra Club’s Beyond Natural Gas Campaign Director, dismissed the agreement as “akin to slapping a band aid on a gaping wound.” In a statement, Nardone declared:

The majority of natural gas must stay in the ground if we want any chance of avoiding climate disaster.

That makes no fracking sense says the Post:

The center provides a model for environmental groups, too. They advance their cause much further when they accept that the country is fracking and push for sound regulation, instead of unrealistically insisting that all that natural gas stay in the ground.

Truth be told, some ‘fracktivists’ are more interested in mobilizing around an issue than collaborating on solutions because it’s good for business.

Infrastructure Matters

If you’re like most Americans, you might be asking yourself: “What is infrastructure?” Infrastructure is the foundation of our economy. It includes highways, public transit and water systems, airports and railroads. Or as former Gov. Arnold Schwarzenegger told his then eight-year-old son: “It’s what Daddy blows up in movies.”

Edward Rendell, former governor of Pennsylvania, shared that story at a forum of regional leaders convened by Philadelphia City Councilman Kenyatta Johnson, “Philadelphia’s Infrastructure: A Pathway to Jobs, Economic Development and Sustainability.”

Johnson said:

As a District Councilman, I recognize that we need jobs. Investing in our road, bridges and alternative energy sources should be used to stimulate job creation and economic development, not only in Philadelphia but in the surrounding region.

One of those alternative energy sources – shale gas – is powering economic growth and America’s energy independence. A report by IHS  found that unconventional gas development contributed economic activity of over $14 billion in Pennsylvania in 2012. The shale gas revolution directly and indirectly supported over 100,000 jobs. That number is projected to double by 2020.

Western Pennsylvania is the sweet spot for the Marcellus Shale formation. As a longtime advocate for minority-owned business enterprises, I was heartened by Sen. Anthony Williams’ commitment to ensuring a broad-based economic benefit:

It’s not just about western Pennsylvania. It’s about all of Pennsylvania… We in Philadelphia need to be in the middle of this conversation.

Fortunately the Oil and Gas Act, commonly referred to as Act 13, includes a provision to foster that conversation. Section 2316 provides:

(a) Requirement: Producers shall provide maximum practicable contracting opportunities for diverse small businesses, including minority-owned business enterprises, women-owned business enterprises and veteran-owned businesses.

(b) Duties – Producers shall do all of the following:

(1) Maintain a policy prohibiting discrimination in employment and contracting based on gender, race, creed or color.

(2) Use the database available on the Internet website of the Department of General Services to identify certified diverse small businesses, including minority-owned business enterprises, women-owned business enterprises and veteran-owned businesses, as potential contractors, subcontractors and supplies for opportunities related to unconventional natural gas extraction.

(3) Respond to the survey under subsection (c) within 90 days.

(c) Survey – Within one year of the effective date of this section, the Department of General Services shall send all producers a survey to report the producers’ efforts to provide maximum practicable contracting opportunities related to unconventional gas extraction for diverse, small business participation.

It’s a truism that we manage what we measure. But somehow the Department of General Services managed to miss the Feb. 13, 2013, deadline for sending the survey to shale gas producers.

Williams promised to fix that. He is a member of the State Government Committee to which DGS must submit an annual report on diverse, small business participation. He will ask members of the Pennsylvania Senate Democratic Caucus to sign a joint letter to DGS to find out when the survey will be sent.

So where do we go from here? Johnson made it clear this was not a one-off event; rather, it was the 1st annual infrastructure forum. He plans to establish an Infrastructure Working Group to develop a long-term strategy to promote job creation and economic development.

For more information, contact Councilman Kenyatta Johnson’s office at (215) 686-3412.

Obama Shows Natural Gas Industry Some Love

On the eve of the first anniversary of Act 13, a small group of protesters lined up in Philadelphia’s LOVE Park and said no way to hydraulic fracturing, commonly called fracking.

Signed into law by Gov. Tom Corbett on Feb. 14, 2012, Act 13 cleared the way for unconventional (horizontal) drilling. The Marcellus Shale law established environmental protections and imposed impact fees on drilling companies. The most controversial provision placed strict limits on local governments’ authority to enact zoning ordinances that regulate where and when oil and gas development may occur.

As the legal challenge plays out in the court, the Marcellus Shale play is powering a brighter future for the nation.

In his State of the Union address, President Obama recognized the impact of innovations in the natural gas industry:

Today, no area holds more promise than our investments in American energy. After years of talking about it, we’re finally poised to control our own energy future. We produce more oil at home than we have in 15 years. We have doubled the distance our cars will go on a gallon of gas, and the amount of renewable energy we generate from sources like wind and solar — with tens of thousands of good American jobs to show for it. We produce more natural gas than ever before — and nearly everyone’s energy bill is lower because of it. And over the last four years, our emissions of the dangerous carbon pollution that threatens our planet have actually fallen.

[…]

Now, in the meantime, the natural gas boom has led to cleaner power and greater energy independence. We need to encourage that. And that’s why my administration will keep cutting red tape and speeding up new oil and gas permits. That’s got to be part of an all-of-the-above plan. But I also want to work with this Congress to encourage the research and technology that helps natural gas burn even cleaner and protects our air and our water.

Will there be a moratorium on shale gas drilling in Pennsylvania? No fracking way.

Fracking Truth in Pennsylvania

The late Daniel Patrick Moynihan famously said, “Everyone is entitled to his own opinion, but not his own facts.” In their campaign to ban hydraulic fracturing, opponents of fracking conflate opinion with fact.

And sometimes they just make stuff up. Exhibit A: This action alert from Food & Water Watch.

I live a short walk from the Community College of Philadelphia. This DC-based group is so concerned about “our community” that it couldn’t even bother taking a photo of a real CCP student. Instead, it used a stock photo of a generic college student. What else are they faking?

Fact is, nearly 74 percent of CCP’s students are minority; African Americans represent approximately 57 percent of the total enrollment.

Fact: The nation’s overall unemployment rate is 7.9 percent. The black unemployment rate is 13.8 percent. In Philadelphia, the jobless rate is 11.1 percent. A whopping 50 percent of black men are unemployed. So, rather than blow smoke about alleged water contamination, Food & Water Watch should shed light on those “jobs in stable industries that will stick around.” Where are they?

In his second inaugural address, President Obama noted that new technologies in the energy sector “will power new jobs and new industries.” Those new technologies include fracking. The CCP Energy Training Center is preparing underserved minorities for the jobs of the future.

In a press release, CCP President Stephen M. Curtis, PhD said:

Our region is home to the largest refinery on the East Coast, which is adding jobs and expanding the base of businesses that work in the energy supply chain. The Center positions the College to support regional partners in identifying the skills training and education required to fill the sector’s vacant positions and increase workforce readiness.

Curtis added:

With energy jobs so readily available, leading companies need workers with specialized technical skills, as well as frontline employees equipped to handle daily tasks such as accounting, bookkeeping, sales, office management and customer service. The goal is to support the supply chain now serving energy companies and offer specialized career training that connects residents to the high-pay, high-demand career paths.

Oh, the horror! If the folks at Food & Water Watch had visited the college, they would know that CCP’s mission is to put students on “the path to possibilities.” It is, after all, hanging from the banner on a light pole.

Facts are stubborn things. In the next few weeks, I will launch a website where I will curate fact-based news and information about shale gas developments in Pennsylvania. To receive notice when the site is live, send me an email.

Are You Prepared for the Natural Gas Boom?

There’s gold in them thar rocks. More accurately, natural gas produced from Marcellus Shale is as good as gold.

The untapped natural gas reserves in Pennsylvania have triggered a second energy boom. That was the message of the speakers at a symposium organized by Temple University’s Center on Regional Politics, “How Pension Funding Challenges and Energy Development Opportunities Will Affect Our Future.”

Pennsylvania’s first energy boom occurred in 1859 when oil was discovered in Titusville. Today, natural gas is creating opportunities across the Commonwealth. Indeed, Gov. Tom Corbett said energy will drive economic growth for decades.

Philip K. Verleger Jr. of the Peterson Institute of International Economics was the keynote speaker. Verleger observed:

Pennsylvania has at least three important advantages. First, one of the major sources of low-cost natural gas is the Marcellus Shale, which stretches across the state. Second, unique rail networks built over 100 years ago provide a way to bring crude from North Dakota and Colorado shale fields to Pennsylvania refineries, as well as to refineries in southern New Jersey and Delaware. Third, eastern Pennsylvania is not exposed to extreme weather, unlike businesses in other coastal states such as Connecticut, Massachusetts, New Jersey and New York. These circumstances give Pennsylvania a unique opportunity.

Verleger added:

One can argue that Pennsylvania’s good fortune came about due more to serendipity than planning. But then, it is always better to be lucky than smart. The job now is to make the most of the luck.

With job creation the top priority for most Pennsylvanians, it’s our “good fortune” that shale production is labor intensive. To fully develop shale production, companies will need to hire engineers, landscape architects, IT professionals, and construction workers and laborers. Those workers will need somewhere to live. The workers will have to eat and have places to unwind.

Rural roads and bridges will have to be upgraded to accommodate heavy equipment, trucks and tankers. There will be increased demand for ancillary business services, including accounting, consulting, legal, security, workforce development, advertising and communications, and public relations.

It is said that luck is what happens when preparation meets opportunity. From drilling companies to diner owners, the opportunities are there. Are you prepared to seize the moment?

While natural gas will reduce our dependence on foreign oil, opponents claim hydraulic fracturing, or fracking, contaminates drinking water. But emotion and anecdotes are not scientific data. This is not their grandfather’s oil and gas business. Today, technology will mitigate any environmental impacts of natural gas drilling.

Pennsylvania is ground zero for the Marcellus Shale play. The Associated Press reports royalty payments to private landowners could top $1.2 billion for 2012.

But every Pennsylvanian has skin in the game. Consider: Marcellus Shale underlies roughly 1.5 million of the 2.2 million acres of state forest land. The Department of Conservation and Natural Resources has leased out 700,000 acres of state forest for drilling. DCNR predicts state forests – public lands – may host up to 1,000 well pads and 10,000 wells once drilling is up to full capacity.

The bottom line: Marcellus Shale is a big fracking deal. Are you prepared for the natural gas boom?