In hydraulic fracturing, water, sand, and additives are pumped into a well under great pressure to create tiny cracks in shale rock. Sand grains prop open the cracks from whcih oil and natural gas to flow into the well.
According to Geology.com, the sand that’s best for hydraulic fracturing should be high-purity silica, have a “spherical shape that enables it to be carried in hydraulic fracturing fluid with minimal turbulence,” and be able to “resist crushing forces of closing fractures.”
Wisconsin has an abundance of this type of sand, and in a few short years, the shale energy boom has created another boom, the Wall Street Journal reports [subscription required]:
Energy companies are expected to use 56.3 billion pounds of sand this year, blasting it down oil and natural gas wells to help crack rocks and allow fuel to flow out. Sand use has increased 25% since 2011, according to the consulting firm PacWest, which expects a further 20% rise over the next two years.
In Wisconsin, the source of white sand perfectly suited for hydraulic fracturing, state officials now estimate more than 100 sand mines, loading, and processing facilities have received permits, up from just five sand mines and five processing plants operating in 2010.
The demand for sand has stimulated local economic development:
Canadian National Railway Co. is spending $68 million over three years to upgrade and restore more than 100 miles of track in Wisconsin so it can boost sand shipments out of state.
At the end of 2011, [shale-oil company EOG Resources Inc.] opened a plant in Chippewa Falls, Wis., about 100 miles east of Minneapolis, Minn., to process sand from mines it operates.
This sand boom has also enriched local residents. A 2012 Minneapolis Federal Reserve report found that farmers were “offered six-figure mineral rights fees” plus royalties for sand on their land. This has created “sand millionaires” whose wealth “percolates through local economies, benefiting enterprises with little connection to mining.”
The jobs and economic impact from sand mining are one example of the prosperity that shale energy production is generating. A study by economic research firm IHS found that shale energy supports over 2 million jobs. Barring new unnecessary federal regulations, shale energy development will continue to produce economic benefits.
There’s no doubt that BP should be held responsible for the 2010 Gulf oil spill. Yet despite BP pleading guilty and receiving a $4.5 billion fine and despite reorganizing its business structure and leadership, in November 2012, EPA declared that because of a Clean Water Act violation at one facility—the Deepwater Horizon oil platform--every branch of the company was barred from getting new federal government contracts and prevented from working with any company doing federal government work, even if it was in an unrelated industry.
Divisions with little connection to the oil spill, like the ones that produce jet and marine fuels, motor oil, and asphalt fall under EPA’s heavy-handed decision. What motor oil and asphalt have to do with the Deepwater Horizon is beyond me.
This past August, BP filed a lawsuit in the U.S. District Court for the Southern District of Texas challenging EPA’s blanket decision. On Monday, the U.S. Chamber, the National Association of Manufacturers, the American Petroleum Institute, the National Ocean Industries Association, the Organization for International Investment, and TechAmerica filed a brief with the court arguing that EPA went too far by adopting “sweeping punishments based on mere affiliation” and failing to act “in a reasonable manner, demonstrating some connection between the violation the agency is addressing and the remedy it adopts.”
The business groups maintain that:
An agency must abide by the terms of the statutes and regulations that govern the exclusion of entities that have committed such violation. And an agency must exercise its discretion in a reasonable manner, demonstrating some connection between the violation the agency is addressing and the remedy it adopts. The EPA followed neither of those dictates in this case. And the implications of that approach, should it be accepted by this court, are disturbing.
Those implications include significant economic effects:
If an entire corporate family is suspended or disqualified from federal programs, a cascade of impacts will follow. First will come the layoffs of hundreds or even thousands of employees whose performed jobs with any relation to federal programs. Second will come the impact on the economy from the loss of corporate value resulting from the entire company’s exclusion from all federal contracting. Third will come the ripple effect: the broader impact on the economy as the industries involved in government programs struggle with the uncertainties introduced by the threat of suspension or disqualification of an entire corporate structure stemming from the improper conduct of a few employees of one corporate affiliate. It is irresponsible for a single agency like EPA to take these actions without considering their consequences for U.S. industry.
Anyone violating the law must to be held accountable, but that doesn’t allow an agency like EPA to run roughshod and abuse its authority.
An avalanche of environmental regulations has made it increasingly difficult to build and develop in the United States. Rules to protect air quality and critical habitat areas; restrictions on energy production, mining, grazing, and forestry on federal lands; and an expansion of the Clean Water Act that will impose new permitting requirements and restrictions on virtually all U.S. lands and watersheds have conspired against development, growth, jobs creation, and prosperity.
Says Bill Kovacs, U.S. Chamber senior vice president for Environment, Technology, and Regulatory Affairs: "It's become a question of where can we build instead of where should we build." He explains in the video above.
Washington lawmakers are scheduled to bolt out of town later this month for their annual monthlong winter recess, marking the end of another year of missed opportunities.
Congress and the administration failed to bring closure to several pieces of business that would spark economic growth and job creation, while alleviating growing uncertainty in the business community. Here are Washington’s top five biggest failures in 2013, in no particular order:
Immigration reform: Prospects for a comprehensive immigration reform bill remain cloudy, but the president and Republican leaders say that they remain committed to fixing the nation’s broken immigration system.
Comprehensive immigration reform stalled over the summer after the Senate passed sweeping legislation to overhaul border security, require employer verification of workers’ status, and create a lengthy path to citizenship for undocumented immigrants. The House, meanwhile, has declined to put that bill to a vote, instead working on smaller pieces of immigration legislation.
Immigration reform remains a top priority for the U.S. Chamber. “America deserves a lawful, rational, and practicable immigration system that provides the labor we need at all skill levels while protecting the rights of citizens, businesses, the undocumented, and those legally pursuing citizenship,” says Chamber President and CEO Tom Donohue.
Tax reform: Lawmakers on both sides of the aisle agree that the current tax code is overly complex, impedes economic growth, and hurts America’s global competitiveness. But that’s where all agreement ends, and bipartisan efforts by the top two congressional tax writers have been hit by one roadblock after another, including the 16-day government shutdown, the last-minute scramble to raise the nation’s debt ceiling, and an all-consuming conference committee negotiation to reconcile the House and Senate versions of the fiscal year 2014 budget resolution.
Senate Finance Committee Chairman Max Baucus (D-MT) and House Ways and Means Committee Chairman Dave Camp (R-MI) have publicly agreed on the fundamental principles of comprehensive tax reform: broaden the base, lower the rates, and simplify the code, all of which the Chamber strongly supports.
Entitlement reform: Entitlement spending remains the main driver of current and future deficits and high debt levels. It must be addressed. Today, the United States spends $1.6 trillion on just three of the nation’s entitlement programs—Social Security, Medicare, and Medicaid. In 10 years, the total price for these programs will soar to $3 trillion. Congress cannot continue kicking the can down the road.
The procedural hurdles involved in reforming entitlements, however, are significant. For example, in the Senate, any bills seeking to change Social Security provisions fall under the so-called Byrd rule, which means that they can be challenged by a single senator as inadmissible.
But regardless of how hard it is, it must be done. And with lawmakers discussing a long-term budget deal, it could be the best opportunity in years to address unsustainable entitlement spending and stabilize federal finances, according to the Chamber.
While no one expected Congress to enact tax reform and entitlement reform in 2013, the fact that there was no progress on either issue is disappointing.
Keystone XL: It is five years and counting on a presidential decision to approve a pipeline to transport Canadian oil sands crude oil to U.S. refineries.
Studies by the administration have shown that construction of Keystone XL would directly result in $3.3 billion in investment in the United States and support tens of thousands of American jobs across diversified sectors, which would, in turn, add billions of dollars to the national and regional economies. Yet environmentalists have held up approval of the pipeline.
In a letter to the president, business groups urged him to “approve the construction of the Keystone XL pipeline to signal to the world that the necessary ingredients for a strengthened U.S. recovery are in place and to bolster the foundations of U.S. competitiveness and energy security.”
Deficit Crisis Redux: The outcome of the budget, the sequester, and debt limit negotiations is the single biggest failure of this Congress and administration, according to U.S. Chamber Executive Vice President for Government Affairs Bruce Josten. “The bias toward unconstrained deficit spending is our top economic issue,” Josten says. "The agreement [to fund the government and raise the debt ceiling], like the fiscal cliff deal, avoided destruction and nothing else.”
After the green frenzy, businesses rapidly jumped on the green bandwagon (or fuel efficient vehicle) to capture their share of the eco-wallet. We seem to be settling into a rational green phase in business, where companies and consumers alike are starting to make decisions based on facts and reality, rather than the desire to be “cool green.” The costs of being environmentally responsible have also come down, and more practical and affordable—options are available. Today, going green encompasses reducing waste, saving energy, and much more than garden variety recycling programs. Some local companies are finding opportunities for growing their businesses by targeting customers interested in riding this next wave of green.
Customers are More Educated
Despite the recession, consumers are buying environmentally-friendly products and two-thirds of them do their homework prior to settling on a product that makes sustainability claims. Sharon Rowe, CEO/founder of ECOBAGS.com of Ossining, New York, who has been involved in the eco-industry for 20 years says, “What might have been considered a green practice two years ago has also changed. Rather than just selecting a green bag, people have begun to look at how it’s made, where it’s made, and whether the product is made in a sustainable way, including manufacturing processes, materials, and labor issues.” To gain a competitive advantage, ECOBAGS markets the fact that their products are made from sustainable materials and are manufactured and produced under Fair Wage and Fair Labor standards.
Large entities, such as the government, universities, and the Fortune 500, have begun to pay attention to sustainability, and small businesses that fit the bill can benefit. According to Gary Survis, managing partner of Go Green Displays of Piscataway, NJ, “If small companies want to do business with these organizations, they’d better do more than talk about their plastics recycling program.” Energy audits, policies on travel, assessments of resources (across all aspects of the business) are all ways that small businesses can go that extra step in building a culture of sustainability.
Go Green Displays target eco-conscious customers by positioning themselves as an expert in everything sustainable. “Establish yourself as a thought leader across the green spectrum and you will be the first one to come to people’s minds when they think green,” says Survis. His company offers to do lunch-and-learns or presentations on green business for clients or prospects. In these programs, Survis talks about best practices and does not try to sell his marketing services. “I make sure that I don’t just know the space I operate in, but that I understand everything from waste reduction to energy use. I attend seminars and educate myself on the full package,” he says.
Provide Smarter Energy
Whereas eco-practices were viewed as an incremental expense several years ago, businesses have found that the basic principles of environmentalism—reduce, reuse, recycle—can save them money in the long run. Energy use has become a key area of focus for many businesses, with some government entities offering significant benefits for adoption of new practices. Geoscape Solar of Short Hills, New Jersey, performs energy audits on homes and businesses, and Jeffrey Chavkin, president and co-founder, reinforces that the businesses he deals with do not want to go green primarily for PR or community-relations benefits. They are seeking bottom-line savings. “They need solutions that are cost-effective and either pay back or do not adversely affect operations or cash flow.”
Geoscape was founded 14 months ago due to increased consumer demand for energy solutions. Chavkin left a career in commodities and his partner left a career in banking. Chavkin’s partner, Michael Boches, had worked for a solar power company 20 years ago, but because the energy solution was not popular, the company folded.
That was in the past; in the future Chavkin sees that wind power will make gains in the years ahead, as will the use of bio-fuels and electric/hybrid vehicles. For more ways your business can save on energy consumption, consult an online source like business.gov/expand/green-business/energy-efficiency/get-started/ that also details government incentives for changes.
Marketing for Green Businesses
Options for reducing paper waste are more plentiful and less expensive than they were several years ago. Print-on-demand technology has begun to deliver great quality, and e marketing and social media have made many ink-on-paper communications unnecessary. Rick Whelan, founder of Ditto! Design! urges companies who do use paper communications to “let the design solution be appropriate to the message and intended audience.” What seems like an obvious rule of good marketing can, in the long run, help save the environment, as well as unnecessary costs. While Whelan focuses mostly on graphic design these days, Ditto! Design! was Forest Stewardship Council (FSC)-certified nearly five years ago. According to Whelan, helping clients move messages to electronic media, employing print-on-demand technologies, or asking customers if they would prefer print or online brochures are all ways to reduce expenses, as well as satiate clients trying to reduce their own paper consumption.
Consultants Take it a Step Further
Many small businesses feel they are starting to plateau on what they can do to improve their day-to-day activities and are looking beyond the obvious. The definition of sustainability extends beyond buying products labeled eco-friendly. Business consultants can look at how they can use their expertise to reduce waste. “Businesses need to take a step back, to see if their general organization can be shifted in such a way to consume fewer resources, thereby saving money,” says Yale Klat, chief sustainability officer of the Salsberg Group. “One client was able to downsize their facility, while increasing both distribution and sales, by creating separate shifts for their workforce and sharing workspace.” While companies are streamlining and downsizing, consultants can help them consider the side benefits of changing internal processes and legacy systems. Many of these changes, although not initially perceived as “sustainability” initiatives may result in a dramatic waste reduction.
Quality for More Green
Funding sources are also cropping up for entrepreneurial ventures that hold true promise for changing the environmental game. Many start-ups and small businesses have received significant financial backing.
Nancy A. Shenker is the CEO/founder of theONswitch, and is the co-author of "Don’t Hook Up With the Dude in the Next Cube: 200+ Career Secrets for New Grads." She can be reached at email@example.com.