The New York Times reports that the Pittsburgh International Airport is joining the many Pennsylvania landowners who are tapping the natural gas abundance of the Marcellus Shale:
Pittsburgh’s airport is struggling financially and mired in debt, with sharply lower traffic ever since US Airways began phasing it out as a bustling hub in 2004. Long gone are the days when British Airways flew 747s to London, and TWA flew to Frankfurt.
For salvation, airport officials are looking down — about 6,000 feet. The quiet runways, it turns out, are sitting on enough natural gas to run the whole state of Pennsylvania for a year and a half, and this month, Consol Energy will drill its first well here to tap the gas, which county officials say will bring them nearly half a billion dollars over the next 20 years.
The well is outside the airport fence but, with horizontal drilling, it will extract the rich deposits that lie under the terminals and runways.
Developing natural gas below a metropolitan airport isn’t new. Both the Denver and Dallas-Fort Worth airports earn millions annually from the energy underneath.
Natural gas production from the Marcellus Shale is going sky-high, and there are no signs that will let up.
Responsible energy development is helping Pennsylvanians by creating thousands of jobs and offering landowners additional revenue streams. Just as it sees the opportunities in the sky above, Pittsburgh's airport also sees the opportunities below. Unfortunately New York State residents also living above the Marcellus Shale are left out because of a state moratorium on hydraulic fracturing.Video of No Fracking, No Boom
The Interior Department has begun work on its new five-year leasing program, and the Atlantic coast might be opened to energy development. The Hill reports that earlier this year, Interior opened the door for seismic exploration of the Atlantic coast. With 87% of the outer continental shelf off-limits right now, that would be welcome news.
Offshore development has tremendous potential. In July, Mark Green wrote that the federal Bureau of Ocean Energy Management (BOEM) released new estimates of how much oil and natural gas is off the Atlantic coast:
BOEM now believes areas within the 200 nautical mile U.S. Exclusive Economic Zone off the Atlantic Coast, from Maine to Florida, could hold 4.72 billion barrels of technically recoverable oil and 37.51 trillion cubic feet of technically recoverable natural gas. Those numbers are 43 percent and 20 percent higher, respectively, than the last government estimate of the Atlantic OCS done in 2011.
In 2013 at a House of Representatives Natural Resources subcommittee hearing, Christopher Guith, vice president of policy at the U.S. Chamber’s Institute for 21st Century Energy, explained the economic benefits from offshore development that are already occurring:
Offshore development supports over 240,000 direct and indirect jobs across the country, but nowhere is this more evident than the Gulf Coast economy. IHS Global Insight estimated that in 2009 the offshore oil and natural gas industry represented 9.3% of total employment and 12% of the economy, and generated almost $6 billion in state and local taxes and over $13 billion in federal revenue.
Opening up the Atlantic as well as more of the Gulf of Mexico and the Arctic will mean more jobs and strengthened energy security. A 2013 study found that opening the Atlantic outer continental shelf to oil and natural gas exploration will create 280,000 jobs.
It may surprise you that in our divided country there’s bipartisan support for expanding offshore energy development. Members of Congress from both parties have sent letters urging expanded offshore energy exploration.
There’s also bipartisanship among governors. In February, Virginia’s Democratic Governor Terry McAuliffe joined Republican governors in advocating for offshore energy development.
Bipartisanship also extends to the public. A recent poll found that increased offshore energy development has majority support among Democrats, Republicans, and Independents.
Members of Congress, governors, and the public are all on board. Hopefully the administration will be too.
Building the Keystone XL pipeline could lead to as much as four times more greenhouse gas emissions than the State Department has estimated for the controversial project, according to a new study published in Nature Climate Change that relies on different calculations about oil consumption.
The study’s authors based their calculation on the premise that increased supplies of petroleum through the pipeline would push down global oil prices marginally, and that would lead to an increase in consumption and thus pollution.
But wait, the State Department concluded in its final environmental impact statement that Canada’s oil sands crude will be developed and affect global consumption no matter how it’s transported:
[A]pproval or denial of any one crude oil transport project, including the proposed Project, is unlikely to significantly impact the rate of extraction in the oil sands, or the continued demand for heavy crude oil at refineries in the United States.
Based upon that analysis, the State Department determined that the pipeline would have minimal impact on the environment.
What’s more, the AP reports that some economists are skeptical of the study’s findings:
An increase of 121 million tons of carbon dioxide is dwarfed by the 36 billion tons of carbon dioxide the world pumped into the air in 2013. That's why University of Sussex economist Richard Tol dismissed the calculated Keystone effect as merely a drop in the bucket. If somebody is concerned about climate change, he wrote in an email, the pipeline "should be the furthest from your mind."
Independent energy economist Judith Dwarkin in Calgary, Alberta, Canada, dismissed the study, faulting the idea that added oil production will lower the price and boost demand. Usually, she said, it's consumption that spurs price and then oil production.
Since we know this oil will be developed, the Keystone XL pipeline should be a part of the transport mix. It will create jobs, boost local economies, improve America’s energy security, and do it with minimal impact on the environment.
This study didn’t offer any reason to not approve it.8 Key Facts about the Keystone Pipeline from U.S. Chamber of Commerce
In 2011, polluted water was discovered in Pavillion, WY. EPA jumped to conclusions and released a non-peer reviewed report declaring that hydraulic fracturing was the cause. After issuing that report, EPA backed away from its claim. So much so that in 2013 it let Wyoming state environmental officials take over the investigation.
The first of three reports has been released and finds no evidence that natural gas wells stimulated by hydraulic fracturing caused water contamination, the AP reports:
A draft state report released Wednesday on a possible explanation why well water in a central Wyoming gas field smells foul and tastes bad points away from leaky gas wells as a source of the problem.
Testing showed no evidence gas wells in the Pavillion area are leaking produced gas into the ground or providing a route for deep gas to seep into aquifers tapped for household water, according to the draft report by the agency that regulates oil and gas development in Wyoming.
The release of the Wyoming Oil and Gas Conservation Commission report, which examined 50 gas wells within a quarter-mile of 15 water wells, opens a 30-day period for the public and others to weigh in on the draft findings.
Encana, the petroleum company that owns the Pavillion gas field, pointed to the latest findings as evidence their gas wells aren’t to blame.
“The report confirms that the natural gas wells in the Pavillion Field were soundly constructed and provide no migration pathway into domestic water wells,” Encana spokesman Doug Hock said in an emailed statement.
I hope in the future EPA doesn't carelessly make accusations against hydraulic fracturing, a decades-old technology.
Because of America’s domestic oil boom, oil imports fell to their lowest level in 3 ½ years in June, improving the trade deficit.
As you can see from this chart by Mark Perry at the American Enterprise Institute, oil imports as a share of total petroleum products supplied have fallen dramatically since 2005, about the time when the shale boom began.Net United States petroleum importsSource: Mark Perry.
It seems counterintuitive to argue for exporting American oil, right? The Washington Post editorial board understands energy markets and explains why allowing U.S. oil exports is sound energy policy [emphasis mine]:
New technology is tapping oil-bearing shale formations in states such as North Dakota and Texas. Most of this product is light oil, which does not require heavy refining. Some of the most advanced refineries in the world are along the Gulf Coast, but that’s actually a problem: Their owners invested in expensive facilities suited to refining heavier crude, so there is a mismatch between the refining infrastructure and the type of crude flowing from U.S. wells. In the deeply interconnected global oil market, in which borders matter less than many people think, the obvious solution is to allow oil companies to ship the light crude to refineries suited for processing it, supporting U.S. profits and U.S. jobs in the process, and to tolerate imports of crude oil that U.S. refineries can handle.
Energy Secretary Ernest Moniz made this point in May.
The Post editorial goes on to note that exporting oil will improve American energy security: “[E]xpanded exports would encourage the development of oil fields and transport infrastructure, which would help the country weather some disruption in the global oil trade.”
The job gains will be substantial. An IHS study found that exporting U.S. oil will mean an additional $746 billion would be invested in domestic oil production resulting in an additional 1.2 million barrels per day of oil produced per year and 394,000 jobs created annually.
We’re long past fearing that an oil embargo will bring our economy to its knees. Instead, we live in a time of American energy abundance. When circumstances change, policies should too.