Tag: hydraulic fracturing

Radio days volume 20

I really had to blow a lot of dust off this series – its last installment was in July of 2013 – but I will be on the internet radio tomorrow morning at 11:00 thanks to radio hostess (and new monoblogue contributor) Marita Noon. She asked me to come on this week’s installment of her “America’s Voice for Energy” program to discuss a post I did last year.

It came about because she was doing a piece on where the candidates stood on energy (which will be her debut post here tomorrow morning) and I noted to her via social media that I had done quite a bit of research last summer on that very topic as part of my “Dossier” series. She wanted to discuss that piece and other thoughts I had on the subject, thus early this morning we recorded my segment of her show, which will be the opening segment. Thirteen minutes may seem like a long time to fill on the radio, but we were rolling so well I almost didn’t get to promote my site.

Yet there are some other things which were sadly left on the cutting room floor, so to speak. Something I would have liked to fill her audience in on further but didn’t have the time to this morning was the unique situation we have here in Maryland with regard to energy. I did get to discuss a little bit about the proposed offshore wind that Martin O’Malley was trying to push, but I wanted to mention that there are hundreds of other jobs at stake in Maryland’s energy industry. (I actually did a little looking up last night because I was curious.)

According to the most recent state report available (2013) there are 401 coal mining workers in the state of Maryland, all based out of Allegany and Garrett counties in Maryland’s western panhandle. No, we’re not West Virginia or Kentucky by any stretch of the imagination but the Obama administration’s “war on coal” isn’t going to help their employment situation, particularly since these coal fields lie close to shale deposits ripe for fracking – unfortunately, a short-sighted General Assembly and Hogan administration put that resource development on hold until 2017.

The other fascinating thing I didn’t get to was the fact that cities up and down the coast are being intimidated into opposing seismic exploration of the ocean floor for the purposes of oil and gas exploration – but had no objection when they went out and did the same thing to map the ocean floor for siting wind turbines. Apparently that was a noble enough cause to kill a few fish over. Honestly, I think the opponents are very aware what is really out there and that’s billions of barrels of oil and trillions of cubic feet of natural gas, all within easy reach of our shoreline and extractable at a cost that would blow the renewables out of the water. (Yes, the pun was intended.)

So take a listen, either live as it happens or later on when it becomes available as a podcast. I believe there are three other guests on the show, so I’ll be curious to see what they have to say as well when I catch the podcast (I’ll be at work when it’s on live.)

Let’s just hope that the long radio slump is over. Thanks to Marita for having me on as a guest, albeit a little reluctantly since I have been under the weather the last few days. But I managed to avoid a Hillary-style coughing jag and pushed through.

The easy way out

A couple weeks ago I pointed out that about two dozen bills passed by the Maryland General Assembly this year were still pending after Larry Hogan had his final bill signing session May 12. Here was the list of bills I urged him to veto:

If he wishes to let the decriminalization of marijuana become law without his signature, that’s quite all right.

So I’m very disappointed to report that the deadline came and went while Hogan was away in Asia, and only two of those bills were properly vetoed: HB980/SB340 and SB190.

Yet while he turned aside the travel tax, Governor Hogan increased a number of court fees and kept an additional O’Malley fee increase scheduled to sunset this year for another five years.

The governor who claims to be business-friendly and who wanted to create jobs went against the wishes of his party on flexible leave and thwarted the introduction of fracking to Maryland for another two years. This after announcing during the campaign:

States throughout the country have been developing their natural gas resources safely and efficiently for decades. I am concerned that there has been a knee-jerk reaction against any new energy production.

Now we have our own knee-jerk reaction.

He also added yet another unnecessary mandate to health insurance with in-vitro fertilization coverage for same-sex couples, and if Bruce, uh, “Caitlyn” Jenner were born in Maryland s/he could legally have his/her birth certificate changed to reflect the “fact” he bills himself as a female.

Perhaps you believe Hogan was making the political calculation about whether a veto could be sustained. With the Senate in Democratic hands by a hefty 33-14 count, it’s not likely a veto could be sustained there. However, a 50-seat group of Republicans in the House only need seven Democrats to keep a veto in play, and given enough political pressure there are still a handful of centrist Democrats who could go along with the governor.

These were the House votes on the eight measures I advocated a veto for. I’m also adding the votes on the handful of bills he vetoed for policy reasons.

  • House Bill 51 passed the House 97-40. It would have difficult to uphold this one.
  • House Bill 54 passed the House 82-58, after originally failing on third reading. This veto could have been sustained.
  • House Bill 345 passed the House 86-52. This one was right on the cusp of a maintaining the veto; definitely doable.
  • House Bill 449 passed the House 93-45, and its crossfiled SB409 passed 103-36. But if Governor Hogan had vetoed this and put the whip to his department heads to come up with regulations by next January they may have upheld this veto.
  • The margins on HB838/SB416 were 94-44 and 93-45, respectively. That’s iffy but the onus should have been placed on the General Assembly to vote on it again.
  • Similarly, HB862/SB743 only won the House by margins of 85-50 and 91-49. Still unlikely to hold, but should have made them vote again.
  • HB980/SB340 only had 82 votes apiece in the House, which makes these good candidates to be upheld.
  • SB190 only passed 84-56, which means it’s also a good possibility to be sustained.
  • SB517, which decriminalized marijuana possession but was vetoed, is right on the cusp of overturn as it passed 83-53.
  • Similarly, SB528, which dealt with seizure and forfeiture (also vetoed), passed the House 89-51 so it’s also a possible overturn.

I suppose I should be happy with the half a loaf I have received from Governor Hogan considering the absolute disaster we’ve had to endure under eight years of Martin O’Malley. But the leftists are crowing about the fracking ban, and see it as just an initial step to a permanent halt.

The only way to curb an ambitious, leftist agenda is to put up a conservative one of your own and stomp out any attempt to sneak things through. Instead, what we are receiving is a leftward drift in lieu of pedal-to-the-metal liberalism. However, to borrow the words of a former governor, we really need to turn this car around and not using the veto pen as much as it should be won’t get us going in the correct direction.

Sneaking laws into the books

Important update: Per the Maryland General Assembly webpage, the date of presentment was actually fixed as May 3. This means the legislative limbo can run as late as June 2.)

On Tuesday Governor Larry Hogan risked carpal tunnel syndrome by signing hundreds of bills into law. The extraordinarily high output was made necessary by two factors: the events in Baltimore that scuttled a planned bill signing back on April 28, and the desire to enact these laws within the period mandated by the state’s constitution. As a refresher, Article II, Section 17 (c) of the Maryland Constitution states:

Any Bill presented to the Governor within six days (Sundays excepted), prior to adjournment of any session of the General Assembly, or after such adjournment, shall become law without the Governor’s signature unless it is vetoed by the Governor within 30 days after its presentment. (Emphasis mine.)

There are a handful of bills which may make it into the books this way. Since the General Assembly session ended at the stroke of midnight April 14. 30 days hence would be tomorrow, May 14. (Update: presentment doesn’t happen with adjournment, as I have found.) Some of the bills in limbo happen to be those which are part of the monoblogue Accountability Project, so you can bet there are some calculations going on about whether a veto can be sustained.

Many of these bills Hogan has held off on signing establish or extend fees and taxes, with a few being issues local to Calvert, Charles, and Howard counties. Two of them extend or increase fees in state courts; in another case I wrote about the “travel tax” of Senate Bill 190 a few weeks ago. Senate Bill 183 would mandate the adoption of the Geographic Cost of Education Index, which would be a budget-buster. He’s also passed on extending the film production activity tax credit that the producers of “House of Cards” wanted.

Business interests, though, should be happy that Hogan hasn’t signed the de facto two-year fracking ban or the extension of flexible leave.

On the social issue end of the spectrum, we do not yet know the fate of bills which would decriminalize marijuana, allow for same-sex couples to have their IVF procedures covered under insurance, let those who have undergone the treatment to revise their gender to change their birth certificates to reflect this, or allow felons who are out of prison but still on probation or parole to vote.

These are less than 5% of the bills which were passed. Many others have already been vetoed as duplicative, but those above are the ones most likely to get an attempt at overriding the veto – or they can try, try again in the next term knowing that the votes for passage were there the last time. Some bills may be improved with a few minor changes that can be worked out while others should just be put out of our misery.

I’m hoping that Governor Hogan sends a strong message by vetoing the following bills I advised voting against:

If he wishes to let the decriminalization of marijuana become law without his signature, that’s quite all right.

This all goes to show that my monoblogue Accountability Project should be a hot-ticket item when it comes out. next week. The good news is that it’s free and available for the taking once I upload it Monday. (See the update above.)

So-called expert believes women can only be prostitutes and maids

Okay, now that I have your attention, allow me to add some context. If I did show prep for Rush Limbaugh, this story would be placed in the “lighthearted stack of stuff.” (This explains why I kept it around for a couple weeks.)

Back on April 20 – which somehow seems appropriate – the Washington Times ran the story I allude to in the title. It detailed an April 6 lecture by “a key figure behind New York’s statewide ban on fracking.” Biologist Sandra Steingraber said the following:

“Fracking as an industry serves men. Ninety-five percent of the people employed in the gas fields are men. When we talk about jobs, we’re talking about jobs for men, and we need to say that,” Ms. Steingraber says in a video posted on YouTube by the industry-backed group Energy in Depth.

“The jobs for women are ‘hotel maid’ and ‘prostitute,'” she says. “So when fracking comes into a community, what we see is that women take a big hit, especially single women who have children who depend on rental housing.”

Needless to say, if a conservative said that women were only qualified to be prostitutes and hotel maids, we would have that splashed all over the front pages for months on end. Instead, it took two weeks to leak out to the Washington Times and, aside from that, it’s barely been mentioned. A cursory news search for Ms. Steingraber only found a few articles on smaller outlets about upcoming speeches and minor reaction to this story.

The Times also quotes another anti-fracking activist who compares the procedure to rape:

Ms. Steingraber’s speech, titled “Fracking is a Feminist Issue: Women Confronting Fossil Fuels and Petrochemicals in an Age of Climate Emergency,” comes after Texas anti-drilling activist Sharon Wilson was criticized for comparing fracking to rape in a March 30 post on Twitter and her blog.

“Fracking victims I have worked with describe it as a rape. It is a violation of justice and it is despoiling the land,” Ms. Wilson said in her blog, TXSharon’s BlueDaze. “Victims usually suffer PTSD.”

I tell you, Valerie Richardson’s story could be comedy gold – but these people take this stuff seriously, and that’s a shame.

While the oil and gas industry isn’t female-dominated by any means, it’s often a function of physical strength and skill level – the women who are coming into the field aren’t typically found at the wellhead but in what the industry calls “downstream” jobs. None of them involve prostitution or scullery work, but they’re usually not going to get their hands overly dirty at the jobsite because they are the technicians and engineers as opposed to the guys doing the drilling and extraction. And that’s just fine – they’re making an honest living. So Steingraber may be right in the specific that nearly all wellhead jobs are held by males, but as an industry she’s well off base.

Yet the problem with this line of thinking is that it pervades the brains of liberals who occupy places of power, such as the EPA or, closer to home, the Maryland General Assembly. The Radical Green leftists in the MGA still haven’t received the “war on women” meme, but they don’t have to be as sly about it, either.

As you are likely aware I am currently working on the 2015 monoblogue Accountability Project, and some of my venom is saved for the idiocy which passes for oil and gas industry expertise. Pro-abortion legislators are continually trying to strangle Maryland’s fracking industry before it even makes it to the crib, as you’ll see when I wrap up the mAP in the next few weeks.

One good example is a proposal on the waste products of fracking, which is originally proposed would have made it illegal for a person to “accept, receive, collect, store, treat, transfer, or dispose of, in the state, waste from hydraulic fracturing.” Well, that pretty much covered it: a backhanded ban on the practice. I have at least one other example in the mAP, so be watching.

For America to prosper, we need to create our own energy. And when we have the bountiful resources that we do and can extract them at a reasonable, market-based price, why not do so? You can see the depths opponents have to reach to make their point, which means their argument is a futile one. Drill, baby, drill!

Maryland: contrarian again

It’s been awhile since I looked at the energy industry, what with legislation, riots, and other general mayhem. Fortunately for me, I have several sources in that industry to return me to speed and one is writer Marita Noon, whose piece on NetRightDaily today detailed the efforts of forward-thinking states to repeal their renewable energy mandates – some by whopping margins in their legislature. In those states, the market-bending allocations to renewable energy are coming to an end, leveling the playing field and perhaps saving their taxpayers millions of dollars.

Unfortunately, Maryland isn’t one of those states rolling back its mandates; in fact, the only piece of legislation dealing with the renewable portfolio was a liberal Democrat-backed scheme to expand it some more. House Bill 377 and Senate Bill 373 both were aimed at significantly increasing the percentage of renewables up to 40% by 2025 – current law peaks renewables’ share at 20% by 2022. (Both these figures are a pipe dream.) The Senate version lost in the Finance Committee by an 8-3 vote, and the House version was withdrawn before it was voted upon.

It was good that a bad bill was thwarted, but it was unfortunate that no bill was introduced to repeal these mandates. Maryland would be in far better shape energy-wise, eventually with lower utility rates, if true reform was achieved: repeal of the renewable energy portfolio, the withdrawal of the state from the Regional Greenhouse Gas Initiative, repealing the subsidy for offshore wind, and encouraging energy production from hydraulic fracturing and offshore drilling.

Over the course of the O’Malley administration, energy companies took the brunt of new regulations and changes in the market; in particular, their cost of doing business was affected by the renewable energy portfolio and the RGGI. If you assume the goal of the utility is to provide energy as cheaply as possible to make a profit – while keeping prices low enough to maintain and grow a customer base – having the dead expenses of the “alternative compliance payment” made necessary by falling short of renewable goals and the CO2 allowances auctioned off by RGGI as a sweet redistribution scheme aren’t helping the cause. Meanwhile, more exploration and investment in energy infrastructure could bring Maryland closer to being at least even as opposed to a net energy importer.

I wouldn’t expect any repeal of these bills to pass on the scale that they’ve moved through some state legislatures, but 71-70 and 24-23 are perfectly fine margins to me. It would also likely require getting around the committee process and bringing the package directly to the floor. (The portfolio repeal, RGGI withdrawal, and repeal of the offshore wind subsidy could be one bill: call it the Maryland Energy Reform Act of 2016.)

The trick is getting the right people to advocate for the changes by showing how much can be saved by consumers. That portion seems like a job for a group like the Maryland Public Policy Institute, while the lobbying on the part of the energy providers should include a pledge of reducing rates. Shaving 2 cents a kilowatt hour off the bill may not sound like much, but it translates to about $216 a year based on average residential usage of about 900 kWh a month. I don’t know about you, but an extra $18 a month would be nice for me. Just think of the economic benefits we received last year when gasoline skidded to $2 a gallon – benefits being lost now as prices have edged back up over $2.50 a gallon.

To help in prosperity, Maryland needs cheap energy. As it stands now, we don’t have it but I think we can get it if the political will is there.

Informally making it formal?

When you stop laughing, hear me out.

It’s only been two months since he left office, but I think we can all agree our somewhat esteemed former governor is all but an official announcement away from throwing his hat into the 2016 Presidential ring. And when you consider that Hillary Clinton is continually being tarred by scandal after scandal (Benghazi and her e-mail questions) and blunder after blunder (the Russian “reset” button and discussing the “fun deficit”), Martin O’Malley almost looks sane. Come on, what else do you have on the Democratic side – the gaffe-prone Joe Biden? “Fauxcahonotas” Elizabeth Warren? One-term Senator Jim Webb of Virginia is the one who has the exploratory committee going, but the far left considers him a “Reagan Democrat” who they can’t support.

So when you see the above photo on the O’Malley Facebook page (which is where I got it) you have to ask if the “taking on powerful and wealthy special interests” message is meant for Hillary? After all, look how much the Clintons’ foundation has raked in over the years. And his message today about the presidency “not (being) some crown to be passed between two families,” would resonate with a lot of people who believed the propaganda about how disastrous the George W. Bush tenure was and are already tired of the constant turmoil surrounding the Clinton family.

Perhaps Delegate Herb McMillan put this best, noting, “Raising taxes on the poor and middle classes 83 times isn’t the same as taking on powerful wealthy special interests.” But it’s more than that.

Obviously the laughter among many who read this website comes from knowing how rapidly O’Malley would genuflect to particular special interests when it suited his purposes. Environmentalists got a lot of goodies during MOM’s reign: California rules on emissions, punitive restrictions on development in rural areas (via the “tier maps”), an ill-advised and job-killing moratorium on fracking, and of course the “rain tax.” Illegal immigrants, too, had a friend in O’Malley, but productive taxpayers – not so much. He also decided to work on legalizing gay marriage only after his electoral coast was clear in the state – if he had tried to run for re-election on the issue he would have lost the black vote in 2010. (Remember, that was before Barack Obama’s flip-flop on the issue.)

Say what you will about Martin O’Malley, but he is the lone Democrat openly considering the race who has executive experience – on the other hand, there are a number of GOP candidates who can boast the same thing: in alphabetical order there’s Jeb Bush, Chris Christie, Mike Huckabee, Bobby Jindal, John Kasich, George Pataki, Rick Perry, and Scott Walker. Depending on who the GOP puts up, the “experience” tag could apply to the Democrat. We’re not saying the experience would be a good one, but it is what it is.

Don’t be too shocked if the O’Malley’s March national tour makes a lot of stops in Iowa and New Hampshire. It’s his way of pandering to the special interests he cherishes the most, and if people are fooled by this sudden bout of populism it’s their own fault. Don’t say you weren’t warned.

Update: At Front Line State Jim Jamitis echoes these sentiments, with a great headline to boot.

Passing on prosperity

Since both have been mentioned in the news as potential Presidential candidates, governors Martin O’Malley of Maryland and Andrew Cuomo of New York have been natural rivals for the attention of the various interest groups that make up the constituency of the Democratic Party. It seems that they are always trying to one-up the other in enacting off-the-charts liberal legislation – when one allowed gay marriage, passed draconian gun laws, or pandered to illegal immigrants, the other tried to follow in rapid succession.

Martin O’Malley and Andrew Cuomo also both cast their lot with the radical environmentalists who claimed (falsely) that hydraulic fracturing for energy extraction would ruin their state’s environment. Yet while O’Malley relented ever-so-slightly in recent weeks, allowing the practice but with regulations one energy expert called “onerous and time-consuming,” Cuomo stopped the practice cold in his state by decreeing in an announcement last week that fracking would be banned, timed nicely after his re-election. Observers of both states are scratching their heads about these decisions, both in the media and in the energy industry. In New York, local media bemoaned the lost opportunity while landowners in the affected area called Cuomo’s ban a “worst-case scenario.”

Yet in the middle of all this sits the commonwealth of Pennsylvania, a state which has embraced the economic benefits of the practice to such a degree that Tom Wolf, the incoming Democratic governor of the state won’t ban it. (However, he may stiffen regulations and increase taxes on energy producers, which will be something to watch in the coming months.)

Granted, their good fortune of geography means Pennsylvania has the largest share of the Marcellus Shale which yielded all that natural gas, while Maryland only has a small slice and New York has a small but significant portion.  For their part, Ohio and West Virginia also have sizable portions of the formation, while Virginia’s share is similar to Maryland’s. Ohio has been nearly as aggressive as Pennsylvania in taking advantage of the shale – although recently re-elected Republican Governor John Kasich is also trying to increase taxes on producers – while West Virginia is lagging behind their neighbors and just beginning the process of allowing extraction.

It’s a given that fracking isn’t without risk, but neither are installing large solar farms or erecting 400-foot high wind turbines. Yet the natural gas and oil provided from fracking make for a much more reliable energy source than the intermittent electricity provided by the latter pair, sources which ironically need a natural gas backup to be consistent.

As time goes on we will see just what economic effects a fracking ban will have on the affected areas of New York. But as we have seen in states which have already began the extraction, the Empire State is missing out on the potential for investment and return that having the Marcellus Shale provides for those lucky enough to live over it. Hopefully our neighbors in western Maryland will see some benefits in the next couple years as Governor-elect Hogan puts “sensible” regulations in place to benefit all concerned parties.

Newt Gingrich was right after all

I wrote a little bit about the 2012 contenders yesterday in a piece about 2016, but I’ve been seeing the evidence that Newt Gingrich’s thought and 2012 campaign plank that we could once again see gasoline at $2.50 a gallon (or less, as the recent photo above from my Missouri-based writer friend Melinda Musil demonstrates) has come true despite naysayers from just a short year or so ago. Yet despite experts who called the idea “absurd” and noted “the price of oil is set on a global market” and decreed “in the immediate term there is almost nothing you can do,” well, here we are. Musil reported yesterday her prices are now under $2 a gallon.

The reason prices are so much lower is pretty much what Gingrich proposed to do in the 2012 campaign: increased production. With fracking and other enhancements in technology allowing domestic output to increase, the benefits have been enormous. Considering that average prices going into the July 4 holiday hovered over $3.60 a gallon, the relief expressed by drivers may begin spilling over into the economy at-large. Now the average is about $2.54 a gallon, with this area’s prices relatively close to that point.

Over time, the benefits will be accruing to consumers – if an Eastern Shore driver goes 20,000 miles a year in a truck that gets 20 miles per gallon, spending $1 less a gallon for a year is equivalent to a $1,000 annual raise that’s tax free. On the other hand, this decline in prices is thwarting the state of Maryland’s scheme to take more out of our pockets by increasing the sales tax on gas, because as I noted a few days back their 8 cents per gallon projected revenue is sinking closer to a nickel. Luckily, the state government over the next four years will desperately try not to confiscate any more revenue from working folks like us thanks to the recent election, and this tailwind could help Governor-elect Hogan address the state’s structural deficit through a modest increase in economic activity.

It’s doubtful that our prices will stay quite this low, for oil at $60 a barrel means our extraction with its price point that’s a little bit higher isn’t sustainable in the long term. But there is the chance that more practice with these unconventional techniques could drive down production costs to a point where our producers could prosper at that price or even below – if we could match the Saudis’ lower extraction cost we could wipe out the OPEC cartel once and for all.

So enjoy these low prices while they last. Hopefully, this modest economic bump will kickstart other sectors and bring us prosperity despite the best efforts of some in Washington – you know, the ones who try to take credit for this energy boom despite having little to do with it.

Another stroke of luck (and it’s not Irish)

Because of the snow, it’s sort of a slow news day today. So I was looking for something interesting to comment on and found out that the practice of fracking can now retire, as it’s reached the ripe old age of 65. From Energy Tomorrow:

We celebrate the first commercial use of hydraulic fracturing 65 years ago on March 17, 1949, conducted by Halliburton in Stephens County, Okla., and Archer County, Texas. But the roots of the fracking story stretch back to the 1860s. In a 2010 article for the Society of Petroleum Engineers’ Journal of Petroleum Technology (JPT), NSI Technologies’ Carl Montgomery and Michael Smith write that energy pioneers experimented with oil well “shooting” that would “rubblize” oil-bearing rock to increase flows. Various methodologies were used to fracture rock formations over the years until Stanolind Oil, a division of Standard Oil of Indiana, conducted the first experimental “hydrafrac” in 1947 in Kansas. It involved pumping fluid carrying “propping agents” at high pressure into a well to create fractures that could be held open to free oil and natural gas in the rock.

People have freaked out over this technology over the last half-decade since the oil and natural gas industry embraced it to bring new life to old fields as well as other places where energy exploration was previously deemed economically unworthy due to quantities thought not to be worth the trouble. Yet the root technology was decades old; the confluence of evolving technique with the increase in oil prices to a point where fracking could be cost-effective gave the impetus to the industry. Truthfully, when oil was $15 a barrel and being pumped like crazy in the Middle East a couple decades ago, there wasn’t much demand for domestic supplies.

On the other hand, natural gas that ran about $4 per thousand cubic feet in 1981 only costs about $9 per thousand cubic feet now (although seasonal fluctuations are more severe.) Since that’s not far off the increased cost of living from then to now, this technology has enabled the natural gas market to hold serve despite increased demand from electricity generation, which receives a much better rate than the residential figures I cited. Granted, the recent surge began around the time when natural gas for residential use hit its all-time peak of $20.77 per thousand cubic feet in the summer of 2008, but opening up export markets can make additional fields profitable while stabilizing prices.

Now there is an element of truth to the argument naysayers in the manufacturing and chemical industries make about the potential that exporting LNG to other countries would increase prices here, although I doubt they would triple as claimed. But let’s explore once again the alternative scenario, one which I alluded to a couple paragraphs back.

Oil companies were laying people off and shutting down wells when prices were $15 to $20 a barrel because there was no way to run many of the old wells profitably. Some seem to forget that entrepreneurs go into business to make a profit, so they can make a living. Just like Staples is lopping off a couple hundred of its lagging retail performers, these companies idled wells which were losing money. In one respect it was great because gasoline went back under a dollar per gallon (remember that?) but that was a short-lived phenomenon which ended about the time of the first Gulf War – meanwhile, it took several more years for the oil industry to recover. Like it or not, that’s a vital cog of the American economy just like automakers and other manufacturers, who can use the incentive of energy which is reliable and still relatively inexpensive to create jobs.

So the ideal this time would be to maintain a fairly steady and predictable price while expanding the supply and maintaining those wells which are in operation so they stay economically viable. But if it weren’t for fracking, we would be in the situation of having to import a greater and greater share of our energy, a policy which would quickly drive up prices and perhaps exacerbate our national economic slowdown to a recessionary point once again. A modest increase in energy prices would be a small price to pay for the creation of thousands of jobs with private-sector investment – and who knows, maybe the predicted price increase won’t come. But I’ll bet the jobs would.

2014 Maryland dossier: part 4 (energy policy)

Today I work into the fourth part of my series, on energy policy.

It’s clear to me that if the state wants to become more successful at improving the standard of living of its citizens, we have to find ways to make energy more accessible and less expensive for the average consumer. That’s the starting point for my critique on energy policy.

There are many points the Republican candidates seem to agree on, which is to be expected.

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David Craig: Craig said it is also time to stop studying fracking and enable natural gas extraction to take place in Western Maryland in an environmentally-responsible manner. (press release, October 4, 2013)

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Harford County Executive David R. Craig, who also is seeking the Republican nomination, said estimates show fracking in Garrett and Allegany counties will bring as many as 14,000 jobs.

If the state continues to study the issue, the people of Western Maryland will suffer as business go to frack in neighboring Pennsylvania, Ohio and West Virginia, he said. (Gazette, September 19, 2013)

Ron George: Make Energy More Affordable, Available, and Less Dependent on unstable governments half way around the world. This includes developing natural gas resources and using clean coal for our own needs. (campaign site)

*

“I have to let you know that I’ve really struggled with the issue and studied the issue, I’ve listened to the fears and looked at the science,” he said. “And I’ve come down on the side of natural gas drilling for ourselves, for Maryland’s use.”

Fracking now will help the state with its energy costs and diversify its alternative energy production, said George, a GOP candidate for governor.

“We have to have other alternatives that are clean,” he said. (Gazette, September 19, 2013)

*

“Before we go building 40 of these [wind turbines] offshore, let’s do this step by step,” said Del. Ron George, R-Anne Arundel. He offered an amendment to build one wind turbine to study the viability of offshore wind in Maryland. He said the Virginia legislature approved a similar plan on Wednesday.

“It will test the economics of large scale offshore wind projects, it will test the mechanics of construction and issues related to offshore wind projects, and it will study the ability of offshore wind projects to withstand weather conditions” 11 miles off the coast of Ocean City.

“It is really doing the next step, so we don’t go wasting money, and we make sure we do it right,” George said. (Maryland Reporter, March 29, 2012)

Charles Lollar: I support development of Maryland’s Marchellus shale natural gas reserves. (campaign website, “Natural Resources”)

Demand that public utilities be held accountable to their customers. (campaign website, “Accountability”)

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In order to reduce (energy prices) Lollar wants to remove subsidies and allow all forms of energy to compete on their merits. This includes allowing fracking in Maryland’s Marcellus shale so that natural gas can lower the state’s energy costs. He sees O’Malley’s subsidies for wind energy as a way of picking winners and losers in the market, and opposes to the handouts. (Real Clear Markets, September 3, 2013)

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Lollar said the state could quickly come out of its perennial deficit if it allowed fracking in Maryland. Lollar emphasized the practice would have to be well regulated, but not so much so as to stop businesses from existing. (SoMDNews, November 1, 2013)

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“We absolutely need to take advantage of that resource, not just as another energy source but to put people to work,” Charles Lollar, Republican candidate for governor, said of natural gas. (Gazette, September 19, 2013)

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I think they [Pepco] have an unfair relationship advantage. I’m not prepared to blame the Democratic party but I am prepared to blame the individual people that have made the system what it is. I do believe that when you have an unbalanced system that heavily favors one party over another, this is the kind of response that you get. There’s a lot of strong-arming. There are strong and forceful relationships that are literally causing people to do things that in their right mind, they would not do.

The power held at the highest levels of our state is incredible and it’s crushing good elected officials and appointed commissioners that want to do the right thing. Let’s put the blame where it needs to be. This idea of charging someone a fee before they get appropriate services is wrong no matter what party you’re from. (Bethesda Now, November 7, 2013)

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Insofar as energy policy goes, our friends across the aisle greet the issue with reactions ranging from radio silence (Anthony Brown) to a belief that poultry waste can be a “responsible investment” (Doug Gansler) to a pedal-to-the-metal emphasis on so-called “clean energy” and outright hostility to fracking (Heather Mizeur). None of these proposals meet the twin tests of reliability and market worthiness that coal, oil, and natural gas do. In particular, one has to ponder the viability of poultry waste as a fuel after the Waterkeeper Alliance picked on one family for months in an losing effort to make an example of them, a move one local environmental advocate said “definitely sets us back.”

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So what I believe had “definitely set us back” is the de facto moratorium on fracking Maryland has had in effect for the last few years, as the state continues to twiddle its thumbs and study the issue at length in “setting an extremely high bar for industry.” Meanwhile, Pennsylvania has seemed to find a reasonable balance between environment and energy; thus natural gas exploration and extraction is creating jobs and revenue for those counties fortunate enough to sit atop the Marcellus Shale formation.

I think David Craig gets this part of the picture, but there’s a lot more to energy policy than just fracking. It would be good to know where he stands on other market-based reforms like repealing the wind energy bill and renewable energy portfolio – as you’ll see in a future segment David has his eye on restoring a balance between economy and environment. So I give him 4.5 of 8 points.

Ron George took a while to come down on the side of fracking, but also seems to foresee more of an “all-of-the-above” approach. Included in that was advocating a single-unit pilot project for offshore wind, despite the fact the bill he attempted unsuccessfully to amend, if passed, had a fiscal note which warned “State expenditures…increase minimally beginning in FY 2013 and significantly beginning in FY 2017 due to higher electricity prices.” Perhaps his view on this has evolved, however, as he did not offer the same amendment in 2013 and voted against O’Malley’s bill. As you’ll see below, he should get credit for weighing evidence.

But it’s difficult to reconcile George’s stance with his previous votes on the subject. Maybe he’s reached a level of satisfaction with the state’s regulations and if so he’s a little more for red tape than my taste would dictate; for that answer I need more guidance. At this point I’ll score him as a solid 4 of 8 points.

Charles Lollar stands with the rest of the Republicans on fracking, which is good. He also makes it sound like O’Malley’s wind folly would be terminated, which is great. But there’s one piece of the puzzle which troubles me greatly.

It’s noted in the Bethesda Now story, where Lollar was quoted as saying “charging someone a fee before they get appropriate services is wrong,” that the forum was intentionally held without a PEPCO representative present. Had Lollar studied the issue more carefully he would have known this rate increase was based on an executive order from Governor O’Malley, who touted the increase as “hardening” the electric grid. The idea is to accelerate the process of preparing the grid for major weather events, which may have been the point brought out by a PEPCO spokesperson had one been invited to the event.

One thing about being an elected official is that you generally hear all sides of the story as part of your duties in office. On the other hand, coming in without that experience means you have to work at the issue. On his front page, Charles claims his goal is to “bring together people of different political beliefs, talents and backgrounds to develop solutions to difficult problems.” Yet he attended a forum where a party to a dispute is sandbagged, and that’s disappointing.

It’s populism to pick on a utility without hearing their side of the story. So my question is whether “well regulated” for fracking will be determined by the hype or the facts. Based on this concern I can only give Charles 2.5 out of 8 points at this time.

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The next portion is something I would anticipate the candidates do quite well in: Second Amendment rights. I’m hoping to follow that up with a discussion of what the candidates would do about Obamacare, and for that answer I had to ask directly.

It’s also worth pointing out that this process would evolve. In his answer to my Obamacare question, Ron George elaborated a little on education so I believe I should add that portion in. It wouldn’t surprise me as the campaign rolls along that these pieces might be revised once or twice along the way; you should expect no less.

Where the boom is allowed to happen

This post starts out with a video. Watch it and then read what I say next.

Call it propaganda from oil company shills, but the fact remains: North Dakota leads the nation with the lowest unemployment rate – even better than Washington, D.C. They have 3% unemployment, which is 0.9% better than the next state on the list (Nebraska) and a full 3.8% better than Maryland’s number. The BLS also notes that “the largest over-the-year percentage increase in employment occurred in North Dakota (+6.8 percent).”

I will caution that fracking isn’t a panacea for all unemployment ills – Pennsylvania could eventually add over 200,000 jobs related to the energy industry by decade’s end but still has a higher overall unemployment rate than Maryland does.  Part of the reason for North Dakota’s success is that it really had few other job producers before energy companies invested heavily into the Bakken play; as one observer notes in the video it wasn’t all that long ago that young people left the area because no jobs were available.

And note that not all the jobs are directly related to energy extraction, with one entrepreneur featured in the video opening her own diner and others getting work from the surge in construction. Obviously that industry will mature as supply catches up to demand but there will be other needs which will eventually have to be addressed in a growing area.

Maryland has a small piece of the Marcellus Shale formation; unfortunately the state seems to be dragging its feet on allowing its exploitation. The two counties which would stand to most benefit, though – Allegany and Garrett – have unemployment rates just about the state average as of April, with both coming in just above 7 percent. Granted, we aren’t talking about a large population center – the two counties combined are just a shade larger than Wicomico County by itself and only a small fraction of Maryland’s overall population. But imagine the impact of 2,000 new jobs in that area – I’m not saying that would necessarily be the case with fracking but that’s certainly in the realm of possibility.

It can’t hurt, can it? Moreover, cheap and abundant energy can bring industry – unlike far-off North Dakota, the western edge of Maryland is within a day’s drive from a number of large markets because of its reasonable highway access. And their success would make life just a little easier on us in the rest of the state as Annapolis can have another source of income besides raising taxes. A rising tide lifts all boats.

Why should the barren, frigid wasteland of North Dakota have all the energy fun? Let’s open Maryland up for business.

Environmentalist doesn’t tell the whole story

A good friend of mine tipped me off to this op-ed in the Baltimore Sun from March 5 and encouraged me to write a rebuttal. The paper wouldn’t take it as an op-ed nor run a shortened version as a letter, so in the spirit of never letting good writing go to waste I’m posting it here.

As the energy industry has arrived in our state in hopes of extracting the natural gas which lies underneath in the Marcellus Shale formation, the term fracking has become part of our vocabulary. As a Maryland resident who has no stake in the energy industry, aside from my role as a consumer of those elements used to create the gasoline and electricity I need for my various jobs and the heating oil I use to heat my hot water and household, my main concerns are twofold: reliable energy which doesn’t cost me an arm and a leg. I suspect those concerns are shared by a vast majority of us.

The cost competitiveness and abundant supply of natural gas gives Americans a great asset, but only if we choose to take advantage of it. This choice, though, is one environmentalists want to frighten us away from because natural gas is not a renewable source. And it’s obvious that some people just can’t stand prosperity as a recent op-ed by Sierra Club executive director Michael Brune demonstrates.

In his piece Brune disparages the entire natural gas industry with a palette of half-truths and wild assumptions. But the bad news for Marylanders is that Brune seems to have the ear of Governor O’Malley. It’s obvious that both are only too happy to impact the coastal environment of the Atlantic as well as areas of western Maryland by building noisy, unreliable, and unsightly windmill farms because they’re perceived as the politically correct thing to do, but those tried and true methods of getting the energy and job creation our state desperately needs are unappealing to them.

And the allegations that Brune makes don’t stand up to scrutiny. For example, hydraulic fracturing has been used in more than one million oil and natural gas wells in the United States since the 1940s, and despite Brune’s strictly anecdotal reports to the contrary not one confirmed case of groundwater contamination stemming from fracturing has been documented, according to a recent University of Texas study. And regarding his shrill warnings about the dangers of piping the natural gas he fails to mention that natural gas is already piped to points across the country via a network spanning well over 300,000 miles nationwide – including almost 1,000 miles lying under Maryland and Washington, D.C. An existing pipeline already services the Cove Point LNG terminal!

One has to wonder why Brune isn’t telling you those facts I easily found with a little bit of research. Perhaps it’s because he wants us to “invest in” (read: subsidize with taxpayer dollars) sources like wind, solar, and geothermal, as well as emphasize energy efficiency. Most of us realize taxpayers can pump all the money we want into these sources but we can’t spend our way into making the wind blow just the right speed to make turbines work effectively all the time, nor can we compel the sun to shine 24 hours a day. Geothermal energy is more promising, but has a limited amount of effectiveness and also requires hazardous pipeline fluid chemicals to handle the wide temperature swings.

And while we should strive for cost-effective energy efficiency, it shouldn’t come with a price tag of reducing our standard of living. A shuttered coal plant is neither efficient nor a job producer, but it’s a badge of honor to a radical like Brune. For those placed out of work by the closure, though, it’s only their economic livelihood they’re losing. No doubt Brune and O’Malley would gladly “invest” government dollars into teaching them the skills needed for a non-existent “green” job.

Environmentalists could be taken more seriously and provide a better service to residents by not obfuscating their argument with scare tactics. Most people have the sense to know that fossil fuels won’t be around forever, but for the foreseeable future the market favors reliable sources of energy including natural gas. If you’re enjoying the current decline in natural gas prices and the resulting extra money in your pocket, you can thank hydraulic fracturing because it’s that decades-old “new” technology increasing supplies, driving down prices, and actually bringing back a discussion about helping our nation’s balance of trade by exporting natural gas.

Who would have ever thought we could beat OPEC at its own game? Let’s put Maryland to work building for the prosperity of tomorrow by making use of that which we have in abundance.