Tuesday, June 14, 2011

Former PA Governor Ed Rendell:
NY Should Drill Shale Gas Now

Former PA Governor Ed Rendell had some interesting, insightful, and very-real-world advice for NY Governor Andrew Cuomo during the June 7, 2011, release party for an economic report sponsored by a New York City-based think tank.  

But Google searches as of this writing show no media outlets, and less than a handful of web pages, have teased out any notice of Rendell's recent takes on this topic.  (Full video of the 53-minute floor show is online here.)  All of these mentions have been very brief, and one of them was from the report sponsor itself — the thoroughly conservative, brainy, and bow-tied Manhattan Institute for Policy Research.

I think the lack of media amplification stems from the fact that public officials such as Rendell (and, for that matter, Rendell's former PA DEP Chief, John Hanger, who's now cranking out an excellent blog here) set teeth on edge within either ideological extreme, pro- or anti-drilling.  Their views are feared for being a little too equally critical — a little too loose on deck for either side's do-or-die campaign.  Yes, they may call for strong regulation and for stiff taxation (often in ways which are shockingly frank for the pro-gas propagandists).  But they also refuse to operate in ways which would needlessly choke all economic benefits out of the enterprise of resource extraction.  (That's no longer good enough for the anti-drillers, who — at this point, at least in New York — have now sharpened their demands to call for a shutdown of even old-school, oil and gas patch activity.)

The Manhattan Institute's study, as authored primarily by University of Wyoming economics professor TImothy Considine, concluded that New York State is presently refusing $11.4 billion in statewide economic oomph — the conservatively estimated net benefit attainable from producing less than a decade's worth of its own landowners' shale gas.  Together with 18,000 new jobs that simply won't get created (at least not around these parts), that's the true cost of the present state of ignorance-fueled, activist-manufactured, political panic. 

The study itself got pretty reasonable coverage, such as this article here from Jon Campbell of the Gannett organization, which owns a number of print outlets serving upstate, including several areas directly underlain by Marcellus shale.

But few have taken notice of what Rendell said that day in NYC.

Rendell, now on standby with a PA law firm, is a Big City Democrat, the former mayor of Philadelphia (two terms), and the former governor of Pennsylvania (two terms) — his last hitch syncing up with the first few years of the state's still-ongoing Marcellus shale drilling boom.

Regarding New York State's nearly three-year-old moratorium on shale gas drilling permits...

"If Gov. Cuomo were to ask me my advice about lifting the moratorium, I would tell him the moratorium should be lifted.  There's too much of an upside here for New York, as there was for Pennsylvania, and too much of an upside for America."

On PA's battle over passing a shale gas severance tax, a tax which Rendell originally resisted as governor, but later fought unsuccessfully to enact before his term expired...

"In Pennsylvania, I think the industry is close to killing the golden goose.  They're going to get good support from the legislature and from Governor [Tom] Corbett, who I think unwisely promised that there would be no shale tax.  That has been a cause of heat and loathing directed at the shale companies because Pennsylvania, like many other states, is cutting things, laying off people..."

"The fear and loathing that's bubbling up in Pennsylvania towards the shale drilling could be stopped easily by paying a fair and reasonable tax, which the shale companies are used to paying in every other state in the union.  It makes no sense, and I have told them that over and over and over again."

On the 1,900 environmental violations racked up over the last three years by shale gas drillers, out of which Considine's study reported 7.9 percent were rated by regulators as "serious"...

"Do the math — 7.9 percent of 1,900 means there were 170 serious violations.  Do you know what one serious violation does in the minds of the people of a county?  And in the minds of the people in a surrounding county?  And, with the media today, in the minds of the people in the entire state?" [21:16]

On the Corbett Administration's recent success in ending — without a formal legislative or regulatory re-write — all in-state discharge of treated flowback waters from fracked wells...

"The reason, right now, that major companies are not putting any of the frack water into surface waterways in Pennsylvania, as Professor Considine found, is they're trucking it to [treatment facilities, or deep well injection sites in] Ohio — which, I guess, as former governor of Pennsylvania, ought to be all right with me.  But I don't know what's going on in Ohio." [24:55]

Back to the situation with neighboring New York...

"Nobody has more riding on this than the state governments do themselves, because of the economic uptick...  New York should go down this path because it's so important, and the upside is so great.  But we've got to use care in every way.  And it shouldn't be just the state department of environmental protection that's exercising that oversight and care.  It ought to be the companies themselves." [28:02]

On challenging industry to do better...

"I went down to Houston while I was governor to speak to the natural gas association and deliver the message:  'You are sitting on the golden goose.  The golden goose is ready to hatch golden egg, after golden egg, after golden egg.  But we're not going to kill the golden goose
— not us — not the regulators.  You are.'"

"So this is a good path to go down.  But everyone has to be concerned about making sure we do it in an environmentally sensitive and in an environmentally friendly way, and in a way which minimizes and mitigates environmental damage.  Ten million gallons of contaminated water is ten million gallons too much." [29:25]

On the Pickens Plan...

"We've got to use every resource we have.  Boone Pickens is right.  Renewables, if they are going to help us significantly, they are going to help us significantly in 2025 at the earliest.  In the meantime, we need to take advantage of this.  Boone Pickens couldn't be more dead-on — absolutely." [50:06]

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