Thursday, November 17, 2011

Fossil Fuels Fueling the Economy

As I may have mentioned from time to time, our corner of PA is smack dab in the middle of a gas boom of a good kind. Numerous wells have been drilled, are being drilled, or will shortly be drilled. The result is a scramble for workers of all sorts from roughnecks to truck drivers to...well...just about everything to support the drilling/pipeline industry. Motels, restaurants, mechanics to care for trucks of all types, stone quarries, excavators, name it, they are either building, expanding, or hiring. Anyone needing, but still without, a job just isn't trying very hard. On any trip to Lowe's or WalMart you can see license plates from all over the country.

Shale Gas Brings Energy Independence, Drilling Supports 140,000 Jobs in Pa.

HERMITAGE, Pa. -- In just five years the United States has gone from importing natural gas to meet its industrial needs to sitting on the edge of being a net exporter, geologist James M. Funk told the 26th annual meeting of Penn-Northwest Development Corp. Tuesday.
"The United States now has a 100-year supply of natural gas and that's growing," Funk related. With Funk was Matt Pitzarella, who said afterward that Funk's projection is "incredibly conservative." Pitzarella, director of corporate communications and public affairs for Range, thinks a 200-year supply to meet all of this country's needs (and for the United States to export its surplus) is more realistic.

The quantities of gas exported, combined with less reliance on foreign oil, could substantially affect the United States balance of trade, Pitzarella stated, thereby reducing our imports as well as what the United States owes abroad.

"Today industrial users are paying half what they did five years ago," he said, "and demand is 40% higher."
Since the shale has been unlocked, Funk said, Pennsylvania benefited in 2010 by having $11.2 billion in economic activity it otherwise would not have enjoyed. And state tax coffers held $1.1 billion related to Marcellus activity.

Drilling supports 140,000 jobs in the commonwealth directly and indirectly, according to the Pennsylvania Department of Labor, which also credits the energy companies with hiring 27,000 employees last year whose average wage exceeded $76,000.
A spinoff industry is water purification, Funk said, with technicians needed to purify the water used in extracting the gas and drivers and trucks needed to haul the water to purification sites.

The issue of how safe fracking is -- the method used to extract the natural gas -- and the danger to the environment was raised.

Pennsylvania's regulations of natural gas drilling are a model for the United States, Pitzarella said, noting that Ohio Gov. John Kasich is looking closely at those of the Keystone State.

Of the materials forced deep below the ground to release the gas consists of into the shale, "99.92% is water and sand," Pitzarella said. The other three substances consist of an anti-microbial agent -- "the same stuff in hand soap but much diluted" -- a scaling inhibitor to keep the pipe from clogging -- "the same that water utilities use that deliver water to your home" -- and extremely dilute hydrochloric acid. The acid cleans the well bores.

"All the chemicals we use are biodegradable," Pitzarella said.

Ours is not the only place experiencing a boom in natural gas/oil production. The North Dakota boom has been well documented (here, here, and here), but even as off shore drilling continues to be put on the slow track, there's plenty going on in the states adjacent to the Gulf.

BHP Billiton to Spend $4.5B On US Shale This Year
BHP Billiton plans to invest roughly US $4.5 billion developing the shale oil and gas assets it bought in the U.S. this financial year as it ramps up production, the head of the mining company's petroleum division said Monday.

BHP expects capital spending to jump to almost US $6 billion in the 2015 fiscal year and roughly US $6.5 billion by 2020 as the company ramps up the number of rigs on its four project areas, Michael Yeager said in a conference call from Melbourne.

BHP spent almost US $17 billion this year buying Petrohawk Energy Corp. along with its assets in Texas and Louisiana and Chesapeake's Fayetteville shale assets in Arkansas.

Meanwhile, New York State is sitting on its hands doing little but holding hearing after hearing and thinking of new taxes to impose to relieve their fiscal problems.

And, you know, let’s not build the Keystone XL pipeline or do any oil drilling along our shores. Wouldn’t do a thing to help the economy anyway.

Besides, Americans are a lazy people. The President says so.

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