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June 28, 2011

Fracking Weltanschauungs; Poor New York Missed Out

When information presents a blizzard, it's important to have multiple sources of information and to have some context in which to frame those sources.

The New York Times writes about the fracking industry: Insiders Sound an Alarm. The article presents GMail strings from industry insiders arguing that Marcellus Shale is the Next Big Bubble and that it is both a gas bubble and also another real estate bubble.

“Money is pouring in” from investors even though shale gas is “inherently unprofitable,” an analyst from PNC Wealth Management, an investment company, wrote to a contractor in a February e-mail. “Reminds you of dot-coms.”

“The word in the world of independents is that the shale plays are just giant Ponzi schemes and the economics just do not work,” an analyst from IHS Drilling Data, an energy research company, wrote.

The Wall Street Journal presents The Facts About Fracking, and from their perspective it's all good.

Yes, there are some complaints that fracking has polluted drinking water with methane gas. The story explains, "Methane is naturally occurring and isn't by itself harmful in drinking water, though it can explode at high concentrations." The stories of Pennsylvania residents who are able to set their tapwater on fire are apparently outliers and not statistically significant.

As a regulatory model, consider Pennsylvania. Recently departed Governor Ed Rendell is a Democrat, and as the shale boom progressed he worked with industry and regulators to develop a flexible regulatory environment that could keep pace with a rapidly growing industry. As questions arose about well casings, for instance, Pennsylvania imposed new casing and performance requirements. The state has also increased fees for processing shale permits, which has allowed it to hire more inspectors and permitting staff.

New York, by contrast, has missed the shale play by imposing a moratorium on fracking. The new state Attorney General, Eric Schneiderman, recently sued the federal government to require an extensive environmental review of the entire Delaware River Basin. Meanwhile, the EPA is elbowing its way into the fracking debate, studying the impact on drinking water, animals and "environmental justice."

There is no commonality between the two Weltanschauungs presented; you would think the WSJ and the NYT are from different planets.

It's not the basis for good decision making or good democracy.


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