I have taken a different approach to addressing public officials on the fracking issue, trying to put it in the context of market behavior, market cycles and diplomacy's - the US's - "weaponization of natural gas."
Governor's of both parties have traditionally fallen all over themselves for economic development, and the area slated for fracking in Maryland, the two most western counties have perhaps more in common with West Virginia than they do Montgomery County.
But the trade-offs are not good and there are better alternatives in "alternative energy."
February 15, 2015
Dear Governor Hogan, Senate President Miller, Speaker Bush, Chairman Barve and Committee Members:
Soon after writing my comments on former Governor O’Malley’s proposed “Gold Standard” fracking regulations, I couldn’t help but think how expensive they might turn out to be - if they were taken seriously. Of course, one would think, Maryland would correctly place these costs on the shale gas industry itself. However, I’ve also been reading about the very interesting career of Benjamin Grumbles, and it wouldn’t surprise me if he maintains that his Department of the Environment should design a voluntary, industry self-reporting system that won’t cost anyone an additional penny. That would be consistent with Inaugural Address themes. But a word of caution is in order after seeing the scope of what Governor O’Malley has laid out. I don’t think either the environmental community or the Maryland public would buy a shift to a “regulatory light” proposal: we’re all too close to the horror stories in Pennsylvania and West Virginia – and I’d be happy to share my own “collection” with you before I take it to the Chesapeake Collectibles Roadshow.
Over at Naked Capitalism, the well regarded economic website run by Yves Smith, they carried an article by Wolf Richter about the crazy dynamics in the price of oil and gas, and what might be driving it. Over-production and a world- wide economic slowdown certainly are, and some degree of speculative frenzy. Richter was leaning towards the speculative explanation for the recent sudden uptick in prices, but noted how gas prices have been sagging for some time, and staying there, and that gas drillers were more interested in the wet-gas and derivative products, not the natural gas – but those prices were now in trouble as well.
Unless, of course, we’re going to export most of the gas, which a lot of us in the environmental community think is what is really going on, aided by the new Cold War obsession with Mr. Putin’s Russia, perhaps the most dangerous obsession since Vietnam. If there are any doubts about the foreign policy “weaponization” of fracked gas, take a look at what happened in 2011 under Secretary of State Clinton: http://www.nytimes.com/...
Energy prices are never easy reads, and having a diplomatic wild-card thrown in does not make their fluctuations more transparent. You can take a look for yourself here at http://www.nakedcapitalism.com/... and also at these graphs, which support the idea of a desperation driven “export dynamic,” especially the top right one from the IMF:
http://knoema.com/...
I think a lot of Marylanders will be very angry if our health, water and landscape are despoiled for the sake of gas exports and for foreign policy causes which may turn out to be disasters. That will be a betrayal of the citizens of Maryland, who may well be standing near Cove Point watching the LNG tankers sail away, thinking about the fate of the Titanic. That ship was another hubristic technologic marvel of its age which would not slow down, even in a danger zone, and whose lifeboat capacity was more than 1,000 short of the passengers she carried. Titanic’s sinking foreshadowed the collapse of the first great era of globalization in 1914.
Just as I did last year for the O’Malley economic policies (here at http://www.dailykos.com/... ) I’ve been considering the choices facing Maryland leaders in the way a potential investor must look at a target market: knowing where that “market” is in its cycle. Some observers of the gas fracking phenomenon believe it is a fragile bubble, or worse, a Ponzi scheme of leveraged and borrowed money that is well on its way to collapse. Here’s a compilation of this assessment:
http://www.zerohedge.com/...
Should we put scarce Maryland resources into this comprehensive regulatory regime for something that may not materialize at all in our state, and which no one has claimed is any type of shale “mother lode” for us? Since many of you are familiar with business cost considerations, this potential fate is about the worst one - to go in late at the top of the market, or even more calamitously, on the way down. Every time we take a considered look before entering a “market,” we have to figure out how much activity is purely speculative, subject to the caprice of a world awash in surplus wealth looking for a quick hit and fast getaway.
Over the past thirty years or so, ever since Reagan, we worship markets, turning them into divinities, but in reality they are behaving ever more erratically. They are human creations, yet have the recurring habit of turning into monsters, becoming our dictators, not our agents. Wendell Berry was suggesting this when he warned us in his courageous Jefferson Lecture of April, 2012, that without a major change in our values, “the nation and its economy will conquer and destroy the country.” I think of that line when I see pictures of shale drilling pads – and their support tentacles. Here at http://www.neh.gov/...
For conservative temperaments, I would think the history of gas and oil prices over the past six years would give great pause to anyone thinking about going “all in.” “Steady as she goes” is not the reality of world markets since Bretton Woods came apart.
With this perspective, the choice is clear. I’m for reducing the risks all the way around for the people of Maryland. By supporting the complementary pieces of legislation called the Protect Our Health and Communities Act (SB-0409; HB-0449) and the Clean Energy Advancement Act (SB-0373; HB-0377), you’ll be shielding human health and enhancing economic well-being. And then you can stop worrying about bursting speculative bubbles and foreign policy disaster - for a moment, at least. There’s much else ominous going on in the world economy, and I’m afraid we can’t escape the fallout, but that’s a narrative for another time.
Thank you for your time and consideration.
William Neil
Frostburg, MD
wrn1935@comcast.net