Natural gas & Costco: as long as we all understand what’s at stake

I was doing some research on another sector entirely and I came across this study of the economic and employment impact of the natural gas industry in Canada (a 2009 study).

I get a little leery of the use of induced impacts – Statistics Canada stopped publishing them altogether a few years ago but other consulting firms still use them -but nevertheless the numbers are significant.   Look at the employment impact in western Canada.  Hundreds of thousands of jobs supported each year.

Of course the extent of the potential natural gas exploration industry in New Brunswick is considerably less than in western Canada (where hydro-fracking is the principal way they are extracting the gas these days) but even at a fraction of the amount it would be huge.

When the mayor of Fredericton makes indignant statements about the industry and statements like “our water is more important than natural gas” – I just hope he is grounding this position in research and analysis and not based on the prevailing winds of populism.    I contrast Mayor Woodside’s position with the Mayor of Pittsburgh who has refused to sign a ban on fracking inside city limits.

In a strange way, the Costco example in Fredericton is instructive.  There was somewhat of a ground swell of opposition to putting it in a wetlands area but they went ahead anyway because everyone wanted a Costco.

I guess for some people, cheaper fresh beef (admittedly the price at Costco is really good) is worth fighting for but a sector of the economy that could provide good, high paying jobs and millions in tax revenue to governments is not.

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5 Responses to Natural gas & Costco: as long as we all understand what’s at stake

  1. Have you come across any solid unbiased research showing the impact of hydro-fracking? Everything I’ve seen is slanted one way or the other.

  2. mikel says:

    The Pittsburgh story is more of a parrallel. The protest groups are saying that Brad Woodside-once a follower of their twitter feed until he found out just how political they were, refuses now to meet with them to discuss whether drilling will be allowed within city limits.

    In Pittsburgh, its a question of whether the Mayor has been bought (sorry to sound conspiratorial, but here’s why)- City council voted 6-3 on putting a ‘homerule charter’ as a referendum question on November’s ballot. This would enable voters in pittsburgh to make their own decision, and this was supported by a clear majority of their council. But at the end of a council meeting, and with no debate, the Mayor vetoed the addition.

    That story is not over, the council can still veto the veto. But its interesting to note that this is in Pittsburgh Pennsylvania, and Pennsylvania just passed the 1000 well mark.

    From Pittsburgh:

    “Last year, the Council spent 3 months on the matter with plenty of information on the potential problems associated with this industry. The facts continue to pile up as to the adverse impacts of fracking and the lack of credibility of this industry.”

    To steal a quote from their website, as Jesse Jackson once said “during slavery everyone had a job”.

    In NB there are two big problems. One, nobody trusts the government, and virtually ALL the ‘safe’ regulations are still to come. Alward, as Richard said, really is a doofus. Since most fracking is still at the exploratory stage, he could easily have announced a moratorium on fracking. And then used that time to bring in the regulations and even exploration. Even if he had to call the legislature back early, he could have put those new regulations into law, rather than saying “Yeah, don’t worry, we’re on top of it”.

    NOBODY (sorry, David excepted, and perhaps Bethany Thorne-Dykstra), believes any government that says it will ‘get to it’. So with a moratorium and new legislation, protestors wouldn’t have a leg to stand on. I can completely understand the argument that asks protestors why they’d be so worried about water in a province where boil water advisories are frequent, and industry has been polluting them for decades. However, the fact is that past wrongs don’t make present rights.

    The other issue is like in Pittsburgh-a democratic one. Alward maintained ‘transparancy’ and then overtly banned any people from meetings where fracking was discussed. We really don’t KNOW how many people are for or against fracking-particularly within their own city. And as we are seeing all over the world, people are rapidly tiring of even elected governments that steamroll over the electorate. Personally I don’t care, its doubtful I’ll live in NB again, but I applaud anybody who stands up to government and industry for ANY reason. Like I’ve said, if a group could reach these people with a program for POSITIVE economic growth, I think you’d see some real progress in the province. But unfortunately, sometimes you get the govenrment you deserve, and the only way to deserve better, is to stand up for something.

  3. mikel says:

    For Harold, and perhaps for David, or anybody so inclined. To see the real value of the industry, one thing to do is check US statistics, which are usually pretty thorough. What would be interesting is to check the economic statistics of a place like Pennsylvania and/or Arkansas, both before and after the industry really took off. Alward’s claim about education in Arkansas improving because of money from the gas industry has long since been completely falsified, so some REAL statistics would be interesting to see. I don’t think anybody has even counted how many people it takes to man an individual frack. I read one place that the numbers are actually quite long, so perhaps thats why we don’t see any real promise of jobs except “hey, it’ll be great”. What jobs are created, and how many? There seems to be lots of places in the US doing it, so how come we never see any specifics?

  4. There is a report that was just published contrasting the shale gas industry in PA versus western NY (the Wall Street Journal article here seems to be a balanced view http://on.wsj.com/pUkVsx). I guess ultimately the ‘pro’ research will be funded by supporters and the ‘against’ by detractors. It’s hard to get unbiased research because even (or especially) in the academic space there are big biases going in. Bethany Thorne-Dykstra – mocked by Mikel – was very concerned about shale gas drilling and led the protests – then she said the new rules were adequate – and got hammered.

  5. mikel says:

    I think jobs are the key issue here, at least for proponents.

    NY has had a moratorium on until recently, and much has been made of Pennsylvania being ‘the place to gas’. As said,they’ve passed 1000 wells.

    Government stats say that 13,000 jobs were created in 2010. Sounds impressive but there are 12 million people in PA, and even the financial industries created 5000 jobs during that year.

    Of course the industry itself says something quite different, it claims that something like 60,000 jobs were created. But of course they are going to say that.

    However, for jobs, I looked at Arkansas, a well established gas state, and the only jobs in the industry I could find were ‘lease operators’. Why there are called that beats me, but essentially its a one man job to start up the pumps in the morning and replace any machinery that needs replacing.

    The REAL place for jobs is located in areas where the gas is being used for industry, like a steel mill in Ohio. However, we really haven’t seen any information on what is going to happen to the gas once its extracted. In places like Arkansas, its simply trucked out, and this has made their road system a shambles.

    What would be interesting is IF Coleson Cove is set up to burn gas, would ANY of the gas found in NB actually be USED in NB. Apart from that, you have a few men to man the drill, pipe the gas to a truck, then somebody to drive it off. Several protestors said that when they were at a drill site, there was more security than there were workers.

    I know I sound pretty partisan, but those are essentially ‘facts’ that you can find from the US census and online. It’s pretty telling that as the US economy tanks, shale gas is suddenly being touted. I don’t trust ANY government, but I do agree that if there WERE proper regulations, there isn’t much to fear from at least a small industry. However, what needs to happen is there needs to be a plan from Alward as to how to manage this industry BEFORE its an industry. Otherwise, why WOULDN”T you listen to protestors, especially when the government doesn’t seem to know what its doing.

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