Tuesday, April 26, 2011

An Economic Perspective

During the April 1-2 Environmental Law Conference up at Cornell, professor of city and regional planning Susan Christopherson provided some economic perspective to the Marcellus Shale discussion. "Drilling affects everything in a community," she said, listing topics from traffic to housing to community health.

“There are so many uncertainties,” Christopherson said. “We don’t know what all the risks are, or who will bear them.” What we do know is that the roads will be heavily impacted by the increased traffic.

Shale drilling is driven by the market. The industry is debt-driven and looking for commercially viable wells and that will determine where they drill and how long they remain in a locality. Like the financial services, shale drilling is “a speculative bubble,” Christopherson said, “but one with serious environmental consequences.”

Drilling impacts are driven by the pace and scale of development. “We should plan for a short-term intensive boom/bust cycle, as well as the impact of building an infrastructure to get their [gas] product to market,” Christopherson said. She said municipal and state officials need to think beyond the well pad and consider cumulative impacts of industrialized drilling activity.

“There will be increased public safety costs,” Christopherson said, pointing to the correlation between the need for more police and shale gas drilling. Other community impacts include increased costs for health and education services, and increased demand on public administrative services such as permitting and zoning officers, and an increased need for environmental remediation and monitoring.

Communities that don’t experience drilling may still feel the impacts. Ithaca will see increased truck traffic, and Watkins Glen is already seeing development of an industrial site for storing liquefied gas and petroleum products. There will be more, she said: pipelines, man camps, water withdrawal sites, compressor stations, truck depots, rail spurs and “trucks, trucks, trucks!”

The big question: are we prepared for the bust? “It will surely come,” Christopherson warned, “because once the gas is gone, it is gone.” And the rural areas will be the ones hardest hit by the boom/bust cycle. The increased housing costs will push out traditional residents; the demand for truck drivers will push the cost of milk production higher as farmers compete with gas companies for drivers.

Resource extraction works against diversity in local economies, driving out small businesses that do not cater to the gas industry. Tourism, in particular, depends on availability of lodging and restaurants. There will be increased economic inequality, Christopherson said.

But communities can take steps to minimize these cumulative impacts. The most important thing, Christopherson said, is to slow the pace of development. That will allow communities to absorb and spread out the impacts. Communities also need to cooperate with each other. Christopherson also challenged the state to take the lead by establishing policy that regulates and monitors the gas industry. The state needs more transparency, too, regarding where drilling happens and when and where spills and incidents occur.

1 comment:

  1. The steps to be taken to "slow development" are i and of themselves difficult and time-consuing. I have learned that as a volunteer member of several of Tompkins County's Natural Gas work groups. Barriers include the number of municipalities, the differing levels of awareness among elected officials and residents, and the varying philosphies among the elected officials re. what local governments can and should do. As a consequence, I have concluded that the first and best approach is to use local zoning law to ban hydro-fracking and, then, as a backup do the work of "slowing development" through a combination of local laws that address specific problems industrialized fracking cause.