Engelder Speaks on "Necessary Sacrifice"

Well, folks, someone got an advanced copy of the upcoming article I had referenced in my "Necessary Sacrifice" post and sent out an e-mail blast earlier today. 

Without further adieu and without further comment:

Voices of Central Pennsylvania  -  June 2010

PSU prof disputes damage drilling will inflict
by Hannah Abelbeck

The environmental risks related to drilling for gas in the Marcellus are worth the costs, according to Terry Engelder, professor of geosciences at Penn State. Engelder has been a vocal advocate of Marcellus development, and it was his estimates of how much gas could be recovered from the shale, a figure announced in a Jan. 2008 Penn State press release, that helped spur the current rush. The events that have followed have “been a life changer,” Engelder told Voices. Since then, the professor, who keeps meticulous records, has spoken with 139 reporters, 194 natural gas companies, and will soon give his 146th presentation on the Marcellus in Buffalo, N.Y. he said. “I go home and work and fall asleep thinking about this,” Engelder said.

In addition to Engelder’s professorial responsibilities, he consults for the gas industry as a principal in Appalachian Fracture Systems, Inc. with Gary Lash, a geosciences professor at SUNY Fredonia, and co-author with Engelder on the Marcellus estimates. AFS consults with geologists and engineers, landowners and investors, providing estimates, explanations and advice. “They’re all part of the same continuum,” Engelder said of his roles as teacher, researcher and private consultant. He likened it to his role as a professor itself, with its three separate responsibilities of teaching, research and service. “It’s kind of hard to tell whether it’s teaching, research or service,” he said. Engelder’s Marcellus estimates and his willingness to talk with the media are an outgrowth of “30 years worth of work,” he said. Now, it has “brought millions back. The money that comes back to Pennsylvania is a manifestation of that press.”

All of the hours traveling, juggling appointments and answering questions are worth it, he said. “When I recognize the value of this to the United States, if I’m in it for a dime, I’m in it for a dollar.” Engelder said he believes shale gas is the “simultaneous solution” to five big national problems: huge federal debts and state deficits, an unfavorable balance in international trade, uncomfortably high rates of unemployment, multiple global wars driven in part by perceived threats to supplies of foreign oil, and an uncertain future associated
with global climate change. None of these have yet to play out in Pennsylvania. Pennsylvania has yet to pass a severance tax or HB 10, a bill that would generate tax revenue by restoring local real estate assessment for oil and gas. According to a 2009 report by the Pennsylvania Budget Policy Center, a non-partisan public policy research group, drillers of more than 70 percent of the wells in the Marcellus Shale will pay the state’s 3.07 percent Personal Income Tax (PIT) rather than the 9.99 percent Corporate Net Income Tax (CNIT).

Instead, Pennsylvania has used leasing of state forest land to cover gaps in the state budget, angering environmentalists. While the industry claims that natural gas will lead to energy independence for Pennsylvanians and for America, critics have pointed out that currently Pennsylvania burns natural gas from the South and Southwest and exports its own gas to the Northeast. Furthermore, gas companies are currently connecting more pipelines to Canada and to the Atlantic coast for gas export. Engelder said that selling overseas is good for the United States since it will help the trade deficit, which he attributes largely to oil imports. Yet press releases announcing recent joint ventures between drilling companies operating in Pennsylvania and foreign companies including StatOil, eliance Industries, Mitsui, BP and Total reveal partnerships that might make national boundaries irrelevant.

Engelder said those partnerships were necessary because companies needed access to capital since drillers were “expending money faster than they can drill.” Engelder cited Robert Watson's work as a source for his assertion that Marcellus development will dramtically improve employment rates and the Pennsylvania economy. Watson is a retired Penn State geosciences professor, and the Marcellus Shale Coalition, an industry group, paid Penn State $100,000 for a 2009 study entitled “An Emerging Giant.” “The report is an exercise commissioned by the natural gas industry to try to prevent the State of Pennsylvania from imposing a severance tax on natural gas. An intelligent lawmaker should not take this study seriously,” said a report by J.M. Barth & Associates, Inc., a New York economic research and consulting firm. Engelder said he was unaware of this critique, adding that “I’m not an expert myself” and “I don’t comment” on the economic debates. “We all want to become sustainable,” said Engelder. “It will take the better part of a century to achieve that. Gas will take us into the better part of the next century.”

“We all enjoy our lifestyle that we have. 100 trillion cubic feet is responsible for all this,” he said. “My assumption is that modern man will want to move about the way we do today,” he said, adding that he believes our taste for a variety of tropical produce and our enjoyment of light after dark, indoor heat and air conditioning mean that our demand for fossil fuels will not change much. Engelder said he believes Pennsylvanians must sacrifice to maintain their lifestyle. “My heart goes out to landowners whose mineral rights have been severed,” he said. “It’s that type of sacrifice that we’re talking about. It’s a necessary sacrifice.” Engelder hopes that “operators will come to recognize this sacrifice.” If they do, he said, they will be more careful and sensitive. “These guys think about it,” he said. The industry has been criticized for pushing self-regulation rather than government regulation, but Engelder disagrees.

“There is an absolute need for regulation,” Engelder said. But Engelder agrees that this drilling comes with a risk to the environment. “This is a very complex industry and there will be accidents,” he said. “People expect that level of risk in automobiles.” “If we want to talk about sacrifice, then we look to Dimock,” he said, referring to the best-known Pennsylvania site for drilling accidents. Engelder acknowledged that surface spills and other problems with the drilling process can cause water contamination. He provided a figure from the Pennsylvania Department of Environmental Protection which implies that 0.25 percent of wells negatively impact groundwater. This statistic does not include surface accidents like spills or casing failures that happen below ground. A 2007 Penn State Cooperative Extension study of 200 private water wells concluded an estimated eight percent of wells experience mild to severe impacts from nearby natural gas drilling. Additionally, Engelder and industry sources have charged that gas will not migrate from the Marcellus to the surface, but a U.S. Geological Survey study in Tioga County, Pa., showed that gas migrated from below the Marcellus to the surface. Because of this, gas can compromise groundwater and can explode.

After the interview, Engelder contacted Voices to say he had followed up on that study and that indeed the conclusion was that gas can migrate.
 

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Thank you, Hannah!  Great work!