The natural gas boom spawned by free enterprise and new technology is doing more to help the poor than LIHEAP, a decades-old welfare program, according to the Wall Street Journal. At the same time the Journal reports that Germany’s so-called green energy programs are forcing consumers to pay well above market prices for electricity.
A study by Colorado-based energy broker Mercator Energy quantified savings produced by hydrofracturing and horizontal drilling techniques used in the Marcellus and shale deposits across the U.S.:
From 2003-08, shortly before the fracking revolution took hold, the price of natural gas averaged about $7.20 per million BTUs. By 2012 after new drilling operations exploded across the U.S.— from West Texas to Pennsylvania to North Dakota—the increase in natural gas production had slashed the price to $2.80 per million BTUs.
Thanks to the lower price for natural gas families saved roughly $32.5 billion in 2012. (That’s 7.4 billion MMBTUs of residential use of natural gas times the $4.40 reduction in price.) The windfall to all U.S. natural gas consumers -- industrial and residential—was closer to $110 billion.
The Mercator study notes low natural gas prices help low-income families the most because they spend a larger share of their income on energy. Despite energy subsidies:
" . . . lower natural gas prices have still shaved $10 billion a year from the utility bills of poor families."
By comparison, LIHEAP provided approximately $3.5 billion in home-heating subsidies to about nine million households in 2012, the Journal reports. That is only 35 percent of the benefit from lower gas prices.
Meanwhile, government green energy mandates have Germans paying the highest electricity prices in Europe, the Journal says:
This year, Germans will be forced to pay 20 billion euros ($26 billion) for electricity from solar, wind and biogas plants—electricity with a market price of just over 3 billion euros...In the near future, an average three-person household will spend about 90 euros a month for electricity. That’s about twice as much as in 2000.
Low-income Pennsylvanians are the biggest winners when politicians allow safe and affordable energy to be developed rathern than impose mandates designed to pad the pockets of green special interests.
President Obama and one of his cabinet members are making separate trips to Pennsylvania this week. Their reasons for visiting couldn't be more different.
Today, the President will speak on education and jobs at Lackawanna College in the heart of the Marcellus Shale boom, which has ushered in unprecedented job growth and lower utility rates for consumers across PA.
Gas production numbers continue to surge. Moreover, this renaissance is providing the educational opportunities President Obama can only talk about. George Stark of Cabot Oil & Gas explains how companies are not only hiring, but also helping to train workers at Lackawanna College in this op-ed.
A few hours south of the President's visit, Secretary of Health and Human Services Kathleen Sebelius traveled to Philadelphia to make another sales pitch for Obamacare yesterday.
Why does Sec. Sebelius need to travel the country to sell a law long on the books? Because the sad reality is Pennsylvanians are not seeing more affordable health care. Rather, spouses are being cut from some insurance plans, workers’ hours are being reduced and premiums are skyrocketing.
Instead of selling a failed policy, we need to truly make health care affordable by allowing more innovation and returning choice to patients.
The contrast between Marcellus Shale and the Affordable Care Act is just one more example of the failure of big government, compared with the success of free markets and entrepreneurs, in improving the lives of everyday Pennsylvanians.
The Delaware River Basin Commission (DRBC) continues to stymie development of the Marcellus Shale in all or parts of 13 Pennsylvania counties even as Governor Corbett, Senator Pat Toomey and property owners plea for an end to the commission's three-year moratorium on gas-well drilling.
Property owners had hoped the DRBC would act on the matter at its July meeting but no action was taken. Bob Rutledge, executive director of the Northern Wayne Property Owners Alliance LLC, says the commission wants to develop the "perfect regulation."
They are completely overstepping the basis of their charter of monitoring water quality and quantity, said Rutledge, whose Wayne County farm has been in his family since the 1840s.
Clark Rupert, a commission spokesman, said the DRBC takes its authority to regulate drilling from its 1963 compact—a broadly worded document that makes no mention of gas wells. The commission has not said when it would act on a proposal to regulate gas-well drilling.
The delay has prompted property owners to explore legal action against the commission, Rutledge said.
On June 27 property owners and Gov. Tom Corbett, an ex-officio DRBC member, sent letters claiming that the commission is infringing on property rights and denying the region of economic benefits.
Gov. Corbett’s letter says:
I am writing to convey a profound sense of frustration and disappointment on behalf of my constituents…
Adoption of this moratorium…was purportedly done to allow for the drafting of appropriate standards that would protect the water resources of the basin. However, deferring the submission of applications until regulations are adopted presumes that regulations will, ultimately, be adopted. That has failed to occur. In their letter, the property owners say that they will be left to conclude that litigation against the commission will be necessary to "regain our right to access our mineral estates" if the commission does not at least act in July to schedule a vote on its proposed drilling regulations.
The Alliance said it had "spent two and a half years…and nearly three quarters of a million dollars to procure a precedent-setting lease that is among the most community- and environmentally friendly leases in existence." The lease is now in jeopardy the Alliance reported.
In our opinion, the Alliance said, the Commission is allowing itself to be held hostage by the media and an emotion-driven anti-drilling community made up mostly of people from outside our region and by activist staffers within DRBC who are exercising their personal biases.
In the meantime, two companies that sought to drill in the Delaware River basin are withdrawing from the region where they would have paid an estimated $187.5 million in leases to landowners. Although the companies named low gas prices as the reason for their change of plans, the inaction of the DRBC could only dampen the enthusiasm of developers.
Rome wasn’t built in a day, but we’re guessing it took less than three years to secure an okay to drill.
With all of its enormous resources, the federal government’s capacity to influence exceeds even that of Hollywood and Madison Avenue. That is why it is so disconcerting when Washington abuses its power to persuade and such good news when one of its misdeeds misfires.
According to National Review Online, the U.S. Environmental Protection Agency (EPA) has backed away from a 2011 draft report that alleged that hydraulic fracturing fluids likely were the cause of contaminated water supplies in Pavillion, Wyo.
The report—released without peer review—generated alarming headlines in national media and contributed to frenzy around similar false allegations in places like Dimock, Pa, which were also proven unfounded. NRO reports the following:
The New York Times reported that ‘chemicals used to hydraulically fracture rocks in drilling for natural gas in a remote valley in central Wyoming are the likely cause of contaminated local water supplies, federal regulators said.’ The Financial Times ran a story headlined ‘EPA blames fracking for Wyoming pollution.’ National Public Radio announced that ‘for the first time, federal environmental regulators have made a direct link between the controversial drilling practice known as hydraulic fracturing and groundwater contamination.’ And the Salt Lake Tribune ran an editorial subtitled ‘EPA report shows water poisoned.’
In reality, the study conclusively proved no such thing. The research was fundamentally flawed, with the conclusion being derived less from science than from politics.
Wyoming state regulators expressed concern over the EPA report, which was found to be based on sloppy research methods that produced a small sample likely tainted by naturally occurring contaminants.
Unlike the Dimock debacle where the EPA confirmed the allegations of contaminated water were unfounded, the agency is choosing to merely drop the Wyoming study without completing the draft report. NRO says:
EPA reps said ... that although the agency ‘stands behind its work and data,’ the study won’t be finalized, and the Obama administration won’t rest on the report’s conclusions.
That’s a nice talking point, but if the Pavillion study could actually stand up to scrutiny, you can bet the EPA would be using it to act—and to act boldly.
But in the end, it didn’t matter much whether fracking had actually contaminated Wyoming’s water; having the public think it did sufficed for the EPA. So go the cynical politics of an agency with an agenda.
One news story highlights hundreds of jobs lost and millions of taxpayer dollars down the drain via corporate welfare. Another celebrates millions of new state revenue and free market job creation. This contrast offers a lesson for lawmakers.
The closure of Pittsburgh-based Flaberg Solar, a manufacturer of mirrors for the solar energy industry, is a tragic story of job loss and taxpayer abuse. Flaberg was awarded $10.2 million in stimulus funds and received an additional $10 million in state grants, putting taxpayers on the hook for up to $20 million.
(T)he current order and market situation in the North American solar market does not offer any prospect of profitably justifying to continue [the plant's operation], said Flaberg Solar's parent company in a statement.
Flaberg Solar, which once employed 200 people, says it cannot afford to pay former workers severances owed them. Vendors stand by with uncollected receivables as the company projects a debt of as much as $7 million.
A second article reported that the commonwealth expects to collect $400 million from the Marcellus Shale Impact Fee in the first two years of the tax's existence.
Although the tax was an unnecessary money grab, its success in generating revenue demonstrates the ability of private ventures to produce thousands of jobs, economical energy and billions of dollars in wealth without government aid.
The entrepreneurial spirit exemplified in the development of Pennsylvania's Marcellus Shale is key to the higher standard of living Americans enjoy. In contrast, corporate welfare schemes like subsidies for Flaberg Solar squander capital and destroy jobs.
A study reported by the Pennsylvania Manufacturers' Association says a carbon tax would have a devastating effect on the state's manufacturers.
Manufacturing output in energy-intensive activities could drop by as much as 15 percent as a carbon tax increases prices of natural gas, electricity, gasoline and other energy commodities, according to the study conducted by NERA Economic Consulting. The decline in less energy-intensive businesses could be more than seven percent, according to the study, Economic Outcomes of a U.S. Carbon Tax.
A carbon tax has been a popular proposal for combating global warming.
Key findings of the study include the following:
- A carbon tax would deal a blow to employment in Pennsylvania with a loss of worker income equivalent to 77,000 to 81,000 jobs in 2013 and 96,000 to 122,000 by 2023.
- The cost of using natural gas would increase by more than 40 percent in 2013, the first year of the carbon tax study, adding to household energy bills and increasing operation costs for many Pennsylvania businesses.
- Gas prices at the pump would jump by more than 20 cents a gallon in 2013.
- Households in Pennsylvania would see a significant increase in their electricity rates, with an average increase of 13 percent in 2013.
- By 2023, the hardest hit economic sectors in Pennsylvania would be coal, which would lose between 48 and 54 percent in economic output, and energy-intensive manufacturing, which would lose 1.9 percent, and non-energy-intensive manufacturing, which would lose between .5 and .9 percent.
"Promised Land," Tinseltown's recent take on natural gas drilling, opened in theaters across the nation this past weekend. Despite a cast of heavy hitters, including Matt Damon, the film grossed a meager $4.3 million (10th place).
Patriot-News columnist Donald Gilliland wasn't impressed either. He encourages audiences to go to a matinee or wait for the film to come out on DVD. Apart from criticizing the "art," he finds the film lacks any semblance to the reality of drilling in Pennsylvania, writing, "The anti-fracking politics of the film are no less misleading than Josh Fox's "Gasland" documentary, but more ham-handed."
New York Post film critic Kyle Smith agrees, calling it "a groaner of an agenda movie" and a film that "gets so cheesy that I suspect it was also secretly funded by Velveeta."
To figure out if the film does in fact reflect rural Pennsylvania, we talked to a real-life land man (similar to Matt Damon's character) Mike Knapp who tells us:
The first two acts of the movie do a pretty good job of accurately portraying land men. Butler [Damon's character] is very caring about the landowners and has full faith that his company is doing the right thing.
But Knapp finds the movie misses the mark when it comes to portraying the drilling process and local landowners:
They [landowners] come across as inarticulate and irresponsible. In one instance, a landowner goes out and blows his check on a Corvette. For folks where the difference between a $100 gas bill and a $200 gas bill can mean not paying other bills, I think it is pretty obnoxious for Mr. Damon to Mr. Krasinski to say you can drill a well on your property because they don't think it is a good idea.
For more on how oil oligarchs and Pennsylvania taxpayers funded the film click here and here. For facts about the benefits and risks associated with natural gas drilling check out Truth, Lies & Answers on Natural Gas Drilling.
There's a memorable line in Promised Land, the new Matt Damon movie opening Friday about a gas drilling company buying land rights in a declining farming community. One character fighting the industry's arrival tells Damon, who plays the gas industry's morally ambivalent landman, "We're not fighting for land, Steve--we're fighting for people."
It's a pity, then, that the Middle East-funded film takes such an anti-people approach to fracking. The film assumes that gas drilling is bad for the environment, laying waste to land and livestock, and that the industry preys on a suffering community's desire for wealth and good schools just to turn a profit.
So far, so Hollywood. Big industry rarely gets more than this false celluloid caricature, even though in Pennsylvania, fracking has created over 102,000 jobs, lowered utility bills, and helped real farmers like Bradford County's Jim VanBlarcom, who was able to double his dairy herd size by leasing his land. And contrary to popular belief, fracking has not contaminated the water supply.
Moreover, the gas industry has boomed without taxpayer subsidies and paid all the taxes common to other businesses plus a special impact fee. That's the double irony of Promised Land: It isn't only anti-people on fracking, it's anti-Pennsylvanians because of the Film Tax Credit used to fund its Pittsburgh-area filming.
Pennsylvania taxpayers doled out more than $4 million through the Film Tax Credit for the movie. For those unfamiliar with the Film Tax Credit, it is unique among tax breaks in that it is "transferable." That is, even if the production company (in this case, Gramercy Productions) doesn't owe any state taxes, they can sell the remainder of their tax credit to another company.
We've noted how corporate welfare for Hollywood studios doesn't "create" any jobs, but shifts economic activity from one area to another. A tax break for one industry requires higher tax rates on everyone else, hindering job creation in every other sector of the economy—which hurts Pennsylvanians everywhere.
In real life, natural gas drilling has revitalized communities across Pennsylvania and helped people to better lives and incomes. For more stories of families benefiting from gas drilling in Pennsylvania, check out The Real Promised Land .
The shale gas boom has boosted the economy in key battleground states like Ohio and Pennsylvania, which may help President Obama, despite his hostility towards fracking—the process which made the gas boom possible.
A new short documentary featuring CF's own Matt Brouillette, the Dinosaur Election, discusses this potential irony and the threats a radical anti-fracking agenda present to our prosperity.
A new anti-fracking movie, Promised Land, is set to release in a couple of months, but controversy around the movie is already in full swing.
The film has come under fire because one of its financiers is a state-owned enterprise of Abu Dhabi. The Abu Dhabi government-owned oil company operates in direct competition with American gas and oil, which has become more accessible and lower priced thanks to fracking. In other words, oil barons in the Middle East are partnering with Hollywood to attack the greatest energy boom in a generation.
But Promised Land's problems aren't isolated to questions over the film's financiers. Phelim McAleer explains:
I broke the news that "Promised Land" was about fracking and now I can reveal that the script's seen some very hasty rewriting because of real-world evidence that anti-fracking activists may be the true villains.
In courtroom after courtroom, it has been proved that anti-fracking activists have been guilty of fraud or misrepresentation.
There was Dimock, Pa. - the likely inspiration for "Promised Land," which is also set in Pennsylvania. Dimock featured in countless news reports, with Hollywood celebrities even bringing water to 11 families who claimed fracking had destroyed their water and their lives.
But while "Promised Land" was in production, the story of Dimock collapsed. The state investigated and its scientists found nothing wrong. So the 11 families insisted EPA scientists investigate. They did - and much to the dismay of the environmental movement found the water was not contaminated.
Hollywood is the land of fiction, so no one should be surprised when a movie like Promised Land attempts to construct a story that isn't based on fact. Unfortunately, the stars in Hollywood and Middle East emirates are not the only groups engaging in a frack attack.
The reality is far different than the Hollywood portrayal of the fracking bogeymen. Fracking in Pennsylvania has created jobs, lowered utility bills, and contrary to popular belief, has not contaminated the water supply.
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The Commonwealth Foundation is Pennsylvania's free-market think tank. The Commonwealth Foundation crafts free-market policies, convinces Pennsylvanians of their benefits, and counters attacks on liberty.