Delay, Baby, Delay: Obama Decision Puts Up to 200k Jobs on Hold
BY NICOLAS LORIS - First, it was 20,000 jobs the Obama Administration delayed by punting a decision to approve the Keystone XL pipeline, which would bring 700,000 barrels of oil per day from Canada into the United States. Multiply that number by 10 and you have the amount of jobs the President is putting on hold by delaying a mineral lease sale in Ohio’s Wayne National Forest for oil and gas drilling. This decision kills jobs and denies Americans access to affordable energy.
The Washington Examiner reports that Wayne National Forest already has 1,300 oil and gas wells in operation, but access to Utica’s shale gas reserves would require hydraulic fracturing. The United States Department of Agriculture announced a six-month delay in the leasing of 3,000 acres in the forest to study the environmental effects of hydraulic fracturing. This decision not only delays access to the jobs and energy that Americans need now, but it blocks an important revenue source for federal and state governments. The Ohio Oil and Gas Energy Education Program estimated that:
Natural gas and crude oil industry could help create and support more than 200,000 Ohio-based jobs from the leasing, royalties, exploration, drilling, production and pipeline construction activities for the Utica shale reserve. The state could experience an overall wage and personal-income boost of $12 billion by 2015 from industry spending.
The study also projects royalty payments to landowners, schools, businesses and communities could increase to as much as $1.6 billion by 2015—a number that exceeds the total amount of royalties distributed by Ohio’s natural gas and crude oil industry in the last decade. Total tax revenue from oil and gas exploration and development in the Utica shale formation from 2011 until 2015, including severance, commercial activity, ad valorem (property), federal, state and local taxes, is projected to be approximately $479 billion. Industry expenditures related to Utica shale development could generate approximately $12.3 billion in gross state product and result in a statewide output or sales of more than $23 billion.
Hydraulic fracturing, known as “fracking,” is a long-proven process by which producers inject a fluid (composed of 99 percent water) and sand into wells to free oil and gas trapped in rock formations. Used in over 1 million wells in the United States over more than six decades, fracking has been successfully used to retrieve over 7 billion barrels of oil and over 600 trillion cubic feet of natural gas.
Spencer Hunt of the Columbus Dispatch reports that “Tom Stewart, vice president of the Ohio Oil and Gas Association, said shale well drilling would be less harmful to the forest than conventional drilling because as many as six shale wells can be drilled on a single pad.”
Fracking is subject to both federal and state regulations, and there have been no instances of contamination to drinking water. Groundwater aquifers sit thousands of feet above where fracking takes place, and studies by the Environmental Protection Agency, the Ground Water Protection Council, and other agencies have found no evidence of groundwater contamination. Where there have been unwanted environmental outcomes—such as gas migration—they were the result of poor well construction or problems with the concrete and steel casings around the well bore. Those instances have been rare, and they were not a result of the fracking process itself.
Hydraulic fracturing will be a critical process in developing energy supplies in the future. The National Petroleum Council estimates that fracking will allow 60–80 percent of all domestically drilled wells in the next 10 years to remain viable.
You can study the effects of hydraulic fracturing for six more months, but the facts are going to remain the same. Fracking is a long-proven process that can help access our nation’s abundant oil and gas reserves. Delaying lease sales is delaying the creation of much-needed jobs.
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