Ohio in position to be paragon of fracking’s future

6/19/2013

Can a state do fracking right? Can it use new shale-gas drilling technology to deliver thousands of jobs, revive depressed industrial zones, spark new high-tech industries, feed state coffers — and still not mess up its countryside, imperil water supplies, and possibly release dangerous amounts of methane gases?

It’s a big order, and environmental concerns remain real. But a strong cross section of Ohio’s leadership — political (Gov. John Kasich), business investors, and think tanks such as Cleveland State University’s Levin College of Urban Affairs — sees smart exploitation of shale reserves as key to a strong, opportunity-rich future.

By historic and geographic accident, the action is focused on northeast Ohio, anchored in Cleveland, Akron, Youngstown, and Canton. This was an early center of U.S. steel and the birthplace of John D. Rockefeller’s Standard Oil Co. in the 1870s.

But the economic action shifted south and west, and the area has been in or close to recession since the 1950s — forever yearning for a new break. Could shale be the answer? Just maybe.

Massive reserves of so-called Utica shale — a source of not just natural gas, but also liquid petroleum products that can be feedstuffs for specialized fuels and chemical manufacturing — have been discovered in this very area (including a swath of territory running east and southeast to the Pennsylvania and West Virginia borders).

The claims are stupendous. Though start-up on wells in Ohio has been slow, the soon-to-come statewide impact easily could reach $10 billion a year.

There would be an additional $500 million in tax revenue, with oil and gas field development creating 65,000 new jobs that would have average incomes of more than $50,000 a year, according to a Cleveland State study by energy expert Andrew Thomas and his colleagues released last year.

The fit could hardly be better for a region with an industrial heritage, a big reserve of unemployed or underemployed blue-collar workers, a related polymer industry focused in Akron, and significant scientific expertise — especially in its universities — to develop the shale for new chemical-based processes and fuel.

But environmental concerns are real with this new technology that digs wells thousands of feet deep, then branches out underground with horizontal drilling in processes requiring millions of gallons of highly pressurized water. Faulty well casings or surface spills raise concerns of risks to ground and drinking water.

Then there are the heavy truck traffic through towns, land clearance for several wells on each pad, and the potential of release of methane gas — a powerful carbon dioxide emitter — without scrupulous oversight.

Aware of the ferocious opposition that fracking has generated in New York and Pennsylvania, the Ohio-based operators seem to be taking precautionary measures. Most supported the state’s shale development control rules — hailed by some as the nation’s toughest — passed last year.

Critics also hail Governor Kasich, a conservative Republican, for his decision to hire several hundred environmental regulators to track the new activity, and for pressing (despite opposition) for a higher state severance tax on shale production.

Now there’s apparently broad support in Ohio for the remarkable new agreement between drilling interests and environmentalists, embodied in 15 model standards for safe fracking production. Developed through two years of often-contentious negotiations, the accord — to be enforced by a new Pittsburgh-based Center for Sustainable Shell Development — ranges from limits on methane emissions to careful rules on wastewater disposal and seismic testing before drilling can commence.

The agreement is not universally popular. The Sierra Club has harshly attacked the Environmental Defense Fund — a major player in forging the agreement — for its supporting role. But there’s little doubt about the integrity of the pact’s oversight board, including such figures as Christie Todd Whitman, a former New Jersey governor and Environmental Protection Agency chief.

The real question may not be the whether of shale extraction but rather the how. In just six years, natural gas has grown from less than 1 percent of U.S. energy supplies to 23 percent, notes John Banks of the Brookings Institution.

With it, natural gas prices have hit historical lows, speeding retirement of coal plants. U.S. fracking, Citigroup reports, could make U.S. petroleum output rival Saudi Arabia and Russia within a decade.

The good news, says Edward Hill, dean of Cleveland State’s College of Urban Affairs, is that the low cost of natural gas “is pushing coal” — the most toxic of fuels — “out of the marketplace.” Coal defenders talk about coal gasification, he says, but “that doesn’t make any sense if you have gas.”

And renewables such as wind and solar power? Gas advocates agree they’re on their way. But they are still far too expensive, and storing their energy to match demand remains a major technical hurdle. Near-term, they argue, natural gas — and the fracking to free it from the ground — is our future.

In the meantime, Cleveland State experts have been dispatched to Poland, Ukraine, and Colombia to coach other world regions on the hows of safe, community-sensitive shale development.

Neal Peirce is a member of the Washington Post Writers Group.