Trading pennies of cash for pounds of problems?
February 2, 2011
Say I decide to change my job, and figure that with a higher salary I ll be set. But a few years later, I m in financial hot water: I forgot to calculate the tripling of commuting costs and the car, clothing, and entertaining required by my new position.
Pretty shortsighted and irresponsible of me, right? But somehow when the gas industry uses the same method to peddle its wares, all too many policymakers plagued by budget woes are dazzled and eager to buy.
Take the widely touted 2010 study commissioned by the American Petroleum Institute that promises hundreds of thousands of jobs and billions in revenues in the Marcellus Shale region. Oops! It didn t even look at costs associated with gas development, like road and bridge repairs, declines in farming and tourism, or reduced property values and taxes. The same fuzzy math guided a recent report funded by the West Virginia Oil and Natural Gas Association that glowingly assessed jobs and money coming, and still to come, from gas drilling in that state.
Fortunately, not everyone s buying the equation that short-term revenue is enough to solve long-term problems. Shareholders recently passed resolutions asking nine major oil and gas companies for plans to manage the environmental and health costs of hydraulic fracturing and gas drilling (read: litigation and fines). Some county officials in Ohio wonder whether the gas industry will need to be taxed more to offset the damage it causes.
Decisions on how, where, and whether to allow gas development shouldn t be made with so many economic questions still unanswered and growing evidence that the rush to drill does not, in fact, pave streets with gold. Unless just like with another get-rich-quick scheme in the nation s history we re happy to keep prospecting for fool s gold.