New York Continues to Miss the Fracking Boat

Mark Perry brings you up to date on economic development related to shale gas exploration in Pennsylvania.  Lots of good news there.  Of course, New York state is missing out on economic gains, and, frankly, they may have already missed the boat. 

While wells may still be drilled in New York someday, the economics of energy development retains a 'land rush' quality in that the ancillary services and indirect jobs that the industry supports get established early in the locales that encourage drilling first.  I've talked about it before.  The field offices, storage depots, processing facilities, disposal sites, equipment repair sites, and all the other things that go into supporting an actual drilled well are pretty much established now in western and northern Pennsylvania.  Should wells get drilled in New York, people and equipment will likely drive across the border from Pennsylvania, perform their work, and drive back across the border to Pennsylvania.  So, land money, royalties and some taxes will  flow to New Yorkers in the eventuality, but most of the ancillary development benefits have likely already been captured by Pennsylvania.

Economic Reality Sinks In in Albany?

I said that New York state cannot thumb their nose at economic reality and keep fracking at bay forever

Meanwhile Pennsylvania, West Virginia, Ohio (and North Carolina soon) are establishing early footholds in the fracking-reliant natural gas exploration industry while New York declares themselves out of the game. Pennsylvania is already garnering the jobs and tax revenue that naturally flows from openness to energy development.

Here is my prediction, several years from now, New York will cease this silliness and declare that it is open to fracking...

Now we have this:

Gov. Andrew Cuomo’s administration is considering a plan that would allow high-volume hydraulic fracturing near the Pennsylvania border, according to a report in The New York Times.

After offering up two of the worst economic development ideas recently, might this be a bow to reality and a turn for Cuomo toward good sense?  We shall see.

New York Snoozed, Thus It Losed

Pennsylvania - and largely rural and poor parts of the state that desperately needed it - has boomed economically due to the unbelievable growth of natural gas production from the Marcellus Shale formation.  Mark Perry has the latest.

Of course, not only has New York missed out on similar economic benefits, as I have pointed out, the longer New York waits, the less economic benefit they will ever get out of this bonanza.  If they ever frack in New York state, it'll be done by Pennsylvania-based crews, out of offices, depots and equipment pools all in PA.  Pennsylvania, by saying yes early, won the land-grab to be the base for the infrastructure, supplies and workforce needed to support a regional drilling industry.

Lefty Nuttiness Runs Smack Into Lefty Nuttiness

A delicious example of lefty contradiction and cognitive dissonance over at SayAnything. Seems they have to shut down wind turbines because they're killing bats (or a bat).

They don’t run when there’s no wind. They can’t be run when there’s too much wind. They can’t be run when it’s too cold, and now some wind power turbines in Pennsylvania can’t be run at night because they’re slaughtering endangered bats.

LILLY, Pa. — Thirty-five windmills at a western Pennsylvania wind farm have been silenced at night since a bat that belongs to an endangered species was found dead under one of the turbines.

The Tribune-Democrat of Johnstown is reporting the farm shut down the windmills overnight after the Indiana bat was found Sept. 26.

The farm in question was built by Gamesa Energy USA and covers parts of Portage, Washington, and Cresson Townships in Cambria County, and part of Blair County, about 60 miles east of Pittsburgh.

Wind power is unreliable and extremely expensive. Yet, for some reason, the direction of national policy is toward subsidizing more and more windmills while traditional, reliable and cheap energy sources like coal are targeted for extinction through taxation and regulation.

Wind power is going to save the planet so we must get cracking, but not unless an insignificant number of annoying animals interfere. Hah! Lefty nuttiness meets lefty nuttiness! Love it.

Astorino for Governor

Readers here may be familiar with a minor NY politician named Rob Astorino.  As always, you usually hear things first here at NBfPB.

Well, Rob may not be minor much longer.  He a-goin' dragon-slaying.  He's taking on Governor Andrew Cuomo this November.

He's taking on the Governor who watched Pennsylvania right across the border see a boom by developing its energy reserves while the NY economy flounders.  He's taking on a Governor with the lamest economic development ideas evah.  He's taking on a Governor who told pro-lifers and gun-owners to get the hell out.  He's taking on a Governor who, as most NYers know, is a total schmuck.

Cuomo has a mountain of out-of-state, Clintonite machine, power-Dem money in his corner, so Rob is up against it.  But it can be pulled off.  Already, you'll notice how Cuomo is running as fast as he can from DeBlasio, who is the apotheosis of the crazed NYC Commie that upstate voters resent run things in this state.  Shit, Andy is even trying to convince people he's for charter schools.  It's all phony, just like all those ads on TV saying that New York is open for business.  Yeah, tell that to Remington Arms, the entire Pennsylvania energy industry, the critical financial services industry, and just about everybody.

Anyway, meet the Republican's potential dragon-slayer...(and, yes, this is the official Donny Baseball endorsement notice.)

Cynical Pro-Union Votes

10 of the 13 Republican defections on the Union Intimidation Endorsement Act that recently passed the Lower Chamber of the Great Sausage Factory are from the union-choked quadumvirate of New York, New Jersey, Pennsylvania and Connecticut. That would be floundering NJ, depopulating New York, falling Pennsylvania, and listless Connecticut. Outside of the financial sector, the best thing that can be said of these states' economies is that at least they are not Michigan.

To be fair, these were free votes. The bill has no shot of becoming law soon and these pols could cast their votes and look good to the unions at home with very little political damage, unless the Chamber of Commerce types have long memories.

New York Successfully Keeping Jobs At Bay

New York's laughable mediocrity of an Attorney General, Eric Schneiderman, is working hard to keep jobs out of New York state. He's suing the feds because, he feels, they aren't doing enough to squash the natural gas exploration technology known as hydraulic fracturing. Trust me the EPA is doing plenty behind the scenes to restrict "fracking" but they can't do what they want, which is ban it, because there is no evidence that it poses severe environmental risks. EPA head Lisa Jackson has admitted that there is no evidence of water contamination caused by fracking. But people see fraudulent movies like Gasland by lying activist Josh Fox and believe this stuff, so there is a political constituency for railing against fracking, and it has grown into the latest trend in environmental activism. Naturally, you can count on politicians like Schneiderman to cotton on in due course.

Meanwhile Pennsylvania, West Virginia (and North Carolina soon) are establishing early footholds in the fracking-reliant natural gas exploration industry while New York declares themselves out of the game. Pennsylvania is already garnering the jobs and tax revenue that naturally flows from openness to energy development.

Here is my prediction, several years from now, New York will cease this silliness and declare that it is open to fracking and two things will happen. One, some companies will say, "No thanks, we have all the work we can handle here in PA and WV." Two, other companies will say OK and send in their PA-based crews and buy supplies from PA-based vendors to work NY wells, delivering only marginal economic gains to NY. Northeastern politicians don't seem to get the energy business. Oil and gas people travel. They're used to it. The industry doesn't setup shop in your state unless you are really friendly, otherwise they just travel in and out. New York is letting PA own the footprint of the industry and will have to be satisfied with the scraps when/if they come around.

New York vs. Pennsylvania

We know that the WSJ Op-ed page is a secret admirer of NBfPB, which is cool. Today they pick up a meme I've been working over in a Tale of Two Shale States. The main point is that New York is leaving alot on the table that they can ill afford to do so, but what the editorial fails to get across is that even if New York eventually acts, it could be too late, Pennsylvania may have secured the lion's share of the economic development benefits.

Fracky Friday

The Department of Energy says that fracking did not contaminate drinking water in Pennsylvania.

A landmark federal study on hydraulic fracturing, or fracking, shows no evidence that chemicals from the natural gas drilling process moved up to contaminate drinking water aquifers at a western Pennsylvania drilling site, the Department of Energy told The Associated Press.

After a year of monitoring, the researchers found that the chemical-laced fluids used to free gas trapped deep below the surface stayed thousands of feet below the shallower areas that supply drinking water, geologist Richard Hammack said. Although the results are preliminary — the study is still ongoing — they are a boost to a natural gas industry that has fought complaints from environmental groups and property owners who call fracking dangerous.

And the Brits, in a fit of good sense and economic logic, aim to encourage the revolutionary technology of fracking in their oil and gas sectors by lowering taxes on shale gas producers.

The UK government has announced large tax breaks for shale gas producers in the country, as part of a consultation on a proposed tax regime for shale gas.

HM Treasury stated Friday that companies will have to pay a profit of just 30 percent on any shale gas they produce in the UK, compared to the current 62 percent tax that is levied on hydrocarbons produced by conventional means on the UK Continental Shelf. This "pad" allowance for shale gas is based on existing field allowance for oil and gas production that are expected to help encourage nearly $21 billion of investment in 2013, according to the department.

DrillDrillDrill Solves Blue America's Blues...?

In addition to investment and jobs, shale gas drilling activity has brought a mini-tax revenue boom to Pennsylvania. Some states are starting to learn that welcoming and nurturing a healthy energy industry within their borders is about as close to a fiscal silver bullet as they are gonna find. And the unions get it too, they know that one of their best shots at keeping their jobs intact and ensuring their fat pension and healthcare bennies get paid, is to lock arms with the energy industry. Told ya' so.

UPDATE: Chevron comes to town big time. Meanwhile the NY Assembly continues to keep shale-related investment capital at bay. How long can New York sit by and watch Pennsylvania capture the lion's share of the investment and collateral development from the Marcellus shale deposit?

Pyrhic Victory for Collectivism

The blogosphere is all over the latest battlefield outcome in the War on Wal-Mart, in which the collectivists have prevailed. Maryland passed their punitive payroll tax bill that wallops, handily enough, Wal-Mart solely.

There are alot of things that can be said about this and I wouldn't want to cover them all (and I have a busy day today), but I have a very stong feeling of what the outcome will be. Wal-Mart will do one of two things:

1. Reduce their presence in Maryland to where they have less than 10,000 employees. The majority of these job losses will come as store closings, but perhaps they have non-store jobs that can just be moved across the border to Pennsylvania, Delaware or Virginia.
2. They will indeed raise the healthcare spending per employee to 8% and offset the increment by peeling back other components of compensation, like retirement benefits and cash wages. Workers could wind up with the greatest healthcare but less cash in their pocket and less in their 401Ks.

I think #2 would be the least likely outcome because it is the least tenable. Wal-Mart would lose their best workers and embitter those that remained. Layoffs would be painful to the unfortunate workers whose jobs were legislated away, but those who remained would have their current compensation intact, so option #1 looks more likely.

Looking at a map of Wal-Mart's stores in MD, it looks like they are heavily clustered around Baltimore and only a handful of stores are outliers. A conceivable strategy would be to move the Hampstead and Westminster stores to Pennsylvania, close the Bowie store, consolidate the remaining presence around Baltimore to fewer stores, and move all non-store jobs out of the state. With these moves, it seems likely that they could get their total Maryland employment down below 10,000.

It is sad to see this come to pass, but the Maryland legislature cannot legislate away the laws of supply and demand so they must have foreseen the consequences of their actions. Marylanders don't have a right to Wal-Mart's jobs or Wal-Mart's services, so they will get only so much of these things as the law allows.

Many feel that Wal-Mart will simplytake their lumps and go along with the law. I disagree. Their business model absolutely depends on the current cost structure, and even the slightest break in their cost structure discipline would begin a long term deterioration of their business. They will not allow that. Finally, the very nature of a large retail operation like Wal-Mart means that they are not married to a current set of locations. They have to go where the people are, so they are in the business of opening and closing stores all the time. Pursuing option #1 doesn't entail anything radical on their part, just doing more of the same thing they do all the time.

I hope that the Maryland legislators that voted for this have a good explanation to give the roughly 7,000 workers who will see their jobs go away.

"Frack Water" Is Greens Latest Desperate Attempt Against Fracking

I won't rehash the particulars of the national debate over "fracking", the technology behind the natural gas revolution here in the US (some background here). But for those who are well-versed in the industry and the relevant policy fights, a couple basic facts are more or less agreed upon. Fracking is more or less inevitable, for the following reasons:

1. the energy resources available to us by virtue of fracking are too big to ignore,
   
2. fracking is in the plus column in terms of environmental impact (gas is the cleanest burning fossil fuel and it will largely displace coal, and then replace large chunks of oil).
   
3. in the end, the greens don't have very good arguments against fracking, there just isn't the evidence that fracking is dangerous.
4. fracking is bringing alot of jobs to previous depressed areas, which, even if fracking was marginally dangerous, are accepting fracking for the economic impact

Given these, especially #3, people in the industry have predicted that efforts to ban or slow fracking will ultimately fail, but that greens will throw everything they have at trying to stop fracking. After the "groundwater pollution" tack fails, which it has almost completely done, the next phase will be to attack the "frack water". We are now there.

Last Thursday, the U.S. Environmental Protection Agency (EPA) announced that it will soon begin the process of developing "comprehensive" national standards for wastewater discharges produced by extracting natural gas from underground coalbed and shale formations.

In a written statement released by the agency, the EPA noted that proposed standard will include input from federal and state governments, industry and public health groups. EPA Administrator Lisa P. Jackson contends this latest action is necessary "to make sure the needs of our energy future are met safely and responsibly."

Frack water disposal is probably the least problematic aspect of the entire technology, but that is not stopping Obama's EPA.

The Pittsburgh-based Marcellus Shale Coaltion, which in its three-year history has established itself as a key voice for developing the Marcellus Shale play in an environmentally responsible manner, expressed bewilderment at the EPA's regulatory plans.

"While we certainly appreciate that the EPA shares our concern in protecting the environment, especially water, it is baffling that the agency would move forward with such measures that completely disregard the facts on the ground," said Kathryn Klaber, the coalition's president. "This is yet another Washington solution in search of a problem, as treated Marcellus water in Pennsylvania is no longer discharged into surface waters."

The fight goes on.

Oil Co. Finds A Billion Barrels in Obscure, Remote Hinterland

The anti-capitalist, anti-development, anti-progress, Malthusian environmental movement bases their opposition to hydrocarbon energy on, let's face it, whatever works. If they can't scare us with global warming, they will make their stand against fossil fuels on more reasonable sounding concerns over resource availability. For years they've been telling us the age of oil is over, then they qualified that to say the age of easy, or cheap, oil is over, saying we'd have to go to the ends of the earth to find increasingly smaller, meaningless pools of oil that are prohibitively expensive to tap.

How many times do we have to prove this wrong to bury the theme and convince the bamboozled public that they've been lied to for years? As North Dakota rockets to the top of the tables as an oil-producing state in a matter of a few years and Pennsylvania becomes the locus of the largest natural gas development prospects on the planet, we now learn of a nearly billion barrel recoverable resource in remote, obscure...wait for it...Colorado.

Anadarko Petroleum Corp. said that land it controls in northern Colorado may hold more than a billion barrels of recoverable oil and natural gas, the latest sign that U.S. energy production is set to surge.

The Woodlands, Texas-based exploration company's disclosure could vault Colorado's Wattenberg field into the ranks of major oil developments in the United States, joining the Bakken Shale in North Dakota and the Eagle Ford in South Texas. These new sources of oil are reversing four decades of declining domestic energy production.

Reminds me of something...

"'Energy supply' is determined not by 'what's out there' but by how good we are at finding and extracting it. What is scarce is not raw energy but the drive and the logic that is able to locate, purify, and channel it to our own ends."

The Election and Guns

John Hinderaker over at Powerline has a worthwhile post up on the influence of the NRA in this election.  It is interesting at the top level because it is something you'd never read in the MSM.  Oddly, while the MSM seems to think that the NRA is the all-powerful puppetmaster of US politics when they cover mass-shootings, most of the time the MSM does know, care, or think about the NRA.

But there is something about Hinderaker's post that is not quite right.  The NRA didn't join the election fight recently after the Lightworker made his comments about a new Assault Weapons Ban in the debates.  The NRA has been engaged all along.  They launched the "All In" and "Trigger the Vote" campaigns months and months ago.  Every issue of American Rifleman for the last year and a half has been a full-throated anti-Obama editorial screed.  But you know what?  Most gun owners yawned.  Big numbers of gun folks chalked it up as typically cynical NRA fundraising - the NRA was not going to let a perfect bogeyman like Obama go to waste without larding its coffers.  I kid you not, read the forums.

But then something strange happened.  Late in the game, Barack Obama validated what at first seemed like so much NRA scare-mongering.  In that debate with Mitt Romney (who any gun nut will tell you enacted gun restrictions in Massachusetts as Governor) Obama hinted at reviving the AWB and going after handguns as well.  He couldn't have fulfilled the NRA's dreams more completely if he tried.  In one instant he wiped away the charges of cynicism and scare-mongering.  And the NRA's already operational anti-Obama efforts received a jolt of energy that cannot be understated.  If these efforts are even half as impressive as the NRA is making them out to be they'll be decisive.  There are alot of gun owners in places like Pennsylvania, Ohio, Michigan, Wisconsin, Minnesota, Florida, North Carolina, Colorado, and Iowa.

Of course, to observers like me, this is yet another area where we have to scratch our heads, wonder, and ask again, as in so many other areas of the Obama phenomenon, is he incompetent or just that arrogant?  Could the Obama campaign have really not understand just how poised and aggressive the NRA was prepared to be in this election and blundered into this situation?  Or did they know full well what the NRA's stance was and thumb their noses and pick the fight anyway?

Whichever, this is a remarkable element of the election which no one is covering or understands well.

Meet the New Pelosi Lapdogs

Sources are telling the Tea Party movement that the following representatives that voted "No" on ObamaCare previously intend to switch their votes to "YES". Nuff said. Melt the phones...

Rep. John Boccieri, Ohio, 16th
http://boccieri.house.gov/
DC Office Number: (202) 225-3876, DC Fax Number: (202) 225-3059
Local Office Number: (330) 489-4414, Local Fax Number: (330) 489-4448
Voted Yes on Stupak
Voted No on Health Care


Rep. Jason Altmire, Pennsylvania 4th
http://www.altmire.house.gov/
DC Office Number: (202) 225-2565, DC Fax Number: (202) 226-2274
Local Office Number: (724) 378-0928, Local Fax Number: (724) 378-6171
Voted Yes on Stupak
Voted No on Health Care

Rep. Bart Gordon, Tennessee 6th
http://gordon.house.gov/
DC Office Number: (202) 225-4231, DC Fax Number: (202) 225-6887
Local Office Number: (615) 896-1986, Local Fax Number:
Chief of Staff: Donna Pignatelli email: donna.pignatelli@mail.house.gov
Voted No on Health Care

Rep. Brian Baird, Washington 3rd
http://www.baird.house.gov/
DC Office Number: (202) 225-3536, DC Fax Number: (202) 225-2478
Local Office Number: (360) 695-6292, Local Fax Number: (360) 695-6197
Voted Yes on Stupak

Cuomo to "Red" New York: Drop Dead

In one day we get two news items that encapsulates Andy Cuomo's bankrupt and idiotic economic policy for the state of New York - energy no, casinos yes. 

By all means let's encourage the effective regressive taxation of poor and stupid people via gambling while we shut off the development of cheap and clean natural gas to fuel our economy and bring needed economic development to depressed rural New York (even though fracking is done safely nearly everywhere else in the USA, even in Jerry Brown's California).  Irony alert, the NY Department of Health was the ostensible authority that gave Cuomo the cover to carry out this liberal policy wish, but gambling has nothing to do with health...huh?

Residents of the Southern Tier are rightly pissed and this sentiment encapsulates the entire political dynamic of New York state.

When Conklin, N.Y., town supervisor Jim Finch heard the news, he began drawing up plans to secede from the state. “I’m serious,” said Mr. Finch, who oversees a town of some 5,000 people on the Susquehanna River just a few minutes’ drive from the Pennsylvania border. “New York City determines policy in the Southern Tier? That’s baloney.”

12 million liberal New York City area residents run the lives of 8 million mostly conservative upstaters, and it sucks for that later camp.  Non-NYC New York is a hollowed out shell of economic malaise and declining population thanks to elitist liberal policy emanating from the NYC political set.  If it weren't for NYC, Cuomo would have lost his re-election race this November.  Secession is one answer (not a good one, but one that I certainly understand), but one day upstaters are going to have to get off their butts and turnout at the polls in legendary numbers if they are ever going to throw the liberal NYC gorilla off their backs.

More here.

Obama Cooked From the Inside, Update

Regular readers will know that I think Obama's exit - either via electoral failure or engineered exit - is underway. Yes, it is a tad conspiratorial but it is not without facts and logic. Here is my latest in advancing the case and here is a bit of electoral strategy that I talked about:

"First, if Obama wins another term it'll probably be accompanied by Republican gains in Congress and incumbency for many is a worse problem to have in the future than incumbency for one. Frankly, I think the Dems would rather run congressional candidates against a President Romney or President Perry rather than in tandem with an Obama second term..."

Today, Ed Morrissey puts a little meat on those bones:

Obama’s numbers are plummeting in places Democrats can hardly afford to lose. In Pennsylvania, where Obama will top a ticket that also includes Bob Casey’s bid for a second Senate term, he’s either at 43% approval (Quinnipiac) or at 35% (Muhlenberg). Wisconsin turned Republican last year and a series of elections this year confirmed it, and Herb Kohl’s seat in the Senate is up for grabs. Obama can be expected to drag down the ticket in Virginia (James Webb’s seat is open), Florida (Bill Nelson), Ohio (Sherrod Brown), Maryland (Ben Cardin), and Michigan (Debbie Stabenow). Obama is underwater in New York and New Jersey already, two normally staunch Democratic states, both with Senate races on the line as well. If Obama runs at the top of those tickets, he might eke out victories in the two states, but his presence on the ticket will depress Democratic turnout and might endanger Kirsten Gillibrand and Robert Menendez; Democrats would almost certainly have to spend a ton of money to bolster them that they’d normally spend elsewhere.

This electoral analysis lines up almost perfectly with the overarching logic in my theory. My theory gets a little less conspiratorial every day.

Oil and Gas News

Production of shale oil out of the Eagle Ford shale play is rocking and natural gas production from the Marcellus Shale in Pennsylvania and West Virginia is blowing away expectations.  More job-creating, wealth-creating, tax-paying, Saudi/Russia petro-tyrant annoying economic activity that is a blessed rare bright spot in the age of Obama.

And yet the anti-fracking activists are still at it, still lying to put a stop to a great advance in modern technology that will alter the US economic landscape and geo-political landscape for the better for ages to come.

Anti "Breeder" Win for ObamaCare

Truly committed progressives hate children.  The fever swamps of leftism teem with disdain for "breeders".  It's all part of their self-loathing nature.  With that in  mind, this result of ObamaCare is a feature not a bug.

WINDBER, Pa. (AP) — A southwestern Pennsylvania hospital will stop delivering babies after March 31 because its obstetricians are either leaving or refocusing their practices, and because hospital officials believe they can't afford it based on projected reimbursements under looming federal health care reforms.

This is a progressive homerun - stop the breeders and do it out in the hinterlands!

Fossil Fuel Magic: NYT Turns A Big Increase Into A Big Decrease

Recently the US Geological Survey vastly increased its estimate of technologically recoverable natural gas from the Marcellus shale formation in Pennsylvania, New York, and West Virginia. You may have read about it here or here. In an amazing feat of deception and biased journalism, the New York Times makes this massive increase look like a decrease and spins a pessimistic theme into the potential of this great energy resource. How did they do it? By comparing apples and oranges. The NYT buries the comparison of the USGS's new estimate with its old estimate deep in the article and draws no thematic conclusions from this development. Instead the NYT compares the new USGS estimate with the estimate of an entirely different governmental agency (EIA), assumes the other agency is the benchmark (even while stating that this agency does not have the expertise to make such an estimate), and concludes that the new USGS estimate constitutes a massive reduction.

The story here is twofold, 1) that on an apples to apples basis the Marcellus Shale's potential as a resource is more promising than previously thought, and 2) that there are overlapping government agencies looking at this energy resource and that at least one of them is ill-equipped to carry out its task. Yet, the New York Times goes to amazing lengths of deception and contortion to tell you neither of those stories in an effort to discredit the potential for Marcellus Shale gas as a major contributor to our future national energy supply.