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Insight: in ohio, "fracking" boom a delicate issue for obama by ferujkll sdff
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Insight: in ohio, "fracking" boom a delicate issue for obama |
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Business,Business News,Business Opportunities
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In a region more accustomed to hard times than optimism, residentshope that a boom in shale gas drilling using the controversialtechnique of hydraulic fracturing - or "fracking" - will lead towealth, jobs and a reservoir of domestic energy that coulddramatically boost the area's fortunes. But the growth of fracking here and across the nation has raisedconcerns about contaminated groundwater, how to dispose of toxicwaste and even whether fracking causes earthquakes. In Ohio, that has created an election-year challenge for DemocraticPresident Barack Obama. With the presidential campaign focused on jobs, the economy and theneed to cut U.S. dependency on foreign oil, Obama's administrationhas walked a fine line in trying to impose environmental rules onthe growing fracking industry without stifling badly needed jobs ora vast supply of domestic energy.
It is a particularly delicate issue in Ohio, a politically dividedstate that may play a key role in determining whether Obama orpresumptive Republican challenger Mitt Romney wins the presidencyin the November 6 election. The optimism over fracking in eastern Ohio springs from its spotatop the Marcellus and Utica shale formations, which hold broaddeposits of natural gas and crude oil. Energy giants such asChesapeake Energy Corp and MarkWest Energy Partners are investingbillions of dollars to tap the shale in a process that couldreinvigorate economically stunted cities such as Steubenville. "All we're looking for is a chance.
This is our chance," said EdLooman of the Progress Alliance, an economic development group inOhio's Jefferson County, which includes Steubenville. "The politicians have to stay the hell out of it," Looman added."The last thing we want to do is regulate these energy companies tothe point that they don't want to come here." 'A BETTER UNDERSTANDING' In January, Obama was criticized by Republicans for delaying adecision on construction of TransCanada Corp's Keystone XL oilpipeline from Alberta, Canada, to the Texas Gulf Coast because ofenvironmental concerns. In Ohio and other states, where Obama's chances of a secondfour-year term as president could hinge on how middle-classfamilies feel about their jobs and finances, he has tread lightlyin regulating fracking. That has won the Democratic president rare praise from oil and gaslobbyists, while frustrating environmentalists and others who haveseen Obama as a protector of the environment.
The head of theAmerican Petroleum Institute, the trade group for U.S. oil andnatural gas companies, recently said the administration now has "abetter understanding" of the industry. The evolving nature of Obama's relationship with the oil and gasindustry was evident in his State of the Union address in January,shortly after his Keystone decision. Obama touted the potential ofnatural gas and said that drilling for it could create nearly600,000 jobs nationally by the end of the decade. Industry supporters have estimated that oil and gas drilling inOhio could mean more than 65,000 new jobs and nearly $5 billion ininvestment in the state's economy by 2014.
"We're taking every possible action to develop a near 100-yearsupply of natural gas," Obama said in March. Obama's leniency on fracking included last month's decision to givedrillers at least two more years to invest in equipment thatslashes unhealthy air emissions from fracking wells. His administration also proposed rules for public lands that wouldrequire companies to disclose the chemicals they use in frackingafter, rather than before, they drill. Most drilling for natural gas is on private land, which has limitedthe administration's authority and left most of the regulation tostate governments.
Obama's relatively light touch on federal regulation has notstopped Romney from accusing him of being too heavy-handed. "I will respect states' proven ability to regulate fracking, ratherthan sending federal bureaucrats to take control," Romney, whowants to expand oil and gas drilling, said in a column in theColumbus (Ohio) Dispatch newspaper in March. In a reflection of the economic potential of natural gas drilling,Obama's fellow Democrats and environmental activists who want moresafety rules or a moratorium on new drilling have been gentle incriticizing his approach. "I understand Obama's position, politically. The regulations havebeen quite a bit less than I would desire, but they would beinfinitely (less) under Republicans," said Dave Simons, formerchairman of the Sierra Club conservation group's Ohio panel onfracking.
"Economic times are tough. There is big money in this,and ... (people) are willing to take a chance on this." Analysts said the need for jobs in hard-hit areas like Ohio'sJefferson County, where the 10.1 percent unemployment rate is wellabove the national average, has made natural gas drilling - andfracking - a bipartisan cause. For the most part, "it hasn't been Republicans against Democrats"on fracking, said William Binning, a political scientist atYoungstown State University in Ohio. "Both parties have beenreluctant to come out strongly against it." 'MAKE SURE IT'S SAFE' Fracking involves the high-pressure injection of sand, water andchemicals into shale to crack it open and allow the flow of gas oroil.
It has sparked an energy boom in several regions of the UnitedStates and driven natural gas prices to 10-year lows. But environmental concerns about fracking also have grown, fromcomplaints of contaminated groundwater in Pennsylvania and Wyomingto earthquakes in Ohio last year that a state agency linked tofracking. A Quinnipiac University poll this year found that nearly three infour Ohio voters believed fracking should be stopped until morestudies are done. However, 64 percent thought the economic benefitsoutweigh the environmental concerns. "Somebody definitely needs to audit what's going on and make sureit's safe," said Rich Clendenning of Lisbon, Ohio, a welder lookingfor work in fracking.
But, Clendenning said, "the way some people'sfinances are now, they would probably put up with earthquakes if itmeant they had a job." Democratic-sponsored proposals to restrict fracking have beenbottled up in Ohio's Republican-controlled legislature. "Anybody who stands in the way of the fracking boom is seen asstanding in the way of jobs," said Democratic state RepresentativeRobert Hagan, who has called for a moratorium on new drilling. So far, few of the promised new jobs and economic benefits havematerialized in towns such as Steubenville, where start-uppositions for drilling companies are often filled by out-of-towncrews with industry experience. However, the flood of Louisiana, Texas and Oklahoma license platesin the region has created a trickle-down effect for hotels,restaurants and other businesses in Steubenville.
The local Best Western hotel has added housekeeping and restaurantstaff. An Italian restaurant has expanded its seating. And JanieMayle, president of an industrial supply company, added a salesmanto pursue business in fracking. 'SHOT IN THE ARM' Tony Guida of Guida Realty in Steubenville is overseeing sales on a3,800-acre (1,500 hectare) parcel of land west of town that will bedeveloped for commercial, residential and industrial uses. "This was really the shot in the arm we needed," Guida said.
"Thereis a lot of excitement, but a lot of us are trying to figure outwhere the jobs are going to come from." Local officials expect a boom in jobs for truck drivers, safetyofficers, welders, pipeline technicians and other industry jobs -many at annual salaries of $60,000 to $70,000, nearly double themedian household income in Jefferson County. "People are very excited at the prospect of good jobs with goodbenefits, but we try not to overpromise," said Anne Wheeler, thehuman resources manager for operations at MarkWest. Energy companies also are paying local farmers and landowners$3,000 an acre (0.4 hectare) or more for mineral rights to theirland, plus royalties on the eventual production of natural gas. The optimism could be good news for incumbent office-holders, fromObama to U.S.
Representative Bill Johnson, a Republican elected in2010 whose congressional district is on Ohio's eastern border. Johnson, who faces a rematch with Democrat Charlie Wilson thisyear, supports fracking and, like Romney, criticizes Obama'sapproach on regulation. Wilson has not called for more regulation. He lists his topconcerns as ensuring that fracking jobs go to local workers andimproving local roads and bridges that will carry heavy loads ofwater and drilling supplies.
"We don't want this to be a gold rush and then a bust that goesaway quickly," he said. (Editing by David Lindsey and Will Dunham). I am Wiring Accessories writer, reports some information about bulk acoustic resonator , radar motion sensor.
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