Well duh! Anyone with any common sense and any knowledge at all about impacts from fracking and boom towns knows that turning America into an extraction colony for foreign countries can’t be good for Americans.
Fremont Center, New York – The recent Department of Energy (DOE) study of the economic impact of natural gas exports contains significant flaws according to economist Jannette Barth. The study, Macroeconomic Impacts of LNG Exports from the United States, was commissioned by DOE and produced by NERA Economic Consulting, a company with close ties to the gas industry and the rightwing Hudson Institute. According to Dr. Barth, NERA’s conclusion that gas exports will be a boon to the economy is not borne out by an unbiased analysis of the facts.
Dr. Barth says that NERA reached its conclusions by relying on a “new and apparently untested energy model” with virtually no track record and no tests of accuracy.
In addition to methodological shortcomings, Barth found the NERA study flawed because it ignored many of the costs that are inevitably associated with producing the “fracked” shale gas that will feed the export market. According to Barth, these uncounted costs will affect all Americans, but may disproportionately impact some of the most vulnerable segments of society:
- Rural communities will face “increased demand for police, fire, first responders and hospitals”.
- The threat of water and air contamination will negatively impact small sustainable businesses such as tourism and farming that depend on “the existence and perception of clean land, water and air.”
- States, counties and local communities will be stuck with the tab for upgrading and repairing roads pulverized by the thousands of truck loads of frack fluid and waste water that have to be transported to and from each gas well.
- Every American taxpayer is liable to be on the hook for “costs associated with water and air contamination and the mitigation of public health impacts.”
While the costs will be widespread, the economic benefits of exporting gas are likely to be concentrated in the hands of the already well-to-do. According to NERA, these include “consumers who are owners of the liquefaction plants” and workers who own shares in “natural resource companies”.
As Dr. Barth notes
“…only 54% of Americans own stock of any kind, retirement savings or otherwise. Clearly, not all of the 54% own natural gas stock” and most who do “likely hold tiny numbers of shares in mutual funds.”
And she says NERA is wrong to assume that the benefits of ownership of gas assets will automatically accrue to the U.S.:
“BHP Billiton, an Australian firm, has invested billions of dollars in US shale gas assets. China National Offshore Oil Company, Cnooc Ltd, paid several billion dollars for a stake in Chesapeake Energy’s Eagle Ford shale play. Total SA, a French company, paid several billion dollars to develop U.S. shale gas reserves in Ohio.”
Dr. Barth also points out that the NERA study fails to address the costs associated with environmental degradation and public health impacts. “Our decision makers should not consider allowing exports of U.S. shale gas unless and until shale gas development can be done in such a way as to protect our environment, our public health and our state and local economies.”
Comments on NERA Study prepared by Jannette M. Barth PH.D. Economist, Pepacton Institute LLC