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Fracking Fudged: Looking at Illinois Chamber of Commerce's Job and Economic Numbers

Henry Henderson

Posted December 14, 2012 in Curbing Pollution

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The Illinois Chamber of Commerce yesterday released a pretty, remarkably rosy sounding report, speculating on the potential impacts that fracking might have on Illinois’ economy. It is, as I say, remarkable stuff. “Natural gas development could create more than 45,000 jobs” according to the “first comprehensive look at Illinois jobs” that could be created when fracking comes. 

Having a look at the report, I was disappointed to find that it’s not really all that comprehensive. Or persuasive. If you happen to consider the facts….

Right off the bat, on page two, there is a long list of what the report doesn’t cover, which includes “any environmental impacts, costs, or benefits,” along with costs of ramping up and down of drilling in impacted areas or potential impacts of volatile natural gas prices to employers  or to electricity bills).

That eliminates pretty much every issue currently under discussion in the contentious national debate over fracking (which is the controversial practice of injecting vast quantities of water, sand and undisclosed chemicals deep into the ground at high pressure to crack open little pockets of oil and natural gas trapped in shale rock formations). And by my reckoning, that also eliminates this report from being a particularly realistic evaluation. So, the “comprehensive look” is by its own description, narrow and divorced from any really meaningful context.

If you are interested in the reality of job creation and fracking, take a look at Ohio, a couple states to our east. Ohio has embraced fracking, and vast portions of the eastern half of the state have been quickly perforated, poked and drilled as part of various oil and gas “plays” in the Marcellus and Utica Shale formations. Ohio Governor Kasich has been a big proponent of the industry in his state. And he has been clear that he thinks it will be a Buckeye economic driver. But despite those early assertions that soon 600,000 Ohioans would be at work on the gas rigs, the Governor has been disappointed so far. Really, really disappointed. Here’s what he’s had to say in the last week:

"You could have a situation where we are not getting the jobs, they're taking the resources, and all their profits and they're heading home," Kasich said. "That is not acceptable to me. Now, we don't have the conclusive evidence that this is happening yet, but I want you all to know, and I want the companies to know that this is an extremely serious matter, and we expect them to be responsive to the people of this state."

And, in an article entitled “Gov Kasich: No Ohioans filling jobs in Ohio oil fields,” there is this:

[Governor Kasich] said his administration is surveying energy companies about the situation — “Because we don’t want to have companies come in here and just bring people in who don’t live in Ohio,” he said — and attempting to gather more information about the types of skills those companies need in oil-field employees.

Of course the industry has a response:

But [Executive Vice-President of the Ohio Oil and Gas Association, Tom] Stewart does admit some specialty jobs are being filled by non-Ohioans. He said the issue is education and safety.

“You just don't put people on that kind of drilling rig without experience. They'll get hurt,” added Stewart.

Ohio has a long history of oil and gas drilling. Yet, few workers in the state have what it takes to get industry jobs there. That leads me to wonder if there are lots of folks here in Illinois, a state with far less drilling history, with the right experience to fill those jobs promised in the Chamber’s report. I’d guess not right now…

But hey, the report does not claim that all those jobs will be out on the rigs. Some of them are “induced jobs,” which are created by “economic spillover activity.” It is not an unusual or inappropriate thing to find this category included in these sorts of speculative job reports. In fact, not long ago the US Chamber of Commerce was trumpeting one of these reports for the controversial proposed Keystone XL tar sands pipeline which noted additional jobs generated for burger flippers and strippers…ahem…sorry,  dancers. Of course, that one was debunked for having ludicrously overhyped job numbers. The Chamber claimed 250,000 jobs would come out of the project, while Cornell University put the number around 6,000. Most who don’t have a stake in the project side with the Cornell University analysis. (Michael Levi, a pipeline supporter at Council on Foreign relations called the study “suspicious,” and said the job numbers were not supported by the analysis.) Critiques of similar manipulative job reports on fracking have been lobbed in Pennsylvania, another state with lots of fracking, but way fewer jobs to show for the industrialization of their rural areas and compromised water resource tradeoffs. Unfortunately, at least one of those compromised sources is also cited in the Chamber’s report too.

And that is where the real failing of the Illinois Chamber report resides: in the tradeoffs.

The report assumes that shale gas drilling will occur in an accident-free world, without environmental impacts of any kind. That simply has not been the case in any of the other states where fracking has occurred. Water concerns abound nationally around hydraulic fracturing, particularly as it relates to contamination of ground water with hazardous waste from the fracking process. And the record here is spotty as it relates especially to waste management and disposal of water fouled, often with really ugly stuff both used in the fracking fluids (carcinogens like benzene, etc.) and naturally-occurring toxics released by the fracturing. Just this week, Colorado regulators expressed concern over their new study which showed fracking wastewater spills contaminated ground water 40% of times it was released in one county. Also this week, the Pittsburgh Post-Gazette reported on similar messes in Pennsylvania where waste injection wells used to store fracking waste have polluted at least 100 aquifers.

Surface and groundwater are key to the health, safety and economy of Illinois. Don’t forget that the shale formations highlighted in the Chamber’s report cover 2/3 of the state. Most of those areas already have a dominant agricultural economy---one that cannot afford groundwater contamination. Consider the impact on the Illinois farm economy this past year due to water shortages. Of course, the Chamber’s economic study fails to acknowledge the potential economic impacts or job losses that could accompany groundwater issues around the state’s farming communities. If it did, it would not be so remarkably rosy…

The report points to a scenario likely to use 32 billion gallons of fresh water annually. That is not a drop in the bucket, especially in our state that remains moored in a massive drought. From a corn crop so parched that a historic crop was left wilting in the field to much of the Mississippi River along our border being impassable due to low water levels, the issue of water scarcity is impossible to miss all over the state.

We live in a real world, and our policy and investment decisions need to live in the real world with us. And the real world involves risks, conditions and realities that the Chamber has ignored and sought to marginalize. That includes immediately the real world where water is a scarce and essential resource that is not to be trifled with… And that is why we are advocating for real, strong, scientifically-based regulatory statutes to protect Illinoisans health, resources and economy. The Illinois Chamber has suggested that we should not be involved in regulatory discussions in Springfield, because we are asking critical questions and insisting on reality based policies and practices that protect people, communities and the economy. My concerns are based on what is going on around us right now. They are based in reality. Why aren’t the Chamber’s?

 

Post updated 12/17/12.

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Comments

Michael BerndtsonDec 14 2012 07:37 PM

I got this sinking feeling there is a tangled web being weaved (woven) here in the Land of Lincoln between Chicago and Downstate players including: Illinois CofC (white-shoe Republicans); Chicago's latest infrastructure and energy plans (Clinton/Emmanuel) ; labor unions, (principally Operating Engineers) more the willing to help with site preparation, drilling, pipelines, facilities construction; large acreage gentleman farmers who live chiefly along the North Shore; and a State with pension debt somewhere between $90 and $300 billion. How does an environmentalist even start.

And most important, mining Ottawa sand next to Starved Rock State Park. That stuff is being shipped to every play in the lower 48. The sand is almost 98 percent pure silicon dioxide and is considered the best frack sand. I read that several groups have sued the State regarding mine expansion into Starved Rock, is NRDC is involved?

Anyways, Illinois is a mess. The New Albany formation under Illinois is purportedly not all that productive given size and geochemistry. My fear is the real focus for fracking will be coal bed methane or coal seam gas (CSG). Coal underlays 75 percent of the state. Using fracking in coal seams is somewhat novel and potentially an environmental nightmare. Research is being done in Australia on fugitive emissions from the surface - not simply gas extraction and processing operations - and the results are none too good - at least for air breathers.

Environmental EngineerDec 16 2012 03:49 PM

Pot, meet kettle.

I agree, based on a brief read, the CoC report does not present a balanced view of the impacts (good and bad) of renewed oil development in Illinois. But the same can be said of the opponents' writings and reports, including blog posts here and the NRDC report claiming that increased efficiency is a feasible method to achived big reductions in carbon emissions at low cost. (Thus making gas development unnecessary.) Both sides are working as advocates, not as communicators of fact.

Michael BerndtsonDec 16 2012 07:07 PM

Environmental Engineer, I'm not sure I agree 100 percent there with your analysis.

Illinois could simply boost renewables up to national percentages and never have to drill and frack a single shale gas well. No one in their right minds would shut down a nuclear plant if its running well and since its been paid for a billion times over after 30 or 40 years of operations. This whole thing is getting curious and Illinois style slimy.

More telling is the reason Illinois wants to frack for natural gas is the distribution of generations between independents to utilities of 94% to 6%, respectively. Illinois electricity is all controlled by finance and corporate interests. Not consumers. This explains the Chamber of Commerce interests in hydraulic fracking.

US Electricity Generation (EIA report) for 2012
http://www.eia.gov/forecasts/aeo/er/early_elecgen.cfm
Units in trillion kwhr/yr
Oil: 0.04 / 1%
Coal: 1.44 / 42%
Nuclear: 0.77 / 19/%
Renewables: 0.5 / 13%
Natural Gas: 1.22 / 25%
Total: 4.08 trillion kwhr/yr

On a national level you could double renewables and implement a 10 percent across the board efficiency Manhattan Project style effort resulting in 1.4 trillion kwhr/yr of found energy potential.

Illinois Electricity generation distribution for 2011
http://www.instituteforenergyresearch.org/states/illinois/
Oil: Trace
Coal: 47%
Nuclear: 48.7%
Renewables: 1.4%
Natural Gas: 2.5%

p.s. the Illinois Chamber of Commerce Fracking report is an embarrassment to report writing. It is a complete cut and paste hack job. I'm embarrassed for simply living in Illinois.

Bill RauDec 18 2012 07:31 PM

Illinois also has the problem of high levels of uranium in its shale. As with PA, flowback brine has a high probability of being radioactive. Since fracking companies are verging on insolvency, Illinois citizens will be left with a huge cleanup bill. See:

http://justblono.org/2012/12/18/closer-to-fantasy-than-fact-the-illinois-chamber-of-commerce-report-on-the-economic-impact-of-shale-gas-in-illinois/

BellaCDec 18 2012 08:53 PM

If water flowing from the Marcellus is so hazardous because of the Uranium content of the shales, should we evacuate all people living in the area where the same shale is exposed at the surface in outcrop and eroded by rivers? That would be thousands of sq km of outcrop. All around the fringes of the basin. Same rock as underground right? Same minerals. Why does NDRC not get going on that?

Oh wait, is it perhaps because the actual amount is ridiculously small and insignificant.

Michael BerndtsonDec 19 2012 11:24 AM

Excellent question, if geochemistry wasn't the answer. Here's a good primer from a Penn State research paper, presented today over the every-man internets:

http://www.mining.com/fracking-flowback-found-to-consist-of-ancient-radioactive-brine-20762/

From my Geo 101 circa 1983 understanding:

The shale layer was laid down and compressed around 400 to 600 million years ago. And over time it dipped via orogenic processes. In the mean time, erosion exposed the shale at the surface. Given that decay rates of radionuclides, atmospheric dilution and the long period of time, the shale near the surface becomes essentially harmless to animals at the surface. The deeper shale on the other hand is semi-saturated with water, which is where a big bunch of the metals and radionuclides become dissolved and concentrated. That water gets forced out of the formation, while not crazy hot - is still not anywhere near being potable, even when mixed and diluted at the POTW.

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