The big bluff

The recent blustering of natural gas drilling representatives with regard to Pennsylvania’s efforts to regulate their activities, and the reactions of those who are fearful of losing revenue and jobs by offending the industry, remind us of something. They remind us of the incident a couple of years ago when the Millennium Pipeline Company came through Sullivan County asking for tax breaks.

The Millennium Pipeline Company informed Sullivan County solemnly that if it didn’t give them exactly what they wanted, they would take their marbles and go home. Even at the time, it was obvious that that was nonsense. Given the level of natural gas prices, it was clear that they would put a pipeline somewhere; and given that the existing rights of way made the path through Sullivan by far the cheapest one—even without tax breaks—they obviously weren’t going anywhere else. But we gave way, and the pipeline is now laid, and the county has foregone revenue that would have been substantial to us but is pocket change to them.

Fast forward, and now the natural gas drilling companies are telling Pennsylvania they’ll pull up stakes and go elsewhere unless it does exactly what they want—in this case, cut out regulation scrutiny.

Sure, they can go to West Virginia. But with newly released figures that show, albeit with information supplied by Chesapeake Energy Company, that there is three times the amount of gas as previously thought, are they going to abandon their billions of dollars worth of lease investments and pick up, lock, stock and barrel? The gas is under Pennsylvania and New York, and if those companies want it, they have to get it on the terms of the people who live here.

The bullying and blustering is also ill timed with regard to the recent change in the fortunes of the whole concept of regulation. For decades now, a theory has been in ascendancy that regulations are anti-capitalist, anti-growth, un-American things that take the bread from the mouths of honest Americans. But the current financial catastrophe has changed things. The parade of cashmere-coated CEOs flying in to Washington on their corporate jets to beg for taxpayer money—after lobbying successfully for years against regulations that might have curbed the reckless and unprincipled behavior that produced the crisis—has made it clear that laissez-faire capitalism itself can steal a lot of bread from people’s mouths if left unsupervised by adults.

As we have noted before, it is the business of business to make money, and not only is there nothing wrong with that, but it makes for the most productive economic system. But without oversight by some other form of human organization that hosts values other than the individual company bottom line—like the welfare of the overall economy and the health of its citizens—it devolves into something like organized looting.

And not only oversight is needed, but a revenue stream to fund that oversight and the subsequent consequences of the business activity, in this case the industrialization of a bucolic region—and an important watershed that serves not only the local population but also millions of others in the major metropolitan areas of New York and Pennsylvania.

We cannot expect mineral extraction corporations, by themselves, to exercise due diligence in protecting the watershed, nor to value other aspects of our environment or portions of our economy that do not directly bolster their bottom line. That’s where we need government to come in and represent other interests and constituencies affected by the corporations’ activities.

In trying to bully state officials into relaxing application details so that there is no opportunity to assess the cumulative effects, the gas-drilling companies are doing their job: trying to minimize costs. But the job of government is to step in when what they want to do conflicts with too many other aspects of the public good.

And in this case, the threats the corporations are using to get their way are empty—though it should be noted that, if the recent plunge in natural gas prices continues, the drilling companies are likely to pull in their horns temporarily, regardless of regulations.

We hope that in the face of such a transparent bluff, Pennsylvania’s regulatory agencies and legislators hold firm. We also hope that they use this delay to fulfill their appointed task of protecting the public from the damage that can be done when corporations are given power over a resource as precious as the Upper Delaware watershed, without adequate regulation and oversight.

Gas companies warn that we shouldn’t kill the goose that lays the golden egg. We suggest that the more apt metaphor is that we don’t want to throw the baby out with the bathwater. Or the fracking fluid, as the case may be.

Also in this issue:

• Not such a myth after all

Dr. Punnybone

Deer Santa