True independence

Champions of natural gas frequently cite the claim that Marcellus Shale gas will provide the United States with “energy independence” as a reason why we should exploit this fuel aggressively. We think a closer look at the facts demonstrates that this “energy independence,” relying as it does on multinational corporations with no allegiance to the United States or the municipalities overlying the shale, is little better than a mirage. If you want to see what real energy independence might look like, you’re better off examining local initiatives to develop alternatives like wind and solar and bolster energy efficiency.

The Marcellus Shale may lie in the United States, but if you think that means the profits will necessarily stay in the United States, you haven’t been paying attention to who owns the leases. In addition to Norway’s Statoil Hydro, which obtained a 32.5% interest in Chesapeake’s Marcellus holdings in 2008, we see countries like China, India, Canada and Britain (of BP fame) making multi-billion dollar investments. China’s government-owned and operated CNOOC Ltd. just made a massive deal with Chesapeake for its Texas holdings, and industry publications report that Chesapeake “seems intent on bringing Chinese investment into its extensive Marcellus Shale holdings in Pennsylvania” ((moneymorning.com)). There is, indeed, some concern that the deal will come under Committee on Foreign Investment in the U.S. (CFIUS) review as a possible threat to national security.

Reliance Industries, Inc., India’s largest conglomerate, purchased a 60% stake in 104,400 undeveloped acres of the Marcellus Shale in Northeast PA in August. In February, the Japanese energy conglomerate Mitsui & Co. purchased a 32.5% stake in the Marcellus Shale assets of Anadarko Petroleum Corp. In May, BG Group, a British company, purchased 50% of EXCO’s Marcellus Shale assets.

In short, the argument that we won’t have to send our dollars overseas to get energy from the Marcellus is only partly true: at the current rate of acquisition, the only reason we won’t have to send our money overseas is because foreign companies and multinationals will have come over here to collect it.

Nor is it clear how much gas, once produced, will be kept here for domestic use. Two Canadian companies, TransCanada Corp. and Union Gas Ltd. are currently looking into importing shale gas from the Marcellus into the Ontario market. And natural gas can be converted to Liquid Natural Gas (LNG), which is a fungible part of an international market, easy to ship overseas and with a price just as much at the mercy of international pressures, like rising Chinese and Indian demand, as that of oil.

Contrast that with the Sullivan County Community Wind Development project, for example, for which the Sullivan Alliance for Sustainable Development (SASD) has just received a $222,000 federal grant. A study will be done to produce shovel-ready plans for wind power installations to be built in our own backyard—just incidentally providing local jobs. These will capture local wind power to produce energy that will be consumed locally/and or sold in an interconnect agreement to electric utilities. The intent is for local ownership—by some combination of municipalities, businesses and individuals— to be a minimum of 35% initially; outside investors would have an incentive to provide the remaining funds for the sake of the tax write-offs available for investment in wind energy. As the write-offs expired, over 10 years, local ownership would rise to 100%.

Then there’s SASD’s proposed SWEEP program, which calls for Sullivan County to create an agency to lend money to commercial or residential building owners to make energy efficiency upgrades like insulation. The loans would be paid back as assessments on the buildings’ yearly county tax bill. The idea is that the upgrades would provide enough energy savings to more than cover the cost of the assessment spread out over 10 or 15 years—with no net cost to the taxpayer. Or take a look at the individuals and companies, like Hawley’s Silk Mill, that are installing solar arrays that get energy directly from their own roofs into their buildings.

Multiply ideas like this thousands of times, and you have an energy plan that would reduce U.S. reliance on imports, create jobs, and help free small communities and individuals from the domination of big corporations—utilities as well as pipeline companies, drillers and the like. Even if you don’t care about carbon footprints or global warming, that’s something worth working toward.

And don’t kid yourself that inviting large multinational corporations into your backyard to work their will with your land is a way to be independent, for you or this country. We can and should do better.

Dr. Punnybone

So Be It