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Hydrofracking and rural don’t mix

January 19, 2012

Cochecton and other rural towns beware: horizontal hydrofracking for natural gas isn’t for you, if you like being rural.

Bear in mind that the gas industry isn’t interested in one well here, one well there, as our local advocates think would be good for a town like Cochecton. If gas companies are seriously interested in our town, they’re interested in turning it into an industrial zone. Intensive well development will spread many of the costs that they will have to incur in all events, the costs of compressor stations and gathering lines being just two. That best suits their bottom line, which is, after all, the industry’s Holy Grail.

In fact, the community prosperity that the industry has touted from the outset, a high-flown claim that has made small rural towns want to reach for the candy, requires dense development in rural communities—one spacing unit butting up to the next, multiple wells on each wellpad. A Cornell professor, Tony Ingraffea, figured that out long ago.

It is true that some communities have, at least in the short run, benefited from drilling without being saturated, such as Williamsport, PA, which is experiencing an early boom. The Williamsport model, however, cannot be scaled to produce parallel results in a rural town. A New York economist, Dr. Jannette Barth, has identified the difference. Where the right infrastructure is in place, where existing businesses can gear up quickly to provide needed services and to open markets which will generate municipal taxes several times over, local government can retain the upper hand. Where that is not the case, new funding must be raised from the tax base to cover the costs of needed services, and, meanwhile, unless a town has developed markets in which industry-generated income will be spent, that money will go elsewhere rather than circulate locally. This difference is called the multiplier effect. If the multiplier effect isn’t there, the town won’t thrive on limited gas development.

We can’t predict whether the industry will choose to exploit our town for its drilling prospects. What we do while waiting, however, is crucial. If Ingraffea and Barth are correct, we need first to see drilling as a choice between all and nothing. Total immersion, such as Tom Shepstone advocated for Cochecton, submitting 90% of the town land to possible gas development, would probably spur local development of taxable services ancillary to the industry, and thus boost the tax base as development expands. That could make us a burgeoning industrial community which in short order would be run by the industry.