If you want to understand why the potential for fracking to be a success in North Carolina (either for our economy or our environment) is very, very small, be sure to check out Professor Rob Jackson’s op-ed in this morning’s edition of Raleigh’s News & Observer. His prediction: A very low economic impact driven my marginal exploration companies with little incentive to clean up the messes they make. As the essay notes:
“The shale gas business is similar to Las Vegas, where the casinos know if enough people gamble they’ll make money because the odds are in their favor. Companies work to set the best odds possible in terms of rules and incentives and then drill a lot of wells knowing that most of them will lose money. They’re banking on the quarter or third that strike it rich. It’s an economy of scale.
In North Carolina, we don’t have an economy of scale. It’s true that we’re still learning about our resource here. We don’t know exactly how thick the shale deposits are. We don’t know whether we’ll have 2 percent organic carbon content or 10 percent, or how much propane, butane and even oil we’ll have.
We do know one thing for certain: The total area of shales in our state is tiny compared with other areas in the U.S. and other countries in the world. Nothing is going to change that fact. It’s also the reason big companies aren’t paying attention to North Carolina.
In recent months, I’ve sat in meeting after meeting with oil and gas executives, scientists from the U.S. Geological Survey and others. When North Carolina’s energy potential comes up, there mostly are shaking heads and bemused smiles. Major drillers of oil and gas won’t be coming to North Carolina anytime soon.
If they don’t come, who will? The smaller wildcatters and mom-and-pop drillers, that’s who. Major companies stick around 10, 25 or 50 years and have a financial incentive to follow environmental safeguards and stewardship. Small companies often don’t. They come and go, and if they’re out of business when liability arises or when things need to be cleaned up, that’s too bad for the taxpayers left holding the bill.”
Read the entire op-ed by clicking here.