Republicans offered their answer to high energy prices with chants of “Drill, baby, drill!” during the 2008 presidential campaign.
Four years later, we have the response from Democrats who don’t want to drill, but who don’t want to take the heat for high gasoline prices, either. “Study, baby, study!” is their temporary slogan, because when you want to kill something without taking the political blame for killing it, you study it to death.
So it was that President Obama decided a year ago that his administration needed more time to study the Keystone XL crude oil pipeline. When Congress pushed for an answer, the administration rejected the project this year, only to have the president coyly imply that the sponsors can come back later – after the election – and try again. At which point, we have good reason to assume, he will kill it again if he is re-elected.
And so it is that New York Gov. Andrew Cuomo has ordered up another round of studies and rulemaking before permitting hydraulic fracturing for natural gas development upstate.
After nearly four years of review by state regulators, hydraulic fracturing – or “fracking” – was widely presumed to be nearing approval in the Empire State. But now Cuomo, a famously hands-on governor who micromanages a sprawling bureaucracy, has begun the regulatory process over. Not only will the new study take time, but regulatory steps that have already been completed, such as public hearings, will need to be repeated. This looks a lot like an attempt to kill New York gas development by studying it to death, despite Cuomo’s denials.
As always, it is important to watch what politicians do and to greatly discount what they say. Cuomo is doing is exactly what opponents of fracking in New York want him to do: sending the industry elsewhere, to friendlier regulatory climes such as those in Pennsylvania, Ohio and Texas. New York won’t ban the practice, but it will make practitioners jump a million hoops and, once they do, jump them again.
Cuomo likes to occupy the political middle ground. He has gone out of his way to cultivate the perception that he and his state are friendly to business and, more broadly, to property rights. But when push comes to shove, he is still a New York Democrat with ambitions for national office. The environmental movement is a core constituency of his party nationally, and especially so in New York.
Not in the parts of New York where fracking would occur, though. Environmentalists tend to live in expensive places like Manhattan, Long Island and Westchester, where government agencies and non-profits are often based, and where foundations are readily available for fundraising purposes. Gas-bearing shale formations exist hundreds of miles away, far below the soil of upstate counties that saw their best days, economically, a century or more ago during the Industrial Revolution. Nowadays, those communities struggle to keep their young people, and landowners there struggle to pay the taxes on land that is not good for very much beyond feeding dairy cows, a business that still exists at all largely thanks to federal price supports.
Scott Kurkoski, the lead lawyer for the Joint Landowners Coalition of New York, a pro-fracking group, told The New York Times that some landowners who planned to lease out their land for fracking face foreclosure as a result of Cuomo’s decision to delay. “I don’t think the governor cares about the plight of the upstate New York landowners,” he said.
What questions did years of study, rounds of public hearings and 80,000 public comments leave unanswered? I manage some oil and gas investments for clients, in which fracking has been used safely for years. I know that there is no dearth of real world examples for experts to examine, as they presumably have already. What remaining questions have not been answered by years of actual in-the-field use of fracking to extract gas?
Not many, except this one: How can Cuomo ever win a Democratic primary unless he does everything he can to block fracking?
A lot of people will love Cuomo’s decision, as well as what it foreshadows for fracking’s national future if Obama, who is much less a natural centrist than Cuomo, is re-elected. Fracking’s opponents will obviously be cheered. So will the largely overlapping group of people who think we should forego our vast natural gas reserves entirely and rely on grossly inadequate “green” substitutes like solar and wind power. (Oddly, a lot of the same people end up opposing things like wind farms and transmission lines to carry that power to people who could use it.) Landowners and politicians in neighboring states that, like New York, hope to take advantage of proximity to big East Coast gas markets when they develop their reserves – providing the federal government does not ultimately interfere in what is, right now, mainly a state-dominated process – will also be thrilled.
But the biggest fans will be other countries that are big natural gas producers. These are countries like Russia and Iran, where gas and oil revenues fund regimes that press an iron thumb on their own populations and, in Iran’s case, make a policy of exporting mayhem along with their hydrocarbons. Shale gas deposits in regions like North America and Western Europe are a huge threat to those regimes. However, if we choose to leave those deposits alone, these regimes can continue to milk their underground cash cow.
They will be delighted to have Cuomo’s New York study this topic again and again.