Where Fracking Is a Curse

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Concerns about fracking, including in this oil field in the Southwestern Los Angeles neighborhood of Baldwin Hills, triggered the state to pass a law regulating the practice last month.
National Journal
Patrick Reis
Oct. 30, 2013, 3:58 p.m.

Frack­ing has been a boon to the na­tion­al eco­nomy, but the na­tion­al eco­nomy doesn’t buy gro­cer­ies.

Gro­cery bills, just like pay­ing rent or mak­ing payroll, fall to in­di­vidu­al fam­il­ies and busi­nesses, just as pav­ing streets and build­ing schools falls to loc­al com­munit­ies. And while frack­ing’s nat­ur­al-gas boom has left some people — and some com­munit­ies — flush with the cash they need to pay their bills, for oth­ers frack­ing has made life all the more dif­fi­cult.

Such is the case in east­ern Ken­tucky, a hard­scrabble swath of coal coun­try that has long teetered on the brink of des­ti­tu­tion. Now, an in­flux of cheap nat­ur­al gas, com­bined with an ava­lanche of new reg­u­la­tions from Wash­ing­ton, is threat­en­ing to send it over the edge.

Ken­tucky is the third-largest coal-pro­du­cing state in the na­tion, trail­ing only Wyom­ing and West Vir­gin­ia, but the in­dustry has fallen on hard times in re­cent dec­ades. Twenty years ago, Ken­tucky’s an­nu­al coal out­put totaled more than 150 mil­lion short tons. By 2011, the last year for which the fed­er­al En­ergy In­form­a­tion Ad­min­is­tra­tion had fi­nal data, that total had fallen by a third.

A strug­gling coal in­dustry is not unique to Ken­tucky; pro­duc­tion totals have leveled off across much of Ap­palachia.

In oth­er Ap­palachi­an states, however, coal’s struggles have been off­set by a bur­geon­ing nat­ur­al-gas in­dustry, where new frack­ing tech­no­lo­gies have al­lowed gas drillers to de­vel­op gas out of the Mar­cel­lus Shale form­a­tion. In neigh­bor­ing West Vir­gin­ia, for ex­ample, gas pro­duc­tion is rising so quickly that state of­fi­cials are hop­ing to use the res­ult­ing tax rev­en­ue to pull their state out of its dire poverty.

But through a cruel con­flu­ence of geo­logy and geo­graphy, the shale boom is likely to leave Ken­tucky be­hind.

The Mar­cel­lus form­a­tion stretches across West Vir­gin­ia, but — as if by design — it makes a cook­ie-cut­ter neat stop at the Bluegrass State’s bor­der. Con­sequently, West Vir­gin­ia is pro­du­cing four times as much gas as Ken­tucky, and there is little evid­ence that Ken­tucky will catch up.

As of 2011, Ken­tucky had 41 bil­lion cu­bic feet in proven shale gas re­serves, which sounds prom­ising un­til one con­siders that West Vir­gin­ia is sit­ting on more than 6 tril­lion.

Un­able to change their geo­logy, Ken­tucky’s state and coal in­dustry of­fi­cials have trained their fo­cus on coal’s oth­er ma­jor chal­lenge: the Obama ad­min­is­tra­tion.

In the pres­id­ent’s push to green the na­tion’s en­ergy sec­tor, coal has of­ten been on the re­ceiv­ing end of some of the toughest reg­u­la­tions. Shortly after tak­ing of­fice in 2009, Pres­id­ent Obama and then-En­vir­on­ment­al Pro­tec­tion Agency Ad­min­is­trat­or Lisa Jack­son im­posed tough­er stand­ards on moun­tain­top re­mov­al and oth­er sur­face coal min­ing. Up­com­ing EPA green­house-gas reg­u­la­tions for power plants also threaten the in­dustry, as coal is among the most car­bon-in­tens­ive power sources.

Those reg­u­la­tions, more than the frack­ing boom, are threat­en­ing coal, in­dustry ad­voc­ates say.

“Our in­dustry is fine to com­pete against nat­ur­al gas. We have throughout our ex­ist­ence,” said Bill Bis­sett, pres­id­ent of the Ken­tucky Coal As­so­ci­ation. Bis­sett said coal has more long-term price sta­bil­ity than nat­ur­al gas, and that it would do fine in a “fair play­ing field” free of ex­cess reg­u­la­tion.

And as for a comeback to raise east­ern Ken­tucky’s eco­nom­ic tides, “the first thing we have to do is find a mar­ket,” Bis­sett said. “A place [where] that coal we have in the ground in east­ern Ken­tucky can be sold.”

Such cus­tom­ers, however, are primar­ily coal-fired power plants, and those may soon be­come harder to come by, as old plants are re­tired and util­it­ies make de­cisions on what types of power to turn to next.

Coal has nev­er been the pret­ti­est of fossil fuels: It con­tains nasty com­pounds and pro­duces nasty by-products, and get­ting it out of the ground re­quires prac­tices that strain the en­vir­on­ment and miners alike. The fuel built its dom­in­ant role in the eco­nomy — it still pro­duces more elec­tri­city than any oth­er source — be­cause it has long been the cheapest.

Now, thanks in part to the de­creased pro­duc­tion costs of nat­ur­al gas, that cal­cu­lus may be chan­ging. The EIA pro­duces an in­dex of the cost-ef­fect­ive­ness of en­ergy from new power plants. Coal has long led that field, but in the agency’s latest pro­jec­tion, which sought to meas­ure which power source would be the most cost-ef­fect­ive for plants com­ing on­line in 2018, its ad­vant­age had been all but eroded by nat­ur­al gas.

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