Deborah Rogers: The economics of fracking

Deborah Rogers – Founder of EnergyPolicyForum and critic of Fracking

Deborah Rogers is an expert in the economics of shale gas and an advisor to the Obama administration.  Speaking at the 2030 Vision conference in Carrick-on-Shannon this month, she made it clear that the shale gas industry in the US is now in deep trouble.  The basic reason for this is that initially it was assumed that shale gas wells would behave much like conventional wells (tapping into an underground reservoir of gas) with a lifetime of 20 years.  All production and cash projections were based on this assumption, which turned out to be hopelessly optimistic.  In fact, the average productive shale gas well has a lifetime of 3 – 5 years only.

Deborah Rogers at 2030 Vision conferenceBased on those initial projections, everyone jumped on the bandwagon and some leasing companies made fortunes. Drilling companies went into huge debt, encouraged by investment banks that made millions in fees.  Initially easily accessible gas was produced.  However, the wells started drying up far sooner than anticipated and the companies continued to drill more and more wells to meet their production targets, motivated by the cost of loans taken out.  They cannot stop, resulting in a glut of gas and the price has plummeted. The selling price of gas at present is roughly half the cost of production, so all shale gas companies are losing money.

“The whole thing doesn’t make sense”, said Ms Rogers.  “Many of the big players have written down their assets, including BP, Encana and Chesapeake. The Marcellus shale gas reserve estimates are down by 80%.  The recovery efficiency for the five major shale gas plays averages 6.5% compared with 75–80% for conventional gas fields.  The biggest companies, e.g. Exxon-Mobil, are now selling their assets.  Is the shale gas bubble soon going to deflate?”

“In the meantime, the drilling frenzy continues with collateral damage in the form of air pollution, ground water depletion, road damages and potential aquifer ruination”, she continued.  “This is immense and will only continue to rise as more and more wells need to be drilled. None of these impacts are at present covered financially by the gas companies – in other words, profits are to be privatized while costs and negative impacts will be borne by the people. “

“2030 Vision – The Future of Energy in Ireland” conference was organised by Good Energies Alliance Ireland (GEAI) to look at the choices of energy sources that Ireland has to make in the future.  Speakers included Eamon Ryan, Leader of the Green Party, who gave an inspirational talk on the potential of renewable energy sources, in particular wind energy, to substitute for hydrocarbons.  The conference was part-funded by Leitrim County Council through the Agenda 21 programme.

Link to Deborah Roger’s presentation at 2030 Vision Conference: http://bit.ly/GJjt2Q

Profile of Deborah Rogers

Deb RogersDeborah Rogers lives in Texas, US. She has worked as a financial consultant for several major Wall Street firms, including Merrill Lynch and Smith Barney. Ms Rogers was appointed as a primary member to the U.S. Extractive Industries Transparency Initiative (USEITI), an advisory committee within the U.S. Department of Interior, in 2013 for a three year term. In May 2013, she was invited to testify before the Senate Committee on Energy and Natural Resources. She was appointed in 2011 by the Texas Commission on Environmental Quality (TCEQ) to a task force reviewing placement of air monitors in the Barnett Shale region in light of air quality concerns brought about by the natural gas operations in North Texas. In June of 2012, she was invited to speak in Rio de Janeiro at the International Society for Ecological Economics in conjunction with the United Nations Rio+20 world summit

Big crowd at Jessica Ernst presentation

Last Saturday night, 2nd March, Canadian scientist Jessica Ernst gave a presentation in Leitrim village. A big crowd, around 150-200 people warmly welcomed her, the talk ending by a standing ovation. Staying in Ireland and United Kingdom until 12th March, she has come from Rosebud (Alberta) in Canada to tell her story, her struggle against oil company Encana.P1030514web
She herself worked in the oil and gas industry for 30 years until this petroleum company shallow-fracked close to her house.
As well as contamination of Rosebud’s drinking water, air pollution, illnesses, flaring noise, traffic… Jessica told of the dreadful impacts on her community. Most of the people stay silent, too afraid to talk and sometimes are paid for their silence. Encana considers her a terrorist, and the Canadian government denies the facts: “Your water is the cleanest in the world, nothing is wrong, it’s brown because you use too much water”, she was told. Jessica chose to go down the legal route and is currently suing the Canadian authorities for unlawful activities related to hydraulic fracturing. Her victory would be the first in the world. The struggle is exhausting: “Canada has fracked the head off Lady Justice. That’s how bad fracking is!”, she declared.
Before her lecture, a National Meeting of groups and individuals campaigning against unconventional gas extraction took place in Leitrim community centre. People came from Dublin, Cork, Clare, Wexford, Sligo, Donegal and elsewhere. Representatives of Making a Real Difference – Ireland (M.A.R.D.I) were there as well. Everyone worked on common concerns such as a strategy plan, internal and external communication, shared ideas and planned next actions.
Jessica joined the meeting towards its end and emphasised the importance of writing letters to Government and local representatives on every issue of concern. “A hand-written letter is worth dozens of type-written letters that you just sign. They pay attention to all letters personally written. Send thousands from the campaign, make your voices heard. ” she said.
It was agreed that there must be a demand that Government removes EPA immunity from prosecution immediately.
Many groups, including Good Energies Alliance Ireland, had information stands and a flyer at the meeting. Following the meeting there was a short presentation on GEAI aims, actions and plans for 2013.
Programme of Jessica’s next talks:
  • Ennis: March 4th. Old Ground Hotel, Co. Clare. 8pm
  • Belfast: March 6th. Queens University, Peter Froggatt Center. 7pm
  • St. Annes: March 7th. United Reformed Church, St. Georges Road, Lancs 7pm
  • Balcombe: March 8th. Church of England Primary School, London Road, RH17 6HS – 8pm until 10pm.
  • Dublin: March 10th. Gresham Hotel, O connell Street Dublin, 11-6pm. Hosted by Richard Boyd Barrett TD & Chair of Save our Seafront with speakers from Norway, An Taisce, SIPTU, The Woodlands League and more. Full programme
  • Dublin: March 11th.
    NUI Maynouth, 1pm, (Hall E, NUIM Campus, bring lunch).
    Hosted by Friends of the Earth: Smock Alley Theatre 7-9 pm, Exchange Street Lower, Temple Bar, Dublin 2.
Jessica Ernst’ website: Ernst vs Encana.

(Pictures AG)

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