Tuesday, June 11, 2013

June 11: Liars

Page one of the TandT has the headline "Report touts shale gas". It is a hymn of praise to shale gas prepared by (surprise, surprise) the New Brunswick Business Council. It is reported in great detail.
Of course, being the professional journalists that the TandT people are, they also include criticism of it. You'll find it toward the end of the report (where few people read). You'll also find that it chose selections that say nothing. As a public service then, here is the whole response to today's report on the praise the Lord glories of shale gas. This is the real report that the TandT deliberately garbled.
For Immediate Release                        PRESS RELEASE                                       June 10, 2013

First Response to NB Business Council Report on Shale Gas

Fredericton NB - The communications committee for the alliance of community groups opposed to shale gas asked Jim Emberger for a first response to the NB Business Council Report on Shale Gas. 


Jim Emberger, a resident of Taymouth NB and a retired software developer says: “The most striking point is that this report proves that if you pay a consulting firm they will produce a positive report for you regardless of how weak and conditional the conclusions are.” “ Below are my first comments to the questionnaire that was used, the supporting data they used, the conclusions that were drawn, and their review of current regulations and their lack of assessment of costs incurred by road damage”  Mr. Emberger continues.


On the questionnaire and subsequent conclusions:

Right off the bat, there was a response rate on their questionnaire of 16% and they calculate the report has an 11% margin of error on those few points where the report can even make a comment, because of the small response rate.  I’m not a pollster or statistician, but I wouldn’t want to bet the farm on that foundation.


On the supporting data:

The report uses some outdated data to support some of its statements.  On the outlook of unproven technically recoverable gas, it cites a 2010 EIA report showing 1,931 trillion cubic feet in North America – the source of the famous 100 years of natural gas comment.  However, the EIA recently revised that figure downward by 42% in the US, meaning at best a 24-year supply.  I don’t have figures on Canada itself, but it is undoubtedly similar. The revisions mirror the actual production figures recently calculated for 65,000 shale wells by Canadian energy analyst David Hughes (Drill, Baby, Drill Can Unconventional Fuels Usher in a New Era of Energy Abundance – David Hughes, 2/13)


The real life accounting of wells by David Hughes, (also Deborah Rogers and Art Berman and others) show that existing shale plays peak in about 4 years on average, with individual wells depleting by 79% to 95% in three years.  Entire plays deplete at an annual average of 30% to 50%.  So despite drilling thousands of new wells, terminal decline starts rather quickly and it is inconceivable that shale plays will last anywhere near the 25- 60 years mentioned in the report.   Remember that shale gas is barely a decade old, and that the figures used for longevity are based on conventional gas wells.  Virtually all plays older than 5 years are in decline.


The report also cites consulting firm IHS CERA for predictions about how much royalty money will flow by the year 2030.  Unfortunately, IHS CERA has one of the worst records of long term predictions anywhere.  It’s long term predictions for oil from their reports of the early 2000’s stated that oil production would soar to millions of more barrels a day, and that we would now be paying between $30 and $40 a barrel.  Instead, the price has been $100 a barrel or more for many years, and supply has not increased since 2005.


The use of GDP as a measure of benefits is flawed as things like road repair, environmental clean-up and legal action would all increase GDP, while actually illustrating negative consequences for NB citizens.

The Conclusions:

The figures for Full time equivalent jobs (FTE) per well based on a One Well model can be misinterpreted.  One cannot simply take the figure of 21.5 FTE jobs per well and multiply it by the number of wells to get how many people will be employed. Most jobs are portable, meaning that a few drilling crews go from well to well, thus not increasing the number of employees, only the FTE statistics.  Since they did not explain the one-well model in the paper, I may have misinterpreted it, but it is something that the press should question.


The report also supports our contention that except for a few geologist type jobs, most jobs for NB’ers would be truck driving and security type jobs.


The conclusions note that gas companies have many existing relationships with existing suppliers and trained employees.  This confirms what we have been saying about the benefits to NB.


Regulatory review:

They compared NB to BC, Alberta, Colorado and Arkansas.  First, BC and Alberta’s gas plays are in the boondocks generally – many miles from anywhere.  Alberta, as noted by the report, is new to shale and is only now addressing new regulations for it. For example, they do not currently require testing of water wells for a frack.


Arkansas, one of the first shale plays, has been playing catch-up, as production started with few regs.  Correspondents from there have told us to stop shale before it starts, because regulations always lag damages.


Colorado – the only long-term health study from the Univ. of Colorado showed the states regs to be inadequate to protecting public health. As extraction moves into populated areas, friction between local governments and state government is increasing.


Geologically, none of these areas resemble NB.  Pennsylvania is probably the closest analogue, but was not considered.  The main point continues to be that all those areas continue to have widespread problems despite a variety of regs.


Road repair paid for by companies?

It is interesting to note that the report claims the cost estimate for road damage cannot be determined yet, but that the government regulations “contemplate” that companies will be responsible for these costs.  We haven’t found any direct reference to this in the new government rules.  Furthermore, shale oil and gas income from royalties have been shown in other jurisdictions to be way less than the costs incurred by accompanying road damage. 

For example, since 2009, Arkansas has taken in approximately $182M in royalties but estimates its road damage from drilling to be $450M.   This is not surprising, as it takes over 1,000 loaded trucks to bring one gas well into production, plus 350 loaded trucks per year for maintenance, and another 1,000 loaded trucks for each additional frack. 
-There is yet more pimping from the Tand T at the top of page 1. This time it's for the events centre, This is a bizarre report. it gives enthusiastic reports of how Moncton will become a boom town when it gets its new hockey rink. But there is not a word of what this is all based on. Where are the studies? Where are the figures? This "report" is nothing more than painting pictures on clouds.  Why on earth would any newspaper use this for a lead story? (Well, we know why.)
In NewsToday, the TandT has at last noticed the government spying scandal in the US in which the government has been massiverly spying on just about everybody, and collecting information - which could and will be used to deal with political enemies and anybody who criticizes the wrong people.  Peter MacKay, our defence minister, is assuring us that this is not being applied to Canadians. Mr. MacKay is full of it. Almost all Canadian communications systems are routed through US jurisdictions.
The editorial page is back to a topic the editorial writer can (almost) understand - the question of whether our cars need one licence plate or two. Way to come to grips with the big questions of the day....
At that, he beats staffwriter Alan Cochrane on op ed who has a  remarkably unintelligent column on how hard it is to be a dad. Well, at least it wasn't about motorcycles going vroom, vroom.
Norbert is still on yesterday's rant - and it's as ignorant as yesterday's.
He begins by heaping blame for our our debt on the government. Come off it, Norbert. Even a person of your barely flickering perception must know that our politicians do not run this province. Irving  delcared himself a member of the government in Norbert's very own paper - on a page facing  Norbert's column. He then appointed the official advisors to the Minister of Finance who is, by conincidence, a former irving employee.
Alward and the boys had nothing to do with our budgets. It was Irving.
I suspect the same is true of a very suspicious looking plan to set educational targets for our schools. (There's a good laugh in there, though. Mr. Alward says he wants the schools to train students to be leaders. In the many years I taught, every school claimed to be training for leadership. But any teacher who tried to do any such thing would get stomped by parents, administrators, and school boards. The same is largely true of universities. They train obedient followers. And that's the way the Irvings of this world like it.)
In today's rant, Norbert takes out his bile on the poor and their sense of 'entitlement'. That's right. It's the poor who have caused the massive debt of our governments, and the great crash of western economies. Make them iggerant, loafin' poor pay.
In the first place, Norbert, we are all of us 'entitled' to a share of what this province and this country produce.
In the second place, the big spending and the big raking in of wealth and of govrnment favours is not being done by the poor. You want to see entitlement? You want to see welfarism? You want to see greed? You want to see indifference to the damage these are causing in this province?
Then have the guts to check out your boss and his corporate friends. Norbert says so in his own column  (read the second to last paragraph). But he doesn't have to wit to understand what he wrote.
Our economies are in trouble because the great corporations have been looting us the same way they have looted third-world countries for generations.  We are being looted by tax breaks, by hidden profits, by massive corruption, all helped along by "free" trade.
Norbert - you know nothing about economics, nothing about government, and damn little about people. And you're a cheap stoolie for big business. Go away.
Alec Bruce begins well in his column on the reasons for the anger in New Brunswick - mostly, but not entirely, over shale gas. But it dwindles away from any useful conclusion in its final paragraph.
Yes, there is a lot of rage in New Brunswick. But there's no mystery about what's causing it. The economic bosses of this province are ramming a project down our throats. They are doing it with the full cooperation of lying newspapers.  This is a province that has been bullied and looted throughout its history. And many people have become angry.
Gee. go figure....
A reader sent me the following site. It's the story the TandT isn't going to tell  you about the very brave young man who blew the whistle on how the US is spying on its own citizens. What will happen to him? Well, my guess is that he will be assassinated (and the body will disappear.)



  1. Hi Graeme, saw this quote by Chomsky today and thought of you...:)
    Thought you would like it !

    "Well, these are major phenomena of modern life-but where do you go to study them in the universities or the academic profession? That’s a very interesting question. You don’t go to the economics department, because that’s not what they look at: the real hot-shot economics departments are interested in abstract models of how a pure free-enterprise economy works you know, generalizations to ten-dimensional space of some nonexistent free-market system. You don’t go to the political science department, because they’re concerned with electoral statistics, and voting patterns, and micro-bureaucracy-like the way one government bureaucrat talks to another in some detailed air. You don’t go to the anthropology department, because they’re studying hill tribesmen in New Guinea. You don’t go to the sociology department, because they’re studying crime in the ghettos. In fact, you don’t go anywhere there isn't any field that deals with these topics. There’s no journal that deals with them. In fact, there is no academic profession that is concerned with the central problems of modern society. Now, you can go to the business school, and there they’ll talk about them because those people are in the real world. But not in the academic departments: nobody there is going to tell you what’s really going on in the world".

    Understanding Power - Noam Chomsky

  2. My experience is that Chomsky is being too kind to the universities.