Jason Barton

Professional Information and Energy News

Archive for the ‘Environmental Externalities’ tag

Fracking in Colorado

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Ugh, this is such a tough issue.

On one hand, there are substantial benefits from the oil and gas brought out by this process, as well as the jobs and revenues that come with them. On the other, we need the long term vision that will protect human and environmental health and the discipline to ensure both of them.

Particularly in places like Weld County, which is Colorado’s biggest agricultural producer and home to many proposed and existing fracking sites, we see the tangible positives and negatives of fracking, and are hearing from citizens who fall on both the pro- and anti-fracking sides of the debate. In agricultural communities the health of soil and water is important not just for the immediate implications to human health, but also for the long term implications for the health and safety of the food we grow, and the livelihoods of the people who depend on selling that food.

I’ve said on this site before that it is the job of government to internalize the externalities, to create a regulatory framework that ensures industry activities do not have negative impacts on the communities where they operate. This framework must include proactive measures motivating companies to guard against problems, as well as reactive measures that force organizations to pay those external costs of clean up and damages if there are  problems.

The important issue raised in the article below is that companies have worked to avoid making the payments even when they are found to be at fault, causing local citizens to question the statewide framework and seek to implement policies on local levels.

The upsides are that Colorado citizens are learning the details of these issues, making our voices heard from different perspectives, and forcing government and corporations to listen and take action. Keep at it, y’all.

By Bruce Finley
The Denver Post

Denver metro cities digging in before oil and gas drills do

COMMERCE CITY — Even in this bastion of industry that hosts a refinery, residents are imploring their elected leaders to protect them from oil and gas drilling planned within city limits.

“This is where we live, where we made our investments of our lives. It’s not about money,” Kristi Douglas said Thursday during a working-group forum, the latest of dozens of city and county meetings in Front Range communities.

[…]

Colorado’s State Land Board hit the brakes on a controversial metro-Denver drilling project after learning that ConocoPhillips is embroiled in a lawsuit for failing to pay the state $152 million for cleanup of leaky underground gas tanks.

[…]

“The state has the experience and the infrastructure to effectively and responsibly regulate oil and gas development,” Colorado Department of Natural Resources spokesman Todd Hartman said. “A healthy industry is important to our state’s economy, and a mosaic of regulatory approaches across cities and counties is not conducive to clear and predictable rules that mark efficient and effective government.”

[…]

But the board delayed a decision after it learned another state agency is suing Conoco in a dispute over past cleanups of contamination at 354 sites of leaking underground gas tanks.
[…]
“We need to get the state General Assembly involved. We need to get some things, like setbacks, addressed,” Benson said. “Yes, we welcome industry here. But you’ve got to protect the health and safety of your people.”
Read the complete article here.

UK Forcing Oil Companies to Internalize their Externalities

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It looks like the UK will force energy companies wishing to drill for oil off its coasts to be responsible for potential indirect costs of their operations. Such a strategy, which economists would call internalizing their external costs, is what I and many others consider the most efficient way to preserve both economic and environmental health.

I think this is great news.

  • JANUARY 6, 2011, 5:33 A.M. ET

UPDATE: UK Lawmakers Question Deep Water Drilling Safety

   By James Herron
   Of DOW JONES NEWSWIRES

LONDON (Dow Jones)–U.K. lawmakers Thursday raised serious doubts about whether the oil industry is prepared to tackle an oil spill similar to the Deepwater Horizon blowout should it occur in the North Sea, but they stopped short of recommending a moratorium on drilling similar to that imposed in the U.S.

Instead, the U.K. Parliament’s Energy and Climate Change Committee called on the government and regulators to compel companies to improve their spill response plans, install extra failsafe equipment on rigs, and increase financial provisions for spill costs.

Major changes to drilling regulations could have a significant impact on the U.K. because its main deep water area, west of the Shetland Islands, is thought to be home to the bulk of the country’s undeveloped oil and gas resources. For this reason, “a moratorium on deep water drilling off the west coast of Shetland would undermine the U.K.’s energy security and isn’t necessary,” said Tim Yeo, the Conservative member of Parliament who is chair of the committee.

Read the entire article here.

Battered BP Thinks Twice About Arctic Oil

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Risk management. Oil drilling. The public. For a business to perceive risk, it is largely measuring costs. There are very few direct costs with environmental damage, so the burden lies with us as consumers and voters to put pressure on firms to make decisions like this one by BP not to drill in areas that pose environmental risks.

When we stay informed of these events (with the help of a diligent and free media) and hold companies accountable to fix their mistakes, or, even better, motivate them to avoid committing them in the first place, we’re doing our job to ensure that a capitalist system functions properly.

Parmy Olson, 08.26.10, 08:05 AM EDT

A foray into environmentally sensitive Greenland must have looked like a bad idea.

LONDON — It’s been four months since the Deepwater Horizon drilling rig explosion that killed 11 people and caused the worst environmental catastrophe in United States history. So, how is BP approaching new opportunities to explore for oil? Probably with a lot of caution.

The oil giant confirmed Thursday that it would not bid for an oil exploration license in Greenland and refused to say whether the decision had been influenced by the deepwater well blowout in the Gulf of Mexico. BP had “decided not to proceed with a bid” during a licensing round, though it had been involved at an early stage, a spokesman told the Associated Press.

Read the entire article here.