Even-numbered years in October are usually dominated by three things: Football, Halloween and the endless barrage of political advertisements.
Hydraulic fracturing is making an appearance on ballot sheets in a handful of states this fall. And, based on the rising scrutiny of the completion technique, it certainly won’t be the only time fracing will go to a vote. Interestingly, candidates for office in states like Colorado and Pennsylvania all agree on boosting oil and gas development to reduce the United States’ reliance on foreign imports. Certain communities, however, still have dissenting opinions.
Listed below is an overview of fracing battleground states in 2014:
Texas: Yes, Texas. The town of Denton, located just north of Dallas/Fort Worth in the Barnett Shale, is voting on a fracing ban. Approximately 270 wells are within the city limits – some of which are too close to housing developments, say residents. Setbacks were enforced in recent years but the anti-frac campaign has picked up steam in 2014 due to companies that, according to some residents, have violated drilling ordinances. As of last week, supporters of the ban had actually outspent the pro-fracers in the arms race for advertising and publicity.
According to a study financed by the Fort Worth Chamber of Commerce, a fracing ban would cost more than 2,000 jobs and $251.4 million in economic activity over the next decade. Other repercussions include the loss of roughly $9.7 million for Denton’s tax revenues and school districts.
California: Three separate towns are voting on fracing bans next month. Governor Jerry Brown, a Democrat, has publicly supported the practice, much to the chagrin of politicians within his own party and the progressive stance of California. Brown and is currently running for his fourth term as California’s chief executive.
Moratoriums on fracing have been debated for the last few years but never materialized, and now communities are pushing for hard bans. Now the counties of Santa Barbara, Mendocino and San Benito are placing fracing’s future in the hands of the public next week. San Benito has just 26 active wells but residents believe they are beating E&Ps to the punch. Santa Barbara is a much more active region, and oil and gas producers have poured in more than $7 million to hold off the initiatives.
Santa Cruz and Los Angeles counties have already passed measures to ban fracing. A study on producing California’s Monterrey Shale estimated that, through 2030, development would create a midpoint of 1.6 million jobs and provide roughly $14.5 billion in tax revenue to the state. California is the most indebted state in the nation and accounts for 15% of the United States’ total debt.
Ohio: This area of the growing Utica Shale has four communities voting on fracing bans. Athens, Kent, Gate Mills and Youngstown will all take the matter to the booths in what is being called a Community Bill of Rights. Youngstown has already shot down anti-fracing bills three times, but the group opposing the practice has managed to create attempt #4. Production of the Utica Shale in Ohio has more than doubled since 2012 and created 5,700 jobs in 2013 alone. Youngstown’s once-high unemployment rate has been cut in half since 2010.
Settled… For Now
Colorado: The Centennial State avoided voting on fracing due to a last-minute compromise between Governor John Hickenlooper and Senator Jared Polis, both of whom are Democrats. Instead of forging ahead with what had the makings of a bitter, hotly contested debate, the two sides forged a 21-person task force to establish a medium. Both Hickenlooper and Polis agreed to drop various measures and lawsuits against the other side as terms of the agreement. It’s worth noting that two Colorado judges have struck down three fracing bans since July.
New York: Although the massive Marcellus and Utica shales lie beneath their feet, awaiting a simple thumbs up for a massive economic development infusion, New Yorkers have displayed a rather negative attitude on oil and gas development in the state. A fracing moratorium was imposed in 2008, claiming more research needed to be conducted before fracing permits would be issued. In six years, nothing has changed. Landowners by the thousands, attempting to benefit from royalties, filed unsuccessful lawsuits against the state over the summer. Meanwhile, neighboring Pennsylvania is generating billions from hydrocarbon taxes. Larry Kudlow of CNBC compared the economic differences between the two states to East and West Berlin in an opinion piece last month.
Next to Follow?
Illinois: This situation appears to be a more muted version of New York.
Homeowners in southern Illinois are showing interest for hydrocarbon development but the Illinois Department of Natural Resources has issued no permits to date due to its uncertainty of fracing’s effects. A joint committee, formed in June 2013, has an imposed deadline of November 15 to either approve its drafted regulations for fracing development or scrap progress and start over. A court order is the only existing path to commencing fracing in the state, said a government representative. Residents say the need for economic development in the area is “desperate,” considering the median annual income is $26,000 per person. Compare this to North Dakota, an oil and gas producing state that has the lowest unemployment rate in the nation and a median income of $31,844.
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