Opinion: Will History Repeat Itself? Lessons from Coal in WV

American philosopher George Santayana wrote “Those who cannot remember the past are condemned to repeat it.” in his Reason in Common Sense, The Life of Reason, Vol.1.   As the shale gas industry roars to life in West Virginia, it is perhaps a valuable exercise to review the history related to our major extractive industry, King Coal, and apply the lessons from that experience to this new extractive industry.  We West Virginians are, after all, experienced, and one of my favorite expressions is “Experience is what you get when you don’t get what you want.”

At the public hearing yesterday at the Capitol, advocates for protective laws significantly outnumbered those who spoke in favor of allowing the Marcellus shale gas industry to continue to operate in a regulatory vacuum.   Those opposed to protective laws argued that the industry brings in jobs and economic benefits to the state.

“Last year, our industry paid $200 million in state taxes and created 35,000 high-paying jobs. Marcellus Shale drilling will create 7,000 new jobs and $300 million in salaries,” said Mike McCown, president of the Independent Oil and Gas Association of West Virginia.

Sean O’Leary, from the West Virginia Center on Budget and Policy countered with “Today, 10 counties in the state generate 62 percent of the gas we produce. They have a higher rate of poverty than the other [45] counties.”

O’Leary has a good point.  Let’s harken to the experience we have had with the coal industry and jobs.  It can be noted that many of the unhealthiest counties in the state are also large coal producers.    The top ten coal producing counties have an average household income of $33,198 versus $37,528 for the state of WV and $52,029 for the entire United States.

History shows that the coal industry generated many hidden costs in terms of illness, death, and environmental tolls which have been subsidized, and will continue to be subsidized, by West Virginians and society at large.  A study conducted by the Harvard Medical School announced on February 16, 2011 analyzes and tallies the full cost of coal, following its life cycle from exploration, through transportation, processing, and burning to estimate that coal is costing the U.S. one-third to over one-half a trillion dollars annually.  “The public is unfairly paying for the impacts of coal use,” says Dr. Paul Epstein, the lead author of the report and associate director of the Center for Health and the Global Environment at Harvard Medical School.  “Accounting for these ‘hidden costs’ doubles to triples the price of electricity from coal per kWh, making wind, solar, and other renewable very economically competitive. Policymakers need to evaluate current energy options with these types of impacts in mind. Our reliance on fossil fuels is proving costly for society, negatively impacting our wallets and our quality of life.”

This study echoes one of the conclusions of a January 2010 report issued by Morgantown consulting group Downstream Strategies and authored by Rory McIlmoil and Evan Hansen.  McIlmoil, the lead author of the report entitled The Decline of Central Appalachian Coal and the Need for Economic Diversification, said the industry does provide substantial benefits to the state but simultaneously imposes massive costs that were evident in the fiscal 2009 budget.  “These are costs that, lacking a change in state policy, will be paid by the citizens of West Virginia for decades to come,” he added.  Given all the plusses and minuses, the report said the net cost to the state in fiscal 2009 came to $97.5 million.

Now we have another extractive industry tapping out the valuable natural resources of our state and furthermore, demanding to do so without any regulation or oversight.  The federal Environmental Protection Agency is in the course of preparing a review of the hydraulic fracturing industry which is scheduled for completion and release in 2012.  New York has implemented a moratorium on new hydrofracking permits to allow time to study the impacts.  Pennsylvania has had 1600 hydrofracking violations between Jan. 2008 and August 2010, of which 1000 were  likely to cause environmental damage.   Meanwhile West Virginia led the nation in the number of gas drilling permits by issuing more than 2800 permits between 2002 and 2008 despite the fact that it has an inadequate inspection force (18 inspectors) to oversee the 50,000 wells, vertical and horizontal, already in existence.

The gas isn’t going anywhere until it’s extracted.  Is it prudent to embrace with open arms an industry which is employing relatively new technology without taking the time to fully assess the impacts?  I recently heard the analogy made that coal is one needle stuck in our arm and that we need to be careful that natural gas, also a fossil fuel, doesn’t become a needle in our other arm.  Recent findings show that natural gas isn’t as clean as we originally thought (see FrackCheck, Jan. 12). When the environmental impacts of hydrofracking are fully accounted for and assessed in relation to climate change, will gas still be described as a transition fuel to renewables?  How much will it cost us in health impacts which are inexorably linked to environmental impacts?

Based upon our state history with coal, any new extractive industry should be viewed with a careful eye toward hidden costs. It would be the wise choice for West Virginia to institute a moratorium on new drilling permits until a) the WV Legislature passes regulations aimed at minimizing impacts, b) the WVDEP Office of Oil and Gas is expanded to the capacity needed to adequately do the job of inspection and enforcement, and c) the EPA report is released in 2012.   Otherwise, we are, very likely, condemned to repeat our mistakes.  And gain even more “experience”.

Tagged as: climate change, coal, drilling, emissions, environment, epa, fracking, global warming, hydraulic fracturing, hydrofracking, marcellus shale, methane, natural gas, transition fuel