Friday, October 14, 2011

Rick Parry Is A Gas Bag

I expected Rick Parry to use some stock geographic stereotypes and plug the energy economy in such a way that would help spur migration to Pittsburgh. He did not disappoint:

And right here in Penn­syl­va­nia, and across the state line in West Vir­ginia and Ohio, we will tap the full poten­tial of the Mar­cel­lus Shale and cre­ate another 250, 000 jobs by get­ting the EPA out of the way. While Mar­cel­lus shale is today’s oppor­tu­nity, the deeper Utica shale for­ma­tions offer equally vast poten­tial with more jobs over the hori­zon for Penn­syl­va­nia and its neighbors.

The ben­e­fits of the boom in Amer­i­can nat­ural gas pro­duc­tion are also demon­strated in man­u­fac­tur­ing and pro­duc­tion. We see that right here at U.S. Steel’s Mon Val­ley Works Plant that employs more than three thou­sand work­ers, many of whom make the steel prod­ucts other com­pa­nies use to develop the Mar­cel­lus Shale today.

The face of man­u­fac­tur­ing in indus­trial states has changed rapidly. Nat­ural gas explo­ration is a game-changer that can bring new oppor­tu­ni­ties to replace the ones that have been lost. Devel­op­ment of nat­ural gas will cre­ate jobs in the sup­ply chain and lead to lower energy costs for manufacturers.

West­ern Penn­syl­va­nia is known for pro­duc­ing great quar­ter­backs I want West­ern Penn­syl­va­nia to Quar­ter­back a new energy rev­o­lu­tion that cre­ates jobs all across America.

There is a lot of silliness in this passage. The biggest laugh at loud moment concerns the increase in shale gas production. Big government is standing in the way? Via Energy Burrito, the odd economics of shale gas extraction:

Wall Street experts say well economics motivate producers to keep drilling for gas even when prices have sifted into the mid-$3s/Mcf. Even at lower prices, analysts say operators still receive good rates of return from gas drilling in the Haynesville and Barnett, as well as other gas fields such as the Fayetteville Shale in Northwest Arkansas and the Marcellus Shale in Appalachia. The Marcellus especially is close to desirable Northeast US markets where premiums to the Gulf Coast Henry Hub price can be $0.50/Mcf or more, experts said.

But the lag in well completions isn't the full story on why output from gas plays continues to rise. Upstream companies that increasingly become expert at finding a play's "sweet spot" are another reason for increasing production, particularly in the Barnett Shale where activity persists a decade after the play became an industry hot spot, John Bookout, managing director of energy for big equity capital investor Kohlberg Kravis Roberts, said.

If there is a problem in the Marcellus it is too much production. We don't have to go into why the EPA doesn't matter. Parry does not appear to understand the domestic energy economy.

Next up are the mesofacts. The Steel City lives! We can thank game-changing shale gas for that. Where would Pittsburgh be without hydrofracking? The region would remain mired in the depression that started in the 1970s when all the jobs were exported to China, Mexico, Japan. Damn that NAFTA. Now damn the EPA for keeping the Rust Belt rusty.

Parry's speech is a time warp. I kept imagining the B-reel footage still associated with the Pittsburgh Steelers and blue collar football while reading the text. From the Cradle of Quarterbacks will come an energy revolution and a manufacturing renaissance. Steel is coming home.


Paul Wittibschlager said...

Agreed. Some of these politicians are nuts. I hear things like get rid of the EPA, FDA, SEC, social security. Where are the responsible politicians that truly lead?

SW PA will continue to benefit from government funding via NIH, DOE, DARPA, etc. So stick with the big guns of big gov that works. Because it does work - for the most part.

BrianTH said...

The good news is that the prevailing attitude in the state and region is "drill, but tax and regulate", not "drill, baby, drill".

The bad news is that it isn't clear our political institutions are functional enough to turn that prevailing attitude into actual policy.

But I do wonder--isn't anyone talking about eds and meds anymore? Or are we really and truly Energyburgh now? Which I suppose is a political issue as well.