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Permanent trust funds: Funding economic change with fracking revenues

By Devashree Saha and Mark Muro - Brookings, April 19, 2016

The recent boom and bust of unconventional oil and gas development, or “fracking,” has reopened serious questions about resource management in many U.S. states. While the oil and gas boom generated revenue, jobs, and economic development, the recent bust has adversely impacted state budgets due to declining industry investments in exploration and production and job cuts.

The boom-bust cycle of unconventional oil and gas development highlights the need for strategic management by state governments of fracking-related revenues, not only to minimize the less desirable aspects of the boom-bust cycle but also to enhance long-term prosperity. States can address these challenges by imposing a reasonable severance (extraction) tax on their oil and gas industry and channeling a portion of the revenue into permanent trust funds. In doing so, states can convert volatile near-term revenues from unconventional oil and gas development into a longer-term and continuous source of investment funds for building sustainable and dynamic economies.

To that end, this report advances five elements of good fund governance and management that states should consider in the design and implementation of permanent trust funds:

  • Establish an effective governance framework
  • Define the fund’s revenue source, deposit, and withdrawal rules
  • Design the investment strategy
  • Seize the opportunity to invest fund earnings to economic transformation
  • Formulate explicit disclosure and transparency standards

Read the text (Link).

Well, if You Ask Me: California! Stop with the massive gas leak already!

By Dano T Bob - IWW Environmental Unionism Caucus, January 7, 2016

So, if you’ve been in a cave the last week, or on holidays time, or only follow corporate media (Washington Post did cover this), there is a massive gas leak going on in southern California right now that no one seems to know how to stop, especially the company responsible. Pretty bad, right? Yeah, really bad. Here’s the basic details:

Methane gas, a HUGE contributor to climate change as a Greenhouse Gas, is currently leaking from from a facility at Aliso Canyon(Orange County, below Los Angeles) at rate of 110,000 pounds per hour, all day everyday. Somewhere around 2,000 some odd homes have been evacuated thus far, and building moratorium has been proposed for the area near the leak. Residents are also gearing up to sue the hell out of the owners of the facility, the Southern California Gas Company(feel free to contact them).

I first learned of this leak (and I currently live in California!) on the day after Christmas via this super informative article from VICE, “Why Engineers Can’t Stop Los Angeles’ Enormous Methane Leak.” Cheery title and timing, eh?

This article does on to discuss how the EDF, Environmental Defense Fund, found out about the leak a week or so earlier via an infrared heat camera, calling it “one of the biggest leaks we’ve ever seen reported” and “absolutely uncontained.”

The leak originally sprung in mid-October (!) and currently “accounts for a quarter of the state’s entire methane emissions.” Another juicy tid bit from this read:

Methane, the main component of natural gas, is 25 times more potent than carbon dioxide when it comes to climate change impact. About one-fourth of the anthropogenic global warming we’re experiencing today is due to methane emissions, according to the Environmental Defense Fund. Leaks like the current one in California, it turns out, are a major contributor. In Pasadena, for instance, just 35 miles from the leak in Aliso, investigators found one leak for every four miles.”

It goes on to say,”So far, over 150 million pounds of methane have been released by the leak, which connects to an enormous underground containment system. Silva says that the cause of the leak is still unknown, but research by EDF has also revealed that more than 38 percent of the pipes in Southern California Gas Company’s territory are more than 50 years old, and 16 percent are made from corrosion- and leak-prone materials.”

Hoodwinked in the Hothouse

From the Introduction:

Desperate to avoid climate regulation that may affect profits, polluting corporations are working hand-in-hand with governments, presenting a dizzying array of false solutions that deepen inequalities in our societies. There is a clear agenda: Manage the climate crisis without compromising profits, the power structures or the economic system that got us here, even if that means exacerbating the problem. Wall Street financiers, the synthetic biology industry, “green” venture capitalists and a host of others are jumping on the “we care about the climate, too!” bandwagon.

These actors have reduced one of the clearest consequences of an unsustainable system into a mere technical problem that can be “efficiently” dealt with through market-based solutions. This market fundamentalism diverts attention away from the root causes of the problem, encouraging us to imagine a world with price tags on rivers, forests, biodiversity and communities’ territories, all in the name of “dealing with the climate crisis.” At the heart of all false solutions is an avoidance of the big picture: the root causes.

False solutions are constructed around the invisible scaffolding that maintains the dominant economic, cultural and political systems—the idea that economic growth is both desirable and inevitable; that progress means industrial development; that Western science and technology can solve any problem; that profits will motivate and the markets will innovate. Most of us in the Global North, whether sensitized to it or not, are participants and, at times, even take comfort in this world view. Sadly, many find it easier to imagine the end of the world than the end of a globalized economy built upon the unsteady legs of expanding empire, ecological erosion and exploitation of workers and communities.

We can take steps, large and small, to stop the climate crisis. What we cannot afford to do is go down the wrong road. Hoodwinked in the Hothouse is an easy and essential guide to navigating the landscape of false solutions—the cul-de-sacs on the route to a just and livable climate future.

--Gopal Dayaneni, Movement Generation: Justice and Ecology Project

PDF File

Fracking Frenzy: How the Fracking Industry is Threatening the Planet

By Robert Galbraith, Gin Armstrong, and Kevin Connor - Public Accountability Initiative, February 2015

The global development of ‘unconventional’ fossil fuels (UFF) such as shale gas has provoked much debate involving scientists,industry, political decision-makers, environmental groups and civil society. More than a decade of large- scale development in North America has left a legacy of environmental damage, primarily resulting from the use of high- volume horizontal hydraulic-fracturing (also known as ‘fracking’) to extract the unconventional oil and gas. Despite the controversy surrounding this technique, the numerous unknowns and uncertainties concerning its impacts and the growing number of questions about the economic benefits of this industry, oil and gas operators are eager to identify new opportunities and so are engaged in a battle to make frackingpublicly and socially acceptable worldwide.

Read the report (PDF).

2 Arrested in Lockdown at Dominion Cove Point LNG Contractor

By Seed Coalition - Seed Coalition; images by David Hardy, December 3, 2014

Two activists with We Are Cove Point locked themselves to the doors of the offices of IHI/Kiewit in Lusby, Maryland this morning. IHI/Kiewit is a joint venture that serves as the engineering, procurement, and construction contractor for the Dominion Cove Point LNG export terminal project. IHI E&C, a wholly-owned subsidiary of Tokyo-based company IHI Corporation, is headquartered in Houston, Texas. Kiewit is based in Omaha, Nebraska.

During the lockdown and extraction, other activists with We Are Cove Point held signs rejecting the project and IHI/Kiewit’s involvement. They attracted the attention of shoppers at stores located in the same strip mall and handed out several leaflets providing information about the project and the campaign against it.

Today’s action comes just a few days after seven people were arresting for blocking the entrance to a construction site in nearby Solomons, Maryland, where Dominion and IHI/Kiewit are building a pier to land equipment for the project too large to bring in by land. To date, twenty-two people have been arrested for protests in Solomons and Lusby. Earlier this year, fourteen people were arrested protesting at three courthouses across the state of Maryland. Their actions demonstrated the breadth of the opposition to Dominion’s terminal and highlighting the broad consequences the project will have if it is completed, included increased hydraulic fracturing for methane gas and the rapid construction of the dangerous infrastructure needed to transport it.

Fracking blast kills one Halliburton worker, injures 2 in Weld County

By Jesse Paul and Mark Jaffe - Denver Post, November 13, 2014

Disclaimer: The views expressed here are not the official position of the IWW (or even the IWW’s EUC) and do not necessarily represent the views of anyone but the author’s.

MEAD — One worker was killed and two were seriously injured Thursday, November 13 when a frozen, high-pressure water line ruptured at a Weld County oil well site.

The workers were trying to thaw the line when the accident occurred, officials said.

The Anadarko Petroleum Corp. well was being hydraulically fractured, or fracked, by the Halliburton Co., and the workers were Halliburton employees.

Anadarko said it was suspending all fracking operations in the area pending a review of the accident.

The area has been the scene of drilling since at least 1979, but this year Anadarko has sunk at least nine deep horizontal wells, according to state records.

Each of those wells has to be fracked by pumping a mixture of water, sand and trace chemicals into the well at high pressure to crack rock and release oil.

Thomas Sedlmayr, 48, was flown to Denver Health, and Grant Casey, 28, was taken by ambulance to the Medical Center of the Rockies in Loveland. The name of the dead worker had not been released.

Quintero zona de catástrofe

By René Cumplido - El Ciudadano, October 28, 2014

Disclaimer: The views expressed here are not the official position of the IWW (or even the IWW’s EUC) and do not necessarily represent the views of anyone but the author’s.

La gran mancha de petróleo derramado aún permanece en el fondo de la bahía de Quintero según el informe dado a conocer por las autoridades este fin de semana. Según el biólogo marino Hugo Poblete, del Movimiento de Pescadores Artesanales de Quintero, el nivel de PH en las aguas arroja una acidez de 2,7, lo que provoca la muerte de toda la flora y fauna del lugar.

Esto coincide con la última declaración de la Enap, propietaria del crudo, reconociendo que el derrame, hasta el momento, supera los 22 mil litros, una cifra diez veces mayor a la dada a conocer durante la semana pasada.

Entre el puerto de Ventanas y  la empresa Oxiquim, en una superficie de 1.800 metros de largo por cinco metros de ancho,  la playa quedó cubierta por petróleo crudo, el que lentamente, pese a los esfuerzos de los equipos de limpieza, comenzó a desplazarse a través de las corrientes por toda la bahía.

La mancha de petróleo aún es visible en el mar en una extensión de 25 kilómetros entre la península de Los Molles hasta cerca de Chachagua, sumando más de 20 playas y pequeños requeríos contaminados con el crudo. Al acercarse, por ejemplo, a playa Las Conchitas, a varios kilómetros del accidente, y aunque la empresa ya dio por concluidas las labores de limpieza, aún se observan restos de hidrocarburos en las algas de los requeríos.

Are Fracking Workers Being Poisoned on the Job?

By Michelle Chen - The Nation, November 10, 2014

Disclaimer: The views expressed here are not the official position of the IWW (or even the IWW’s EUC) and do not necessarily represent the views of anyone but the author’s.

Last week's Republican election victories will set the stage for more stagnation in Washington, but might also grease the skids for some of the most controversial energy ventures at ground zero in the climate change debate: the long-stalled Keystone XL Pipeline project, and the booming hydraulic fracturing, or "fracking," industry. But one thing that might put the brakes on the dirty fuel rush is the mounting research evidence linking oil and gas extraction to massive health risks for workers and communities.

A new study published in Environmental Health reveals air pollution data on major, in some cases previously underestimated, health risks from toxic contamination at gas production sites related to fracking. Air samples gathered around "unconventional oil and gas" sites by community-based environmental research teams contained unsafe levels of several volatile compounds that "exceeded federal guidelines under several operational circumstances," and that "Benzene, formaldehyde, and hydrogen sulfide were the most common compounds to exceed acute and other health-based risk levels."

This suggests fracking may bring risk of cancer, birth defects and long-term respiratory and cellular damage to local towns and farms. Building on other studies on drilling-related water contamination, the air pollution research may stoke growing opposition from communities near drilling sites, who must weigh the industry's promises of new investment and jobs against the potential cost to the human health.

The findings also raise questions about the safety of fracking-site workers, who may have far less legal recourse over potential health damage than do local homeowners. Many work contract jobs under harsh, isolated conditions, in a volatile industry where pressure to pump profits is high and labor protections weak.

Jobs! Money! Nope! Benefits of LNG exports grossly exaggerated

By Al Engler - Rabble.Ca, October 24, 2014

Disclaimer: The views expressed here are not the official position of the IWW (or even the IWW’s EUC) and do not necessarily represent the views of anyone but the author’s.

In the 2013 provincial election, Christy Clark's Liberals promised that exporting liquefied natural gas (LNG) to Asia would provide jobs and expand government revenues.

A year and a half later this boom is nowhere to be seen.

Fifteen liquefying plants and pipelines have been promoted. Six were reported to be on the verge of starting construction. But in early October, Petronas -- the company closest to seeking regulatory approval -- announced that it was considering shelving its proposal.

The Malaysian government-owned corporation wanted assurances that provincial and federal taxes and royalties would be kept low and that the company could bring in workers from abroad to construct and operate its facilities.

Then on October 21 the provincial government announced that tax rates and royalties on LNG operations would be slashed, and that the public should understand that if these projects proceeded, significant public revenues could not be expected for 15 years.

All of the proposed projects have faced strong opposition from Indigenous people and local communities to pipelines, liquefying plants and increasing tanker traffic.

The most widely promoted LNG terminal in Kitimat is in doubt after a substantial majority in this industrial city voted against the proposal. (People living in the adjacent native reserves who were expected to vote overwhelmingly against the LNG project did not get a vote in this referendum.)

Kitimat showed that when issues are openly and thoroughly debated, the communities most dependent on industrial employment will vote against projects that damage the environment.

The B.C. and federal governments as well as the corporate media continue to promote LNG as the key to future employment and increased public revenues. But even without the prospect of blockades, lengthy public hearings and litigation, the profitability of LNG exports is dubious.

Grassroots environmental and social justice groups condemn Public Service Board decision, Call for Massive Rally and Sit-In

By Will Bennington; image by John Dillon - Popular Resistance, October 10, 2014

Disclaimer: The views expressed here are not the official position of the IWW (or even the IWW’s EUC) and do not necessarily represent the views of anyone but the author’s.

Addison County, VT – A coalition of environmental and social justice groups condemned today’s Public Service Board (PSB) ruling to not reopen the Addison Natural Gas Project Certificate of Public Good, and called for a massive rally and sit-in on October 27 to protest the decision and the Shumlin administration’s continued support of the project.

350 Vermont, Rising Tide Vermont, the Vermont Workers’ Center, and Just Power are calling for the sit-in, which will focus on the Governor and his continued support for the project.

“We’ve reached the end of our rope with Vermont’s broken utility regulatory process,” said Jane Palmer, a small farmer and landowner in Monkton, who has been involved in a legal battle with Vermont Gas for over two years to keep the pipeline off her property and out of the state, “The Board is ignoring the facts. The whole process is broken and rigged to get Vermont Gas the result it wants. The Board is giving Vermont Gas carte blanche to do and spend whatever they want, while ignoring the concerns of the larger community.”

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