Daily Archives: April 21, 2011

Pandering, politicians, and oil prices

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Michael Giberson

The Free Dictionary defines pandering as, among other things, “To cater to the lower tastes and desires of others or exploit their weaknesses.”

Here is a new example of the common political variant of pandering: The newly organized federal Oil and Gas Price Fraud Working Group.

Consumers don’t like high gasoline prices and wish somebody would do something about it. Politicians like to be seen as decisive leaders who can get things done for hard-working American families who have already sacrificed so much, blah blah blah. Politicians know that most of what they can do is substance-free showboating, but it will look like they are doing something. Therefore, the OGPFWG.

Tom Fowler, energy reporter for the Houston Chronicle, quotes Craig Pirrong:

“This is a transparently political fishing expedition that insinuates that fraud or manipulation is distorting oil prices without providing even the flimsiest factual basis for such a suspicion,” Pirrong said. “This is part of a broad effort by the administration to deflect criticism with regard to gasoline prices.”

I think Pirrong is giving the OGPFWG too much credit. An actual fishing expedition takes a lot more effort than issuing a press release or two, but that is all we will see from the OGPFWG.

Fracking regulation just became a little bit more difficult

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Michael Giberson

Tuesday night a Cheasapeake Energy fracking operation in Pennsylvania suffered a breakdown resulting in the spill of thousands of gallons of fracking fluids at the drilling site and into a local stream.

The news reports so far are kind of sketchy on the scope of the potential damages. They report “thousands of gallons” of fluids spilled, but that phrase encompasses a range from 2 thousand to 999 thousand and isn’t very descriptive: Two thousand gallons is enough water to fill a relatively small backyard swimming pool, 999 thousand gallons is a very large municipal water tower.

How dangerous the spill sounds in new stories varies a bit:

  • A Forbes blogger said, ”thousands of gallons of salt water, likely mixed with minute quantities of chemicals used in the controversial but long-established fracking process have reportedly spilled out of the well and into a stream.”
  • Bloomberg reported, “Chesapeake Energy Corp. is trying to regain control of a natural-gas well in rural Pennsylvania that erupted yesterday, spilling chemically treated water into a creek and prompting evacuations of nearby residents.
  • An Associated Press story in the New York Times said, “thousands of gallons of chemical-laced water [spilled], contaminating a stream and forcing the evacuation of seven families who live nearby as crews struggled to stop the gusher.”

The small backyard swimming pool could also be described as “chemically treated water” (and that municipal water tower), though I suppose if a backyard swimming pool leaked its “thousands of gallons of chemical-laced water” there would be no need to evacuate neighbors.

A more recent Associated Press story says that the driller, Cheasapeake, says “initial testing has found little impact on waterways from a spill of thousands of gallons of drilling fluids from a well site in rural northern Pennsylvania.” Of course you would expect them to say that. The state of Pennsylvania will be testing streams and groundwater in the area.