17 May 2013

Fracking pollution, property rights and payments

Grant McDermott wrote a nice comment on fracking, and I left this reply:*
  • There is GOING to be some pollution. The question is how much.
  • It would be useful to compare lifecycle pollution from fracking to other energy sources.
  • The precautionary principle is too strong, but it would be good to have a strong penalty -- and fast process to administer it -- for pollution (or lack thereof -- in PA and NY).
  • This (social) discussion should not compare peer review (which has problems) vs populism (ditto), but property rights vs regulation.
  • Grant discusses regulation versus common law remedies. Regulation will crowd out common law and it's often myopic and/or biased. Common law can work and it would not take too long to find victims. I reckon that Deepwater would not have happened with an (open ended) common law liability. (The TX fertilizer plant that exploded "only" had $1 million in insurance but did $100 million in damages.)
I've said some other things on fracking, regulation and the cost of cleanliness here.**

* Grant and I talked during a hangout yesterday: 64 min on YouTube or mp3. He has written more on these topics, i.e.,
** The other day, I claimed that Canadian tarsands producers could keep the environment clear (except accidents) for about $5 per barrel produced. Yes, that's $5 less profits, but probably worth it if the result is "ethical oil." According to the wiki-brain, Canada has 170 billion recoverable barrels. Profits/barrel were $22 in 2007 (when prices were in the $60-70 range), so there's scope for spending on cleaner production. Would $5/barrel cover it?*** (Semi-related: Oil company share prices and behavior are not pricing in a low-carbon future. Government failure or market failure?)

***I spoke to a guy from Shell on Wednesday who claimed that Shell could reduce carbon emissions at Alberta's tar sands by 40% at a cost of $1 per barrel. My figure is based on the cost of desalination ($1/m3), noting that it takes about 5 bbl of water to produce 1bbl of shale oil. Since 5bbl is 0.8 m3, that translates to $0.80/bbl of oil, given "salt water" as an input. If the water's 6x more polluted, it would cost $4.80/bbl.

1 comment:

  1. I am sorry to have missed this but being in the wrong timezone doesn't help :(. Here is a blog I wrote on the current fracking situation in Romania: http://blog.dropbydrop.com.au/2013/04/romania-shale-gas-water-will-vital.html

    ReplyDelete

Read this first!

Make sure you copy your comment before submitting because sometimes the system will malfunction and you will lose your comment.

Spam will be deleted.

Comments on older posts must be approved (do not submit twice).

If you're having problems posting, email your comment to me