Thursday, June 3, 2010

Which Movie are the Locals Watching?

I was struck this evening at the difference between the independent documentaries making the rounds in the Haynesville Shale versus the Marcellus Shale.  It says a great deal about each area's approach to natural gas extraction, and it influences the economic success of each region, at least in the short term.

I had the chance to watch the pre-world premiere of Greg Kallenberg's "Haynesville" last October before it officially premiered in Europe.  It is a qualified endorsement of natural gas, recognizing its place in a cleaner energy future as well as an economic driver.  It is a fairly even-handed approach to the pros and cons of natural gas development, although it didn't take a hard look at the impact of hydraulic fracturing, which has become a cause célèbre for environmental advocates and the anti-fossil fuel folks.  It has been well received in the Louisiana-Texas region, which, as noted in the recently released economic impact study, is enjoying relative economic stability in these trying times thanks to the natural gas industry.

Currently making the rounds in Pennsylvania and New York is the film "Gasland," a harsh look at the environmental impacts of drilling.  It received a special jury prize at the 2010 Sundance Film Festival and is being shown in theaters throughout the region (including a special showing at the Pennsylvania state house).  It premieres on HBO on June 21, so it likely will receive a great deal more exposure than "Haynesville."  I have not seen the movie, but the press materials portray an alarmist view of the gas drilling industry.  The film seems to take a fairly one-sided view of the risks of drilling by focusing on a few well documented incidents.

It is interesting to compare and contrast the approaches the locals are taking to the drilling boom in each region by looking at the popular documentaries.  It is ironic that gas drilling began in the U.S. in Pennsylvania 150 years ago but has become something of an environmental pariah of late.  In Louisiana and Texas, the focus largely has been on the economic impact.  People are cognizant of and concerned about the various impacts, but most people understand the balance between the risks and the economic opportunities.

Interestingly, Pennsylvania is one of the only states that doesn't have a natural gas severance tax.  One has been proposed, but in this anti-tax Tea Party world, new taxes might not be easy to pass.  I hope for the benefit of Pennsylvanians that the state's legislature has the intestinal fortitude to institute a severance tax.  Producers will cry a river, but royalty rates in the region generally are in the mid-teens (compared to 20-25% in the TX/LA region), so a few percentage points going to the state won't make that big of a difference in the long run.  The Marcellus is a good bit shallower than the Haynesville, so it is cheaper to drill. 

Pennsylvania is in a budget jam and the Marcellus Shale is a once in a lifetime opportunity for economic development.  Would a realization of the economic benefits help change the attitude of the citizenry?

1 comment:

Anonymous said...

How tragic! A slanted anti-industry piece like Gasland gets played on HBO while the more even-handed Haynesville gets pushed to the side.

It just shows how Hollywood looks for sensationalism rather than truth.

Les B