Thursday, December 15, 2011

Frac Sand Mining Supplies China With Energy!

A major rationale for frac sand mining, an essential ingredient for hydrofracking, a way to extract natural gas and oil from shale, is that it will provide us with energy independence from foreign energy suppliers. But a close look at the hydrofracking industry shows that a major market for this new energy supply is not us, but China!

The Wall Street Journal, Fox News and other news outlets have exposed the fact that China and other foreign countries are a major market for hydrofracked energy. Some political leaders admit it. Is Monroe County sure that it wants to risk its water, possibly subject its children to the deadly effects of silicosis and destroy its countryside to supply China with energy?

A second rationale: jobs. But a UW Extension economist has found that many sand mine jobs are filled by outsiders, not locals, and the multiplier effect of other jobs being created by a mine is relatively small, just 1.3.

(Above, Monroe County's Valley Junction sand mine)

The WALL STREET JOURNAL reported in April that one hydrofracking mining company sold a stake of one of its shale formations to a Chinese company for $570 million. Here's the link to that story:

FOX NEWS reported that Alaska's Gov. Sean Parnell said that Japan and other Asian countries may be a "better market for Alaska gas" and that he has suggested to TransCanada Corp. (TRP) and the state's large oil producers that they focus on building a natural gas export terminal, rather than a long-distance pipeline to the contiguous U.S.

Parnell said the current boom in natural gas production from shale-rock formations in the U.S. and Japan's shift away from nuclear power, toward gas-fired electricity generation, following the March earthquake and tsunami that triggered a nuclear crisis there, as major factors that have shifted the natural gas market from the U.S. overseas.

A PITTSBURGH TV STATION (hydrofracking is polluting water and drying up streams in some parts of Pennsylvania) published the following:

"Drilling companies rapidly expanding their U.S. operations in places such as Pennsylvania's vast Marcellus shale formation repeatedly tout they are providing American jobs and securing the nation's energy future.

Yet, a Tribune-Review examination found foreign companies are buying significant shares of these drilling projects and making plans for facilities to liquify and ship more of that natural gas overseas.

A leading player in the natural gas grab is China, whose thirst for energy to fuel its industrial explosion is growing rapidly. Others include the governments of South Korea and India, and companies in Great Britain, the Netherlands, Norway, Japan and Australia.”

And, on the local front, THE WINONA POST reported Dr. Steve Deller, University of Wisconsin Cooperative Extension Economist, spoke at a meeting in Alma, Wis., in October, and focused on the economic impact of frac sand mining.

“Deller said he had looked into the “multiplier” effect of proposed new mining jobs in the area (Buffalo County, WI) — a calculation that shows how many other jobs will be generated by a new business, through money spent by new paychecks added with a mine. He said the multiplier effect is relatively small — at about 1.3.”

“The second question to look at, said Deller, is who will fill the new jobs. Often times, new jobs are filled by people from out of the area, and when the company itself is also from far off, most of the money ends up elsewhere.”
“Deller said that numerous studies of mining communities show that they are often unstable, and that the economics of those areas are closely tied to the price of the commodity sought.”

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