Sunday, February 12, 2012

Connecting the Dots: From Fracking for US Shale Gas to Exporting US Propane … at the Expense of Rural and Suburban Americans

For Many Propane-Reliant People in the US the Ultimate Byproduct
of the Fracking-Fueled Natural Gas Boom Could be Poisoned Water

In this increasingly interconnected and complex world, all politics is both local and global.

Take propane, for example, a fuel on which so many rural and suburban homes and businesses in the United States depend to heat their buildings and water and to power their kitchen ovens and stoves and outdoor barbecue grills (and standby electrical generators in case of electrical grid power failures). Propane, which is also called LPG (Liquefied Petroleum Gas) is produced as a byproduct of oil and gas production and refining.

Since propane is a byproduct--there are no propane wells--propane production is instantly affected by changes in the oil and gas industry.

Major Industry Change

A major industry change is about to occur, one that has potentially negative consequences for millions of aforementioned Americans.

For the first time ever, the U.S. is poised to become a net exporter of propane. The game changing development is a U.S. natural gas drilling boom--more specifically, a shale gas drilling boom--made possible by a controversial gas extraction method known as hydraulic fracturing, or hydrofracking, or, simply, fracking. It makes mining for natural gas deposits buried in deep, dense shale economically feasible. More fracking means more shale gas production, which means more propane production.

On the surface, this would seem to be a good thing since the price of propane, which, in the U.S. for some reason follows the price of oil rather than the price of significantly less expensive natural gas, remains crushingly high for ordinary, hard-pressed homeowners and small businesses. (U.S. propane companies claim prices are not high enough, citing weaker prices caused by increased propane production and an unusually mild winter as their reason for laying off workers during the worst economic downturn since the Great Depression.)

Poisoned Water

So much for surface impressions, which mean nothing in the energy business. Industry insiders say domestic propane customers won't benefit from increased production of the fuel because domestic supplies will tighten--and prices will actually climb--as the surplus is exported to Japan and China. Not for nothing are two large propane terminal expansion projects underway in Texas: U.S. producers can make more money selling their product abroad than at home.

More seriously, the same fracking that makes possible the shale gas production that drives increased propane production … threatens to poison water supplies. Seriously. Fracking uses significantly more water than conventional drilling with increased potential for permanent water contamination.

The toxicity evidence is mounting; as a result, fracking, which only recently became a household word in the U.S., is fast becoming a dirty word, too. (Some companies and politicians are proposing fracking with propane instead of water. Click here to read about this potentially explosive solution.)

Cruel Injustice

Rising opposition to fracking is the reason why President Obama in his politically charged State of the Union address called both for more natural gas production--to reduce reliance on imported oil--and for more regulation. Obama was clearly referring to the need for more regulation of fracking and for stricter enforcement of fracking rules that are already on the books yet too often neglected by gas producers.

A cruel joke--under the banner of energy independence. Unless natural gas fracking is stopped, rural and suburban Americans in the Northeast, say, whose homes and businesses typically cannot use natural gas to begin with because of their inaccessibility to natural gas pipelines, could soon find themselves in the worst of all possible worlds: plagued by poisoned water owing to a government-backed natural gas boom and as dependent as ever on costly, oil price-tied, tanker truck-delivered propane … while a few strategically situated companies in Texas profit mightily from exporting the gas to Asia.

Put differently, whereas in 2008 candidate Obama complained about (politically hostile) rural Americans who "cling to guns or religion," it is quite possible that in 2012 President Obama, facing a tough reelection campaign, will similarly complain, this time, about rural and suburban Americans who persist in clinging to their propane … and their water.

POSTSCRIPT: More about export-driven, U.S. propane terminal expansion plans here and here.

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