Monday, October 15, 2012

Do They Really Think People Just Don’t Know What `Fungibility’ Is?: A Good Question To Ask As The Fracking Industry Tries To Pull Another Fast One

Above, Pennsylvania’s Mansfield University– image from its website–the college on it its 175-acre campus is one of the state colleges recently deprived of funding, whose possible future actions pose a concern.
Last Friday, American Public Media’s Marketplace program presented the information, in a story a story about the funding of state colleges, that the state of Pennsylvania had made a decision to cut the budget for 14 schools in the state System of Higher Education by 18 percent. 

We may infer from this that political officials in the state of Pennsylvania apparently made a considered evaluation that, balancing out relative needs and priorities, the state money it was devoting to higher education would best be reallocated to other state needs.  Although that was key to the story reported, the story was, on its surface, about something else: A new law in that state of Pennsylvania nominally declaring that royalties from hydrofracking on state campuses, supposedly 50% of such royalties, money that would have gone to “state coffers,” be redirected to the colleges.  For the redirection to occur, the colleges have to permit hydrofracking on their campuses.  (See: Pennsylvania allows fracking on public college campuses, by Eve Troeh, Marketplace for Friday, October, 12, 2012.)

The Vice Chancellor of the state education system, Karen Ball, offered an earnest assessment that the fracking revenues would not be “anywhere near” the amount necessary to make up for the 18 percent cut . . .

. . . . This is so silly!  As if these guys think that nobody understands what fungibility means!  Marketplace is a weekday evening show that  focuses on business and the economy so its listeners certainly ought to be well acquainted with the concept of fungibility.  They should have readily caught the flaw that made this story's reporting totally nonsensical. Similarly, true Pennsylvania may be cutting budgets at its state universities by 18 percent but, even with those drastic cuts, the college students there must still be getting educations good enough to know the simple basics of what fungibility entails. . .

 . . . To put it simply, fungibility means money is money.  That means that if Pennsylvania wants its state colleges’ budgets to be down by 18% percent, a law that says that the colleges can directly glom onto some monies that would have headed first to state, doesn’t mean that the colleges get to actually keep more money in the end.  All the state need do is reduce the budget for the schools in the state system by exactly the amount of the “fracking income” the schools have been allowed to take directly, putting the budgets back again exactly where the state put them before, and that’s what you can expect* the state will and should do if the state had honestly assessed what level it thought the schools’ budgets should be relative to state needs and priorities in the first place.
(* You would expect this unless you are of a conspiratorial mind and believe that state politicians cut back on state school budgets only as a way to then induce the state colleges to permit fracking on their campuses.) 
So what is this reported poppycock about income from fracking royalties coming to the rescue of state colleges with tight budgets?  Pennsylvania has been very busy recently allowing the newly-invented practice of fracking everywhere in the state.  Fracking is a practice that was, according to the fracking industry, supposed to help the state’s economy. .  but its economy is doing so poorly that it is cutting back its state colleges by 18%?  (The story starts out with the line: “Pennsylvania's economy has been transformed by hydraulic fracturing for natural gas.”)

Truth to tell, fracking does extraordinary detriment to the environment and has all sorts of external negative costs to the economy.  Many of those costs come home to fully roost only in the longer term.

These laws cited in the Marketplace story are pretty much exactly what one commenting listener accused the Marketplace reporter responsible for the story was buying into: A public relations gimmick.  That’s why the Marketplace story with peppy lines “It's an idea already at work in other states” (citing Texas, Ohio, West Virginia, Indiana) sounds just like a transcription of an industry press release.

Why mobilize a public relations gimmick with respect to college campuses?  Because it’s a good bet that many college students will be well informed about the hazards of fracking and that they will mobilize to tell others.  This tactic might head those students off at the pass and put a dent into some of their youthful energy if those students can be debilitated by confusion.  Then there is the way that parents care protectively about their children: They might be offended that the concentration of young people found on a college campus would be put at risk by fracking there and in the vicinity (even if another Marketplace listener commented with sardonic humor: “Those crazy college kids... always wanting to get high on fumes”!).    

For some time now I have been saying that the fracking industry is engaging in a premeditated “hit and run” strategy, looking to do as much as they quickly can while knowing the damage it will inflict, trying to do it before people realize how dangerous and destructive the new technology is, how devastating to the environment and before the lower and lowering cost of alternatives like solar are recognized to have overtaken and relegated the fracking industry to a curious antiquity.

Essential to the industry’s plan is public befuddlement about the true costs of the tradeoffs the public is being asked to make.

The Marketplace story reports that under this kind of shell game arrangement with state colleges, a West Virginia University is to get “15 percent of the revenue” from fracking.  Unmentioned is that while the fracking company (and school) collect this revenue, 100% of the negative harm and destruction caused by fracking goes unshouldered by them, passed on to others, the school’s students and families included.

Here are some of the negative , external costs involved in hydraulic fracturing (even if the Marketplace story had an industry representative on hand to assure those listening to the story that it would be arranged that the “dirty work” would all be “screened from view” at the campuses:
    •    Decades of water pollution that involves the poisoning of:
    •        essential underground drinking water aquifers, and
    •        drinking water in rivers and streams- water treatment facilities will be wrecked.
    •    Massive quantities of water usurpation
    •    Radiation poisoning in the form of released radium and radon (lasting for thousands of years).- Gas produced from the Marcellus Shale is often, itself, radioactive.                       
    •    Earthquakes and instability of the land.       
    •    Significant poisonous air pollution.  (Resulting, for instance, in peripheral neuropathies for those nearby.)
    •    Release of carcinogens.
    •    Greenhouse gas pollution releasing climate change-causing carbon that was safely sequestered for 400 million years.
    •    Roadways and highways destroyed by intensive use by trucks carting in lakes of clean water and carting out about 80% of that afterward in foul “produced” water.
So here is a question: After state colleges allow fracking, will they get to keep at least as much money as they need to play for the costs of cleaning up afterward?  Will they get to keep at least what they need to compensate students for the injury of exposures?  Keep at least what they need to cover the cost of alternative water supplies for the colleges?  Keep money to cover the increased insurance costs for the college, those on campus and those in the vicinity?

The answer to all of the above is: No. . .  It doesn’t work that way.  For one thing the costs are all too great to cover in the end.  For another thing there is that bit we considered at the beginning of this article about fungibility.   Remember, fungibility means the colleges don’t actually get to keep anything at all because the state can cut them right back down to the funding level state officials thought they should be at in the first place.  And when it comes to sorting out the importance of relative priorities: States that permit fracking are going to have plenty other problems of their own to sort out and pay for, aside and apart from tending to the needs of their college campuses.

* * * *
Here are some prior articles, replete with many links, to earlier stories I've written about hydraulic fracturing for both National Notice and Noticing New York:
    •    WEDNESDAY, DECEMBER 7, 2011, Why Are Hearings on High-Volume Hydraulic Fracturing (“Fracking”) Held In New York A NATIONAL Issue?

    •    TUESDAY, DECEMBER 6, 2011, Testimony at Department of Environmental Conservation’s 11/30 Hearings on High-Volume Hydraulic Fracturing (“Fracking”): The LONG and the SHORT of It

    •    THURSDAY, DECEMBER 1, 2011, Wednesday’s Department of Environmental Conservation Hearings on High-Volume Hydraulic Fracturing (“Fracking”): Noticing New York’s Testimony Plus. .

    •    FRIDAY, JULY 29, 2011, Conundrum: If Gov. Andrew Cuomo Traded The Moratorium on Hydrofracking To Get Gay Marriage Would That Be Good Or a Bad Thing?

    •    MONDAY, NOVEMBER 21, 2011, Fracking Double Whammy: New York Loses Two Aces In The Hole When Confronting Climate Change (i.e.Weather Weirding/Global Warming)

    •    MONDAY, AUGUST 8, 2011, Hydraulic Fracturing’s Deleterious Environmental Effects: Andrew Cuomo’s Plan To End His State’s Ban and the Passage of the NYS Marriage Equality Law

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