Fracking — what are the risks for Nova Scotians?
The renewed interest in fracking raises the trade-off between jobs and the health of people and of the environment.
We need rewarding, safe, and satisfying jobs but at what risk to our own or others’ well-being or to the environment which sustains life?
Fracking is an ineffective way to create jobs. It is capital intensive; fracking uses a lot of expensive, complex equipment relative to the jobs created. This complexity means machinery and experienced workers will be imported from other regions and countries. Just because a Nova Scotian works in the tarsands does not mean they can get a fracking job here. Moreover, fracking puts existing industries, including farming and tourism, at risk. In addition, the workers move around the region as the stage of production goes from exploration to development to operation to decommissioning. Fracking is a prime example of the boom/bust economy, creating an economic roller-coaster for the local people.
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The Nova Scotia “Atlas” of natural gas reserves speculates that fracking might significantly boost the province’s revenues through royalties, and indirectly as those new jobs lead to increased incomes and spending, increasing both income and sales tax revenues.
The Atlas’ royalty estimates assume there will be no royalty ‘holidays’ or other concessions, yet in Nova Scotia each lease has a two-year holiday (two years of production without paying royalties). As fracking wells produce more than 85 per cent of their output in their first year, very little of the production will be subject to royalties. And those imported workers send much of their income back home to their families.
We must also consider the costs imposed by fracking.
Municipalities face a major challenge improving and maintaining their roads to handle the heavy trucks making literally hundreds of trips per day, hauling water and chemicals to well sites and toxic wastewater back out. Unsolved is the problem of treating that waste water. Accidents cause spills at the site and along the roads, and other environmental damage. In addition, a significant increase in workers will put pressure on local services for health, schools, accommodations, etc.
There are also significant costs to the province. Before any fracking occurs, the provincial government must develop a regulatory regime and gather baseline data on water and air quality and on social conditions, such as unemployment and wage levels, to be able to assess the impacts of fracking on the community and the environment. There are ongoing costs for monitoring and litigation to enforce the regulations and to deal with leaking wellheads long after their owners disappear.
As happens in other jurisdictions, fracking companies may demand subsidies and concessions from local and provincial governments, especially now with low natural gas prices and decreased demand.
We must also take a broader perspective in terms of greenhouse gases. Methane is 85 times more damaging than carbon dioxide. The increased leakage of fracked gas, from well-head to distribution to the consumer, is already causing alarm as it adds to greenhouse gases.
How much are Nova Scotians willing to risk to gain the limited benefits of fracking?
Michael Bradfield is a retired Dalhousie University economics professor.
