WILL FRACKING PRODUCE ENOUGH JOBS TO OFFSET HUGE POTENTIAL TAXPAYER LIABILITY FOR ANY CLEANUP, FIX UP COSTS FROM ACCIDENTS?
Back on April 8th (of this year), the SCPR did an extensive report on just how many jobs hydraulic fracking will produce for the cities, villages and townships of Stark County.
It wasn't all that long ago that Canton mayor William J. Healy, II was predicting thousands of oil and gas industry jobs springing up in Canton and across Stark County.
On March 1, 2012 the mayor made a big deal of his optimism in his "state of the city" message in - a grandstanding way - naming Canton as "The Utica Capital.
His action was done in coordination with former Repository executive editor, now director of energy and public affairs for the Canton Regional Chamber of Commerce, David Kaminski.
An interesting shift for Kaminski, no?
From a supposedly eagle-eyed journalist to publicity person - indirectly, of course - for the big-moneyed oil and gas industry.
Back in 2011 Chesapeake Energy had set up administrative operations in Canton. An operation that it was hoped at the time would produce 70 jobs or so.
However, it seems that first casualty of the Healy administration's inability "to close a deal" that would have brought Canton about 400 jobs resulted in the jobs going to nearby Louisville. A city of some 9,200 compared to Canton's 73,000.
Maybe the chamber needs a better partner than the Healy administration?
However, Canton does bless the chamber with $175,000 annually in a cash payment. This year there was a debate among council members as to exactly what good Canton was getting out of providing this annual grant to the chamber.
Here are URL links to videos of the debate for those want a refresher.
- First, Allen Schulman (in favor of the grant) - http://www.youtube.com/watch?feature=player_embedded&v=ymOajPmcXNc.
- Second, Cole (pro-grant) and Morris (anti-grant) - http://www.youtube.com/watch?feature=player_embedded&v=i855YujCs7Q
Most of us were - to put it mildly - "surprised" when it was announced about three/four months later that Chesapeake was going to be relocating an expanded center from Canton to Louisville.
Read this from the online publication Ohio Gas&Oil.
The Oklahoma City-based energy company will start construction soon on the new facilities at the Beck Industrial Commerce Center at 3588 Beck Road in Louisville, Ohio, less than 10 miles from downtown Canton. Chesapeake bought the land from Louisville-based Groffre Investments.Does it read almost verbatim like Healy's description? Note that the press conference was on March 1, 2012. The Louisville announcement came in July, 2012.
The eastern portion of the site is “undeveloped rolling virgin agricultural land with the topography generally flat & ready for development,” according to the city of Louisville’s website. The western part of the site is equipped with 250,000 square feet of manufacturing and warehouse buildings and has railroad siding and heavy utilities.
“In planning for our Utica field office, we looked for a centralized location with the necessary acreage to accommodate our expanding work force and growing operations here in Ohio,” Keith Fuller, Chesapeake’s director of corporate development, said in a press release. “This project demonstrates our commitment to the city of Louisville, Stark County and many other communities neighboring our area of operations in the Utica.”
So the question becomes, should Mayor Healy's and his friends at the Canton Regional Chamber of Commerce be sending along naming rights for Louisville to take on the mantle of being "the Utica Capital?
Moreover, should they be tabbed with having "egg on their faces" in having made bold predictions which have yet to materialize in the sense of suggesting that Stark County and "the 'heavy Utica Shale' counties (e.g. Carroll)" will produce jobs anywhere near some the wild numbers being thrown about by proponents of fracking?
One more point on Chesapeake's presence in Stark County.
Will the ballyhoo about 400 jobs eventually showing up in "The Constitution City" turn out to be more overhype?
With the announcement last week that eight jobs from corporate development and public relations being lopped off the 400 or so jobs, one has to wonder whether or not additional cuts are in the offing?
David Kaminski, being chamber of commerce PR guy he now is, seems to be resorting to "spin" in order to put the loss of Louisville jobs in a minimalist state? In a local media article he appears to retain his - in the opinion of the SCPR - unfounded unbounded optimism regarding Stark's prospects for job growth with fracking as the source.
Will additional "shoes be dropping" in terms of further job loss as the Chesapeake facility inches forward to completion and and actual placement of personnel in Louisville takes place?
Another interesting case study, in light of all the Healy hyperbole about oil and gas industry jobs coming to Canton and Stark County, is GE Oil and Gas case.
(GE Oil and Gas) earlier this year that agreed to set up up on about five acres in Mills Business Park with about 34 jobs related to the oil and gas industry.
The City of Canton, led by Mayor William J. Healy II and development director Fonda Williams, provided the city’s Job Creation Incentive Program as an incentive to GE Oil & Gas, and Canton City Council approved the incentive package. (emphasis added: Source of quoted material)The point being that GE Oil and Gas was not exactly breaking down the gates at Mills Park to get in.
It did take an "incentive package" to get the 8th largest Fortune 500 company to throw in with Canton and the developers (the Canton Chamber and the DeHoffs) of the Mills Business Park.
Other than the Chesapeke gig (short-lived as it has been) and the GE Oil and Gas thing, there as been precious little, perhaps nothing, that the mayor of "the Utica Capital" can point to as getting remotely near the expectation that hydraulic-fracking was going to bring thousands of jobs to Stark County with the suggestion that the were going to be concentrated, in large part, in Canton proper.
It important that fracking produce a huge economic benefit for those counties (i.e. massive numbers of jobs and concomitant government revenues) in which it is taking place and moreover for the state of Ohio government.
Because, as one Voice of the People letter writer (Steve Belovich, Hinckley Township) to the Akron Beacon Journal writes, if there are environmental problems that develop with fracking, the taxpaying public will be underwriting the cleanup and repair costs, to wit:
In addition to the radiation problem, which is very real, the frackers have no backup plan in case of an accident. If an accident does occur, they leave it in the hands of the taxpayer-funded first responders to handle. Oddly enough, these risk factors, and the potential expenses associated with them (cleanup, lawsuits) are never mentioned in the investment documents.
This is a shift of financial responsibility from the frackers, where it belongs, to the taxpayer, where it doesn’t belong. Any investment-seeking document from a fracking company (drilling, processing or holding) should include this as a financial risk factor — yet they don’t. This “failure to fully disclose” is a very serious potential Securities and Exchange Commission violation.
Worse, if there is an accident, most crackers lacks the financial strength to handle it — and the separate “shell companies” recently formed to handle the high-risk, critical pieces of the fracking process appear to exist precisely for risk avoidance through planned bankruptcy in the event of lawsuits. So, the ultimate financial burden will fall on the taxpayer.Is oil and gas industry jobs thing just one more line item on Mayor William J. Healy, II's "hope and prayer" list for a better future for the city of Canton?
Of course, if the financial ferver projections of fracking do not prove out (notwithstanding the chamber of commerce report that fracking is safe; December, 2010), then we will not be hearing a whisper from the fracking enthusiasts as Ohio taxpayers are paying out huge bundles of taxpayer monies to cure problems as they surely will develop.
It is not a matter of if; only when, and, of what scope.
While a few folks might have "eggs on the faces" for not being very good forecasters; Ohio's taxpayers potentially may have a financial disaster waiting in the wings.