What’s More Dangerous – Puppies or Fracking?

Humans have a tough time quantifying risk or perceiving proportionality. We tend to overstate some risks while ignoring others based upon a variety of factors…things like “what scares us”, “what motivates us” and “what we DON’T know we don’t know”.

Another reality is that our emotions are largely fed by fear. We tend to act more quickly and instinctively to fear or pain. A person holding his or her hand over a flame will move it away quickly to avoid pain, far faster than someone seeking to touch a fine leather or satin. People trying to sell us stuff know this. Not just people selling us goods and services, but ideals and values. In America, selling ideals and values is a pretty big business in itself…tens of billions of dollars per year. Although fear clearly sells, it rarely buys us something we really want to own. There is no real joy in the state of NOT burning your hand…you just avoid the pain.

As I studied the arguments for and against hydraulic fracturing, or frac’ing for short (fracking if you are an opponent, so that you can use the old f and ck in a word), it struck me how much breathless fear is being used to sell us on the idea that frac’ing is somehow bad. If we only look at costs and discount b, we make benefits to zero, we tend to make bad decisions. When we look at all the “could POSSIBLY be” costs and none of the benefits, we make even worse decisions. All decisions are best made by balancing both costs and the benefits.

I decided to create a fear-based campaign on something OTHER than frac’ing, just to see how easy it would be, using actual data and academic studies, as flawed as they may be. Then I decided to frame frac’ing as a pitch to both a Silicon Valley VC and the Governor of California circa 2005. In a pitch, you focus on the benefits, and minimize the risks, although you have to acknowledge and counter the challenges.

So let’s start with fear. Who here likes puppies? Most of you? Good.

When Adorable Attacks

America is killing its young people. The killer? Vicious young dogs. Predators that prey preferentially on our kids. Dog bites occur every 75 seconds and over 1,000 citizens require emergency care EVERY DAY as a result of this deadly scourge. In 2012 alone, over 37 people, half of them children, were KILLED in vicious young dog attacks, ranking puppies higher than baby snatchers in childhood mortality.

Worse, over 50% were kids under 8 years old. More disturbingly, over 32% of these vicious attacks were on people LIVING with the dogs in question! Our “best friends” are killing us! Worse, these vicious killers tend to attack in packs. 34% of all fatalities last year were caused by gangs of marauding young dogs, and 58% of these killers were “family” dogs. Equally disturbing, your home is no protection. Over 80% of those killed were killed on their own property!

The economic scale of the human carnage wrought by puppies (for the purposes of this campaign, we define “puppies” as young dogs and adult young dogs), attack victims suffer losses of between $1 billion and $2 billion per year. All statistics are from dogsbite.org

These vicious puppies are growing in number every day, and we are now using well over 5% of our croplands to feed these voracious hounds in what some refer to as “protection payoff” in order keep them from attacking us humans as we sleep. New Zealand scientists report that the ecological Footprint of just ONE puppy is nearly TWICE the footprint of an SUV. Not only are these beasts deadly, they are destroying the environment AND our precious water supply with the massive amounts of bacteria-infested fecal waste generated from the some 70 million puppies that ravage our US communities. This does NOT include the over 21,000 leukemia-related deaths per year from people with known, verifiable exposure to these vicious puppies.

Even with regulations in place by over 600 communities, the killings and attacks and suspicious leukemia continue and the filthy waste keeps piling up. Clearly, these regulations are falling far short of protecting us. Nothing less than a total ban on puppies and puppy mills is acceptable in protecting our environment, water, children and elderly.

The Pitch of a Lifetime

Now let’s go with the “opportunity case”…The pitch to a Silicon Valley VC and the Governor of California back in 2005 about a new and sustainable alt energy.

Gentlemen, we are looking at an exciting new energy source based upon the convergence of two proven technologies, one that has been tested and used for close to 70 years, and the other for the last 90 years. Each, on their own, have been niche technologies that generated marginally better economic returns under certain conditions using traditional energy feedstock. The breakthrough came from discovering that when you combine these technologies, we are able to generate not only superior economic margins, but could do so with feedstock that was considered waste in the past. The amount of such waste feedstock is now understood to contain centuries of low cost energy at projected demands, and is completely scalable!

These technologies have been extensively studied over the last 70 and 90 years. They have, in fact, been used separately over 1,000,000 times and have performed at better than 6 Sigma in regards to performance and environment risk exposure. As such, the industrial process defined by combining these two technologies poses negligible risk to the environment, although they may cause remediable problems on a local basis, not unlike or outside the scale of any other highly-tuned industrial processes. Substantive regulatory infrastructure is already in place on a State by State basis, although additional regulatory burden may be placed to prevent pure “Black Swan” events.

In the US alone, we have identified an energy supply potential that exceeds over 100 years along the demand curve thus far from what was previously considered “waste”. By 2012 it will be generating an aggregate of $300 million per day, or $110 billion per year in gross revenues and growing in excess of 10% per year. The US domestic market can consume all we make of this new alt energy up to $300-400 billion per year before we would need to explore exporting the energy. And, unlike nearly all alt energies, we will be able to due to its form, which allows easy transportation and storage as an energy liquid.

Getting this alt energy to market can be done with existing infrastructure, and supplementary infrastructure can be paid for out of cash flow. This infrastructure expansion will have both single purpose AND broad general use that will survive the manufacturing process.

This industrial process is “shovel ready” and it will initially require the use of between 1.5% and 3.2% of the freshwater available when operating at peak, which we will buy at full market price. A hidden benefit of the market pricing mechanism for fresh water will be the ancillary efforts in research and development to reduce the cost of treating wastewater by 50% or more from existing technologies, resulting in several novel breakthroughs that will transcend our industry.

One of the waste streams of our alt energy process is Natural Gas and it will drive the cost of this important portion of our domestic energy mix by 75% for the foreseeable future. It will help drive what bankers will call “an industrial renaissance” in the US in less than ten years. It will directly employ several hundred thousand domestic workers and nearly 2 million overall domestic workers during that time frame. Additionally, this renaissance is predicted to create 2-3 million more manufacturing jobs. It will also lower the cost of moving goods to market in the US by 40% or more. On a combined basis, it will keep inflation in check for US goods and make them competitive in the world markets again. If that isn’t enough, it will also reduce US greenhouse gas emissions by 13% over the same period, allowing the US to become a world leader in reducing greenhouse gas emissions.

The principal product we manufacture will single-handedly and directly cut the US trade deficit by more than 12% from what it would otherwise be for 2012. It also makes us less strategically vulnerable to the politics of the Middle East. As for good corporate citizenry, our output is taxed, all totaled (Federal, State and Local), at over 44% higher than nearly any other industrial good. Not only that, but we will manufacture our product throughout great swatches of the US and our feedstock value will go up. This will result in one time transfer payments to US citizens, mostly rural, of hundreds of billions of dollars. It will create ongoing royalty streams of $20-30 billion per year to many millions of individual citizens across every voting district in the country.

We will make the US energy infrastructure the envy of the rest of the world.

Other countries around the globe will find substantive hurdles to cross in order to compete with the US in this arena thanks to the maturity of pre-existing infrastructure that provides investors substantive first revenues quickly. Investors will also experience a superior return on exposed capital that can’t be met in the less mature areas of the world, as well as the NIMBY resistance and political delays due to the differences between how the US and the rest of their world administer and hold their feedstock.

This might be the most compelling pitch EVER in the history of business. What’s even more compelling? It’s really not a lie.

In fact, NEITHER of these cases are lies (except that the New Zealand university ecologic impact study has been thoroughly refuted on a number of issues).

To the Moon, Alice

One is presented specifically to scare us, while the other celebrates the opportunity.

Mankind is driven to create and innovate, not sit on his or her thumbs in caves. We were not scared to go out because of dangerous animals and we were not scared to create a fire because it might suffocate us.

John F. Kennedy, in a famous speech at my alma mater, Rice University, in September 1962, said, “Why go to the moon? … Why does Rice play Texas? … Because we choose to.”

What he DIDN’T say was, “It is very dangerous and carries a lot of risks and we don’t know how. Therefore, I propose we put a complete ban on going to the moon”.

JFK made a call to action for a noble, some might say quixotic goal that could be undertaken by our government. Similarly, I don’t oppose an effort on our nation’s part to find cheap, inexhaustible energy. In fact, according to NASA, we spent roughly $150 billion on 2011 dollars (roughly $24 billion in 1969 dollars) to send a man to the Moon. According the Brookings Institute, the US will have spent roughly $150 billion between 2009 and 2014 in Green Energy programs. The projects break down as $100 billion for renewable supply, $15 billion in conservation research, $10 billion in electric cars research and subsidy, $10 billion in high speed rail research and subsidy, $6 billion in “smart grid” research and $6 billion in nuclear power research and subsidy.

The difference? The government has competition for making energy available and low cost. The people of the US oil and gas industry stood up and took on the kind of challenge that President Kennedy laid down. In the last decade, they have raised the bar for what success looks like. The benefits are myriad, although they sadly seem to be lost on musicians, entertainers and armchair epidemiologists of various stripes.

Having said all that, let’s take a step back and look at a thorough cost/benefit analysis.

Costs Puppies Hydraulic Frac’ing
Deaths per year 37 0
Deaths per year (sensational) 21k 5k
Ecological Impact (acres) 20 million 100 thousand
Global Warming (real alternatives) Net + Net –
Aquifer Contamination Negligible Negligible
Decreasing OPEC Dependency None Very Positive
Likelihood of War None Decreases
Trade Balance None (1) 12% and growing to US favor
GDP $10 billion $110 billion
Annual Tax rate 0-8% 44%
Spark Manufacturing Renaissance No(2) Yes

(1) Unless we could sell puppies to Northeastern and Southern China. I heard somewhere that they prefer white puppies.

(2) Puppy mills? Sounds kind of manufacturer-y.

Clearly hydraulic frac’ing is the American energy dream come true. And we don’t even have to board the workforce when we go on vacation…though I’ve met a few roughnecks that I might not let stay in the house.

What do you think? How would you pitch today’s American energy revolution if you could go back in time? Please leave a comment below.

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Allen Gilmer

Allen Gilmer is the Co-founder, Chairman and CEO of Drillinginfo. Allen is active in all aspects of Drillinginfo’s new product development and is widely recognized for his industry leadership and vision. He holds several patents in the field of multi-component seismology. He received his Bachelor of Arts in Geology from Rice University and his Master of Science in Geology from The University of Texas at El Paso. Follow him on Twitter @allengilmer.
  • LandmanInsider

    This is grand! Congrats! You’ve made my day.

  • agilmer

    PS. Left unsaid (because it hurts the scare argument) is that 70+% of the mortal attacks are attributed to 2 breeds, pit bulls and rottweilers. Thus, prohibiting dogs, like prohibiting fracking, is a less than efficient choice.

  • Gene Ames

    You bet ya! Keep the commentary coming. It’s a spark of sanity that will drive Yoko Ono, etal crazy. In fact, I’ll bet she owns a Rottweiler.

  • Guest

    Many dog owners and trainers belief that there is no such thing as a bad breed. Instead there is bad breeding and irresponsible owners. This could be an applicable analogy for this discussion as well.

  • Jred83

    Good read. You couldn’t have explained this”fear-based campaign” any better. Thanks.

  • Gene Ames

    From 3/28/13
    BRYAN COUNTY, Ga. (CBS Atlanta/AP) — A 21-month-old girl was mauled to death by seven pit bull dogs in Bryan County.

    The Savannah Morning News reports that the girl was killed by the dogs in the backyard of her family’s home.

    “When we got here and spoke to EMS, they told us that when they got here, she was already cold,” Bryan County Deputy Sheriff James Beatty told the Morning News. “There was nothing they could do.”

    Authorities say the little girl’s grandmother woke up from a nap after hearing a commotion and saw the dogs attacking the toddler. The grandmother along with others rushed outside to save the little girl, but it was too late.

    “All the dogs had access to the house, nine dogs in all,” Bryan County Sheriff Clyde Smith told the Morning News. “She habitually played with dogs, all of them. But they drug her all over the yard. Something turned them on her. We don’t know what.”

    The dogs involved in the attack were put down.

    The little girl would have turned 2 in June. Her name has not been released.

    • George B

      A couple generations ago Pit Bulls were family dogs. Here’s Petie, his trainer, and a bunch of children in 1932. http://www.youtube.com/watch?v=V6vwl1amjPk What changed is the Pit Bull appeared in a rap video in the 80s and suddenly became the dog to have to go with the image of a black street thug. Owner demographics have changed more drastically than the dog itself.

      Using hydraulic fracturing to get natural gas out of shale has been around for many years in North Texas. If you fly through DFW airport, you’ve been around a bunch of horizontal drilling and hydraulic fracturing. Environmentalists ignored this when it was just a local story, but success brought lower energy prices and suddenly hydraulic fracturing is evil that must be stopped. My theory is lower natural gas prices destroyed green energy and put pressure on other countries. Five years after drilling started at DFW, the anti-fracking crowd is warning other that it could happen to them too. http://blog.shaleshockmedia.org/2013/01/26/fracking-at-the-airport/ Meanwhile, Chesapeake set up a place for the public to watch them drill and frac right across from Grapevine Mills Mall. http://www.askchesapeake.com/Barnett-Shale/Multimedia/Pages/Chesapeake-Learning-Center.aspx

  • Wow. This is great. I am doing a research paper on the subject and this gives some excellent background info, in your well worded pitch, as well as an easily understandable reference to something we love so very much. Makes me wonder what other “scary” subjects are blown out of proportion. And @Gene Ames, Yoko Ono owns a Labrador, which had the highest number of bite related fatalities in 1988.

  • Jennifer Deforke

    As an owner of pitbulls, and an advocate for safe fracking, I am taken aback by the comments that most mortal attacks are attributed to two breeds……that is here-say ….most people mis-identify breeds of dog due to media and social stigma. In fact, Pitbulls are not even a “recognized breed” therefore they do not really exist. Bad dogs are due to bad owners….not bad breeds. That is the same thing as saying that one race is pre-programmed to commit crimes. No need to be a racist or a breedist. Bad fracking is due to bad humans, not bad fracking. Frack safely and all win……Train your dog and all win…..whats so hard about all this? Can we not rise above and just do whats right? Don’t leave kids unattended with large dogs – neither kids nor dogs can be trusted without adult supervision. Don’t let money hungry idiots do fracking. Just hire responsible workers and implement proper safety protocols. No need to lash out against Yoko Ono or anyone else for that matter…..own a rottweiler or bully breed if you can handle it….raise yourself above the hate and learn the facts of every situation. Hate and mistrust begets more hate and mistrust.
    Don’t let yourself fall victim. Own a large dog, support safe fracking.

    • Formerly known as Skeptic

      Not a “recognized breed”? Tell it to the United Kennel Club: http://www.ukcdogs.com/Web.nsf/Breeds/AmericanPitBullTerrier12012012

      “The United Kennel Club was the first registry to recognize the American Pit Bull Terrier. UKC founder C. Z. Bennett assigned UKC registration number 1 to his own APBT, Bennett’s Ring, in 1898.”

  • Larry Ciptak

    Beautiful article. Sex, babies and puppies are three top marketing hooks. Perhaps tying in something on sexy baby puppies next time? Love the wit and psychological soundness.

  • Ed Longanecker

    Excellent! Well done.

  • wow. such unconventional CBA for such an unconventional procedure. Great article!

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  • xbox361

    this author seems to think the truth will set us free.
    ignorance is bliss and America is all about bliss

  • ohmary

    The real elephant in the room is that we should not be digging any more carbon out of the ground — period.

    • agilmer

      Why, Mary? Should we stop digging metals out of the ground? Extracting nutrients out of the ground? Interested in learning why carbon, the building block of life, should be so specially treated.

      • ohmary

        Carbon is not a metal. The reason we should not extract any more CARBON out of the ground is because when completely oxidized – burned- it forms carbon dioxide and water primarily in the form of water vapor. Carbon dioxide and water vapor are both greenhouse gases. As the temperature increases the atmosphere is able to hold more water vapor which exacerbates the green house affect. We have enough carbon in the supply chain already to take climate change to unacceptable levels. The more carbon we dig out of the ground and burn the more the temperature will increase unless something drastically changes.

        • agilmer

          So you would want to control water vapor as well? Hmm. Interesting. Sure, CO2 is a greenhouse gas, and it’s stand alone effects in driving temperature understood pretty well. It’s the other climate drivers that are not. No other fuel that we know of has the beneficial properties of diesel or gasoline. Thus we will be much less efficient under a mandate to divest ourselves. Clearly the Chinese and Indians will not observe a mandate, and China adds very pollutive coal-based plants that put out the equivalent of one France per week in CO2 emissions. The US, on the other hand, through frac’ing, has dropped its CO2 emissions by some 12% over the last 5 years, more than any Kyoto signatory, basically by swapping relatively clean natural gas for coal. Any effort to swap less efficient for more efficient will be borne disproportionately by the poor in society, unless you adopt a completely socialized approach to power, which will be, definitively, the death knell for technological breakthroughs. All in all, we are doing a fabulous job as protectors of the planet with our existing policies or lack thereof, and unless you have a plan to coerce the Chinese, your thesis rings more of fundamentalism…. Carbon is Evil…. than as a basis for a policy that the US or the world will choose to coordinate itself by. Thank God for the 16 year respite we have enjoyed so far from warming, eh?

          • ohmary

            So your position is that we have done enough and now it is everyone else’s turn. Well we started this process long before the other countries. The developed world bears most of the responsibility for the climate change that has/is occuring yet we should not lead in continuing to reduce emissions by conservation and/or new technology. Is that what you are saying? The corporate big wigs are getting rich at the expense of the rest of us. They do not have to pay to dump their garbage – CO2. What other industry get to do that. Who said anything about regulating water vapor? I said as the temperature increases the atmosphere holds more water vapor which exacerbates heat retention and thereby climate change until of course it rains. Lets hope those rains don’t cause more floods. than in the past. The atmosphere is storing much more moisture and energy than it used to. It will release that moisture and energy from time to time. Let’s hope that doesn’t disproportionally affect the “poor in society.” You are obviously are not a scientist because you think carbon is a metal. Well I am a scientist and I am entitled to my opinion and god help us all – so are you.

          • agilmer

            Ohmary… everything you are excercised about is predicated on some sort of mythical static climate. Which point is the “one”? You are so worried about an industrial process that you would re-order the world in a way that is impossible. Given that we have done a fine job of cleaning up our mess, and developing countries want the chance to create a mess (and the riches that go along with it), so that they can use PART of those riches to clean up, as we did, I am not sure your terror is justified. This concept of “cost” and “sin” you espouse is a value system… not science. Let’s just call it what it is.

          • ohmary

            Cost and sin? You are the one who mentioned first the poor in society. I was pointing out the the poor in society suffer from things other than the energy costs you are referring too. Your affiliation says it all – drilling info. Interesting article today on pays.org saying China is rapidly becoming a climate change leader but it is still not enough. http://phys.org/news/2013-04-china-global-climate-leader.html . By the way this is my last response to you. You make your money off the drilling industry. You have a biased position and in my opinion are not objective on this issue.

          • agilmer

            And you, my friend, are a bigot.

        • Dion Warr

          ohmary: Based upon Allen’s word usage, it would appear that he is well aware that carbon is not a metal, as his followup questions would indicate parallel inquiries as to other substances exclusive of carbon (e.g., metals, nutrients) before returning to tie back to your original statement about “not… digging carbon out of the ground”. Incidentally, hydraulic fracturing used to collect and extract trapped natural gas has been shown, in fact, to reduce our reliance on coal reserves, which actually involves the “digging of carbon out the ground” rather than drilling, which is the primary mode of reaching oil and gas reserves in place; drillers use a bit, not a shovel.

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