Nagging Questions

I know I said yesterday I was working on a post on critics of drilling. And I was. I emailed one prominent individual who is named as a critic, even though his criticisms have more to do with the economic sustainability and viability of the Marcellus Shale play rather than drilling or hydraulic fracturing. I am awaiting his reply to some emailed questions before I proceed. I decided to read and report on a study the Environmental Protection Agency published on possible contamination or degradation of drinking water in and around areas where hydraulic fracturing has been used to eliminate coal-bed methane as a hazard. Over 400 pages, complete with pictures and charts and everything. Bureaucratic reports are fun reading.

Although thousands of CBM wells are fractured annually, EPA did not find confirmed evidence that drinking water wells have been contaminated by hydraulic fracturing fluid injection into CBM wells.

Evaluation of Impacts to Underground Source of Drinking Water by Hydraulic Fracturing of Coalbed Methane Reserves, 2004, Final Report

Under the multiple pressures of its legislative authority to evaluate potential threats to drinking water, complaints from residents in a variety of places that hydraulic fracturing has introduced contaminants into or drained wells or other drinking water supplies, and with the additional judicial determination that investigating and evaluating the potential threat to drinking water supplies from hydraulic fracturing, the EPA in 2001 began a study that resulted, in 2004, in the report (.pdf) whose conclusion is quoted above.

On the other hand . . .

In July, a hydrologist dropped a plastic sampling pipe 300 feet down a water well in rural Sublette County, Wyo., and pulled up a load of brown oily water with a foul smell. Tests showed it contained benzene, a chemical believed to cause aplastic anemia and leukemia, in a concentration 1,500 times the level safe for people.

--snip--

The contamination in Sublette County is significant because it is the first to be documented by a federal agency, the U.S. Bureau of Land Management. But more than 1,000 other cases of contamination have been documented by courts and state and local governments in Colorado, New Mexico, Alabama, Ohio and Pennsylvania. In one case, a house exploded after hydraulic fracturing created underground passageways and methane seeped into the residential water supply. In other cases, the contamination occurred not from actual drilling below ground, but on the surface, where accidental spills and leaky tanks, trucks and waste pits allowed benzene and other chemicals to leach into streams, springs and water wells.

As part of its larger narrative, ProPublica takes aim at the EPA study so heralded by the industry:

[O]ne of the report’s three main authors, Jeffrey Jollie, an EPA hydrogeologist, now cautions that the research has been misconstrued by industry. The study focused solely on the effect hydraulic fracturing has on drinking water in coal bed methane deposits, typically shallow formations where gas is embedded in coal. It didn’t consider the impact of above-ground drilling or of drilling in geologic formations deep underground, where many of the large new gas reserves are being developed today.

"It was never intended to be a broad, sweeping study," Jollie says. "I don’t think we ever characterized it that way."

Nevertheless, a few months after the report’s release, the sweeping 2005 Energy Policy Act was passed. Almost no attention was paid to the three paragraphs that stripped the federal government of most of its authority to monitor and regulate hydraulic fracturing’s impact on the environment. By default, that responsibility would now fall to the states.

“That pretty much closed the door,” said Greg Oberley, an EPA groundwater specialist working in the western drilling states. “So we absolutely do not look at fracking...under the Safe Drinking Water Act. It’s not done.”

--snip--

"We've kind of reached the tipping point," says Dhieux, the EPA inspector in Denver. "The impacts are there."

In December 2007, a house in Bainbridge, Ohio exploded in a fiery ball. Investigators discovered that the neighborhood’s tap water contained so much methane that the house ignited. A study released this month concluded that pressure caused by hydraulic fracturing pushed the gas, which is found naturally thousands of feet below, through a system of cracks into the groundwater aquifer.

Ian Urbina's April 16, 2011 New York Times story on a study done by Congressional Democrats, including Rep. Henry Waxman of California and Edward Markey of Massachusetts.

The inquiry over hydrofracking, which was initiated by the House Energy and Commerce Committee when Mr. Waxman led it last year, also found that 14 of the nation’s most active hydraulic fracturing companies used 866 million gallons of hydraulic fracturing products — not including water. More than 650 of these products contained chemicals that are known or possible human carcinogens, regulated under the Safe Drinking Water Act, or are listed as hazardous air pollutants, the report said.

Who is right about this? According to an extensive report at DeSmogblog.com, there are, indeed, documented cases of direct links between hydraulic fracturing and water contamination.

An internal document from Pennsylvania’s Department of Environmental Protection outlines over 60 instances of water contamination and fugitive methane migration from gas drilling operations, many of which were due to unexpected pockets of underground pressure, the failure to contain well pressure, faulty production casing, or the accidental drilling into other abandoned or producing gas wells.

The National Resources Defense Council, which supports federal regulation of hydraulic fracturing (rather than an outright ban, which many current fracking opponents seem to prefer), has a list of other confirmed cases where a direct link between hydraulic fracturing and water contamination exist. Among the many documented cases is the following:

Pennsylvania: A gas well near the home of the Simons family in Bradford County was drilled in 2009 and re-fracked in February, 2011. Shortly after the 2011 operation, the Simons family reports that their tap water turned gray and hazy. After the water changed, family members began getting severe rashes with oozing blisters, and one child had to be taken to the hospital for torrential nosebleeds that would not stop, nausea and severe headaches. The Pennsylvania Department of Environmental Protection (DEP) tested the water and found very high levels of methane and other contaminants in the water, but said it was safe to drink. Since the Simons family stopped using any of their water, these symptoms have gone away but the water still “stinks awfully; it is a scummy, rotten, nasty smell...”

It seems obvious that more study of the possibility of contamination of drinking water supplies, whether private wells or public sources, needs to be done. A constant theme among critics of the 2004 EPA report - among many - is that there is still a great deal we do not know about the structure and possible flow activity within the areas currently being drilled. While the 2004 study seemed to indicate that hydraulic fracturing posed no risk to drinking water, as a former EPA official in the Bush Administration has made clear:

When we got the report, it was a snapshot in time. It was a thorough review describing the issues. Whether it's hydraulic fracturing or any other type of practice that can have an impact on the environment, one single report shouldn't be the basis for a perpetual, never-ending policy decision.”

It wasn't meant to be a bill of health saying 'well, this practice is fine. Exempt it in all respects from any regulation.' I'm sure that wasn't the intent of the panel of experts, and EPA never viewed it that way. That's one reason why we were urging Congress to say 'look, if you are going to issue an exemption, ensure that it is not perpetual.'

Despite a clean bill of health once upon a time, I see no reason not to ask, again, about the safety to our drinking water.

Explaining Myself

Wednesday is my music post day, and as I am gathering information on a post for tomorrow on critics of drilling, I thought it might be important to take some space to explain what I am up to, why, and what possible relevance this has to the title and subject-matter of this web log.

As someone who was born and raised and lived the first 25 years of his life in and around the Marcellus Shale natural gas boom, my interest is deeply personal. My elderly parents still live in the house in which I grew up; this September will mark the forty-first year in that house. My youngest sister and her husband live in the same town. I have deep family roots in neighboring Bradford County, PA, with an ancestor of my paternal grandmother settling just outside what is now Wysox, PA after the War for Independence.

After swinging between supporting, then opposing the development of natural gas resources in and around this gorgeous, rural landscape of my youth, I decided it was important to learn some facts. What I have found is a mountain of information, with blogging being a really poor medium for distilling all that information in to a usable shape. All the same, I am approaching the subject as someone who assumes, (a), I know absolutely nothing about the natural gas business or its practices; (b) I am not in a position to judge the actions of the actors involved; (c) the reality of an on-going need for natural gas, absent a comprehensive energy policy at a national level, necessitates using sources that require unconventional methods of extraction; (d) there are no good guys or bad guys in this on-going situation, just people and companies and institutions and interests acting in their own self-interest, to the best of their abilities.

I have no illusions about the gas companies. I also have no illusions about the local communities, their residents or local elected representatives. I am not, as a recent commenter claimed, under the sway of dishonest critics. My only concern is to find out, as best I can - and present as clearly as I am able - what is actually happening. These posts will continue until I have satisfied myself that I have some kind of grip on the matter. My guess is, then, it may last a while.

As to the relationship between these posts and this web log and its purpose, I can only wonder why some might think they bore no relationship to one another. Being a Christian includes finding out for oneself as much as possible about what is happening in the world, in order to live in it faithfully. Jesus Christ didn't die on the cross then rise on the third day so we could escape from the messiness around us. We have to immerse ourselves in it in order to get the message of Divine love and acceptance out to as many people as possible. I am writing all this, in short, precisely because my faith calls me to do so. How can anyone minister to people without understanding what is happening in their world?

As I say, this series of posts will continue for as long as it takes. I am writing them for myself as much as anything, as a way of figuring out what is happening, why, and what it might mean for all of us. The gas boom in PA, and a possible one in New York once the drilling moratorium is lifted, is, to me, the biggest story not too many people know about. I am doing my own tiny part to spread the word that something is going on.

A Musical Interlude

When I discovered that A Perfect Circle had covered my all-time favorite song, I had to listen to it. We'll get to the song itself in a moment. It comes from an album APC put out in 2004, Emotive, the bulk of which are covers. I am not now nor ever have been a huge fan of covers, but APC does justice to the songs by setting aside any attempt at idolatry, the links to the originals being merely title and lyrics. Musically and affectively, the songs are APC.

For example, would anyone believe this is Led Zeppelin's drum-heavy "When The Levee Breaks" if they didn't know the lyrics?



What relationship does the following have to Elvis Costello's frenetic sneer at cynicism, "(What's So Funny About) Peace Love And Understanding?"



Having listened several times to Billy and Maynard's rearrangement of Marvin Gaye, I think that, while it may be true as one commenter at YouTube said, APC has removed every bit of soul from the original, that may well be more than merely a demonstration of the musical limits of the band. The original was a crie de coeur, stemming from a series of letters Gaye had received from his younger brother serving in combat in Vietnam. Our times, on the other hand, cannot hear yet another voice screaming out their righteous anger. When someone known for their screaming, however, whispers what we all know to be the truth, doesn't that make us want to stop, turn the volume on everything else down, and hear what they have to say? Maynard's delivery on this song, so different from anything one could hear on a Tool record, the band's muted, musical delivery of the melody does the song justice by understanding not only what the song is, but how to deliver the message in a way that fits the times. Rather than a slavish devotion to the original arrangement, Billy Howerdel and the rest of the band have shown reverence for the spirit behind it by arranging it to suit our over-loud times. Since APC in thought to be yet another experimental heavy metal band, that so many of the arrangements are gentle, lilting, the lyrics delivered in that same suggestive (seductive?) manner, the surprise is compounded.

In short, A Perfect Circle have created a wonderful song. The original is what it is. Their version, however, is what it is, and both can be enjoyed and passed on because they both do what they are supposed to do, provide a musical platform for two very different prophetic voices to deliver their message to a world hungering for a word of truth.

And now, for some random fun . . .

Afraid of Everyone - The National
Face of Yesterday - Renaissance
When She Cries - Andy McKee
Tremolando - Steve Howe's Remedy
High Ideals - Elbow
Find the Time - Wakeman With Wakeman
Brandenburg Concerto #3, Movement 1 - Johann Sebastian Bach
Sex Sleep Eat Drink Dream - King Crimson
Mystery - Indigo Girls
Car Hiss By My Window - The Doors

What Texas Can Teach Pennsylvania . . . And New York

[PA] Gov. Tom Corbett, whose successful campaign last year received sizable donations from members of the natural gas industry, has said he wants to make Pennsylvania the Texas of the natural gas boom.

Wilkes-Barre, PA Times Leader, March 31, 2011

While Pennsylvania continues to wrestle with the many issues and concerns over development of the Marcellus Shale natural gas reserves, there is a laboratory of sorts to which it can refer to understand how best to cope with the push and pull of different interests, constituencies, and pressures. While the Marcellus has, by far, a great potential, right now the biggest producing natural gas play in the country is in the Barnett Shale in central Texas.

According to this fact sheet (.pdf) the first test wells in the Barnett date back to 1981. It wasn't until the use of horizontal drilling and hydraulic fracturing techniques improved, however, that large scale drilling became feasible. By 2003, the Barnett gas boom was ready to take off. By 2007-2008, residents in counties overriding the Barnett were signing leases worth as much as $28,000 an acre, with royalties ranging from 15% to 25%. According to Ian Urbina of the New York Times, some of the leases are made by black churches as a way of generating much needed revenue.

In the fall of 2008, as the effects of the burst housing bubble began to reverberate through the finance industry, then the larger economy, the trading price for natural gas sank. Production was curtailed, and the value of the leases disappeared. According to a report in the Albany, NY Times-Union, the price has yet to recover.

In May 2008, well owners could sell natural gas for more than $10 per 1,000 cubic feet, according to the U.S. Energy Information Administration. In April 2010, that price had dropped to less than $4.

In an October, 2009 article in the independent Fort Worth Weekly entitled "Leasing Our Lives Away", reporter Jerry Lodbill began his discussion of leases for gas extraction on what one would hardly call an upbeat note:

So you've signed a gas lease. Congratulations: You've been taken for a fool. Certain material facts were kept from you that, had you known them, likely would have made you throw the contract in the trash where it belongs. Since you didn't, let's take a virtual tour of your new reality.

As with all legal documents, the devil exists in the fine print. No less for these mineral-right leases than anything else.

If a lot of your neighbors also signed, the gas company now has powers you were never told about. The lessee can essentially do whatever he wishes on the surface to produce the gas under your property. He can hold your property hostage for decades by performing inexpensive, nonproductive tasks. He can, and from all historical evidence will, pollute any surface location where he installs mineral extraction equipment. He does not care what you think about it.

Perhaps more ominous is the fact that he is not limited to extraction of minerals from a specific formation (such as the Barnett Shale) but may explore for deeper deposits that are said to exist under the Barnett Shale. In South Texas his brethren are still holding leases executed in the 1930s, leases that have so polluted the surface as to make the land unusable for its earlier purpose of cattle ranching. With the original target minerals now played out, these lessees today are exploring for and producing gas there. Equipment that is no longer functional still leaks carcinogens into the ground. The surface rights owners have been denied access to areas on their property. So, while you've been told verbally that there'll be no effects on your surface usage, that is not an enforceable contract provision, and the lessee, and his landman representative, knew it when he or she asked you to sign.

--snip--

And what will you get? Maybe the lease offer on your quarter-acre lot included a bonus of $25,000 per acre plus 25 percent royalties. If gas prices stay high that might get you about $208 per year in royalties, or about $12,450 total (including your bonus) over a 30-year payout lifetime.

Oh, and remember, that's the gross amount. It doesn't consider income tax and an ad valorem property tax increase due to all that gas you own. Of course, gas prices are in the toilet right now, and they're selling less gas than they'd expected.

In a story from March, 2010, we hear the drilling companies are being . . . pokey . . . about ponying up their payments on leases.

In August 2008, the Southwest Fort Worth Alliance, a collection of homeowners associations representing about 25,000 property owners, approved a natural gas leasing deal with Vantage Energy that provided for bonuses of $27,500 per acre and a royalty rate of 23 percent. For residents, it read like the sweetest deal ever in the Barnett Shale.

Homeowners were told that they’d get their money after a fairly simple process: Property titles would be verified by Vantage’s leasing agent, The Caffey Group; homeowners would fill out a tax form and sent it in to Caffey; they would go to a signing party and sign the leases; and bonus checks would be sent to their banks in a draft form that would be converted to cash within 30 business days.

David and Joyce Richey did all those things. They signed their lease on Sept. 13 of that year. Their bonus was calculated at $8,800 for their quarter-acre property, and a draft for that amount was sent to their bank on Sept. 16. They then waited for the check to clear.

On Nov. 6, however, the draft was returned unpaid. And now the Richeys are part of a lawsuit against Vantage and Caffey alleging breach of contract, fraud, antitrust violations, and deceptive trade practices toward themselves and other property owners.

--snip--

The suits thus far center on deals that were negotiated by SFWA with Vantage and by South East Arlington Communities of Texas in April 2008 with XTO Energy. In mid-October of that year, the drilling companies — XTO, Vantage, Chesapeake, and others — pulled their offers off the table for property owners who hadn’t signed. By March 2009, they were back in those neighborhoods, but by then offering deals with zero bonuses.

Petroff contends that the drillers didn’t like the record levels that bonus offers had reached and, in violation of antitrust law, teamed up to drive prices down. A hearing on May 6 in a Tarrant County district court will determine if the plaintiffs have legal grounds to sue over antitrust issues.

“The companies acted together at the same time, and we have some interesting evidence that we can’t share at this time saying they did,” Petroff said. “The competition was fierce in 2008, and the prices went sky-high. But then [the drilling companies] looked at each other and said it doesn’t make sense to pay that kind of money.

“But they had binding contracts in place, and you can’t nullify a contract just because gas prices went down,” he said.

The state of Texas, and its various agencies, seem to be piling on landowners who may not want to lease their land.

The Texas Railroad Commission has issued a ruling allowing more than two dozen east Fort Worth landowners who didn’t sign a mineral rights lease to be forcibly included in a drilling plan, a move that gives producers added leverage against leasing holdouts. It is the first time the commission, which regulates the oil and gas industry in the state, has used a 1965 law to take such action, called a force pooling, against small land owners. Experts said the ruling is particularly applicable in urban areas, where hundreds of small tracts often must be assembled, or pooled, into a drilling unit. Jacqueline Weaver, a University of Houston law professor who has written extensively on Texas oil and gas law, said the issues involved are important enough that they likely will have to be resolved by state courts. Historically, she said, the Mineral Interest Pooling Act has been used to protect small land owners from getting squeezed out of drilling units, rather than forced into one.

The collapse of gas prices and the drillers no longer exploiting leases in some areas, including land leased by those churches, have had other, complicating factors, according to the Urbina story linked above:

The impact of the downturn was immediate for many.

“Ruinous, that’s how I’d describe it,” said the Rev. Kyev Tatum, president of the Fort Worth chapter of the Southern Christian Leadership Conference.

Mr. Tatum explained that dozens of black churches in Fort Worth signed leases on the promise of big money. Instead, some churches were told that their land may no longer be tax exempt even though they had yet to make any royalties on the wells, he said.

It isn't just about a boom going bust.

The federal Environmental Protection Agency plans to rewrite its rules for air pollution from gas and oil drilling in response to a lawsuit from the San Juan Citizens Alliance. EPA officials held a public meeting Tuesday in Denver to solicit input on updated rules. They held a similar meeting Monday in Arlington, Texas. The effort marks the first major update to several air-quality rules for the industry in 10 to 25 years, in some cases. Environmental groups hailed the development. "Those of us who live in the Four Corners region are getting slaughtered by the air-quality impacts. It's not acceptable," said Mike Eisenfeld of the San Juan Citizens Alliance, who testified at Tuesday's meeting. A gas industry advocate urged the EPA officials to be careful with the rules. "How many lives would be lost or quality of life degraded if we didn't have affordable energy to heat our homes in the winter; generate electricity to power dialysis machines, life-support and medical diagnostic equipment; and fuel to safely transport our loved ones?" said Kathleen Sgamma, director of government affairs for the Western Energy Alliance. Regulations that are too onerous will push gas exploration overseas, where the rules are more lax, Sgamma said. The EPA should focus on vehicles and power plants, which pollute more than gas and oil equipment, Sgamma said. The EPA is looking at four air-quality rules governing the emissions of volatile organic compounds and sulfur dioxide from new gas-processing plants, plus toxic-emissions from glycol dehydrators and other gas and oil equipment. The two toxic emission rules would apply to both new and existing equipment. The EPA had not updated its rules, as required by law, for many years. WildEarth Guardians and the San Juan Citizens Alliance sued the agency, and the EPA came to terms on a settlement with the environmental groups in January. "That's kind of a slam dunk. It's kind of hard to win a case like that," said Bruce Moore, an EPA official from North Carolina who led Monday's meeting. The settlement calls for new air-pollution rules to be in place by Nov. 30, 2011. Volatile organic compounds and nitrogen oxides form ozone when they interact with sunlight. Ozone causes lung problems in humans and makes it hard for plants to grow. The toxic chemicals at issue are familiar to residents of the gas patch: benzene, toluene, ethylbenzene and xylene, as well as hexane, Moore said.

Along with the risk of air pollution, there is the reality of damage to ground water.

A North Texas oil and gas company that recently came under scrutiny from the U.S. Environmental Protection Agency is also the subject of an environmental lawsuit filed by Texas Attorney General Greg Abbott.

The EPA recently announced that it is including two counties in North Texas’ Barnett Shale in its study of hydraulic fracturing’s impact on groundwater.

At least in part, the EPA is looking at operations of Plano-based Aruba Petroleum Inc., said Wise County landowner Tim Ruggiero. He says he documented water well contamination when Aruba drilled on his 10-acre plot of land and that an EPA official visited his home on Thursday.

Even as Pennsylvania deals with the on-going development of its natural gas resources, and its new Governor desires the Commonwealth be industry-friendly, the lessons from north-central Texas should be a guide for developing a comprehensive resource-extraction policy in light of the reality of the potential from the Marcellus Shale. New York, where there currently exists a ban on hydraulic fracturing (although Gov. Andrew Cuomo has signaled his intent to lift it after careful study from the state Department of Environmental Conservation), should also take both Texas' and Pennsylvania's experiences as object lessons for developing the same kind of policy prior to any lifting of the ban on drilling. While the allure of dollar signs can be blinding, it is incumbent upon elected leaders to lead, which includes balancing the preferences of all actors. This is not a call for banning gas drilling or hydraulic fracturing. Rather, it is a call for elected leaders to take information available from the experience of the Barnett Shale boom in Texas and apply it to their approach so that everyone - landowners, gas companies, potential employees, and the state - can benefit all the while keeping an eye on minimizing environmental damage and limiting the amount of litigation that might come from the activity.

Gas Boom Or Gas Bubble?

In 2003, Range Resources showed that a productive natural gas well could operate in the Marcellus Shale "play", using hydraulic fracturing - called "unconventional techniques" in the literature - to operate a well with a (.pdf) "cumulative initial flow rate of 22 million cubic feet a day" in Washington County, PA. In 2008, Penn State geologist Terry Engelder and his colleague Gary Lash of SUNY Fredonia published a paper (the last link above) that used survey data, as well as the production capacity of active wells in the region, to estimate 500 trillion cubic feet (TcF) of gas within the entire Marcellus formation. With an estimate of ten percent of that gas recoverable, that is 50 million TcF. Engelder and Nash admit their estimate far exceeds that of the recent USGS surveys. They caution, however, that these estimates are rooted in limited information, not the least of them being the limited amount of productive wells within the total Marcellus Shale "play" at the time those estimates were made, as well as limiting their estimates to information within only one-quarter the entire region, and at shallower depths than are reached at the heart of the play. Extrapolating from the USGS's own information, they revise their figure upward from 6.3 TcF using a factor of eight to reach their figure of 50 TcF of recoverable natural gas within the total formation.

After this data was published, and with Range Resources experience in Washington County, other gas companies entered the region, snapping up leases and applying for permits for drilling. The gas boom was on.

It is almost impossible to know exactly what the size and extent of the Marcellus Shale gas deposits are. The best determinant is using data from active wells, and extrapolating data from the actual production, taking a cue from other long-term unconventional gas wells. The principal control are wells in the Barnett Shale in central Texas. In 2009 Range Resources revised their initial estimates for the estimated ultimate recoverable (EUR) from wells within the southwest play of the Marcellus from 3 to 4 Bcfe (billion cubic feet estimated) per well to 4 to 5 Bcfe per well across the 430,000 net acres. These estimates are rooted in data from the first 145 days of active production, including the decline over time of productivity. According to Dave Cohen, the author of the article linked here, these estimates assume an active production life for Marcellus wells of 40 years. He notes, however, that the Barnett Shale wells only had an average active life of 7.5 years. What would the recovery rate be if the wells had, rather than a 40 year productive life, only 20 years? Certainly less than half, because the curve in the production decline is neither uniform nor proportional.

In other words, while initial production has been highly promising, only three years in to extensive drilling across much of the region, and more and more new wells skewing any attempt to estimate the productive capacity of the Marcellus Shale play make it impossible to come up with solid figures on how much gas is recoverable. This is not to say Engleelder and Lash's initial estimate is wrong, or that the gas companies assumption of a 40-year production life for Marcellus wells is wrong. It is, rather, to note that, by and large, the boom in Marcellus Shale gas production is rooted in a combination of unknowns and promising but as-yet not definitive initial well production figures.

In his Drilling Down series at the New York Times, Ian Urbina published a story on June 26, 2011 whose headline sums up the content:

Insiders Sound an Alarm Amid a Natural Gas Rush

The story, and over 400 pages of accompanying source documents, highlights gas industry and investment advisers caution in the face of public hype. Of all the stories in the series, this one has received the most criticism from the industry, some of it fair. While there are, indeed, hundreds of pages of email exchanges, internal documents and memoranda, there are many honest questions that need to be asked concerning these documents and other information that formed the basis for Urbina's story.

Reading through those hundreds of pages yesterday, I, for one, got the sense that, far from "sounding an alarm", the emails reflected the quite natural give-and-take concerning everything from caution in regards to the investment potential to downplaying the public hype over Marcellus Shale production numbers. While I find the claim the Times "outsourced" the article to a critic of shale gas the kind of scurrilous, semi-ad hominem attack that does not address the facts in question, the insistence that the documents were "cherry picked" does, to me at least, seem well-founded. In any large organization/industry, there are going to be a variety of points-of-view. In light of two recent financial bubbles - the dot-com bubble of the late 1990's and the housing bubble of the middle years of the previous decade - many investment advisers are likely skittish about claims of piles of money to be made in an untested area, full of wild-catters, new companies looking to make a quick buck, and serious concerns over environmental quality and state oversight of everything from leasing permits and land use to where hydraulic fracturing can and cannot be used.

A further problem with Urbina's story is simple enough - he does not use any actual data to bolster his claims that the doubting Thomas's within the industry have facts on their side. In essence, his story places without context the discussions among some within a large and diverse set of industries that, perhaps, the public relations campaign regarding natural gas recovery in the Marcellus Shale may not be all its cracked up to be.

The responsibility for a lack of data, however, rests squarely on the shoulders of the natural gas industry. They are reluctant to reveal large quantities of externally audited data concerning the production at wells, a complaint many researchers have repeated. It would be helpful if the industry allowed outside production audits, independent researchers, and others investigate their data in order to understand and give some kind of support to their various claims.

On the other hand, the idea that all may not be coming up rainbows and kittens within the Marcellus Shale gas boom does have some actual evidence.

The environmental impact of natural gas drilling is subject to debate, but nobody disputed that driller Encana Oil & Gas USA Inc.’s continued presence in Luzerne County would have created jobs and work opportunities.

--snip--

Encana’s decision to scrap drilling in Luzerne County means that major development probably won’t happen here, Kelsey said.

The company announced Thursday that the two exploratory wells it has drilled in the county are unlikely to produce natural gas in commercial quantities, prompting the company to immediately cease operations in Luzerne and Colombia counties.

Kelsey characterizes the company’s departure as a “missed opportunity.”

“It’s different than a situation where you have a major employer who quits and leaves, suddenly leaving many people unemployed,” Kelsey said. “It was more an opportunity that looked like it was coming to Luzerne County but won’t happen.”

Another article that same day explained Encana's decision, and some of the underlying geology:

“Over time, we’ve seen the industry trying to define where the limits of where the Marcellus play are,” said Dave Messersmith, an educator with Penn State University Cooperative Extension and a member of Penn State’s Marcellus Education Team.

“So we have a basic understanding of the geology, but in many cases, it really takes some exploratory wells to really understand what the potential is,” he said.

Messersmith said he expects to see companies drill more exploratory wells to define the edges of the economically viable shale play in Northeastern Pennsylvania generally.

“It’s a highly speculative business, especially in the early stages of a play’s development,” Messersmith said, adding that cases like Encana’s are “pretty common within the industry. We haven’t seen a lot of that happen in Pennsylvania, but obviously, as the years pass, we will see industry continue to look at the edges of the play.”

That same day, the same newspaper, The News Leader of Wilkes-Barre, PA, had the following editorial:

As it rapidly withdraws from the county’s Back Mountain region and the commonwealth, Encana carries in its draft a flurry of emotions, not the least of which are certain residents’ dashed hopes. The natural gas firm and its partner company, Whitmar Exploration Co., had drilled two exploratory wells in this territory and recently deemed it unlikely to produce sufficient amounts of natural gas to be profitable.

So long, land leases. (The companies had signed renewable deals for the rights to more than 25,000 acres in the county).

See ya, royalty checks. (They remain but a fantasy, for now.)

--snip--

[L]et’s use this reprieve in the Marcellus Shale melodrama as an opportunity for personal introspection and public action. Did our state, county and local governments respond appropriately to the industry’s potential threats, or its possible economic upside? If not, why not? What weaknesses have been exposed that can be addressed? Was cooperation evident among governing bodies?

Are adequate safeguards in place for our water supplies today? What about tomorrow?

Were our decisions related to the natural gas industry motivated mostly by self-interest, civic good or something else entirely?

The next time drilling companies, or another outside force, begin to influence our communities, how can we be better prepared to handle the situation smoothly, swiftly and collaboratively?

Beyond Global Warming (UPDATE)

On Friday, I discussed Cornell University professor Robert Howarth's study of the greenhouse gas footprint of the entire process of extraction and use of natural gas. I also discussed the criticisms of Howarth's study, its admitted limitations, and my own sense that a narrow focus on the greenhouse gas emissions misses other, more immediate threats to the environment.

Yesterday, I discovered a treasure trove of primary material, thanks to Ian Urbina's Drilling Down series in the New York Times. Appearing since February, the five articles in the series so far cover issues ranging from the impact of the waste water produced by hydraulic fracturing to questions regarding the reliability of claims on the extent of gas within the Marcellus Shale. Each article also has a link to an indexed, highlighted group of documents, sometimes numbering in the thousands (over eleven hundred for the first article alone) that consist of internal studies and memoranda, press releases and court filings, even (in the case of the first article) a couple hundred pages of hand-written EPA tip sheets. My favorite of these last was the call from a woman claiming to be the wife of Jesus Christ, who was disguised as rock singer Billy Idol. She also claimed to be the Queen of the Earth. How does a government bureaucrat follow up a call like that?

The first article in Urbina's series details the hazards posed by waste water from hydraulic fracturing. These are many, and various. First, the water used is gathered locally, which poses a potential risk to local water tables. Each well can use from 2 million to ten million gallons of water.

Only about twenty percent of the water put in to the well is pumped out and considered waste. That waste water not only contains sand and various salts, but various chemicals - the identity and proportions of which are still unknown - as well as waste products from underground. In the Marcellus Shale, this includes, among other naturally occurring toxins, radioactive isotopes of radon. Along with the shale, some regions of the Marcellus basin have abundant uranium. The radioactive decay has created pockets of radon gas, which can become dissolved in the waste water (as well as create a residential hazard; Utica, NY, in particular, has a high concentration of homes that have possible radon contamination).

Some of this water is collected in to pools. Most, however, is transported and dumped in to public sewage treatment plants. While this seems like a solution, there are several reasons why it is not. First, the sheer volume of water puts pressure on the treatment plants' ability to operate. Second, many of the materials in question cannot be properly filtered through conventional sewage treatment processes. Finally, there are no regulations regarding testing for radiation in drinking water, so there is no reliable way of ensuring the safety of the water.

Tucked away in the middle of the 1,113 pages of accompanying source documents with this article are two different sets of documents that highlight, each in its own way, the real environmental hazards that accompany natural gas drilling using horizontal drill hydraulic fracturing techniques. On page 293 is a news release from the Pennsylvania Department of Environmental Protection (DEP) regarding a $75,000 fine levied against Jersey Shore, PA. Along with discharging fecal matter, the plant also was in violation of an approved plan for accepting gas well waste water on ten occasions, including exceeding the 50,000 gallon limit in the approved plan. The plant also did not keep records of what was in that waste water.

Starting on page 317 is a fifty-five page study DEP conducted on the South Fork Tenmile Creek, which took treated water discharged from a facility that accepted well waste water. Tenmile Creek is in southwestern Pennsylvania, not too far from Pittsburgh. The study was conducted as a Cause and Effect Survey, using, according to the report, standard methodologies and bioassays to determine the effect on aquatic flora and fauna from three sites located downstream from the discharge site. A control site was located upstream.

The fauna used as a measure of the health of the stream are identified in the report as macroinvertebrates, which we non-technical folk usually call bugs, but refers to aquatic insects. The first test results were from Station 1, furthest from the discharge site. They randomly selected samples, then used a metrics called the Index of Biological Integrity (IBI), which covers a wide array of indicators, among which include Taxa Richness (the macroinvertebrates were not identified at the species level, just the genus; the plankton and other microfauna were identified to the species level), Total Taxa Richness, and something called EPT, which specifically refer to mayflies, stoneflies, and caddisflies. They had rated the various taxa on an existing standard scale of tolerance to pollutants, finding that while the range, on a 0-10 scale was 2-9, with a higher number meaning higher tolerance, the majority of the sample bugs were at the higher end of the scale.

If the IBI score was greater that 63.0, then the stream was healthy, the aquatic life "attaining", as written in the report. In fact, ten miles downstream from a site dumping treated waste water into a creek, the score was 28.

The survey of plankton indicated a higher concentration of salt-tolerant taxa, including rotifers and diatoms that prefer a higher salt content. In fact, the report states explicitly that tests showed "very high total dissolved solids (TDS) (over on thousand) with correspondingly high levels of chlorides, typically found in oil and gas wastewater downstream from the STP [Sewage Treatment Plant] discharges."

Long story short - even treated water is hazardous to the ecosystems in streams receiving effluvia from sewage and waste water treatment facilities that include drilling waste water.

Now, one could argue, I suppose, that the death of some bugs hardly matters. First of all, in response, it isn't about the bugs themselves (although that, too, is an issue). It is about what we are putting in the environment that is killing those bugs. One of the assumptions most people have is that, after being treated, water released from such plants is both safe and clean. It shouldn't contain fecal matter, as did the water from the Jersey Shore plant. It shouldn't be high in salt, threatening the sustainability of life in the stream, as in South Fork Tenmile Creek.

Yet, it is.

If it were only South Fork Tenmile Creek that was effected, it wouldn't be an issue. If only Jersey Shore were dumping (literally) crap out of its treatment plants, as well as well waste water after already exceeding its legal capacity and not keeping track of what was in that water, well, I might be frustrated but hardly concerned.

It is repeating these stories over and over and over and over again. There are thousands of communities in Pennsylvania, hundred of waste water treatment facilities accepting well waste water, tens of thousands of miles of small streams like Tenmile Creek taking in higher levels of chlorides and other salts (as well as other solids that were not tested for) than the indigenous fauna can tolerate and remain healthy. These creeks feed rivers, from the Monongahela and Ohio to the Susquehanna and Delaware, which are each and all part of irrigation systems, watersheds, and even sources of drinking water for small towns and even cities.

These studies were conducted in 2009, about a year or so in to the expansion of natural gas drilling in Pennsylvania. Current projections see sustained drilling for decades. That is years and years of pouring filth and poisons in to our water ways, killing the fragile life that exists there, threatening the soil, irrigation, and drinking water. We do not yet know the total cost - environmental, economic - of hydraulic fracturing on the environment, but it seems it is already being paid, in part, by the ecosystem of South Fork Tenmile Creek.

UPDATE: On the main page for the Drilling Down Series, to which I linked above, there is a downloadable Excel Spreadsheet listing the contaminants found in over 200 tested wells across Pennsylvania. The sheet lists two different isotopes of radium in water, those same two in solids, two isotopes of uranium in water, one isotope of uranium in solids, something referred to as "Gross Alpha", a reference to alpha-particle radiation, and benzene. The radiation levels are listed at picoCuries per Liter, or pCi/L. The international standard is the Bequerel, one decay per second. The relationship between the two standards of measure per volume is 1 pCi/L = 37 Bq/m3. The EPA safety threshold is 1.91 pCi/L. The volume of radioactive radium in a tested well in Bradford County, PA, is 506.

As so many fret about possible radioactive contamination from fallout from the Fukushima meltdown in Japan, we already have extremely high levels of radiation in wells from domestic gas production.

Democratic Development Part I - The Real World

Last night I caught the last half of This American Life and was both surprised and jealous to discover they were doing a story on one town, Mt. Pleasant, PA, and its encounter with a gas company, Range Resources. The particulars of the story, a conflict over zoning in Mt. Pleasant, has been covered in the press and on-line, so while I am going to recap it here, I urge anyone who has not to check out either TAL's website to download a podcast of the program, or, if you are in the northern Illinois area, listen to a rebroadcast of the program on WNIJ this morning at eleven a.m.

The conflict between Mt. Pleasant and Range Resources can be summed up pretty easily - David and Goliath. As this blog post at Marcellus Drilling News.com makes clear, the company was quite willing to toss an entire town, and all its gas reserves, away if the township didn't pass an ordinance to its liking.

Range Resources, one of the largest drillers in the Pennsylvania Marcellus Shale, is threatening to stop drilling in Mt. Pleasant Township (Washington County), PA. A letter to landowners in the Township says, in part, “We may be forced to shift activity to other, more cooperative townships.”

Why the threat? The dispute seems to center on the type of permits that will be issued in the Township if a new ordinance is passed later this month.

The township has been working on a new oil and gas ordinance which is slated to be adopted by the end of the month. Range, [Township Supervisor Larry] Grimm said, "is dead set opposed" to gas drilling being a conditional use instead of a permitted use. Conditional use would require a public hearing on each well.*

--snip--

“If the township is still uncooperative, we are prepared to explore all options, including no longer drilling, which would cost landowners tens of millions of dollars in lost royalties. We don’t want to do that.”*

There was not a debate over whether or not to drill in and around the Mt. Pleasant area. The question involved details, wherein the devil usually resides. A conditional-use ordinance may - or may not - require a public hearing on each new well, but it also places restrictions on well location, whether or not company supervisors can sleep on-site (another conflict within the town), truck route usage through the town, and other concerns.

Range, like all stakeholders in this matter, certainly has the right to make its voice heard, to make the case for its preferred outcomes, and to use any and all legal lobbying means necessary to get the township to act in a way that suits its interests. At the same time, the three council members - and there are only three, part time council member, on a limited public budget dealing with a variety of matters all rural communities face from animal control to meth production and distribution along with the gas boom - were pursuing an ordinance they believed, and from the feedback from the community had good reason to expect would be supported as, in the interests of both the township and the gas company. Indeed, the conditional use zoning law would not require a public hearing and comment period before each new well. Rather, it would establish guidelines for bundling proposed and actual wells together for periodic hearings, but Range could continue to explore and drill, provided certain other legal limitations were followed.

This struggle in Mt. Pleasant has been made more complicated by recent attempted legislation in the Pennsylvania State Senate. A bill that would impose an impact fee on natural gas companies had, tucked in near the bottom of the bill, a provision that stated any community that did not pass permitted-use zoning ordinances for the gas companies would have no access to the funds distributed through the legislation. The bill includes a model ordinance local governments could use to draft their legislation to be in line with the proposed legislation.

The legislation failed, but is sure to be reintroduced. As I keep saying, the stakes are too high for this to go away.

The struggle throughout Pennsylvania between gas companies playing the hardest of hard ball and small townships over zoning ordinances has not been lost on local governments in New York. With a ban on natural gas development still in place, localities have been studying the action to their south, and are getting together to compare notes on how to proceed once the ban is lifted.

Gregory Sovas recently addressed local government leaders in Upstate NY to brief them on the fact that local governments cannot enact laws—zoning or otherwise—that would prohibit hydraulic fracturing or drilling in the Marcellus and Utica Shale. The legal principle is that local government laws cannot supersede the state law when it comes to regulating oil and gas drilling. Mr. Sovas should know—he’s the author of the language that became the law.

MDN received a number comments on that article (see here) stating the legality of local zoning ordinances regulating oil and gas drilling is far from over. The commenters claim that New York’s law in this regard is not yet settled.

A recent article sums up that viewpoint, stating that DEC Commissioner Joe Martens has left the door open in the forthcoming new regulations for local governments to control or even ban fracking by using zoning ordinances. . . .

The hardball tactics the gas companies are willing and can afford to play are not pretty. Even more than the often nonsensical theater at the federal level, this kind of local struggle proves how little politics resembles beanbag. Townships, villages, boroughs, counties, any and all local governing bodies throughout the Marcellus Shall region should be prepared for politics at their worst. While there has been much screaming about the topic, particularly on-line, no serious player involved in these matters has proposed an out-and-out long-term ban on natural gas exploration and drilling. Indeed, as the case of Mt. Pleasant, PA makes clear, the issue was not whether to drill and develop, but under what conditions. The gas company has tremendous resources at its disposal, not the least of them the option of withdrawing from the township altogether, letting it wither on the vine while other, neighboring townships (having learned their lesson), prosper as the gas companies are given the keys to the town, the town store, and pretty much anything else they want. The proposed legislation in Pennsylvania, which appears to have a mirror in New York (although it seems assured there will be litigation over that very question), does not help localities in making the best decision for their constituents.

In the real world, the politics of economic development can be rough and tumble. The case of Mt. Pleasant makes clear just how rough.

Bridge Fuel

As we recognize the need for energy independence and alternative sources to power our nation, natural gas is an important economic driver and a critical bridge fuel.

Rep. Dianne DeGette, D-CO

When the total emissions of greenhouse gases are considered, Greenhouse gas emissions from HVSWHF-obtained natural gas are estimated to be 60% more than for diesel fuel and gasoline. HVSWHF-obtained natural gas and coal from mountain-top removal probably have similar releases. These numbers should be treated with caution. Nonetheless, until better estimates are generated and rigorously reviewed, society should be wary of claims that natural gas is a desirable fuel in terms of the consequences on global warming.

Robert Howarth, David R. Atkinson Professor of Ecology & Environmental Biology, Cornell University.

One frequently reads and hears reports on scientific papers in the mainstream press. Whether it is some interesting tidbit about astronomy, the discovery of a planet perhaps, or something from medical biology such as new data on the effects of certain vitamins on general health, science news is either interesting or important. Yet, journalists aren't scientists (and most will admit that under pressure) and sometimes, in the desire to provide timely information they make mistakes. There is nothing wrong with this, and the errors are of the kind that most folks, including many scientists, make, such as confusing correlation and causality.

When there is an issue freighted with so much political, financial, economic, and environmental baggage as a report on the greenhouse gas footprint of fossil fuels, however, the itch to sensationalize may seem overwhelming. In April, Robert Howarth of Cornell University and some colleagues published a paper on the net total effect of natural gas extraction and combustion, comparing it to the extraction and combustion of coal. While admitting up front they had limited data, and revising their estimates based upon misstating the rate of capture of methane within coal veins and mines, they discovered that, far from being a "clean alternative" or "bridge fuel" from dirty coal, the entire process for getting natural gas out of the ground, getting it to municipal generating stations and underground storage tanks where it can be sent through pipelines to residential gas users has a similar overall potential impact to coal.

If you Google "Robert Howarth", among the links provided at the top of the list of 1.9 million include such stories as these: "Natural Gas May Be Worse for the Planet than Coal", in the April 16, 2010 edition of Technology Review; "BBC News – Shale gas ‘worse than coal’ for climate", on the homepage of Gas Drilling Awareness for Cortland County[, NY]; "The Clean Fossil Fuel? Natural Gas Under Fire", from May 9 of this year on the website The Txchnologist, a site sponsored by GE; "Shale gas worse than coal: study", an April 27 report from the Canadian Broadcasting Corporation.

All this breathless reporting has been met by equally breathless retorts from the industry. America's Natural Gas Alliance, the industry umbrella organization, was quick to make clear the limitations of Howarth's study.

News of the National Energy Technology Laboratory's (NETL) presentation supporting the fact that natural gas produces half the greenhouse gas emissions of coal came out last week just as debunked professor Robert Howarth went to Washington to trot out his baseless claim that somehow natural gas is actually a less clean fuel.

News of the National Energy Technology Laboratory's (NETL) presentation supporting the fact that natural gas produces half the greenhouse gas emissions of coal came out last week just as debunked professor Robert Howarth went to Washington to trot out his baseless claim that somehow natural gas is actually a less clean fuel.

The NETL, according to its website, is "part of DOE’s national laboratory system, ... owned and operated by the U.S. Department of Energy (DOE). NETL supports DOE’s mission to advance the national, economic, and energy security of the United States." The report in question is a detailed analysis of the overall greenhouse gas (GHG in the linked report) footprint of natural gas, from cradle to grace, as it were, and it contradicts Howarth's study. In a summary on the website Marcellus Drilling News, the NETL study is summarized as follows:

…the Department of Energy’s National Energy Technology Laboratory (NETL) has applied ISO standard methodology, and a substantial understanding of industry operations, to do the calculation itself… Its conclusion? Used to generate electricity, natural gas – conventional or not – results in far less emissions than coal.

Using a 100-year global warming potential and assuming an average power plant, unconventional gas results in 54% less lifecycle greenhouse gas emissions than coal does. Even using a 20-year global warming potential, as Howarth controversially argues one should, the savings from substituting unconventional gas for coal are almost 50%. The NETL study acknowledges – and explores – a range of uncertainties. But it finds nothing close to the problems that Howarth claims.

Howarth found a large fraction of produced gas from unconventional wells never made it to end users, assumed that all of that gas was vented as methane, and thus concluded that the global warming impacts were huge. As the NETL work explains, though, 62% of that gas isn’t lost at all – it’s “used to power equipment”.

No less an institution than the Council on Foreign Relations has weighed in.

The NETL documents don’t address the Howarth study explicitly, but if you flip to page 25, you’ll see a big part of the discrepancy explained. Some readers will recall that Howarth found a large fraction of produced gas from unconventional wells never made it to end users, assumed that all of that gas was vented as methane, and thus concluded that the global warming impacts were huge. As the NETL work explains, though, 62% of that gas isn’t lost at all – it’s “used to power equipment”.

The NETL work also does a much more careful job looking at things like losses from long distance transmission. In addition, it doesn’t include losses from local distribution, since there’s no local distribution involved in using gas for power generation.

Bottom line: Those who were skeptical of the Howarth study were reacting correctly. There’s still much useful work to be done, but for now, the NETL work is a far more useful guide for thinking through the gas emissions issue.

Since this is science, even as it is laced with politics - big politics, big money, big stakes - the argument, I believe, will go on, but I would offer a couple thoughts on the controversy. First, the issue of the greenhouse has footprint of natural gas is, overall, less urgent than the potential for long-term environmental damage from the process used to extract it, what the NETL report calls "unconventional wells", hydraulic fracturing. Trying to taint natural gas with culpability in global warming misses the point. The threat from hydraulic fracturing is very real, very immediate, yet also long-term, and (perhaps) only tangentially related to matters of global warming.

This is not to suggest that continued study of the question of the cleanliness of natural gas is unwarranted. Given the highly-charged atmosphere (no pun intended), any study will become fodder for whichever side feels their ox is being gored. The question of whether or not considering natural gas a "bridge fuel" to cleaner energy production and use should be continually evaluated. For now, however, the question is not gas's status as a bridge. Instead, studies of the impact of hydraulic fracturing on ground water and soil health should be conducted, and attention should focus on the already-existing questions and problems surrounding the life-cycle of natural gas.

A Necessary Musical Interlude

I've been working hard all week. At work. Researching and writing these series of posts on the Marcellus Shale gas boom. I need a break from it. Maybe you do, too. Some here's and there's. Then some randomness to sweeten the pot.





Some of these are past their expiration date, but they are also the musical equivalent of comfort food for me. I feel better hearing them.

Now for the unexpected:

Reality Dream III - Riverside
Lay, Lady, Lay - Steve Howe (Bob Dylan Tribute)
Good Lovin' - Grateful Dead (Live)
Now She'll Never Know - Marillion
Compromise - Indigo Girls
So Legt Ihn Die Blumen, Lazarus Oratorio - Franz Schubert
Vital Signs - Rush
Little Brother - Grizzly Bear
Mellotron Scratch - Porcupine Tree

Policy, Politcs, And Hydraulic Fracturing

One complaint often heard in various liberal circles is that the United States is the only industrialized country not to have some kind of comprehensive energy policy. This is very true. We also do not have comprehensive policies regarding housing, job creation, immigration and naturalization, law enforcement jurisdictional lines, and pretty much any other policy area. The reason for this lack of any comprehensive policy in these areas is simple enough to understand: the structure of our government, as well as the whims and fancies of politicians, quite simply create too many barriers to the creation of any comprehensive policy in any area. With federalism placing limitations on the reach and sovereignty of both states and the federal government, differences between civil, criminal, and administrative law as well as their reach, and the ideological and policy preference differences within and among the parties all create enough of a barrier to limit the possibility of creating some kind of comprehensive, coherent policy on any issue you wish to name. Laws change, different parties take over Congress or the Executive Branch, Administrative regulations accrue and change over time, states approach various matters in a piecemeal or thorough fashion, only to have a new governor come in and fundamentally alter the equation.

The pursuit of a comprehensive energy policy and strategy was one of the major goals of the Carter Administration. In a speech to the nation on April 18, 1977 (according to his memoirs, Keeping Faith), he announced his plan to introduce such legislation to Congress, famously declaring that the pursuit of such a policy would be "the moral equivalent of war". Now, there are wars and there are wars. Even the gilded chapter of Carter's memoirs on the subject make clear he and his staff pursued the goal with all the energy and expertise of the Italian campaign in Albania during the Second World War. Rather than a long-term, comprehensive strategy, what emerged at the end of Carter's term were a series of measures, some conflicting with one another, all limited in scope and soon to be ignored or made moot with time. In the decades since, there has been no attempt to create any kind of strategy to deal with the complicated matter of energy consumption, conservation, the environmental threat of extracting non-renewable resources, or support for renewable energy.

The situation at the state level varies depending upon many factors. California, for example, is a good model for how to design an energy policy that balances multiple concerns, while ensuring that all stakeholders both have a voice and surrender their most cherished desires. Texas, on the other hand, is a wide open arena, with oil and gas companies able to dictate the terms of their presence in the state.

Yesterday, I noted Pennsylvania Governor Tom Corbett's desire to make Pennsylvania the Texas of the northeast, by which he presumably means limited administrative and environmental regulation, little to no taxation of their business enterprises or practices.

I will be up front about this approach. I find it odd, to say the least. In the case of Pennsylvania, or, indeed, any of the states in the Marcellus Shale region, it is the states who hold the upper hand in any possible discussion over the terms by which outside entities are allowed to open up shop. The potential of the Shale natural gas fields are far too attractive for the companies to balk at playing by rules that are set to benefit the states in question. In other words, any threat by any gas company not to play ball is empty. In fact, any company that followed through would have three or four others ready to take its place.

Yet, as too often happens, there seems to be a belief that, having abundant natural resources available for exploitation means public capitulation to private demands on everything from taxes and property regulations to environmental oversight and the maintenance of the transportation networks. On the one hand, the states see possibilities for economic development from the industry; on the other hand, they are unwilling to make the industry share the burden for that development, seeing instead such development coming from the effect on development upon existing revenue streams. This scenario is, quite clearly, playing itself out in the mountains of Pennsylvania.

While the states differ in their approaches to the entwined concerns of economic development and environmental protection, there is an on-going effort to address specific concerns regarding the potential hazards from hydraulic fracturing. Introduced recently for the third time, the Fracturing Responsibility And Awareness of Chemicals Act (FRAC Act - I find this kind of thing too cutesy) is designed to address two specific matters relating to hydraulic fracture techniques for natural gas drilling. The first is a loophole in the law that exempts natural gas companies from oversight in matters regarding clean water. The second is the on-going lack of transparency on the chemical content of the fluid used in hydraulic fracturing. A story on the recent reintroduction of the bill includes comments from one of the authors and co-sponsors of the legislation:

“There is a growing discrepancy between the natural gas industry’s claim that nothing ever goes wrong and the drumbeat of investigations and personal tragedies which demonstrate a very different reality,” Rep. Polis said in a press release. “The FRAC Act is a simple, common sense way to answer the serious concerns that accompany the rapid growth of drilling across the country. Our bill restores a basic, national safety-net that will ensure transparency within the industry and safeguard our communities. If there is truly nothing to worry about, then this bill will lay the public’s concern to rest through science and sunlight.”

--snip--

“As we recognize the need for energy independence and alternative sources to power our nation, natural gas is an important economic driver and a critical bridge fuel,” said Rep. DeGette. “However, it is incumbent upon us to ensure the process for extracting natural gas from our land is done safely and responsibly. The FRAC Act takes necessary but reasonable steps to ensure our nation’s drinking water is protected, and that as fracking operations continue to expand, communities can be assured that the economic benefits of natural gas are not coming at the expense of the health of their families.”

“While the natural gas industry would like to pretend that the current regulatory framework is sufficient to protect the environment, drinking water and public health, scores of citizens throughout the country are telling a different story,” said Rep. Hinchey. “We need to know exactly what chemicals are being injected into the ground and we must ensure that the industry is not exempt from basic environmental safeguards like the Safe Drinking Water Act. The FRAC Act is an important first step toward ensuring that people are protected from the risks of hydraulic fracturing.”

With New York poised to move forward in allowing the use of hydraulic fracturing in the natural gas fields of the Southern Tier, this law would address specific concerns on a national level, giving state lawmakers the ability to make responsible decisions regarding balancing the very real need for economic development with the very real dangers posed by the use of this particular technique. It isn't a national energy policy, but it is a good step forward.

Economic Development Or Economic Exploitation

Judge Jones further emphasized that the oil companies “wield significant, if not exclusive, power in the drafting of oil and gas leases” and that “a determination that Plaintiffs had repudiated their leases via the filing of these actions further tips the balance in favor of the oil companies” and “would likely dissuade lessors from bringing potentially meritorious actions.

Report on March 11, 2011 ruling on class action suit brought against Oil and Gas companies by lessors in Pennsylvania, Federal District Court, Middle District of Pennsylvania, Judge John E. Jones III writing for the court.

Nothing more clearly states the tangled issues of economic development, the promise of vast sums of money involved, and the disparate power of the various stakeholders in the pursuit of retrieving the natural gas in the Marcellus Shale in Pennsylvania than this summary report.

According to an on-line fact sheet of the Wilkes-Barre, PA News Leader, between January of 2008 and mid-2009, the asking price per acre for drilling leases went from $100 to as much as $2000 an acre. Over and above the asking price, however, lease terms in Pennsylvania are also dictated by a Pennsylvania statue, known as the Guaranteed Minimum Royalty Act of 1979 (.pdf), that mandates a minimum royalty for lessors on oil and natural gas extracted on privately held land of one-eighth the value extracted. In another class-action suit decision, in federal District Court in Erie, PA, Range Resources was found to have used unlawful accounting methods to determine royalty payments to lessors.

A class action settlement has been reached in a class action lawsuit against Range Resources (“Range Resources” or “Defendant”) in federal district court in Erie, Pennsylvania (styled Frederick v. Range Resources), alleging, among other things, that Range Resources unlawfully reduced natural gas lease royalty payments of certain property owners above Marcellus Shale by using the point-of-sale volume of gas as opposed to the volume of gas collected at the wellhead and by allegedly deducting marketing costs and management fees, according to a Range Resources Marcellus Shale natural gas lease royalty class action lawsuit settlement news report.

The Range Resources Marcellus Shale natural gas lease royalty class action lawsuit settlement reportedly provides, among other things, for a cap on the amount of costs that can be deducted by Range Resources prior to calculation of Marcellus Shale natural gas lease royalties in the future.

Similar such suits are cropping up across Pennsylvania under the terms of the Guaranteed Royalties Act.

Legal action isn't restricted to Pennsylvania, however. In New York, there is a class-action suit brought against Chesapeake Energy by landowners in New York. A moratorium on horizontal-drilling hydraulic fracturing in New York State, and Chesapeake is insisting that the leases, due to expire soon, should be extended.

According to pressconnects.com, Chesapeake Energy is one of several energy companies that have sent letters to landowners in the New York Southern Tier with whom it has leases asserting that the state’s fracking moratorium constitutes a “force majeure” — or an unforeseen event that hinders the terms of the contract — and that the leases are being extended. Some of those property owners expected their leases to run out this year. Now, approximately 300 have joined two class action lawsuits Chesapeake’s force majeure claims.

An issue with even more potential impact than the money involved in gas drilling leases is jobs. According to a February, 2011 story in the Wilkes-Barre, PA News Leader, Chesapeake Energy is extending a commitment to hiring local workers, but the pace is slow-going.

When Chesapeake’s first rigs began arriving in Bradford County about two years ago, the company had 38 local employees, according to David Fisher, the company’s vice president of drilling services.

“And when I say local, I mean Pennsylvania, New York, Ohio, West Virginia, working in this Northern District for Chesapeake. As of today, we have 225,” Fisher said.

One of the company’s goals is to see those numbers increase, especially for Pennsylvanians. And, he emphasized on Thursday before a tour of a subsidiary Nomac Drilling’s new employee training and housing facility near Sayre, the jobs are life- and family-sustaining.

It’s possible that someone new to the industry with a high school diploma but no prior experience can complete the training program and start working in the region on drill rigs making between $55,000 and $60,000 a year, Fisher said.

“What we’re trying to do as much as anything else through our training and through our presence here, is to build careers, not just jobs,” he said.

--snip--

Retired Bradford County Sheriff Steve Evans, who went to work for Chesapeake as senior security officer in February, said he believes the training and housing facility is “living proof” that Chesapeake is “a company that really cares about minimizing the impact of a major, major operation – the harvesting of Marcellus Shale.”

“This is a substantial financial commitment to the community. We have housing issues here. There’s not enough housing. So this company invested a great amount of resources in building a very nice part of our community,” Evans said.

And, he said, the men and women who work for TriCorps Security at the facility are current or retired law enforcement officers from the local community.

“I know their personal stories, folks. I know that this has been a real blessing. Law enforcement officers don’t get paid a tremendous amount of money, and Chesapeake/Nomac has had no problem providing professional law enforcement officers, in exchange for their efforts, financial means to help their families in these trying times,” Evans said.

Money for land. Money for gas. The prospect of careers in a field that pays well. The lure away from public service to private security. All of these are very real, and very promising opportunities for a region of the country that has been seeking investment in development. The kinds of opportunities the gas boom is offering land-owners, communities, and individuals are very real and very attractive. The various law suits in both New York and Pennsylvania involve land owners seeking better terms, and legally-calculated returns for leasing their property for natural gas development.

Yet, what is the cost hidden behind the billions of dollar signs? As I indicated yesterday, there have already been a host of environmental and safety issues in the gas fields. Pennsylvania's Republican governor is attempting to address concerns in what can only be called a unique administrative manner.

Approval of enforcement actions and punishments aimed at Marcellus Shale drilling operators must now go through top officials in the Department of Environmental Protection in a change that the agency said Wednesday is aimed at improving its consistency in handling the rapidly growing industry.

--snip--

"We need to make sure we are consistent and that we make our best effort to be the most effective regulator of this industry, which will benefit all Pennsylvanians," [Katy] Gresh {PA DEP Spokeswoman] said.

Gov. Tom Corbett, whose successful campaign last year received sizable donations from members of the natural gas industry, has said he wants to make Pennsylvania the Texas of the natural gas boom. Pennsylvania is the largest natural gas state not to tax the activity, and Corbett is against imposing a new tax on it.

As questions about the potential environmental hazards of hydraulic fracturing mount; as accidents across the state pour toxins in to water ways and water sheds, and as neighboring New York is poised to reopen private lands for natural gas exploration and extraction, the push and pull of the various issues and questions has yet to be addressed systematically. Both PA's Republican Governor and New York's Democratic Governor see the potential benefits from the investment in economically stressed areas. While New York placed a moratorium on hydraulic fracturing, there is every indication that moratorium will be lifted soon. What is left unaddressed in the potential cost of the environmental damage.

All those dollar signs are silencing a host of uncomfortable questions that have not yet even been asked, let alone answered. Good jobs, better roads, financial security are all attractive goals, worthy of state support. At the same time, protecting our natural resources from undue and unnecessary damage, even destruction, is also a worthy goal, offering the grim possibility that all the money made today may end up being needed to pay the cost of cleaning up the mess that will, most assuredly, be left behind.

Hydraulic Fracturing - Promise And Problems

While geologists and industry specialists understood, before the various revised assays of the region, there was a lot of potential for natural gas deposits within the Marcellus Shale, it was with the development of horizontal drilling combined with hydraulic fracturing (known as "fracking") in the past couple decades that have allowed for deep wells (up to 10,000 feet) to be drilled to access these deposits. With the widespread, successful use of fracking in the Barnett Shale in the Dallas-Fort Worth area, it became industry practice. It also opened up many new areas for exploration and exploitation.

Fracking is simple enough to understand. Because there are few huge reservoirs of natural gas within and beneath the layer of shale, the trick to getting the gas out is two-fold. First, the shale is brittle, what geologists call fissile. Because it is made up in part from the compression of organic materials, it is also porous, tiny holes and pockets running through out the formation. In order to get that gas, the rock has to be broken, the gas then pooling and forced out of the ground.

Fracking does both. While basically water, it has a variety of chemicals and physical additives, to give it some punch. Forced under high pressure, it hits that fissile material. After sufficient shale has been reduced to power, the water acts to force the natural gas in to the empty space. The flow on the pipe is reversed, and up comes the gas. Then, the fracking liquids are pumped out as much as possible.

The industry insists that, done properly, the process poses no risks and offers the benefit of access to previously untapped sources of energy. With natural gas burning far more clean than coal, it is touted as an alternative for use in municipal power generating plants as well as residential power (full disclosure here - our house has a generator that is powered by natural gas; once a week, it cycles through a test run filling the surrounding with the smell of gas; we love our generator, and if it weren't for the natural gas line that feeds it, we would have many days and nights without power, in the worst parts of both summer and winter). With the many debates over energy use, global warming, and the impact coal-fired electrical plants have that are not limited to greenhouse gas emissions, it would seem that the fields in the Marcellus Shale offer the prospect of long-term access to a cleaner alternative.

The process, however, is not without either its critics or its problems. I will admit that my doubts about the entire situation began not with the discovery of the Marcellus gas boom itself, but last June when I heard a report on NPR about a documentary entitled Gasland, which I wrote about. The following is from the transcript of the interview host Ira Flatow did with the director of Gasland, Josh Fox:

I traveled to a nearby place called Dimock Dimock, Pennsylvania, 50 miles away from me. And I found the place in utter dismay and disarray. Halliburton trucks all over the place. People - very scared, their water bubbling and fizzing, kids getting sick. One of the resident's water well exploded on New Year's Day 2009, just spontaneously combusted because I guess so much natural gas is pooling up inside the water well that the pump ignited it and it blew up into...

FLATOW: Did this only happen after the drilling...

Mr. FOX: After the drilling.

FLATOW: It wasn't there all this time?

Mr. FOX: No.

FLATOW: It was like natural gas pockets underground and...

Mr. FOX: Well...

FLATOW:...that might have existed and they happen to tap into while they were drilling their own well.

Mr. FOX: Residents insist that their water was good. There were pre-drilling tests that showed no methane or natural gas compounds, which are also some of the more volatile organic compounds that are carcinogenic...

FLATOW: Mm-hmm.

Mr. FOX: ...benzene, toluene, xylene. You know, the residents on the ground and everywhere that I went where this is a problem, chemicals migrating into the water supply from the drilling process.

In April, The New York Times published a long article that looked at the same sets of issues and questions surrounding the practice.

“Questions about the safety of hydraulic fracturing persist, which are compounded by the secrecy surrounding the chemicals used in hydraulic fracturing fluids,” said the report, which was written by Representatives Henry A. Waxman of California, Edward J. Markey of Massachusetts and Diana DeGette of Colorado.

The report, released late Saturday, also faulted companies for at times “injecting fluids containing chemicals that they themselves cannot identify.”

The inquiry over hydrofracking, which was initiated by the House Energy and Commerce Committee when Mr. Waxman led it last year, also found that 14 of the nation’s most active hydraulic fracturing companies used 866 million gallons of hydraulic fracturing products — not including water. More than 650 of these products contained chemicals that are known or possible human carcinogens, regulated under the Safe Drinking Water Act, or are listed as hazardous air pollutants, the report said.

A request for comment from the American Petroleum Institute about the report received no reply.

--snip--

Some ingredients mixed into the hydraulic fracturing fluids were common and generally harmless, like salt and citric acid. Others were unexpected, like instant coffee and walnut hulls, the report said. Many ingredients were “extremely toxic,” including benzene, a known human carcinogen, and lead.

Companies injected large amounts of other hazardous chemicals, including 11.4 million gallons of fluids containing at least one of the toxic or carcinogenic B.T.E.X. chemicals — benzene, toluene, xylene and ethylbenzene. The companies used the highest volume of fluids containing one or more carcinogens in Colorado, Oklahoma and Texas.

The report comes two and a half months after an initial report by the same three lawmakers that found that 32.2 millions of gallons of fluids containing diesel, considered an especially hazardous pollutant because it contains benzene, were injected into the ground during hydrofracking by a dozen companies from 2005 to 2009, in possible violation of the drinking water act.

As the report made clear, the companies consider the details over what is included in the fluid injected underground proprietary information, and refuse to divulge details over its contents. All the same, the discovery of high concentrations of various toxic and carcinogenic compounds in and around drilling areas has raised red flags among both environmental activists and law-makers.

On April 20 of this year, at a natural gas well outside Canton, PA, a cracked pipe led to the release of thousands of gallons of fluid used in the fracking process. The leak, above ground, reached a small stream that, in time, dumps in to the Susquehanna River. This particular well was operated by Chesapeake Energy, an Oklahoma City-based energy company that is among the biggest investors in the Marcellus Shale Development.

This isn't the only time there have been problems with Chesapeake-operated wells.

Pennsylvania regulators levied a record fine for contaminating drinking water against major natural gas producer Chesapeake Energy, a move that threatens to intensify a fierce debate over drilling for natural gas in the state.

The Pennsylvania Department of Environmental Protection fined Chesapeake $900,000 for contaminating water supplies inBradford County, a busy drilling area in the prolific Marcellus shale gas formation, the agency said on Tuesday. It was fined another $188,000 for a fire that injured three workers in February.

The fine will again cast a spotlight on hydraulic fracturing, or fracking, a controversial process used to extract natural gas from shale formations, which involves blasting a mix of water, chemicals and sand into the rock.

While public criticism has recently been focused on the possible contamination from fracking waste products, Tuesday's action stems from complaints that gas near drilling wells had seeped into the drinking water.

The agency began an investigation in February 2010 after receiving complaints from residents about drinking water near Chesapeake shale gas drilling sites. The agency concluded that contamination was caused by improper well casing and cementing, allowing seepage from non-shale shallow gas formations.

And Chesapeake isn't the only company facing penalties. According to a report published in April of last year in the Towanda, PA Daily Review, since the beginning of large-scale drilling in Pennsylvania in 2008, there were 1500 violations of various state environmental laws.

Two-thirds of the 1,435 violations were identified by the report's authors as likely to harm or pose a threat to the environment, while the other third were identified as administrative or safety violations.

The violations were issued by the state Department of Environmental Protection, the agency that regulates gas drilling in Pennsylvania, which released the records to the association in response to a Right to Know Law request.

Elana Richman, projects coordinator for the Pennsylvania Land Trust Association, said the organization sought the records to measure the gas extraction industry's environmental record as Marcellus Shale drilling expands in the state.

"We had the feeling that there was a lot out there that we weren't seeing," she said.

The association found that of the 952 violations with environmental implications, 277 were for improper erosion and sedimentation plans or controls, 268 were for faulty wastewater pits, 100 were violations of the state's Clean Streams Law, and 154 were spills of brine, oil, drill cuttings or other waste to the ground or streams.

DEP released the details of one such spill Monday, when it announced that it had fined Talisman Energy USA $15,506 for a spill of gas drilling wastewater at a Bradford County well site in November.

The spill of between 4,200 to 6,300 gallons polluted a small, unnamed tributary to Webier Creek, DEP said. The company has since completed the state's cleanup requirements.

Violations associated with recent high-profile environmental accidents, like well blowouts and gas contamination of water supplies, occurred in smaller numbers during the report's study period, between January 1, 2008, and June 25, 2010.

Another company that has faced fines is Dallas-based Chief Oil & Gas, which received a $180,000 fine from the PA DEP. Chief is the company that states, right on its homepage, that social responsibility is one of its core values.

It isn't just the potential for contamination of ground water and wells. There are other, more insidious potential hazards linked to fracking.

Two natural gas companies agreed Friday to temporarily cease operations of injection wells in an area of central Arkansas that has seen more than 800 earthquakes during the past six months.

Oklahoma City-based Chesapeake Energy and Clarita Operating of Little Rock said they would comply with the Arkansas Oil and Gas Commission’s emergency request to stop all injection activities in Greenbrier- and Guy-area wells used to dispose of wastewater from production. The panel’s next regular meeting is March 29.

Geologists are studying a swarm of recent area quakes, most tiny, in an attempt to determine whether there is a connection between the seismic activity and gas-drilling companies’ work in the Fayetteville Shale formation. A 4.7-magnitude earthquake, the most powerful reported in the state in 35 years, struck near Greenbrier on Sunday night.

A six-month moratorium on new injection wells in the area took effect in January to allow time to determine what relationship, if any, there is between the wells and the earthquakes.

In the absence of a comprehensive national energy policy that includes incentives for research and development for alternative energy sources, there is an obvious need for the potential resources that lie deep beneath the Northeast United States. Nothing, however, occurs without some cost, and the wide-spread use of hydraulic fracturing certainly poses as many risks and hazards as it does the promise of extracting badly-needed natural gas from two miles below the surface. It would seem obvious that, in light of the sheer volume of issues surrounding the practice, more and better safeguards are needed to ensure both that the practice is carried out in a responsible manner as well as fulfilling the promise of all that untapped natural gas becoming available for use.

Tomorrow - Development or Exploitation?