Explosive Texas ‘fracking’ accident could have been much worse

The Big Fracking Bubble: The Scam Behind Aubrey McClendon's Gas Boom

By Jeff Goodell ~ Rolling Stone

 

 

Aubrey McClendon, America's second-largest producer of natural gas, has never been afraid of a fight. He has become a billionaire by directing his company, Chesapeake Energy, to blast apart gas-soaked rocks a mile underground and pump the fuel to the surface. "We're the biggest frackers in the world," he declares proudly over a $400 bottle of French Bordeaux at a restaurant he co-owns in his hometown of Oklahoma City. "We frack all the time. What's the big deal?"

McClendon dominates America's supply of natural gas the same way the Tea Party-financing Koch brothers control the nation's pipelines and refineries. Like them, McClendon is an influential right-wing power broker – he helped fund the Swift Boat attacks against John Kerry in 2004, donated $250,000 to the presidential campaign of Rick Perry, and contributed more than $500,000 to stop gay marriage. But unlike his fellow energy czars, McClendon knows how to tone down his politics and present a friendlier, less ideological face to the public. He secretly gave $26 million to the Sierra Club to fight Big Coal, and built a Google-like campus for Chesapeake's 4,600 employees in Oklahoma City, complete with a 63,000-square-foot day care center, a luxurious gym and four cafes manned by cook-to-order chefs. He even voted for Barack Obama because he thought the country needed "an inspirational figure."

At 52, McClendon still looks like the whip-smart accountant he once aspired to be – crisp white shirt, polished shoes, a toss of white hair. To hear him tell it, the cleaner-than-coal fuel he produces will revive our faltering economy, free us from the tyranny of foreign oil and save the planet from global warming. "I have a fossil fuel that makes other fossil fuels obsolete," he boasts. By McClendon's estimate, the industry has drilled more than 1.2 million wells nationwide, yet so far there have been only a few confirmed cases where things have gone wrong – despite dire warnings from scientists and environmentalists that fracking pollutes rivers and streams, contaminates drinking water and turns large swaths of farmland into industrial moonscapes. "Where is the mushroom cloud?" McClendon asks. "Where are the dogs with one leg? Where are the people that have been maimed or hurt?"

He sips his Bordeaux; his own private wine cellar once boasted more than 10,000 bottles. It's a good riff, with some truth to it. But what McClendon leaves out is the real nature of the business he's in. Fracking, it turns out, is about producing cheap energy the same way the mortgage crisis was about helping realize the dreams of middle-class homeowners. For Chesapeake, the primary profit in fracking comes not from selling the gas itself, but from buying and flipping the land that contains the gas. The company is now the largest leaseholder in the United States, owning the drilling rights to some 15 million acres – an area more than twice the size of Maryland. McClendon has financed this land grab with junk bonds and complex partnerships and future production deals, creating a highly leveraged, deeply indebted company that has more in common with Enron than ExxonMobil. As McClendon put it in a conference call with Wall Street analysts a few years ago, "I can assure you that buying leases for x and selling them for 5x or 10x is a lot more profitable than trying to produce gas at $5 or $6 per million cubic feet."

According to Arthur Berman, a respected energy consultant in Texas who has spent years studying the industry, Chesapeake and its lesser competitors resemble a Ponzi scheme, overhyping the promise of shale gas in an effort to recoup their huge investments in leases and drilling. When the wells don't pay off, the firms wind up scrambling to mask their financial troubles with convoluted off-book accounting methods. "This is an industry that is caught in the grip of magical thinking," Berman says. "In fact, when you look at the level of debt some of these companies are carrying, and the questionable value of their gas reserves, there is a lot in common with the subprime mortgage market just before it melted down." Like generations of energy kingpins before him, it would seem, McClendon's primary goal is not to solve America's energy problems, but to build a pipeline directly from your wallet into his.

As recently as a decade ago, many energy experts believed that America was nearly pumped out – that the only oil and gas left here at home was too difficult and too expensive to get out of the ground. Until we can ferment synthetic fuels with genetically engineered yeast or develop solar cells as cheap as Frisbees, the argument went, we would be stuck buying oil from the Arabs.

Geologists had long known there was a lot more energy buried deep underground – they called these subterranean rock layers "the kitchen," because it was where the gas and oil were actually made, before they bubbled up and gathered in reservoirs. But nobody knew how to extract these deep reserves – at least, not in a way that made economic sense. Then, in the 1980s, a Texas wildcatter named George Mitchell began working on a way to drill a mile down into the earth, turn the drill sideways, and keep drilling horizontally into a thin layer of shale. Next, he pumped in a few million gallons of water and sand under enough pressure to shatter the rock. When he pumped the water out, gas and oil flowed out of the rock's fractured pores.

The new technique ignited a boom in drilling for "unconventional" sources of gas and oil: Shale gas now provides 25 percent of America's gas supply, enabling the U.S. to pass Russia as the world's largest producer of natural gas. Initially, even environmentalists were enthusiastic. Fred Krupp, who heads the Environmental Defense Fund, called the gas boom a "potential game changer" – a cleaner energy source that could replace coal and oil for a few decades, until the cost of wind and solar power dropped enough to put fossil fuels out of business. But exactly how much gas and oil we can continue to squeeze out of deep sources like shale rock is unclear. In his State of the Union address, President Obama estimated that there's enough to fuel the country for nearly 100 years. T. Boone Pickens, the energy billionaire who has a major stake in Chesapeake Energy, offers an even more sweeping assessment. "Natural gas," he tells me point-blank, "is the solution to America's energy problems."

At first, when oil and gas producers confined themselves to fracking in the wide-open spaces of Texas and Oklahoma, nobody much gave a damn. The trouble started in 2007, when drilling operators made a run on the Marcellus Shale, a broad region of gas reserves that stretches through Pennsylvania and up into Ohio and New York. Almost overnight, fracking's technological miracle was recast as the next great environmental menace. The Oscar-nominated film Gasland exposed the dark underbelly of fracking, interviewing residents who could literally light their faucets on fire, thanks to the gas that had contaminated their drinking water. Last year, The New York Times documented how gas drillers were dumping millions of gallons of irradiated wastewater loaded with toxic chemicals into Pennsylvania's rivers and streams, largely without regulatory oversight.

At the same time, scientists began to conclude that America's reserves of natural gas have been overhyped. In January, the Energy Department cut its estimate of the amount of gas available in the Marcellus Shale by nearly 70 percent, and a group affiliated with the Colorado School of Mines warns that there may be only 23 years' worth of economically recoverable gas left nationwide. Even worse, new studies suggest that because of fugitive emissions of methane from wellheads and pipelines, natural gas may actually be no better than coal when it comes to global warming. "I was an early optimist about natural gas," says Robert Kennedy Jr., who sits on a panel that's advising Gov. Andrew Cuomo on whether to allow drillers like McClendon to expand into New York. "But after looking into it, I now believe that, without tighter regulations and stricter oversight, the shale-gas boom could turn out to be an economic and environmental disaster."

The oil and gas business is full of guys like T. Boone Pickens, self-made men who rose from a hardscrabble life on the prairie to become titans of the industry. McClendon, by contrast, grew up awash in oil money: He's the great-nephew of Robert S. Kerr, the influential Oklahoma governor and senator who co-founded the Kerr-McGee Corp. in 1929. Kerr-McGee was the ExxonMobil of its time, an energy giant that eventually sold for $16 billion. McClendon's personal fortune is now estimated at $1.2 billion, including a major stake in the NBA's Oklahoma City Thunder and a $20 million retreat in Bermuda.

By the time McClendon headed off to college, at Duke University, he didn't have much interest in the family business. He majored in history, joined a frat and listened to a lot of Bruce Springsteen. But his real passion was accounting. "I just wanted to be a businessman," he says, "and to me, the best way to understand business was to be an accountant." He might have gone on to a steady, solid career at Arthur Andersen had he not come across an article in The Wall Street Journal during his senior year. "It was about two guys who had drilled a big well in the Anadarko Basin that had blown out, and it was alleged to be the biggest blowout in the history of the country," McClendon recalls. "They sold their stake to Washington Gas and Light and got a $100 million check. I thought, 'These are two dudes who just drilled a well and it happened to hit.' So that really piqued my interest."

After graduation, McClendon married his college sweetheart and went to work for a small Oklahoma City oil company owned by his uncle. He worked in accounting for a few months, but quickly became what is known in the industry as a "landman" – the person who finds and negotiates the leases that allow drillers to extract oil and gas. "Landmen were always the stepchild of the industry," he says. "Geologists and engineers were the important guys – but it dawned on me pretty early that all their fancy ideas aren't worth very much if we don't have a lease. If you've got the lease and I don't, you win."

In 1982, McClendon struck out on his own as a landman. He was 23, living in a modest house, making $24,000 a year. "I bought a typewriter, rented an office, bought some maps and basically just started to follow around other companies, trying to see what crumbs they would leave," he says. He called his tiny outfit Chesapeake Investments – for no reason except that "I always loved that region of the country." He soon forged a partnership with another landman, Tom Ward. "We worked together for six years," Ward recalls, "doing deals for scraps of land in Oklahoma, faxing each other in the middle of the night. Eventually, we got the hang of it."

When the fracking revolution began, McClendon says, he and Ward quickly realized that the new technique offered them an opening. In the natural gas industry, the advantage had long gone to operators with the geological and engineering expertise to pinpoint gas reservoirs. Now it didn't matter where you drilled – the gas was pretty much evenly distributed throughout the earth's deep shale layers. The edge suddenly belonged to operators who could lock up as much land as quickly and as cheaply as possible – precisely the skill that Ward and McClendon had developed scraping around Oklahoma land deeds. In 1989, the two men chipped in $50,000 to form a new company, Chesapeake Energy, to focus primarily on shale gas. It grew like a Silicon Valley startup: By 1993, when Chesapeake went public, the firm was valued at $25 million.

From the outset, financial risk-taking was as much a part of the firm's success as technological innovation. Chesapeake was the first gas-exploration company to issue high-yield junk bonds, which gave it a steady cash flow to pay for leasing and drilling. "To be able to borrow money for 10 years and ride out boom-and-bust cycles was almost as important an insight as horizontal drilling," McClendon says. "For the first time, we were able to build a company where, if something didn't work for a little bit of time, we could regroup and find something that did work."

By 2003, Chesapeake had expanded deeper into Oklahoma and Texas, as well as Louisiana and Arkansas. "They became a land-acquisition machine," says Phil Weiss, an analyst at Argus Research who has followed the firm for more than a decade. The key to success was discovering new gas plays before other companies, then leasing vast tracts of land as quickly and quietly as possible.

Chesapeake's land operation became almost as technologically sophisticated as its drilling operation, with a huge databank of property records and mineral-ownership rights across the country. "The goal is not just to pump gas," explains Pickens. "It's also to lock up future reserves." The company's financial statements estimate that it currently holds drilling rights to as much as 100 trillion cubic feet of gas – enough to supply the entire country for five years.

At Chesapeake, McClendon operated more like a land speculator than an oilman. "Our approach is to go in early, quietly and big," says Henry Hood, who directs Chesapeake's land purchases. "We like to get our deals signed before anybody knows what we're up to and tries to run up prices." But buying up such huge swaths of land requires huge chunks of cash – and the money often comes not from gas production, but from selling off land or going into debt.

After Chesapeake drills a few wells in a region and "proves up" the reserves, it hawks the leases to big oil and gas companies looking to get into the shale-gas game. In 2010, it pocketed $2.2 billion by selling land it bought in Texas for $2,000 an acre to one of China's largest oil companies for $11,000 an acre. "That's a five-to-one return on investment," says Jeff Mobley, Chesapeake's senior vice president for investor relations.

In recent years, the company has also sold off the future proceeds it expects to receive from thousands of wells – a complex financing deal that enables it to borrow cash now without counting the debt it will owe when it has to drill the wells later. The very first deal, made with Deutsche Bank and a Swiss investment firm, brought Chesapeake more than $1 billion in return for 15 years of future production from 4,000 wells. "It's not illegal, but most gas and oil companies don't do it," says Bob Brackett, an analyst with Sanford C. Bernstein & Co. "Chesapeake's poor credit rating pushes them to turn to unconventional financing."

To make its operations even riskier, leaseholders like Chesapeake are required by law to drill on the land within three to five years after acquiring the rights or wind up forfeiting the lease. "The more land they acquire, the more capital they have to spend upfront," says Deborah Rogers, a former investment banker who learned just how precarious Chesapeake's business model was when she looked into the firm's financial statements after the company sunk wells near her property in Texas. "Then they have to drill it or lose it, which further adds to capital costs. And the more they drill, the more gas they produce, which lowers the price of gas and further reduces their revenues. In the end, this drilling treadmill is difficult to sustain for long – especially if the wells under­perform, or the resource turns out to not be as valuable as they thought."

This sort of gambling suits McClendon, who is known for placing big bets – and sometimes losing big. During the financial meltdown in 2008, McClendon was forced to sell off 94 percent of his stock in Chesapeake – some 33 million shares – for $550 million to meet a margin call on his personal investments. (Only a few months earlier, the stock had been worth $2 billion.) Despite the dramatic setback, Chesapeake's board boosted McClendon's annual salary to $112 million, making him the highest paid CEO at any S&P 500 company at the time. The pay hike, which sparked a shareholder lawsuit, was scorned by Wall Street analysts. "McClendon clearly thinks of Chesapeake as his own personal piggy bank," says one. In the end, that piggy bank may prove to be empty: In February, Chesapeake announced that, because of low gas prices, its revenues will fall $3.5 billion short of its expenses this year.

Until a few years ago, Bradford County was a forgotten landscape of struggling dairy farms and strip-mall nail salons dotting the Susquehanna River in northeastern Pennsylvania. Then, in 2007, gas speculators looking for the next big play zeroed in on the geologic formation called the Marcellus Shale, a 300-foot-thick layer of gas-soaked rock that underlies much of Pennsylvania, as well as parts of Ohio and New York. Chesapeake was one of the first operators to rush into the region, buying up nearly two million acres of land in just a few months. Since then, the company has drilled more than 600 wells here, and it hopes to drill thousands more, virtually covering the region with rigs. "In 10 years," McClendon says, "the Marcellus is likely to become the most productive natural gas field in the world." The county, population 62,000, has already been transformed from sleepy farmland to industrial boomtown: the roads crowded with trucks hauling water, the rail lines rumbling with trains hauling sand, the roadside bars overflowing with drill hands from Oklahoma and Texas, the hotels and motels booked for months in advance.

Chesapeake's operations in the region are run out of an old department store in the county seat of Towanda, located on the banks of the Susquehanna some 20 miles south of the New York state border. It feels more like a military outpost than a corporate office, with dozens of white SUVs emblazoned with the Chesapeake logo parked in rows out front. Inside, offices are separated by thin walls thrown up in a hurry, many of them decorated with arty shots of drilling rigs in pristine landscapes. In these parts, the company's PR efforts are squarely aimed at quelling any environmental fears. To underscore how safe fracking is, Brian Grove, Chesapeake's director of corporate development in the Marcellus region, explains that the layer of shale being drilled is 7,000 feet beneath the surface, whereas drinking water rarely runs deeper than 1,000 feet. "That leaves 6,000 feet of rock in ­between," he says. "There is no way that any fluids are going to migrate from the shale rock up to the drinking-water aquifers."

Grove, an affable guy in a Chesapeake shirt, also points out that the entire length of the well bore is encased in heavy steel, to prevent gas from leaking into the drinking water. What's more, he adds, the top 750 feet of the well, where it's most likely to pass through aquifers, gets a triple layer of steel – a precaution the company took after it had some problems with methane near the surface getting into drinking water. In short, he suggests, the fluids and gas traveling up the well bore are completely isolated from the surrounding earth by up to three layers of heavy steel. "It's a closed system," he says. "Done right, drilling and fracking does not pollute drinking water." This, in essence, is the mantra at Chesapeake: Everything we do is safe and environmentally responsible. Trust us.

One afternoon, Grove drives me out to the Nomac 7 rig, which is drilling about 15 miles east of Towanda. I climb up into the operations box on the rig and watch as the driller guides a bit a mile down into the earth through an eight-inch hole. Once the drilling is finished, millions of gallons of fracking fluid – water and sand, mixed with a host of chemicals that make the water "slippery" – will be injected deep into the well to fracture the underground shale. The wastewater, known as flowback, will then be pumped out, and gas production will begin.

The problem with all sophisticated technology, of course, is that things inevitably go wrong.

Last April, a Chesapeake well in Bradford County suffered a massive blowout. It was the onshore, natural gas version of what happened to BP in the Gulf two years ago: A wellhead flange failed, and toxic water gushed uncontrollably from the well for several days before workers were able to bring it under control. Seven families were evacuated from their homes as 10,000 gallons of fracking fluid spilled into surrounding pastures and streams. Pennsylvania fined the company $250,000 – the highest penalty allowed under state law.

Well failures, in fact, are fairly common at drilling sites.

I ask Anthony Ingraffea, an engineering professor at Cornell University and a former consultant for oil-service firms, to look at the 141 violations levied against Chesapeake in Pennsylvania last year. According to Ingraffea, 24 of them involved failures of well integrity. "When a well loses integrity, it means the seal is broken and something – usually methane, but it could also be flowback water – is leaking out underground," he says. "And it's impossible to know where it is going, or in what amounts."

It's also impossible to know what chemicals are flowing out of the wells, or how toxic they are, because companies like Chesapeake are not required to disclose the compounds they use in fracking operations. Providers of fracking fluids, such as Halliburton, claim that the composition of such fluids can't be revealed without disclosing trade secrets. In 2005, the industry lobbied hard for what's known as "the Halliburton loophole," which exempts it from federal disclosure requirements. In recent months, Colorado, Texas and Pennsylvania have moved to tighten state regulations and require mandatory disclosure of what's in the fracking fluids, but loopholes still remain. "We don't know the chemicals that are involved," Vikas Kapil, chief medical officer at the National Center for Environmental Health, admitted at a recent conference. "We don't have a great handle on the toxicology of fracking chemicals."

Whatever it is, there's a lot of it: Random data I sampled from five wells that Chesapeake drilled in Pennsylvania and Ohio last year reveals that the company injected between 24,000 pounds and 230,000 pounds of chemicals into each well. Some of the chemicals are relatively harmless, used in common household products. But others – such as 2-butoxyethanol – are known to cause cancer in animals.

An even larger threat is the flowback waste that is pumped out after a well is fracked. It's a salty brine, mildly radioactive, and laced not just with toxic chemicals but with natural hydrocarbons and heavy metals like barium and benzene, which are known carcinogens even in minute quantities. In fracking operations out West, the flowback is generally injected into underground sites that meet EPA standards. But in the Marcellus, there are virtually no injection sites. In the early days, gas producers did pretty much whatever they wanted with the billions of gallons of toxic water their operations produce. "Since there were no laws covering the disposal of this stuff at first, they just dumped it into rivers or hauled it off to sewage plants to be 'treated,' which they knew didn't work," says Deborah Goldberg, a lawyer at Earth­justice. "They just wanted to get rid of the stuff as quickly and as cheaply as possible." At one fracking operation, a subcontractor was caught opening the valves on the back of his truck and dumping the wastewater on roads.

New laws in Pennsylvania now prohibit companies from discharging flowback into rivers and streams. Instead, operators like Chesapeake either "recycle" their water by running it through a filtration system, or haul it off to Ohio and inject it underground – a process which, some seismologists now suspect, is the reason Ohio was hit by an uncharacteristically large number of earthquakes last year. (The injected water lubricates fault lines, the theory goes, causing them to slip.)

McClendon dismisses the dangers of flowback, insisting that other industries cause far more pollution. "Why are you not focused on the amount of oil runoff from parking lots when it rains?" he recently asked a top environmentalist. "What about the billions of tons of agricultural chemicals that run off every day into streams and rivers? That's real pollution that kills real fish, and degrades a real environment. What's worse for Chesapeake Bay? Fertilizer runoff from poultry farms? Or fracking 200 miles away for which there is no evidence that one drop has ever gotten more than 100 yards away from a well site?"

According to McClendon, environmentalists hate fracking for a self-serving reason: because it upends their dreams of green power. "If you believe in a world where the wind and the sun are going to produce all our power in the future, then we've disrupted that vision of the world," he says. "On the other hand, if you dream of a world where air is cleaner, where energy is half the price it was before and we're not exporting a million dollars a minute to OPEC or having to go fight wars in Afghanistan and Iraq, then you should embrace natural gas. That's what's so troubling to me – that people are willing to turn a blind eye to the enormous, well-known consequences of what we do today and not realize that this new path is the only affordable, scalable way to something else."

Last year, scientists at Duke University, McClendon's alma mater, published the first rigorous, peer-reviewed study of pollution at drilling and fracking operations. Examining 60 sites in New York and Pennsylvania, they found "systematic evidence for methane contamination" in household drinking water: Water wells half a mile from drilling operations were contaminated by methane at 17 times the rate of those farther from gas developments. Although methane in water has not been studied closely as a health hazard, it can seep into houses and build up to explosive levels.

The study caused a big stir, in part because it was the first clear evidence that fracking was contaminating drinking water, contrary to the industry's denials. Just weeks after the study was released, the Pennsylvania Department of Environmental Protection fined Chesapeake $1.1 million – the largest fine against an oil and gas operator in the agency's his­tory – for contaminating 17 wells in Bradford County, including some that had been part of the Duke study.

McClendon, a major benefactor to Duke, fired off a blistering letter to the university, which was printed in the alumni magazine and widely circulated online. He didn't point out any errors by the scientists or question their methodology. Instead, he went after their character, dismissing the study as "more political science than physical science" and accusing them of having a bias against fossil fuels. "These guys," he tells me, "have invested their lives in the view that climate change is occurring, that fossil fuels are bad, and that natural gas is a fossil fuel, and therefore it's bad."

When I ask Avner Vengosh, a geochemistry professor who served as a lead author of the study, about McClendon's letter, he laughs lightly. "I have no agenda," he says. "I am a scientist. I report what the evidence I find tells me to report." He and his colleagues visited Chesapeake's headquarters in Oklahoma a few weeks before the study was finished and shared their results with the company. They also offered to consider any data that Chesapeake might have that would challenge their results. "They offered us nothing," says one scientist who attended the meeting.

One of the wells in the study belongs to Sherry Vargson, a dairy farmer who lives in a white house on nearly 200 acres in Granville Summit, a rural area 20 miles from Chesapeake's regional headquarters in Towanda. Unlike many residents, who have been forced by gas companies to sign nondisclosure agreements, Vargson is happy to discuss her experiences with Chesapeake. In 2007, shortly after her two children left for college, a landman from the company showed up at her door and asked to lease the mineral rights beneath her farm. "He told us there was natural gas in the shale rock a mile down, and they had a new way to drill for it that was minimally invasive and would cause very little damage to our land," she recalls. "He said it was a patriotic thing to do, that natural gas would help America gain energy independence."

The landman offered Vargson $100 per acre, plus 12 percent in royalties. He told her there was no way to predict how big the royalties would be, but emphasized that she stood to make "a lot of money" over the 30-year life expectancy of the well. Vargson accepted the deal. "We thought we were taken care of," she says.

Drilling, which began the next year, was an immediate nightmare. One morning, Vargson woke up at 6 a.m. to find 18 trucks idling in her driveway. The hillside behind her house was leveled for a drill pad, and the rig went up 500 feet from her back door. Once the fracking began, water trucks made hundreds of trips up and down her driveway, while air compressors roared all day and night. When the gas was flared off before production began, the flame was so bright in the night sky that she could see it glowing red on the horizon 12 miles away.

Vargson noticed not long after production began in 2009 that water in the trough out back stopped freezing on cold nights. Inside the house, the faucet began to sputter and spit. Her husband seemed to have a lot of headaches, and Vargson felt nauseous if she stayed in the shower for more than a few minutes. Acting on a tip from a friend, she had her water tested. It was loaded with methane.

"I discovered I could light my water on fire," she says. "And I still can." To demonstrate, she walks over to the faucet in her kitchen, lights a match and turns on the faucet. Whoosh! A flame shoots out like a blowtorch.

Vargson stopped drinking the water after she discovered the methane – but tests showed that her water also contained elevated levels of toxic chemicals like radium, manganese and strontium. Chesapeake agreed to supply Vargson with fresh drinking water, delivered to her door in five-gallon jugs once a month, but it denies any responsibility for the elevated methane levels. Tom Darrah, a Duke geologist who has examined Vargson's well for a new study, finds that difficult to square with the facts. "Anyone who has seen the data I have and thinks this much methane in her well is from natural sources has their head in the sand," he says.

For Vargson, and many homeowners just like her, fracking has proved to be a full-blown disaster. Since she signed up with Chesapeake, her back pasture has become a full-time industrial zone, her water supply has been contaminated, and it will be virtually impossible to sell her home, since it lacks drinkable water. What's more, her well turned out to be a dud: The landman from Chesapeake who sold her on the deal failed to mention that 80 percent of a well's gas is often depleted within the first two years. In all likelihood, Vargson's well will end up being a money-loser for Chesapeake, either sold off to another company or refracked in an attempt to dislodge more gas. Either way, the royalty checks that Vargson and her husband were counting on for retirement will hardly pay for dinner and a movie. "We made about $1,400 the first month, and it's been all downhill from there," she says. Her check for last November: $70.

I ask her how she feels about the promise of fracking now. "I think the industry is destroying our water resource to extract a gas resource," she says. "And in the long run, I don't think that's a very smart trade."

As fracking has come under increasing attack, McClendon has used his financial clout to keep the drills pumping. Chesapeake spent only $2 million on federal lobbying last year – about average for a company its size – but it has contributed almost as much to political candidates and PACs in the current election cycle as the Koch brothers. (McClendon makes it clear that he won't be voting for Obama this time around.) In Pennsylvania, Chesapeake has contributed more than half a million dollars to state and local politicians since 2008 – the highest total in the industry.

McClendon, who funds an industry lobbying group called America's Natural Gas Alliance, has also used his cash to attack Big Coal, hoping to topple his chief competitor and refit coal plants to run on natural gas. In 2007, when a Texas utility threatened to build 11 new coal plants, he won over many clean-energy activists by spending $1 million on a "Coal Is Filthy" media blitz. The $26 million he gave to the Sierra Club helped fund its "Beyond Coal" campaign, which has blocked more than 150 new coal plants. But in 2010, when McClendon tried to cement an alliance with environmental groups at a two-day conference in Colorado, the plan backfired. McClendon struck many of the assembled activists as aloof and arrogant. A few weeks later, after he backed away from a promise to lobby for tougher laws requiring the industry to disclose the chemicals it uses in fracking fluid, one top environmentalist sent an e-mail to other participants calling McClendon "a pathological liar."

But McClendon's worst enemy may not be environmentalists or coal companies, but his own recklessness. He played a leading role in creating the fracking bubble by hyping the promise of endless natural gas and sweet-talking Wall Street into funding a massive land grab. If the bubble bursts, Chesapeake's stockholders won't be the only ones who pay the price – the shock waves will be felt throughout the economy, from homeowners who rely on natural gas for heat to manufacturers who were betting on it to power their new factories. Thanks to McClendon's gambles, Chesapeake is struggling to cover $10 billion in long-term debt. In recent weeks, the company has announced it will sell off more land and shut down some production. McClendon also hopes to increase demand and boost gas prices by promoting cars and power plants that run on natural gas, and by cutting deals to export gas to Europe and Asia, where prices are five times higher than in the U.S.

Turning vast stretches of Pennsylvania into a pincushion in order to ship gas to China doesn't exactly mesh with McClendon's emphasis on making America energy independent. But unless something changes, that's precisely where things are headed – on a grand scale. "In the Marcellus, the boom has just begun," says Ingraffea, the Cornell engineer. "The idea is to drill everywhere." Tougher laws and stricter enforcement could mitigate the damage to people and the environment, but widespread drilling – especially at the boomtown pace that McClendon is pushing – will inevitably result in mishaps. Well casings will fail. Fracking chemicals will be spilled. Drinking water will be contaminated. Methane will seep into the atmosphere, accelerating global warming. When you add it all up, you can see why many environmentalists and clean-energy activists no longer see natural gas as a bridge to a more sustainable future. "It's time to stop thinking of natural gas as a 'kinder, gentler' energy source," Mike Brune, executive director of the Sierra Club, recently blogged. "Instead of rushing to see how quickly we can extract natural gas, we should be focusing on how to be sure we are using less."

That kind of talk enrages McClendon. "What does that mean, Mike?" he asks angrily when I ask him about Brune's comment over dinner at his restaurant. "Does that mean we maximize the use of coal? That we fill the countryside with windmills and kill all the migratory birds and double electricity prices while we do it? What's the human cost to doubling electricity prices? What's the human benefit to halving them? I think those are enormously important questions that are never imposed at the same time people say, 'Fracking is bad.'"

I look at the $400 bottle of wine on the table. Much of what McClendon says is misleading – wind power is as cheap as gas in some places and falling fast, and cutting back on gas doesn't have to mean burning more coal. But his plan is clear. He's not going to back off until every last square foot of shale rock in America is drilled and fracked and sucked clean of gas. McClendon may rely on sophisticated new drilling technologies, but at heart, he's driven by the same dream of endless extraction that has gripped oil barons and coal companies since the dawn of the Industrial Revolution. In the end, all his talk of energy independence and a cleaner, brighter future boils down to a single demand, as simple as it is disastrous: Drill, baby, drill. 

New Fracking Rules Come Up Short Leaving Communities, Earth Unprotected

Friday, May 4, 2012 by Common Dreams
'Seriously inadequate' proposal disappoints

Today, the Obama administration proposed new rules on the fracking industry's procedures and oversight on public lands. Outdated fracking regulations have been replaced with out of touch fracking regulations, falling short of protecting communities from toxic pollution, according to environmental groups.

The new proposal would require that companies get approval before fracking, and would require companies to reveal chemicals they use in hydraulic fracturing; however, the companies will only be required to reveal their chemicals after they complete the process.

Also, the rules only apply to public lands and would not affect drilling on private land, where the bulk of fracking occurs.

Democratic Congresswoman Diana DeGette, a vocal proponent of expanding fracking regulation, called the measure "seriously inadequate," according to Reuters.

Jessica Ennis from Earthjustice stated:

"In light of the near-constant reports of fracking-related air and water pollution, an update to federal rules is long overdue. Unfortunately, these proposed rules from the Department of the Interior fall far short of what’s needed to protect public health. The President promised in his State of the Union that this country’s gas drilling boom would not come at the expense of public health. This proposed rule fails to meet that promise.”

Earthjustice: Interior Department Proposes Updated Fracking Rules, Comes Up Short

The U.S. Department of the Interior unveiled a set of rules governing hydraulic fracturing, or “fracking,” on public lands today. The controversial oil and gas development technique—in which drillers blast millions of gallons of chemically treated water into the earth to force gas from underground deposits—has been linked to air and water pollution and public health problems.

The proposed rule does not require fracking companies to disclose chemicals before they are pumped into the ground—a critical measure that would give nearby communities time to test and monitor water supplies for any fracking-related water pollution. [...]

“The oil and gas industry has gotten used to operating in the shadows for too long—hiding chemical information, fighting against right-to-know laws, silencing families who speak out. It’s unacceptable and needs to end now."

Natural Resources Defense Council: BLM Proposal to Reduce Risks to Ground Water from Oil and Gas Fracking

“We need BLM to be a leader when it comes protecting our lands, water and ultimately our health from fracking pollution, yet several states already have stronger protections in place than what the agency proposed today. This is a critical first step, but so much more needs to be done.

“Oil and gas operations are expanding rapidly with new technologies and into new areas, including closer and closer to where families live and children go to school, but federal safeguards have not caught up. And industry does not inspire confidence when it balks at the notion of sharing chemical ingredients upfront. Communities shouldn’t have to wait for that information until after the deed is done.”

“We hope the agency will strengthen this proposal before it becomes final.”

Reuters: US proposes new rules for fracking on federal lands

Environmentalists and some lawmakers said the rules didn't go far enough.
Interior's proposal on disclosure differs from a draft of the rules that leaked to the media earlier this year, by mandating disclosure after fracking is completed.
"Requiring the information before the fracking occurred would have caused in our view delays that were not necessary," Salazar said on a conference call.

Democratic Congresswoman Diana DeGette, a vocal proponent of expanding fracking regulation, called the measure "seriously inadequate."

"We're all seeking common-sense solutions to ensure the safety of natural gas production, but with all due respect, requiring disclosure after fracking has already occurred seems less common-sense and more 'closing the door after the horse has left the barn,'" DeGette said in statement.

Some environmentalists said communities need to know what chemicals may be pumped into the ground before drilling happens, so water supplies can be monitored in real time, however.

New Study Predicts Frack Fluids Can Migrate to Aquifers Within Years

Wednesday, May 2, 2012 by ProPublica

by Abrahm Lustgarten, ProPublica 

 

A new study has raised fresh concerns about the safety of gas drilling in the Marcellus Shale, concluding that fracking chemicals injected into the ground could migrate toward drinking water supplies far more quickly than experts have previously predicted.
 
More than 5,000 wells were drilled in the Marcellus between mid-2009 and mid-2010, according to the study, which was published in the journal Ground Water two weeks ago. Operators inject up to 4 million gallons of fluid, under more than 10,000 pounds of pressure, to drill and frack each well.

Scientists have theorized that impermeable layers of rock would keep the fluid, which contains benzene and other dangerous chemicals, safely locked nearly a mile below water supplies. This view of the earth's underground geology is a cornerstone of the industry's argument that fracking poses minimal threats to the environment.

But the study, using computer modeling, concluded that natural faults and fractures in the Marcellus, exacerbated by the effects of fracking itself, could allow chemicals to reach the surface in as little as "just a few years."

"Simply put, [the rock layers] are not impermeable," said the study's author, Tom Myers, an independent hydrogeologist whose clients include the federal government and environmental groups.

"The Marcellus shale is being fracked into a very high permeability," he said. "Fluids could move from most any injection process."

The research for the study was paid for by Catskill Mountainkeeper and the Park Foundation, two upstate New York organizations that have opposed gas drilling and fracking in the Marcellus.

Much of the debate about the environmental risks of gas drilling has centered on the risk that spills could pollute surface water or that structural failures would cause wells to leak.

Though some scientists believed it was possible for fracking to contaminate underground water supplies, those risks have been considered secondary. The study in Ground Water is the first peer-reviewed research evaluating this possibility.

The study did not use sampling or case histories to assess contamination risks. Rather, it used software and computer modeling to predict how fracking fluids would move over time. The simulations sought to account for the natural fractures and faults in the underground rock formations and the effects of fracking.

The models predict that fracking will dramatically speed up the movement of chemicals injected into the ground. Fluids traveled distances within 100 years that would take tens of thousands of years under natural conditions. And when the models factored in the Marcellus' natural faults and fractures, fluids could move 10 times as fast as that.

Where man-made fractures intersect with natural faults, or break out of the Marcellus layer into the stone layer above it, the study found, "contaminants could reach the surface areas in tens of years, or less."

The study also concluded that the force that fracking exerts does not immediately let up when the process ends. It can take nearly a year to ease.

As a result, chemicals left underground are still being pushed away from the drill site long after drilling is finished. It can take five or six years before the natural balance of pressure in the underground system is fully restored, the study found.

Myers' research focused exclusively on the Marcellus, but he said his findings may have broader relevance. Many regions where oil and gas is being drilled have more permeable underground environments than the one he analyzed, he said.

"One would have to say that the possible travel times for a similar thing in Arkansas or Northeast Texas is probably faster than what I've come up with," Myers said.

Ground Water is the journal of the National Ground Water Association, a non-profit group that represents scientists, engineers and businesses in the groundwater industry.

Several scientists called Myers' approach unsophisticated and said that the assumptions he used for his models didn't reflect what they knew about the geology of the Marcellus Shale. If fluids could flow as quickly as Myers asserts, said Terry Engelder, a professor of geosciences at Penn State University who has been a proponent of shale development, fracking wouldn't be necessary to open up the gas deposits.

"This would be a huge fracture porosity," Engelder said. "So I read this and I say, 'Golly, does this guy really understand anything about what these shales look like?' The concern then arises from using a model rather than observations."

Myers likened the shale to a cracked window, saying that samples showing it didn't contain fractures were small in size and were akin to only examining an intact section of glass, while a broader, scaled out view would capture the faults and fractures that could leak.

Both scientists agreed that direct evidence of fluid migration is needed, but little sampling has been done to analyze where fracking fluids go after being injected underground.

Myers says monitoring systems could be installed around gas well sites to measure for changes in water quality, a measure required for some gold mines, for example. Until that happens, Myers said, theoretical modeling has to substitute for hard data.

"We were trying to use the basic concepts of groundwater and hydrology and geology and say can this happen?" he said. "And that had basically never been done."

EPA's rules on fracking still leave public health, communities at risk

Thursday, April 19, 2012 by Common Dreams
Environmental Groups: New Fracking Rules Fall Short

The Environmental Protection Agency (EPA) issued its first regulations on air pollution from hydraulic fracturing, known as fracking, on Wednesday, but environmental groups say the rules fall short. The groups say the regulations fail to protect public health by ignoring the many environmental hazards associated with fracking, and say the administration caved to industry demands by allowing fracking companies to continue releasing methane, a powerful greenhouse gas, until 2015.

"These rules do not resolve chronic water, public health, and other problems associated with fracking and natural gas," said attorney Erik Schlenker-Goodrich of the Western Environmental Law Center.

“These first-ever EPA limits on dangerous air pollution from natural gas fracking wells are a critical step toward protecting our kids, our communities, and our planet,” said Meleah Geertsma, an attorney in Natural Resources Defense Council’s climate and clean air program. “But to fulfill President Obama’s State of the Union pledge to develop these resources ‘without putting the health and safety of our citizens at risk,’ the EPA needs to do more to protect people living near oil and gas production facilities.”

Miriam Rotkin-Ellman’s wrote on NRDC's Switchboard blog that while the rules are an improvement, the "EPA backpedaled on protections from cancer causing benzene emissions and will continue to allow a loophole that puts communities at risk."

* * *

Akron Beacon Journal: U.S. EPA adopts first air rules on fracking, but drillers have until 2015 to comply

The new safeguards, when fully implemented, will cut emissions of volatile organic compounds from drilling by nearly 25 percent and cut VOC emissions from new and modified fracked wells by almost 95 percent, the EPA said. 

The agency said the new limits would reduce VOC emissions from drilling by 190,000 to 290,000 tons a year, and cancer-causing benzene levels would be cut by 12,000 to 20,000 tons a year. 

It also will reduce escaped methane, the key component of natural gas and a potent global warming gas, by 1 million to 1.7 million tons a year, the agency said. 

Such chemicals — seen as a growing problem — produce unhealthy smog, put health-threatening toxics, including hexane and formaldehyde, into the air and contribute to global warming. 

The new rules are a first effort by the federal EPA to regulate fracking. 

But the Obama administration, which has strongly backed natural gas drilling, made significant concessions to the oil and gas industry. That includes a delay in requiring that gases be captured at the well until Jan. 1, 2015. 

The original federal plan called for compliance in 60 days. 

* * *

Lena Groeger, ProPublica: The EPA’s First Fracking Rules—Limited and Delayed

"It sets a floor for what the industry needs to do," said attorney Erik Schlenker-Goodrich of the Western Environmental Law Center. "The reality is we can do far better."

Over the past few years, more information has come out about fracking's potential harms to the environment and human health, particularly relating to the risk of groundwater contamination. In addition to the many potentially toxic components of the highly pressurized fluid injected into the ground during the natural gas drilling process, fracking can also release cancer-causing chemicals like benzene and greenhouse gases like methane into the air. The federal government has made moves to tighten regulations, and we've chronicled the history of those regulations.

The EPA's new rules don't cover most of those issues. Instead, they address just a single problem with natural gas, namely, air pollution.

"These rules do not resolve chronic water, public health, and other problems associated with fracking and natural gas," Schlenker-Goodrich said.

The agency is actually barred from regulating the impact of fracking on groundwater. That is because in 2005 Congress exempted fracking from the Safe Water Drinking Act. Congressional proposals to give the EPA more oversight have so far failed.

* * *

USA Today video: EPA issues air pollution rules for fracking wells

* * *

Miriam Rotkin-Ellman, Switchboard: Still Fuming: New EPA Natural Gas Rules Leave Communities at Risk


[H]ere’s a summary of major flaws in the standards that endanger children and families across the country.

• There is a 2.5 year delay before requirements kick in to use the most effective technology to control pollution from gas wells. This is really disappointing because these controls are urgently needed. A recent
study in Colorado showed that health risks increase the closer you get to the well and in many states these wells are located in people’s backyards and next to schoolyards. 

• EPA is leaving in place a loophole that allows existing facilities the ability to release thousands of pounds (up to 1 ton per year) of cancer causing benzene from one type of equipment (large glycol dehydrators) despite analysis showing that this could result in dangerous cancer risk for neighboring communities.. 

• Under the new rules, existing facilities will not be required to upgrade their equipment to reduce emissions and protect public health. This means that families already struggling with the air pollution caused by these facilities won’t get the relief they need. 

• Under the Clean Air Act, the EPA is supposed to evaluate the health threats from industrial sources, like fracking facilities, and set standards to protect the most vulnerable populations. But, with this National Emission Standards for Hazardous Air Pollutants (NESHAP) rule, EPA missed the opportunity to provide critical relief from toxic air pollutants that are linked to respiratory and neurological problems and cancer. 

• The NESHAP rule relied on a heavily flawed analysis of health risks which omitted dangerous pollutants, ignored major sources of pollution, and failed to protect the most vulnerable populations. On the technology side, the rule failed to consider existing best practices already being deployed by many facilities to control pollution and prevent health impacts to surrounding communities. These technologies such as, improved efficiency, leak prevention systems, and emission controls are currently available, feasible, and can even save the industry money.

Frack Job

Gang of Seven Meets Behind Closed Doors to Draft State Fracking Regulations
by RUSSELL MOKHIBER


To regulate or to prohibit.

That is the question.

Ask people on the ground who are being adversely affected by hydraulic fracturing, and overwhelming they say – prohibit.

They don’t believe that you can frack without harm.

The major environmental groups know this.

That’s why, when major environmental groups join with industry to draft regulations, most of them don’t admit to it – and the drafting of the regulations takes place behind closed doors.

Over the last couple of years, a group of three fracking companies and four major environmental groups have been meeting in secret to draft model laws to regulate the industry at the state level.

Only one company – Southwestern Energy – and one environmental group – the Environmental Defense Fund (EDF) – have admitted to participating in this effort.

Lisa Wright is a grassroots activist working on shale issues in upstate New York.

“I would like to know who all the groups are and why the secrecy?” Wright asked.

So, we asked EDF’s Scott Anderson – who are all the groups and why all the secrecy?

Anderson said he wouldn’t tell us who the groups are – that’s up to each group to make their involvement public – or not.

“EDF is happy to have our name associated with this,” Anderson told Corporate Crime Reporter last week. “I would observe that the politics surrounding natural gas development are polarized to say the least. This is an effort of people to attempt to work on a consensus basis, to develop well construction rules that are as reasonable as possible. There are no guarantees that the wheels won’t come off. The other groups would just assume not announce their participation until the project is successful.”

Anderson did say that the other three environmental groups are major players with recognizable names.

So, we rang up a couple of the usual suspects – and asked if they were involved.

The Natural Resources Defense Council’s Jenny Powers responded by saying that “NRDC is not part of a covert effort to draft shale regulations with the gas industry.”

“Several years ago, we were asked if we wanted to be a partner in an effort led by EDF and one gas company, Southwestern Energy, to develop model state regulations that would significantly strengthen oversight of this activity in states in which it is already being undertaken subject to unacceptably weak standards,” Powers said. “We opted not to partner in this effort. We made that choice because the primary focus of our national efforts has been advocating for uniform federal standards, which we view as critical to protecting Americans and their communities from the dangers of fracking.”

“Instead, we said we would provide feedback to the effort because we recognize that oil and gas drilling is currently taking place in over 30 states and, as noted, existing regulations are wholly inadequate to protect public health and the environment.”

Next, we asked Sierra Club – are you part of this covert effort?

“We were invited to the table and have sat in on some conference calls to evaluate the project, but we believe our resources are better used working directly on natural gas regulation at the federal and state levels,” said Sierra Club’s Maggie Kao.

A group of eight – four companies and four environmental groups – originally began meeting in early 2010, Anderson said. One of the companies dropped out last year.

The group of seven now meets regularly – sometimes by phone and sometimes in person. The next meeting will be next month at an undisclosed location.

The group has drafted a model state law – elements of which have been adopted by Arkansas and Montana last year.

An edited copy of one draft, dated January 12, 2012, gives some insight into how the negotiations are working.

One provision of the draft – titled Audit and Enforcement – would have given the state regulator the authority to visit a well site to inspect the facility, cite the operator for violations, and issue a fine. That provision was redlined out of the draft.

Nonetheless, Anderson portrays the covert effort as an attempt to bring violators under control.

“There are far too many instances where oil and gas operations have caused unacceptable problems,” Anderson said.

“We are dedicated to try to find out what the causes have been and to come up with improved regulations and practices to prevent these problems. Road damage from overweight vehicles is one of many problems that oil and gas development poses. Also spills of chemicals – frequently the trucks are hauling wastewater. Sometimes there is intentional midnight dumping. Spills at the surface are the single biggest cause of documented causes of drinking water pollution. That happened a lot in New Mexico. Improper well construction is the second biggest cause of drinking water problems. It is essential that people drill their wells correctly, outfit the wells with the right quality of pipe, have that pipe set at the proper depths, make sure there is an adequate cement job.”

Anderson said the group has agreed to some common principles – we want to work on a collaborative basis.

“We agree that the rules shall be as protective of the environment as reasonably possible.”

Anderson says that just because there have been no proven cases of drinking water being contaminated by the actual fracking process doesn’t mean it won’t happen.

Why Obama Is Wrong About Natural Gas

Sunday, March 4, 2012 by Rolling Stone
by Jeff Goodell


Speaking in New Hampshire yesterday, President Obama signaled that he will not go wobbly on energy during the upcoming campaign (climate is another story). He made a strong case for his commitment to the clean-power revolution, and vowed to end $4 billion in subsidies for Big Oil and Gas. "You can either stand up for the oil companies, or you can stand up for the American people," Obama said. "You can keep subsidizing a fossil fuel that’s been getting taxpayer dollars for a century, or you can place your bets on a clean-energy future." He also showed off this chart, which illustrates how America’s dependence on foreign oil has gone down every year since Obama took office.

Cutting subsidies and reducing our dependence on foreign oil are the no-brainers of energy policy, the kind of initiatives that Tea Partiers and Treehuggers both love. In that sense, it's classic Obama; the president is highly skilled at taking uncontroversial policy initiatives and making them sound like bold, revolutionary ideas.

But I want to highlight one sentence from yesterday's speech that is dangerously misinformed. It's about natural gas, a subject that Obama has been pretty high on recently. In his State of the Union speech in January, he blew a big wet kiss to frackers and shale gas drillers everywhere, while promising to "develop [America’s gas reserves] without putting the health and safety of our citizens at risk." Yesterday, Obama touted the economic benefits of investing in clean-energy technology: "Because of the investments we’ve made, the use of clean, renewable energy in this country has nearly doubled – and thousands of Americans have jobs because of it."

Then he said this: "We’re taking every possible action to develop a near 100-year supply of natural gas, which releases fewer carbons." By "carbons," I assume he is coining a new phrase for "carbon dioxide pollution." That’s O.K. He's the president; he can make up new words. But there are at least three other things wrong with this sentence.

1. It suggests that natural gas is a clean, renewable form of energy. O.K., he doesn’t say that explicitly, but the suggestion is there. So let’s be very clear: natural gas is a fossil fuel. It’s 350 million years old (give or take). It needs to be extracted from the ground, which, thanks to the fracking boom, we now know has many adverse environmental consequences, from contaminated wells to the industrialization of rural areas. It also needs to be burned to create heat or electricity, which creates air pollution. Compared to coal, which generates almost half the electricity in the United States, natural gas is indeed a cleaner, less polluting fuel. But compared to, say, solar, it’s filthy. And of course there is nothing renewable about natural gas. 

2. It implies that 100 years of natural gas is a sure thing. It is not. The whole question of how much gas we have – or oil or coal, for that matter – is fraught with uncertainty. It depends on factors like price and demand and whether new technologies can be developed to get at hard-to-extract gas, and whether or not you care that we blast and drill our way through suburbs and National Parks. Chris Nelder over at Slate has a good primer on this. As Nelder points out, when you look at actual proven reserves, we have only about 11 years worth of gas. If that's true, it raises a whole lot of interesting questions about future energy investments. I mean, if T. Boone Pickens wants to invest hundreds of millions of his dollars to convert vehicles to natural gas, that’s up to him – but why invest big public dollars in a fuel that might not last much more than a decade? 

3. It argues that switching to natural gas will reduce the risk of global warming. True, burning natural gas – aka methane – releases about half as much CO2 as an equivalent amount of coal. But the problem is that when it comes to trapping heat, methane is about 21 times as potent as CO2 (although is stays in the atmosphere a much shorter time). And as it turns out, a lot of methane leaks out into the atmosphere in the course of producing natural gas. Exactly how much, and with what effect, is hotly debated. Some studies have shown that natural gas could, in fact, be worse for the climate than coal. But even if you don’t factor in leakage rates, shifting to natural gas is not going to begin to stop global warming. As a new study by climate scientist Ken Caldeira and tech billionaire Nathan Myhrvold argues, shifting to natural gas "cannot substantially reduce the climate risk in the next 100 years." I know wonky papers can be a drag to slog through, but this one is important and well worth a read.

So rather than being a "bridge fuel" to the future, as many natural gas boosters like to call it, natural gas may turn out to be, as climate blogger Joe Romm puts it, a "bridge fuel to nowhere." Obama, of course, is never going to say that. But a little less wide-eyed boosterism would be welcome.

Situation All Fracked Up

We Asked For Water, They Gave Us Gasoline

by ROBERT HUNZIKER

 

According to worldwide energy industry participants, all of the low hanging fruit is gone.

Finding new energy sources will henceforth be difficult and expensive… and very dangerous to your health. The unquenchable thirst for energy is unique to modern man, a little over 100 years old, and energy is unquestionably the heartbeat of modern civilization.

We cannot exist without it, but where and how to find it is fast becoming the biggest challenge to the health of planet earth. Case in point: Fracking is the fastest growing segment of the energy industry, massively so in North America, but it may be the death knell of society well before global warming has the opportunity to really strut its stuff.

According to Texas Governor Rick Perry, when confronted on the campaign trail about fracking problems: “We have been using hydraulic fracturing in my home state for years and this is a fear tactic that the left is using and the environmental community is using that absolutely, excuse the pun, does not hold water.”

Governor Perry’s bias and ill-founded statement is herein refuted by 12 personal testimonials in Texas included in the appendix to this article. Further, it is well understood by professionals who seriously follow the trails and tribulations of fracking that almost all cases where fracking has poisoned ground water are quickly settled, payoffs to the victims, by energy lawyers who arrange for the legal documents to be sealed.  The implication herein is we do not know the whole story by a long shot, but knowing the whole story may be the only way to survive as a species. Why we don’t know all the facts should be one of the most important political questions of 2012.

The upcoming national debate about the election of 2012 should, front and center, address the fracking issue in earnest, and the government has a responsibility to its citizens to re-establish effective monitoring of the fracking industry under the U.S. Clean Water Act. Why not? Fracking poisons ground water (see testimonials in appendix), and because fracking is the fastest growth segment of the energy industry, it will be too late once its deadly effects are well understood by the public at large.
\
How do we reverse poisoned aquifers?

1)    December 8th, 2011-Environmental Protection Agency says Gas-Fracking Chemicals Detected in Wyoming Aquifer, (a drinking-water aquifer in west-central Wyoming; residents of Pavilion, Wyoming warned to use ventilation when showering in order to air out potentially dangerous chemicals, and to drink and cook from bottled water.

2)    April 27th, 2011- Jessica Ernst, an Alberta, Canada resident who is an oil patch consultant, sued Encana, Alberta Environment and Water, and the Alberta Energy Resources Conservation Board for $33M over allegations that Encana’s fracking/drilling caused water contamination, i.e., her faucets began to whistle, the toilet fizzed, black particles clogged her water filters, and she broke out in rashes.

3)    December 23^rd, 2011- US Dept. of Energy issues a request for proposals, offering $35 million, of projects that will address environmental impacts of… including contamination of drinking water with fracking chemicals….”

4)    According to WaterDefense.org, “Across the country, state regulators have documented over 1,000 incidents of groundwater contamination related to fracking.  In many cases, water is so polluted with gas that people can literally light their water on fire, right out of the tap!”

5)    A New York Times article, d/d August 3, 2011, “A Tainted Water Well, and Concern There May be More,” by Ian Urbina, states: “The report concluded that hydraulic fracturing fluids or gel used by the Kaiser Exploration and Mining Company contaminated a well roughly 600 feet away on the property of James Parsons in Jackson County, W.Va., referring to it as “Mr. Parson’s water well… This fracture fluid, along with natural gas was present in Mr. Parson’s water, rendering it unusable.” The article goes on to conclude: “…E.P.A. report, said that she and her colleagues had found “dozens” of cases that she said appeared to specifically involve drinking water contamination related to fracking. But they were unable to investigate those cases further and get access to more documents because of legal settlements.”

APPENDIX

A list of actual groundwater contamination cases from the Natural Resources Defense Council:

Arkansas: In 2008, Charlene Parish of Bee Branch reported contamination of drinking water during hydraulic fracturing of a nearby natural gas well owned by Southwestern Energy Company. Her water smelled bad, turned yellow, and filled with silt.

Arkansas: In 2007, the Graetz family in Pangburn reported contamination of drinking water during hydraulic fracturing of a nearby natural gas well owned by Southwestern Energy Company. The water turned muddy and contained particles that were “very light and kind of slick” and resembled pieces of leather.

Arkansas: In 2009, a family in Bee Branch, who wishes to remain anonymous, reported changes in water pressure and drinking water that turned gray and cloudy and had noxious odors after hydraulic fracturing of a nearby natural gas well owned by Southwestern Energy Company.

Arkansas: In 2007, a family in Center Ridge reported changes in water pressure and water that turned red or orange and looked like it had clay in it after hydraulic fracturing of nearby wells owned by Southwestern Energy Company. They told their story on YouTube.

Arkansas: In 2008, a homeowner in Center Ridge reported changes in water pressure and water that turned brown, smelled bad, and had sediment in it after hydraulic fracturing of a nearby well owned by Southwestern Energy Company. He also told his story on YouTube.

Colorado: In 2001, two families in Silt reported a water well blow-out and contamination of their drinking water during hydraulic fracturing of four nearby natural gas wells owned by Ballard Petroleum, now Encana Corporation. Their drinking water turned gray, had strong smells, bubbled, and lost pressure. One family reported health symptoms they believe are linked to the groundwater contamination.

Colorado: In 2007, the Bounds family in Huerfano County reported a pump house exploded and contamination of drinking water during hydraulic fracturing of nearby wells owned by Petroglyph Energy.

Colorado: In June, 2010, the day hydraulic fracturing began on a nearby gas well in Las Animas County, landowner Tracy Dahl checked his cistern and found approximately 500 gallons of grayish brown murky water where water had previously run clear for years. The Dahls have extensive water testing documentation going back many years, verifying that their water has always been clean and clear. They were told by Colorado Oil and Gas Conservation Commission (“COGCC”) staff that the water could not be tested for chemicals in the hydraulic fracturing fluid because there is insufficient information about the chemicals used. Three monitor wells on the ranch are now producing methane at an escalating rate.

New Mexico: A 2004 investigation by the U.S. Environmental Protection Agency found two residents who reported that the quality of their water was affected by hydraulic fracturing.

New York: In 2007, the Lytle family in Seneca County reported contamination of drinking water the morning after hydraulic fracturing of a nearby natural gas well owned by Chesapeake Energy Corporation. The water turned gray and was full of sediment.

New York: In 2009, the Eddy family in Allegany County reported contamination of drinking water during hydraulic fracturing of a nearby well owned by U.S. Energy Development Corporation. The water turned “foamy, chocolate-brown.”

North Dakota: The North Dakota non-profit organization Bakken Watch reports very serious health symptoms in humans, livestock, and pets after nearby hydraulic fracturing. Their website has photos of sick animals, pit leaks, and corroded tanks. North Dakota state legislators admit they are “understaffed and overwhelmed” and “struggling to provide adequate oversight amid an explosion of activity in North Dakota’s oil patch.”

Ohio: In 2007, there was an explosion of a water well and contamination of at least 22 other drinking water wells in Bainbridge Township after hydraulic fracturing of a nearby natural gas well owned by Ohio Valley Energy Systems. According to the State investigation, one of the contributing factors to this incident is that: “the frac communicated directly with the well bore and was not confined within the “Clinton” reservoir.”

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…”

Pennsylvania: In September 2010, a lawsuit was filed by 13 families who say they have been and continue to be exposed to contaminated drinking water linked to hydraulic fracturing. Eight different properties in Susquehanna County are said to have contaminated drinking water. One child has neurological symptoms consistent with exposure to toxic substances. Southwestern Energy, the company operating the well near these families, responded that it promptly investigated all complaints and that both the company and the Pennsylvania Department of the Environment independently tested the water and found no link between gas operations and the water quality and no problems with the integrity of the gas well.

Pennsylvania:  In 2009, the Zimmerman family of Washington County reported contamination of drinking water after hydraulic fracturing of nearby natural gas wells owned by Atlas Energy. Water testing on their farm found arsenic at 2,600 times acceptable levels, benzene at 44 times above limits, naphthalene at five times the federal standard, and mercury and selenium levels above official limits.

Pennsylvania: In 2008, two families in Gibbs Hill reported contamination of drinking water after hydraulic fracturing of a nearby natural gas well owned by Seneca Resources Corporation. Their water had strong fumes, caused burning in lungs and sinuses after showering, and caused burning in the mouth immediately upon drinking. The state found that the company had not managed the pressure in the well properly and had spilled used hydraulic fracturing fluids that contaminated the drinking water supply.

Pennsylvania: In 2009, families in Bradford Township reported contamination of drinking water after hydraulic fracturing of nearby natural gas wells owned by Schreiner Oil & Gas. The drinking water of at least seven families has been contaminated.

Pennsylvania: In 2009, the Smitsky family in Hickory reported contamination of their drinking water after hydraulic fracturing of nearby natural gas wells owned by Range Resources. Their water became cloudy and foul smelling. Testing found acrylonitrile, a chemical that may be used in hydraulic fracturing.

Pennsylvania: A family in Bradford County reports that its water turned black and became flammable from methane contamination in 2009 after hydraulic fracturing of a nearby well operated by Chesapeake Energy. The water cleared for a while but turned black again in 2010. Relatives living down the road also report their water turning black in 2010.

Texas: Larry Bisidas is an expert in drilling wells and in groundwater. He is the owner of Bisidas Water Well Drilling in Wise County, and has been drilling water wells for 40 years. Two water wells on his property became contaminated in 2010. When his state regulator stated that there has been no groundwater contamination in Texas related to hydraulic fracturing, Mr. Bisidas replied: “”All they’ve gotta do is come out to my place, and I’ll prove it to them.”

Texas: In Wise County, Catherine and Brett Bledsoe report that their drinking water became contaminated in 2010 soon after hydraulic fracturing began on two natural gas wells bordering their property. The water stung their eyes during showers, and their animals refused to drink the water. Without any assistance from regulators, the Bledsoes paid for their own water testing. The testing found benzene, a known carcinogen, at double the safe levels.

Texas: In 2007, three families who share an aquifer in Grandview reported contamination of drinking water after hydraulic fracturing of a nearby well owned by Williams. They experienced strong odors in their water, changes in water pressure, skin irritation, and dead livestock. Water testing found toluene and other contaminants.

Texas: The Scoma family in Johnson County is suing Chesapeake Energy, claiming the company contaminated their drinking water with benzene and petroleum by-products after hydraulic fracturing of natural gas wells near the Scoma home. The family reports that its drinking water sometimes runs an orange-yellow color, tastes bad and gives off a foul odor.

Texas: Tarrant County Commissioner J.D. Johnson, who lives in the Barnett shale area, reported groundwater contamination immediately after two gas wells on his property were hydraulically fractured. His water turned a dark gold color and had sand in it. (I live in Tarrant County.--jef)

Texas: Carol Grosser, in south Texas, noticed changes in her water after a neighbor told her a nearby well was being hydraulically fractured. Carol noticed changes in her water pressure and rust-colored residue in her stock tanks. The fish in her tanks died, and some of her goats had abnormal milk production and produced kids with unusual birth defects.

Texas: Toby Frederick began noticing a foul odor and discoloration in his water after ”an oil company blew out some casing during a hydraulic fracturing job northeast of his property.” Mr. Frederick paid for his own water samples, which found traces of benzene, a known carcinogen, in his water. He sent samples to his local Ground Water Conservation District, but never received any results. The Texas Railroad Commission told him his water was drinkable, even though it is brown and smells like diesel fuel.

Texas: The Executive Director of the Upper Trinity River Groundwater Conservation District in north Texas stated that the District “gets ‘regular reports’ from property owners who said that ‘since a particular [gas] well had been fracked, they’ve had problems’ with their water wells, such as sand in them, saltier water or reduced water output….” (Close to me, too.--jef)

Texas: Susan Knoll in the Barnett shale reports that last year her drinking water became foamy right after hydraulic fracturing of a well adjacent to her property. Since that time, additional gas wells have been fractured near her home and her drinking water has continually gotten worse. It sometimes foams, becomes oily, and has strong odors that burn Susan’s nose when she smells her water. Susan has a lot of videos and more information on her blog.

Texas: Grace Mitchell, a resident of Johnson County, Texas, is suing Encana and Chesapeake. According to her lawsuit, soon after drilling and hydraulic fracturing took place near her home in 2010, her water became contaminated, feeling slick to the touch and giving off an oily, gasoline-like odor. Testing results performed on her well water confirmed it was contaminated with various chemicals, including C-12-C28 hydrocarbons, similar to diesel fuel.

Texas: The Harris family of Denton County, Texas, is suing Devon Energy. They say that their water became contaminated soon after Devon commenced drilling and hydraulic fracturing near their home in 2008, and that their water became polluted with a gray sediment. Testing results performed on the well water found contamination with high levels of metals: aluminum, arsenic, barium, beryllium, calcium, chromium, cobalt, copper, iron, lead, lithium, magnesium, manganese, nickel, potassium, sodium, strontium, titanium, vanadium, and zinc. (Also near me.--jef)

Virginia: Citizens reported drinking water contamination after hydraulic fracturing. Water was murky and had oily films, black sediments, methane, and diesel odors. Individuals experienced rashes from showering. The Buchanan Citizens Action Group reported over 100 documented complaints of adverse effects of hydraulic fracturing and the Dickenson County Citizens Committee reported ground water quality deteriorated throughout the county as a result of the large number of hydraulic fracturing events.

West Virginia: The Hagy family in Jackson County, West Virginia, is suing four oil and gas companies for contaminating their drinking water. They say their water had ”a peculiar smell and taste” and the parents as well as their two children are suffering from neurological symptoms. A news article reports that the lawsuit makes the connection between the drinking water contamination and the hydraulic fracturing process.

West Virginia: In Marshall County, Jeremiah Magers reported in October, 2010, that “As soon as they ‘fracked’ those gas wells, that’s when my water well started getting gas in it.” He also lost all the water in his well.

West Virginia: In Wetzel County, Marilyn Hunt reported to the EPA in 2010 that: ”frac drilling is contaminating the drinking water here.” Residents report health symptoms, such as rashes and mouth sores, as well as illness in their lambs and goats, which they suspect is linked to drinking water contamination.

Wyoming: Families in the small town of Pavillion have been reporting contamination of their drinking water for at least ten years. Hydraulic fracturing has been used in the many wells in the area owned by Encana Corporation. Drinking water has turned black, smelled bad, and tasted bad. Individuals report medical symptoms they believe are related to water contamination. The U.S. Environmental Protection Agency found contamination in 11 water wells, and concluded in the draft report on its investigation that: “the data indicates likely impact to ground water that can be explained by hydraulic fracturing.”