NEW YORK - State Bans Fraking

"New York State Bans Fracking" by Abrahm Lustgarten, ProPublica 12/17/2014

When natural gas companies first pressed into New York in 2008, state environmental regulators barely understood the process of "hydraulic fracturing."  Today, six and a half years after ProPublica first raised concerns that the drilling could threaten both the state's water supply and its residents' health, Gov. Andrew Cuomo banned the process across the state.

The ban makes New York, which holds large natural gas reserves in the Marcellus Shale, the largest and most significant region to bow out of the nation's energy boom because of concerns that its benefits may be outweighed by the risk.

The decision comes after a long-awaited report from the state's Health Department this week concluded that the fracking would pose health risks to New Yorkers. It also follows an exhaustive state environmental review effort that began the day after ProPublica's first story in July 2008.

Since then, New York has walked an indecisive line on drilling, while an energy boom provoked by advances in fracking technology took much of the rest of the country by storm.  Today's lower oil prices are due, in part, to an oil bonanza in North Dakota's Bakken Shale that had barely begun when New York first put a temporary halt to new drilling in the state.  Likewise, the gas drilling waves that have rippled through states from Pennsylvania and West Virginia to Michigan, North Carolina, Maryland, Texas and Wyoming had yet to run their course.

But by delaying a decision on drilling for so many years, Cuomo also allowed a clearer picture of the impacts and changes that drilling activity would bring to emerge.  That clearer picture ultimately dampened the enthusiasm for drilling in New York and validated many of the environmental and health concerns that anti-drilling groups have raised across the country.

Just across the state line from New York's Southern Tier, where the richest Marcellus gas deposits lie, Pennsylvania landowners dealt with one incident of water contamination after another.  They complained of illnesses caused by both the water and new air pollution brought by the drilling.  State regulators in Pennsylvania – once enthusiastic boosters of the process – wound up cracking down on drilling companies' messy practices and strengthening their own environmental laws as a result.

Across the country, similar stories emerged, many of them reported as part of a four-year-long investigation by ProPublica.  From Texas and Louisiana to California, drilling waste was being spilled or leaking into drinking water aquifers and high pressures caused by fracking activities were causing wells to leak.  Methane gushed from wells and pipelines.  And residents' allegations that the drilling was causing symptoms from nerve disorders to skin lesions and birth defects began to be substantiated through peer-reviewed scientific research.

The potential payoff for such risks – which the drilling industry long maintained were minimal – was that drilling would bring huge economic benefits to rural regions long desperate for new jobs and an injection of economic vigor.  That economic promise has been born out across many parts of the country, but in some instances, those who needed the financial benefits most have been denied them.

An investigation by ProPublica earlier this year found that landowners in Pennsylvania who supported drilling and signed leases with drilling companies in order to earn a share of the profits were instead being cheated out their payments, called royalties.  In fact, the stories showed, energy companies had withheld royalty payments worth billions of dollars from both landowners and the federal government across states from Texas and Wyoming to Louisiana and Colorado, substantially blunting the prosperity that could come from allowing drilling to proceed.

All of this, it now seems, must have made Cuomo's decision this week a lot easier.  But the ban also reflects the conclusion of a lengthy learning curve for New York State.

When ProPublica reporters, in a joint project with WNYC, first went to Albany to talk with the state's environment regulators, those officials couldn't answer basic questions about the process they were poised to permit:  What chemicals would be pumped underground near drinking water supplies?  Where would the waste be disposed of and did New York have facilities capable of handling it?  State officials told ProPublica then that fracking had never once caused pollution to water supplies, and said they were unaware of the hundreds of cases brought to their attention by ProPublica where such damage had indeed taken place.

On the morning of July 23, 2008, then Gov. David Paterson called for those state environment officials to go back to the drawing board in their assessment of the risks of fracking before the state issued any new permits, effectively placing a moratorium on drilling that lasted until now.

COLORADO - Local Community Bands Fracking

"Colorado fracking fuels fight between state and local government over control" PBS NewsHour 9/8/2014

Excerpt

JUDY WOODRUFF (NewsHour):  We just heard about how immigration may affect the coming election in a number of states, including Colorado.  Well, it turns out there is another issue that could have a significant impact in the state of Colorado, fracking.

Communities there are engaged in a battle with the state to get more control over oil and gas drilling.

Rocky Mountain PBS’ Dan Boyce reports from the town of Longmont.

KAYE FISSINGER:  I found out that they were going to be fracking all around Union Reservoir.

DAN BOYCE, Rocky Mountain PBS:  Seventy-year-old great grandmother Kaye Fissinger is a busy woman these days.  She’s been fighting for the last three years to protect the town she loves from fracking, the technique of pumping pressurized water deep underground to fracture rock and extract oil and natural gas.

KAYE FISSINGER:  So, we don’t have drilling and fracking yet here, and that’s because of the ban.

DAN BOYCE:  Fissinger was eager to show us this reservoir at the edge of Longmont, where companies have been trying to put in a series of gas wells.

KAYE FISSINGER:  There will be fracking all around here, where people play.

DAN BOYCE:  She’s worried it will soon look like so many other places along Colorado’s Front Range, with drill towers and wellheads cropping up next to homes at an unprecedented rate.

Activists like Fissinger in a handful of communities just north of Denver succeeded in keeping this boom away from their doorsteps by lobbying at the local level.  The Longmont City Council voted to restrict where wells could be built a couple of years ago.

A few months later, residents took it a step further, passing a ban on fracking altogether.  The state government immediately launched two lawsuits against Longmont for this, and it fired up a grassroots citizens movement for a statewide initiative to give local communities more control over fracking.

ENVIRONMENT - Drillers Using Diesel Fuel For Fracking

"Report:  Drillers Illegally Using Diesel Fuel to Frack" by Naveena Sadasivam, ProPublica 8/14/2014

A new report charges that several oil and gas companies have been illegally using diesel fuel in their hydraulic fracturing operations, and then doctoring records to hide violations of the federal Safe Drinking Water Act.

The report, published this week by the Environmental Integrity Project, found that between 2010 and July 2014 at least 351 wells were fracked by 33 different companies using diesel fuels without a permit.  The Integrity Project, an environmental organization based in Washington, D.C., said it used the industry-backed database, FracFocus, to identify violations and to determine the records had been retroactively amended by the companies to erase the evidence.

The Safe Drinking Water Act requires drilling companies to obtain permits when they intend to use diesel fuel in their fracking operations.  As well, the companies are obligated to notify nearby landowners of their activity, report the chemical and physical characteristics of the fluids used, conduct water quality tests before and after drilling, and test the integrity of well structures to ensure they can withstand high injection pressures.  Diesel fuel contains a high concentration of carcinogenic chemicals including benzene, toluene, ethylbenzene and xylene, and they disperse easily in groundwater.

FracFocus is an online registry that allows companies to list the chemicals they use during fracking.  At least 10 states, including Texas, Colorado and Pennsylvania, mandate the use of the website for such disclosures.

The report asserts that the industry data shows that the companies admitted using diesel without the proper permits.  The Integrity Project's analysis, the report said, then showed that in some 30 percent of those cases, the companies later removed the information about their diesel use from the database.

"What's problematic is that this is an industry that is self-reporting and self-policing," said Mary Greene, senior managing attorney for the environmental organization.  "There's no federal or state oversight of [filings with FracFocus]."

The FracFocus website currently has no way to track changes to disclosures.  The Integrity Project noticed the changes when it compared newer disclosures to those in older FracFocus data purchased from PIVOT Upstream Group, a consulting firm in Houston.

Energy In Depth, the communications and research arm of the Independent Petroleum Association of America, published a lengthy response to the Integrity Project's report and criticized it for including diesel use that occurred prior to a 2014 Environmental Protection Agency rule clarifying the types of chemicals considered "diesel fuels."

Energy In Depth said the Integrity Project was "retroactively changing the definition of diesel fuel in order to malign more operations for engaging in an activity (a "diesel frack") that did not occur."

The EPA first listed kerosene as a type of diesel fuel in May 2012 when it released a draft version of the rule finalized this year.  Kerosene is also listed as a type of diesel fuel in the definition of the Toxic Substance Control Act, which controls the production, use and disposal of chemicals.

In its response, Energy In Depth also pointed out that in some cases companies may have provided incorrect data to the FracFocus website and were seeking to correct it, not skirt the law.

"We no longer use the contract completions crews that used very small trace amounts of kerosene and a hydrocarbon distillate on five wells more than three years ago," said John Christiansen, director of external communications at Anadarko Petroleum Corp., one of the companies listed in the report.  "Since 2011, there has been no re-occurrence, and we remain in compliance with EPA regulations," he said in an email to ProPublica.

The report found that six companies had changed disclosures for wells; Pioneer Natural Resources accounted for 62 of the changes.  Tadd Owens, vice president of governmental affairs at Pioneer said most of these changes were made because of "coding errors" while submitting data to FracFocus.

"We did use trace amounts of kerosene in 2011 prior to when the EPA issued guidance.  The rest of the wells on the list are coding errors and we have an ongoing internal quality control process [to identify them]," he said.

For many years fracking industry groups insisted their member companies never used diesel fuels in their operations.  Then, in 2011, a congressional investigation found that in fact between 2005 and 2009, 12 companies had injected 32 million gallons of diesel fuel or fracking fluids containing diesel fuel in wells in 19 states.

The industry groups then shifted their argument, declaring that they could not be in violation of federal regulations in their use of diesel fuels because the EPA had never adequately spelled out exactly what exact kinds of fuels were barred.

Indeed, in a 2011 email to ProPublica, Halliburton, a company listed in the congressional investigation as having used 7.2 million gallons of diesel fuel, said it had not violated any laws "because there are currently no requirements in the federal environmental regulations that require a company to obtain a federal permit prior to undertaking a hydraulic fracturing project using diesel."

The EPA then acted to make its enforcement authority explicit, and earlier this year finalized more detailed regulations governing the use of diesel fuels in fracking operations.

In February 2014, after the EPA released its rule, Lee Fuller, the vice president of government affairs at the Independent Petroleum Association of America, stated that the rule was "a solution in search of a problem."

"Based on actual industry practices, diesel fuel use has already been effectively phased out of hydraulic fracturing operations," Fuller said.

Yet energy companies have continued to produce fracking fluids containing diesel fuels.  The Environmental Integrity Project's report identified 14 well fracturing products – commercially called emulsifiers, dispersants, additives and solvents – sold by Halliburton that contain diesel fuels.  Halliburton's own safety data sheets for these products list diesel as a chemical in these products.

"Halliburton is working with state regulators and customers to be sure all [FracFocus] reports are accurate," said Emily Mir, a spokeswoman for the company.  Mir would not comment on whether Halliburton informs drillers that purchase its products that they are required to obtain a permit before diesel fuel can be used for fracking.

FRACKING - Sleaze of Greed, Protection Racket

"Aggressive Tactic on the Fracking Front" by Naveena Sadasivam, ProPublica 7/2/1024

A Pennsylvania gas company offers residents cash to buy protection from any claims of harm.

For the last eight years, Pennsylvania has been riding the natural gas boom, with companies drilling and fracking thousands of wells across the state.  And in a little corner of Washington County, some 20 miles outside of Pittsburgh, EQT Corporation has been busy – drilling close to a dozen new wells on one site.

It didn't take long for the residents of Finleyville who lived near the fracking operations to complain – about the noise and air quality, and what they regarded as threats to their health and quality of life.  Initially, EQT, one of the largest producers of natural gas in Pennsylvania, tried to allay concerns with promises of noise studies and offers of vouchers so residents could stay in hotels to avoid the noise and fumes.

But then, in what experts say was a rare tactic, the company got more aggressive; it offered all of the households along Cardox Road $50,000 in cash if they would agree to release the company from any legal liability, for current operations as well as those to be carried out in the future.  It covered potential health problems and property damage, and gave the company blanket protection from any kind of claim over noise, dust, light, smoke, odors, fumes, soot, air pollution or vibrations.

The agreement also defined the company's operations as not only including drilling activity but the construction of pipelines, power lines, roads, tanks, ponds, pits, compressor stations, houses and buildings.

"The release is so incredibly broad and such a laundry list," said Doug Clark, a gas lease attorney in Pennsylvania who mainly represents landowners.  "You're releasing for everything including activity that hasn't even occurred yet.  It's crazy."

Linda Robertson, a spokeswoman for EQT, said in a statement that the company had worked hard and conscientiously to address the concerns of the residents.  She said consultants had been hired, data collected on noise and health matters, and that independent analysis had shown the company was in compliance with noise and air quality requirements.  She would not comment in detail on the financial offers.

"When landowner and leaseholder concerns arise, it is a standard practice for EQT personnel to work diligently to listen to and understand their concerns, particularly those related to the temporary inconveniences of living near a production site," Robertson said.  "Regarding the neighbors on Cardox Road, the majority of whom are leaseholders, we have been in regular and ongoing communications with residents and local officials to address and resolve questions as they arise."

Hydraulic fracturing – or fracking – has provoked a litany of health and environmental concerns since it gained popularity within the last decade.  Many environmentalists and public health experts contend that the practice can pollute groundwater aquifers, drastically reduce air quality and endanger the health of residents living near wells.

Over the years, the industry has vehemently denied that its work is a threat, and has often pointed to a lack of conclusive proof that gas drilling operations are to blame for any harmful health or safety issues.  The industry has undertaken an array of efforts to quell these worries and preserve its business — lobbying state legislators, conducting its own scientific studies and occasionally settling quietly out of court with landowners who have threatened to sue.

The liability agreements EQT has used in Finleyville — they are often known as nuisance easements — have been used in other circumstances.  Residents living close to airports, for instance, are often offered such easements as compensation for having to bear with the noise, vibrations and fumes from air traffic.  Property owners close to landfills and wind farms may also sign similar agreements.

But experts say such easements are rare in the oil and gas industry.

"This is only the second time I've seen one," said Clark, the Pennsylvania attorney.  "They're absolutely not common at all."

Clark says it is unlikely that companies will start handing out such agreements en masse, saying doing so could decrease landowners' confidence about the safety of the company's operations and their personal health.

"People are going to say the gas companies must be concerned about air pollution because they're offering these easements," said Clark.  "Everybody's going to get suspicious."

Earlier this year, a couple in Texas was awarded $3 million in a lawsuit against a gas drilling company.  The couple alleged that the company's operations had affected their health, decreased their property value and forced them to move away.  The case was one of the first successful lawsuits alleging that air pollution from gas drilling activity caused health issues.

Experts say that verdict and others like it have emboldened landowners to take their claims to court.  Nuisance easements may be one way to ensure that the company can easily block landowners from claiming damages.

Apart from drilling and fracking wells, EQT also builds and operates the infrastructure — pipelines and compressor stations — necessary to move natural gas to market.  Its operations are headquartered in Pennsylvania but it also owns wells in Kentucky and West Virginia.

In 2008, landowners in Finleyville signed a gas lease for drilling with Chesapeake Energy.  The company only drilled one well, but last year it sold its leases to EQT, which has since drilled 11 additional wells.

So far the company's strategy to reduce its liabilities has worked with some landowners.

Muriel Spencer, whose house is about 500 feet from the drilling, took the money.  She said she did not consult with a lawyer, but had asked the company to put a five-year time frame around the release.  The initial contract released the company from liabilities indefinitely.

"I cannot complain about the drilling to this point," Spencer said, adding that EQT "has been nothing but fair with me."

The company's spokeswoman would not comment on how many landowners EQT approached with the proposed agreements, but said that "approximately 85% of the residents" had signed them.

An initial version of the proposed standard agreement listed 30 Finleyville residents and required that they all sign the agreements in order to receive the $50,000.  When the residents refused, EQT modified the agreement such that the compensation was not contingent on all landowners signing it.

ProPublica found that at least four of the 30 residents have agreed to some version of the initial agreement that EQT proposed and have received $50,000 in exchange.  It is unclear what changes were made to the agreement during negotiations.

Robertson, the company spokeswoman, said in her statement that "any changes made to the agreements during negotiations were based on requests directly from the resident, and/or their attorney."

But some of the residents have refused to negotiate with the company.

"I was insulted," said Gary Baumgardner, who was approached by EQT with the offer in January.  "We're being pushed out of our home and they want to insult us with this offer."

Baumgardner says his house is like an amphitheater, constantly vibrating from the drilling.  At times the noise gets up to 75 decibels, equivalent to a running vacuum cleaner, he said.  Earlier this year, EQT Corp. put up a sound barrier to limit the noise, but Baumgardner says it has made little difference to his quality of life.

"We took the pictures down in the bedroom because they still vibrate at night," he said.

Baumgardner says he has had to leave his house at least three times so far because the gas fumes from the well site were too much to bear.  A local health group has installed air quality monitors in his home and several of his neighbors.  Last year when the one of the monitors began flashing red, his daughter, pregnant at the time, fled the house.  She has since moved away after her doctor advised her not to live close to a drilling site.

"Our house is most often not livable," said Baumgardner.  EQT's response to his complaints, he said, has been "constant dismissals, excuses, delays and broken promises."

Robertson would not respond to Baumgardner's specific assertions.  She did point to several mitigation efforts she said the company had taken, including the sound wall, but also involving switching to quieter machinery and applying for permits to transport water via pipes instead of trucks.

Baumgardner believes the nuisance easement he was offered is a part of the industry's tactic to silence landowners.

"Throughout the last several months, an EQT regional land manager, one of our community advisers, and our community relations manager have all been engaged in phone calls and personal meetings with residents, attended township meetings, and visited the production site on multiple occasions to identify and confirm the reported issues, if any," Robertson's statement said.

"The easements are part of our overall consistent and ongoing effort to address leaseholder concerns."