Wednesday, December 17, 2014

Cuomo’s choice to ban fracking driven by science, politics

Tonight, I was scheduled to cover a town board meeting in Windsor, New York, where officials were going to review a plan to change their zoning to allow fracking. The process for a zoning change promised to be long and contentious, and was necessary in light of a recent court ruling putting the decision of whether and where to drill in the hands of local governments.

Things changed dramatically this afternoon, when Governor Andrew Cuomo announced that he would ban shale gas development statewide due to unacceptable health risks. Cuomo’s position, backed by a long-awaited report from the state Department of Health, is a departure from his earlier position that he would allow fracking where local governments favored it. Reporters, pundits and the public they serve are still getting their minds around Cuomo’s emphatic decision, which came after more than six years of policy review. While it puts the matter to rest, many questions remain: What are the legal consequences? Do industry lawyers and supporters, who have been beaten at every turn in their efforts to bring shale gas to New York, have another challenge in them? Or is this the end of the line?

Those answers will come soon, but apparently, from my conversations with sources and a press-release from the Joint Landowners Association of New York, not tonight. The news of the hour is that, after a six and a half-year journey, fracking is dead on arrival in New York. Along that line, I share my response to a request by Andrew Revkin, author of New York Times  Dot Earth, for a "what just happened" analysis. (Revkin’s compilation of reaction from many informed sources can be found here.)

Cuomo’s decision is consistent with his progressive politics that got him to where he is now. It's a bold move and I optimistically take it as sincere attempt to overcome the inertial forces of fossil fuel dependency. Success here could add considerably to his legacy. But he has much more to do. The fracking ban needs to be accompanied by practical reforms and initiatives in energy development & consumption. How much longer will New York City residents have to rely on Fuel Oil as their primary source of heat? What about coal burning plants? I have written about the answer to these questions by a group of scientists and professionals that have contributed to the credibility of the anti-fracking movement. I offer that post again here.)

So why did it take six and a half years? Science takes time. Establishing risks of high volume hydraulic fracturing and the new era of on shore drilling it has enabled is especially difficult because shale gas development is relatively new. The industry controls most of the information and has plenty of legal, scientific and political wherewithal to challenge any conclusions that don’t work in its favor.

Science is part of the calculus. But despite what Cuomo would like us to believe, scientists don’t make these kinds of decisions. The full equation is Science + politics = policy. Cuomo finally got tired of being hounded on the issue by his political base. The movement in New York against shale gas was relentless and it was focused on him. At one point, he told Susan Arbetter, host of Capitol Press Room, that it was the most effective political action campaign he had seen. (I will link to that interview as soon as I find it, but I wanted to get this post up right away.) Activists, both institutional and grass roots, promised to step up their efforts if Cuomo allowed even a single well.

The Home Rule decision by the state’s high court in June, and the depressed price of natural gas made a decision politically easier. Cuomo would have a hard time taking the perceived riches of fracking from landowners back when landmen were at their doors with big checks in hand. Nobody is currently seriously looking at shale gas exploration, much less development, in New York with gas prices as low as they are and the encumbrances of Home Rule.

New York has become a showcase for the anti-fracking movement, and Cuomo's decision today has raised the movement's stature nationally. But it’s also important to remember that Cuomo’s decision is the end-point of a process that started 6-plus years ago - before frack was a bad word. As recounted in my book, Under the Surface, the moratorium issued by Governor Patterson in July, 2008 had nothing to do with organized fractivists, who did not appear on the scene until after Josh Fox’s movie Gasland two years later. New York’s moratorium was the direct results of landowners posing reasonable questions in public hearings about how the state was prepared to govern shale gas development. Six and half years later, Cuomo’s actions have provided the answer: it wasn't then, and it isn't not now.

Tuesday, July 22, 2014

Pa. Auditor General finds state’s fracking oversight a fiasco Probe finds lack of inspections, enforcement, transparency

Pennsylvania’s regulation of the shale gas boom has been underfunded, inconsistent and ineffective, according to an investigation by the state’s auditor general released today.

Auditor General Eugene DePasquale likened the Pennsylvania Department of Environmental Protection’s efforts to oversee the industry to “firefighters trying to put out a five-alarm fire with a 20-foot garden hose.” He added: “There is no question that DEP needs help and soon to protect clean water.”

The audit, covering a period of 2009 through 2012, was launched by DePasquale immediately after he was sworn in as auditor general in January 2013. It came in the wake of a controversy over whether state investigators obscure or alter the outcome of investigations into drilling’s impact on water supplies by disclosing an incomplete suite of chemical tests. The intention of the probe, according to a letter from DePasquale at the time, is to determine the "adequacy and effectiveness of DEP's monitoring of water quality as potentially impacted by shale gas development activities, including but not limited to systems and procedures for testing, screening, reporting and response to adverse impact such as contamination."

The report was blunt in its findings: the problems related to shale gas development are much deeper and broader than the DEP can presently handle, and they often go unaddressed or left up to industry without adequate follow-up by the agency. The problem is rooted to a wholesale lack of inspections, enforcement and transparency.

Often, according to the report, the agency does nothing about confirmed cases of water pollution tied to drilling problems.  After reviewing a selection of 15 files of water degradation tied to nearby shale gas operations, auditors found the agency issued only one order for the driller to restore or replace the water supply. Instead, the DEP relied on voluntary action by companies to resolve complaints and violations.

“When DEP does not take a formal, documented action against a well operator who has contaminated a water supply, the agency loses credibility as a regulator and is not fully accountable to the public,” DePasquale said. “When DEP has enforcement authority under the law it must exercise that authority routinely, consistently, and transparently. Those gas well operators whose actions cause harm to water supplies should not get an enforcement ‘pass’ just because they have convinced DEP that they will come into compliance with the law or that they negotiated a settlement with the property owner.”

Among other findings:

• The DEP does not post required inspection information on its website. Auditors found errors of more than 25 percent in key data fields, and 76 percent of inspectors’ comments were omitted from the online inspection reporting.  “It is unfathomable to us that for a basic responsibility of DEP -- inspecting oil and gas facilities – little criteria exists for when those inspections should occur,” DePasquale said. “Until DEP updates its out-of-date inspection policies, to include mandated inspections at specific critical drilling stages and during the life of the well, it will be nearly impossible to measure DEP’s performance in conducting this very basic responsibility to protect the environment.”

• The DEP does not use an official and independent system to track shale gas well waste from the well site to disposal.  Instead, the agency relies upon a “disjointed process that includes self-reporting by well operators with no assurances that waste is disposed of properly.”

• With respect to transparency, auditors discovered that accessing DEP data is “a myriad of confusing web links and jargon” that was often incomplete. “We could not determine whether all complaints received by DEP actually were entered into the system. What’s more … it is difficult to figure out exactly how many complaints were received, investigated, and resolved by DEP,” DePasquale said.

Although reports critical of the gas industry and regulators are nothing new, the inspector general’s report is noteworthy because it comes from within an independent arm of state government.

The DEP disagreed with all of eight findings of the audit critical of the agency, but agreed with a majority of the 29 recommendations for improvement.

Auditors encouraged DEP to:

• Issue orders to a well operators who pollute water supplies —even if DEP used the cooperative approach in bringing the operator into compliance or if the operator and the complainant have reached a private agreement;

•· Develop better controls for how complaints are received, tracked, investigated, and resolved;

• Hire additional inspectors to meet the demands placed upon the agency;

• Create and follow policy requirements for timely and frequent inspections;

• Create a functional system to track shale gas waste and be more aggressive in ensuring that the waste data it collects is verified and reliable;

·• Reconfigure the agency website and provide complete and pertinent information in a clear and easily understandable manner.

Friday, July 11, 2014

Global fracking debate: Coming soon to town hall near you Upstate NY localities face fallout from Home Rule decision

Late last month, New York’s high court issued a ruling that put the debate over the merits and risks of shale gas development in the hands of local governments.  The much-anticipated ruling – a monumental victory for grassroots political action -- settled a long-standing question regarding the state’s jurisdictional control over the matter. Yet it raised many other questions about how local governments will respond.

There are towns for drilling and towns against drilling. But much of the fight over where and to what extent shale gas development – including high volume hydraulic fracturing -- will be a part of the New York landscape will play out in towns with no stated policy. Do communities that don’t want fracking need to actively pass a ban? Can communities that want fracking amend zoning laws to encourage it? What happens if they do neither?

These questions are predicated on a pending decision by Governor Andrew Cuomo on whether to allow fracking anywhere in the state. While the outcome of that remains anybody’s guess, we know from Cuomo’s past remarks that he favors a plan to begin issuing shale gas permits in towns with no local bans. These happen to be along the border with Pennsylvania, which also sit over the most viable parts of the Marcellus Shale. This dynamic becomes especially relevant to towns in this area – and there are many of them -- with no comprehensive plan and nothing on the books specific to fracking.

One of these places is Vestal, where dozens of residents against fracking attended a town board meeting this week to urge elected officials to pass a local ban.

The reaction by Town Supervisor John Schaffer, as reported by, was not especially concrete. "Our town code says you can't do it here to begin with, and I've told these people [anti-fracking activists] that over and over and over," Schaffer said. He then added: "We’re aware of the recent Court of Appeals decision regarding home rule. While the decision permits the town to enact legislation that would ban fracking, it does not require us to ban it. According to the town board, we will carefully monitor this issue and will act when and if there’s an incident for us to do so."

(In her blog The Marcellus Effect, Sue Heavenrich covers a similar controversty unfolding in Candor, NY.)

Some legal experts say that towns could – depending on wording and interpretation of local law -- grant variances to gas companies to site wells in areas otherwise zoned against industrial use, which is just what supporters of gas development are hoping for and what opponents dread. Attorney Helen Slottje represented Dryden and Middlefield in their Home Rule victory. In a recent appearance on Capitol Press Room, Slottje pointed out that while the Court of Appeals ruling would make it more difficult for operators to drill in zoned areas, it would still be possible, depending on how a given town reacted to the ruling.

“There are in most zoning codes various exceptions for different uses that could be construed by a court to be like gas drilling sufficient to allow gas drilling to proceed,” she said. “The safest thing for a town to do is to pass a zoning amendment or stand alone law that makes it clear that gas drilling is not permitted in their town.”

Industry lawyer Tom West also raised that possibility. He told host Susan Arbetter his clients would be “implementing a strategy to protect our investments,” but because the nature of the fight had been so tactical – like a chess game where each side was anticipating the other’s moves -- he was “not at liberty to discuss that strategy.”

All this sounds suggestive and inconclusive because it is, at least until the matter is fully deliberated and acted upon at a town board level.

Some activists are already beginning to push the matter. Sue Rapp, a member of Vestal Residents for Safe Energy (VeRSE), characterized Vestal Supervisor Schaffer’s comment that the town would take a wait-and-see approach as “garbled messages not on point ... When examined, his remarks convey nothing of substance on the issue of zoning regs/variances and gas drilling.”

The ambiguity can be maddening or inviting, depending on your stake in the debate, and it has provoked some thoughtful comments from readers on my recent post about fallout from the Court of Appeals decision.

In response to a comment by Mary Sweeney, who pondered whether existing zoning laws would preclude drilling with no stated bans, fracking critic and policy analyst Stan Scobie elaborated on the undisclosed plan that West mentioned on Arbetter’s show. According to Scobie, West is organizing a campaign with certain towns over Marcellus shale zones to create policy – zoning overlays – that would maximize development of the play by creating the legal architecture to override zoning laws. Scobie writes:

Governor Cuomo and the DEC some time ago raised a difficult issue, namely,  fracking would perhaps be OK in those towns who "wish" to be fracked,  but  how would we know which ones they are? To address this the pro-drillers have crafted a "zoning overlay" strategy.
This plan would have each town modify their Comprehensive Plan, if they have one, to be somewhat fracking friendly, and then develop and legislate zoning overlays. These would, if passed, clearly identify the towns and areas in towns where fracking was OK. There would be no "frack me" resolutions passed quietly and quickly at Town Board meetings with zero attendance as seemed to be the case a couple of years ago. 

Scobie’s full response can be viewed here in the comments section.

This week, I asked West in an email whether zoning laws already on the books – those that prohibit industrial operations in residential or other areas -- effectively serve as “bans” to oil and gas. And of if so, can drilling supporters work around them? West responded:

Whether oil and gas activities are considered an industrial use, will be a municipality by municipality determination...  Much of the clarification will come over time.

In other words, much of where drilling is allowed will come down to interpretation of local zoning laws, and that interpretation will be made on a town by town basis by local leaders and their lawyers.

In short, the fight over drilling in New York is far from over. It continues on the state level, where activists like Walter Hang are leading a campaign to pressure Cuomo to withdraw the controversial policy review that is essential for it to go forward. And, pending that outcome, it continues on a local level, where towns will have to either craft policy clarifying how and if their zoning laws apply to gas drilling, or face the prospect of court challenges and the consequences when push comes to shove with money, leases, and passions on the line.

Monday, June 30, 2014

New York’s high court upholds Home Rule bans ... Decision complicates natural gas prospects

It’s settled. There will be no fracking in New York communities such as Dryden and Middlefield – serene and scenic places that have passed rules that find shale gas development incompatible with local land use ordinances.

The three-year battle over jurisdictional control over the industry ended today when the New York Court of Appeals upheld lower court decisions that cedes control over where and if shale gas development can happen from state to local governments. That’s a landmark victory for Home Rule advocates, including residents of more than 170 upstate communities that have passed moratoriums or bans on the controversial process.

But the future of fracking in the Empire state remains more unsettled than ever. All of the communities with fracking bans happen to be outside areas with the strongest prospects for shale gas development. In Southern Tier counties bordering the booming gas fields in northern Pennsylvania, many local governments either support fracking, or have no enforceable policy to prevent it. For every place like Dryden, there is a place like Sanford, a rural community near the Pennsylvania border that sits over 50,0000 acres of the Marcellus Shale, for which XTO Energy – a subsidiary of Exxon Mobile – has paid farmers $110 million just for the chance to test.

Sanford has no land use restriction, and is governed by a town council eager to see  rigs and roughnecks role across the Pennsylvania border and clear pads in the meadows, fields and woodlots of Southern Tier farms. And according to some who have been engaged in the fight since it began with the leasing rush of 2008, the prospect of drilling in these places is more imminent following today’s court ruling.

The court decision in effect provides legal sanction to a plan proposed by Governor Andrew Cuomo in the summer of 2012 to begin issuing permits on a trial basis in areas where communities and industry favor development. As reported by Danny Hakim of the New York Times in June, 2012: “Cuomo’s administration is now trying to acknowledge the economic needs of the rural upstate area, while also honoring the opposition expressed in some communities, and limiting the ire of environmentalists, who worry that hydrofracking could contaminate groundwater and lead to other hazards.”

Walter Hang, a policy analyst who runs Toxic Targeting, an environmental data firm in Ithaca, said Cuomo’s plan from 2012, combined with today’s court ruling, moves New York state a step closer to fracking in these places. “Today’s decision serves up the Southern Tier on a silver platter to allow shale gas development to begin,” he said. “Sure, it prevents fracking in some areas. But it allows it in the five counties along the Southern Tier where it’s most likely to begin. It’s the classic double-edged sword.”

Cuomo’s plan in 2012 to begin fracking in certain localities but not others drew support for those pinning the promise of economic development on the drilling industry, and drew rallies and protests by anti-frackers, who characterized the fracking trials as “sacrifice zones.” Cuomo has been mostly silent on the issue since then.

Not everybody shares Hang’s outlook. Some anti-fracking activists expect that New York’s ruling will not only discourage shale gas development in New York but will also encourage other municipalities throughout the country to establish land use restrictions. (See comments of Mary Ann Sumner, the Dryden Supervisor who helped organize the ban.)  And Brad Gill, executive director of the Independent Oil and Gas Association of New York, called the court decision “one more nail in the coffin” for fracking in the state. Gill’s view, often echoed by other industry supporters, is that drill operators will be less likely to commit capital to area that lacks regulatory uniformity and predictability. There is truth to both of those views, but they overlook the fact that the industry, first and foremost, will follow the geology. Wildcaters, in particular, are likely to seek out niches in unexplored territories, like the Southern Tier of New York.

As with most policy calculations, science and law are fundamental factors, but politics will be the decider.  The Legislature could pass a bill clarifying ambiguous language over the state’s role in extraction operations on which the Home Rule case was built. It’s also possible that the Legislature could ban fracking altogether, although anti-fracking bills passed repeatedly in the Assembly over the years are yet to fly in the Senate.

For now the decision remains firmly in the hands of the governor, who can at anytime enact or withdraw the policy review of fracking, called the Supplemental Generic Environmental Impact Statement. The 1,000-plus page document is as complicated and bureaucratic as its name suggests,  and it's been on hold for years.  Don’t expect that to happen before election. Rocking the boat on this hypersensitive issue would certainly alienate the governor’s progressive base. But after election-day, he has plenty of politic wiggle room and, with today’s Court of Appeals ruling, a clearer view of the legal landscape.

Thursday, May 22, 2014

NY shale prospects dim six years after leasing frenzy Industry faces mounting legal, economic hurdles

New York’s Marcellus Shale gas reserves, once thought to be world class, continue to lose their luster along with the gumption to develop them.

Shale gas proponents, once giddy with anticipation during the leasing boom of 2008, know now what they didn’t know then: legal hurdles to overcome state and local roadblocks look more formidable if not insurmountable with each passing court case and hearing, and the resource looks less and less worth the effort under today’s economics.

Given the inherent uncertainty in mineral exploration, much of the impetus behind it boils down to a mindset. While even some of the most ambitious extraction endeavors go bust, it’s a given that resources buried 5,000 feet deep will not be found where nobody chooses to look. And nobody is going to look if they are not allowed to, or if the effort of looking is deemed greater than the rewards anticipated under any scenario.

Two recent indicators of future prospects in New York have, for the most part, slipped under the radar of the mainstream press, but it’s a reasonable bet they have not escaped notice of prospectors and the people who finance them. The first indicator is the status of a lawsuit by industry and a group of landowners to legally force open the Marcellus frontier in New York. I’ll get to that in a minute. The other indicator is the latest assessment of economically recoverable reserves under current market conditions, if the moratorium were lifted or bypassed.

First the economics. Although it may be a fading memory for many, stakeholders will remember a time when New York was expected to join Pennsylvania as a global energy producer with gas from the Marcellus Shale. Many will recall the summer of 2008, when the leasing frenzy – whipped up by a $110 million deal between XTO Energy and landowners in Deposit, New York – sent lease prices soaring along the relatively unexplored fringes of the Marcellus in the Southern Tier of New York.

Since then, the price of natural gas has fallen by more than two thirds. Moreover, New York state’s moratorium on shale gas development, pending a review originally expected to last a year, is about to begin year seven, with no end in sight. In the meantime prospectors have moved on to other ventures, leaving many to wonder when and if they will return to the Empire State. The answer is simple: They will return when and if a) it’s allowed and b) it’s profitable.

The League of Women voters became interested in the profitability issue when the state released its 2014 Energy Plan, which includes vague references to shale gas development within New York’s borders. To help bring things into focus, the league  commissioned petroleum geologist Arthur Berman and petroleum engineer Lyndon Pittinger to assess the potential of the shale gas under New York state in the context of market viability.

The result, a report titled Resource Assessment of Potentially Producible Natural Gas Volumes from the Marcellus Shale, State of New York, was released last month. It begins with varying projections of the Marcellus Shale potential from credible sources that show, if anything, just how uncertain the starting point of that calculation is and always has been. Estimates of the recoverable reserve range from those posed by Penn State geologist Terry Engelder in 2008 -- 489 trillion cubic feet (tcf), with about 71 tcf under New York stat – to those offered by The United States Geological Society in 2011: 84.2 tcf for the entire Marcellus play extending through Pennsylvania and four other states.

To clear up a point of common confusion, these numbers represent “technically recoverable” gas. As Berman and Pittinger point out, the “economically recoverable” figure, which is more relevant, is bound to be lower. Both figures are moving targets. That which is technically recoverable changes with technological advances; economically recoverable resources change with economy, and specifically with the value of the resource. The  value, in turn, is influenced by supply, demand, and infrastructure to get it to market. All of these things are influenced by regulation, which in New York remains unknown.

In a nut, the League of Women Voters report found that the business of fracking in New York, moratorium aside, would not be viable at today’s price -- between $4 and $4.50 per MMBtu, or Million British Thermal Units. The price would have to rise to $6 per MMBtu to encourage exploration and even then production would be modest -- between the 0.8 and 2.5 Tfc. A price of $8 MMBtu would encourage production between 2 to 9.1 tcf -- more than marginal but hardly the bonanza that people were expecting in 2008. For gas to reach $6 MMBtu, Berman notes, “Substantial unforeseen changes in the natural gas supply/demand balance would need to occur.”

(You can hear Berman discuss his report with Capitol Press Room Host Susan Arbetter here.)

It’s fair to note that Berman has long been a critic of shale gas development, and his projections tend to reflect a broader notion that its economic sustainability falls well short of expectations promoted within the field. But he is respected, and even shale gas proponents such as Engelder, given the chance, show no eagerness to flatly dismiss his assessment of New York. “Art may not be that far off the mark although he is usually low relative to other analyses,” Engelder said in a recent email, asking his take on Berman’s work.  “Maybe some of Broome County works at $4 gas,” Engelder added.

It’s also worth noting that Berman’s analysis draws on and expands the same school of thought developed last year by a team comprised of a cross-section of professionals, led by investor Chip Northrup, who happen to be upstate New York residents and who have been conspicuous in the battle to keep fracking out of their state. The team also includes Lou Allstadt, a retired Mobil vice president, Brian Brock, a geologist, and Jerry Acton, a retired systems engineer for Lockheed Martin. (Here's link to Northrup's blog, No Fracking Way.)

Within days of the release of the report by the League of Women Voters, shale gas proponents suffered another discouragement on the legal front. First, some background: Undaunted by a string of defeats in state court that have consistently ruled in favor of municipalities’ rights to ban drilling, a legal team representing landowners and industry filed a suit against New York that claims the indefinite moratorium on shale gas development violates the state’s own policy under the State Environmental Quality Review Act. The state filed a motion for dismissal on the grounds that the plaintiffs had suffered no damages and the moratorium fell well within the state’s right in establishing policy on shale gas, regardless of how long it took to review all the factors.

The complaint was filed by the Joint Landowners Coalition of New York, represented by Scott Kurkowski and funded by the Mountain States Legal Foundation, a group founded by the Koch brothers to fund conservative legal causes. A companion suit was filed by industry lawyer Tom West on behalf of Mark Wallach, a trustee of Norse Energy, a bankrupt drilling company with interests in upstate New York. Morgan Costello of the attorney general’s office provided council for the state.

On April 24, both sides appeared in a hearing before state Supreme Court Judge Roger McDonough. It’s often tough to tell the outcome of a case based on a hearing and prior to a ruling, but by all counts, the judge seemed to lack sympathy for the landowners, and pressed them on the merits of their complaint against the state. Here’s an excerpt from an account posted April 26 on the Joint Landowners website:

Judge McDonough asked if the executive branch can delay forever. Ms. Costello’s answer was that it can take extended time. Judge McDonough seemed to agree with Ms. Costello on the executives role, calling it “separation of powers 101.”
Attorney Tom West for Norse spoke next. The Judge focused on time limits in SEQRA. There are none. He suggested that this should be remedied in the legislature or in the executive branch. As Attorney West kept hammering at the history of delay and the ongoing wrong, the Judge said that he can only take the executive on its word at this stage of the process. (Editor’s note: Motive will emerge in discovery, but we have to get past the motion to dismiss in order to get to discovery.) The Judge sympathized with the frustration but kept returning to time limits in the law.

The blog concluded optimistically that the “judge reserved decision” and though he did not recognize the fracking moratorium as an “illegal delay” under the state’s SEQR policy, there may be an opening for an argument of “unreasonable delay.”

That optimism was not shared by West. In a recent email in response to my query about the status of the case, West was blunt:  “We are not expecting a positive decision based upon the way that oral argument went.” The West Law firm took down the links to the complaints once posted on its website.

While the jury is still out, so to speak, there is little good news based on these recent events for those counting on a near-term future in shale exploration and development in New York, and plenty of good news for those hoping to see New York lay the groundwork to establish itself as an alternative energy trend-setter.

But the story is not that simple, of course, with plot lines extending well beyond New York, and woven deeply into the national and global circumstances that will determine the future of fracking. Those plots are quickly evolving.

One example: The U.S. Energy Information Administration has just cut its estimates of recoverable reserves in the Monterey Shale in California by 96 percent. California, like New York, is politically influential, and it’s hard to ignore other similarities regarding their roles in the fracking saga. In California, the notion that the geology cannot support the hype has enlivened the argument that the fracking bonanza was a bust from start, and has encouraged legislation for a moratorium similar to New York’s.

But while shale gas prospects are dimming in New York and California, they are getting a big push from places inbetween as well as other parts of the world. Global forces are encouraging development of gas reserves in dozens of other U.S. states to capitalize on growing international demand for cheap and readily available fuel sources, with the economic and political equation favoring expediency over externalized costs. Those demands, already substantial and growing in Asia, have spiked in Europe. The age-old call for energy independence is again taking on a new urgency in the Free World, with the Ukraine crises vividly illustrating the danger of energy dependence on unpredictable and unfriendly governments – in this case, Russia.

Many think more gas from the U.S. and a global spread of the fracking gospel is the answer. Michael Lindenberger of the Dallas Morning News, recently reporting on the significance of a deal for Russia to strengthen it’s economic status with a $400 billion deal to export gas to China, cited Texas Senator John Cornyn as characterizing the broad political push for policy to encourage more U.S. exports. More exports, according to Cornyn, make economic sense but, moreover, are justified “because of the competition it would provide for Putin and the Russian monopoly.”

Of course, we are talking about shale gas and fracking, so it comes as no surprise that there is little consensus and much division on the topic. Seamus McGraw, author of End of County, Dispatches from the Frack Zone, has been following the fracking issue since he began writing his book as the shale gas boom first developed in Pennsylvania. He points out that the global economics of shale gas cannot be isolated from the economics of other energy sources, including coal. The political urgency provoked by international threats in areas involving key American interests must account for the practicalities of various solutions. And a primary practicality  of shale gas exports involves infrastructure in place to get energy where it needs to go today, not years from now. And here I will give McGraw the last word. In a recent discussion on my Facebook page, he posted:

You're not going to break Russia's stranglehold (on natural gas exports) because a) they've got pipelines which beat LNG (liquid natural gas) every time, and b) because they can set the price as low as they want to drive us out of market and then jack it back up at will. All this is going to do is drive up prices here to the point that gas may no longer be reliably competitive with coal, choke off any ancillary economic benefits to manufacturing, and concentrate what advantages there are entirely in the industry itself. And even that, as the Russia/China deal demonstrates, isn't going to be nearly as lucrative as the industry imagines. It's a bad deal all around.

Ultimately, global markets along with political considerations will shape the deal, good or bad, and determine whether the value of gas in places like New York ever justifies the costs of extracting it.

Saturday, April 26, 2014

Paper trail for Pa. shale waste leads to ex-IBM site in NY Official dismisses DEP record of cuttings shipped upstate

A delivery arrives in the village of Endicott, NY last summer
Photo: NY Friends of Clean Air and Water
ENDICOTT, NY -- An issue over what – exactly -- is arriving in tanker trucks for disposal at a manufacturing plant in Endicott, New York is a recent and vivid example of the fear and uncertainty over the endpoint of waste produced by the shale gas industry, and the lack of regulatory wherewithal to track it.

It’s a matter of record with the New York State Department of Environmental Conservation that the tanker trucks in question are importing more than 80,000 gallons of waste a day to the plant in the heart of the village. That sum includes 30,000 gallons of leachate from the Seneca Meadow’s landfill, and 50,000 gallons from the Broome County landfill. But there is much that is not on the record, and I will get to that in a moment. First, some background.

Leachate is the soluable and suspended matter that percolates through landfills with (in this area) 30 inches of rain each year, plus whatever moisture is in the landfill itself. This drainage includes essentially anything that goes into the landfill that can be flushed out with water. Put another way, Leachate consists of landfill dregs.

Municipal sewage treatment plants are generally not equipped to handle landfill leachate, so it’s shipped to commercial plants designed to treat industrial waste. The sprawling manufacturing campus in Endicott, in the middle of a heavily populated retail and residential area of the village, was once home to IBM Corp’s micro electronic division .The industrial park, now owned by Huron Real Estate, includes a plant that has been treating waste produced from onsite operations for decades.

The most recent imports are a new source of income for the current operators, i3 Electronics. They began arriving conspicuously last year from Seneca Meadows landfill in 18-wheel tanker trucks rolling through the village. At that time, the business was owned by EIT, which eventually fell to bankruptcy. Along with the tanker trucks came suspicion and fear that former and current operators of the business are trying to offset steady manufacturing losses and job declines over the years with revenue from waste imports.

The suspicion is not without justification. As far as state regulators are concerned, the plant is processing this new source of landfill waste, without a permit, as part of a pilot study. But no time frame has been allocated, and no public comment period or public notification has been declared. According to Mary Jane Peachey, a regulator with the state Department of Environmental Conservation, the DEC has not monitored the input or output of the plant in at least five years.

And here is another critical piece of background: The i3 Electronics site and the surrounding residential and retail district is a Class 2 state Super Fund site, meaning existing pollution there poses a “significant threat to public health or the environment.” Since 1979, IBM Corp. has been pumping toxic solvents from the ground that have seeped from the micro-electronics plant into the community, affecting more than 470 homes. There have been multiple spills since.

It is no surprise that Endicott residents are generally concerned about becoming a waste destination, and specifically concerned about waste from shale gas development, which have been banned in New York pending a health review.

Much of the controversy over fracking waste involves the chemical solution that goes into shale gas wells to stimulate production, and the liquid mix of brine, chemicals and metals that comes out. But liquid waste – called flowback – is just one part of a broader metric. Shale gas development also involves a viscous solution called drilling mud, and solid waste, including drill cuttings tinged with varying degrees of metals, solvents, and naturally occurring radio active material (NORM) from deep in the ground. It’s a matter for record that drilling cuttings from the Marcellus Shale tend to be radioactive, and the New York State Department of Health has advised officials from the DEC to devise a testing protocol to ensure hot drilling waste is handled and disposed of properly .

Drill cuttings, like flowback, are also exempt from federal hazardous waste handling laws, and they often end up in landfills, like Seneca Meadows.

And that’s how shale gas dregs can end up Endicott, or countless other places where landfill leachate is treated. The shipping of leachate to private plants is not, in itself, sinister, or even especially newsworthy. It’s the exemptions, loopholes, and lack of disclosure about its contents that makes it a problem and rightly invites the attention of activists and media watchdogs.

According to records filed with the state Department of Environmental Protection, the Seneca Lake Meadows landfill was the final destination for Marcellus Shale drill cuttings from 196 wells drilled in Pennsylvania during 2010 and 2011. After tracking this bit of information down on their own, some Endicott residents and area activists wanted to know if this potentially radio active drilling waste stream ended in Endicott via the importation of Seneca Meadows leachaete. If so, were state regulators aware of it?

And that brings us to the part of the story where the record gets muddy.

A citizens group called the Western Broome Environmental Stakeholders Coalition met with the DEC’s Peachey in February to get to the heart of the matter. (A video of the meeting, filmed by activist Bill Huston, is available here.) Early in the meeting, the question came up as to whether the Seneca Meadows leachate arriving in Endicott was tested for radioactivity – a simple question that apparently invited a very confusing answer.

Peachey said that step is unnecessary, unless agency personal “are aware” that the waste comes from a suspected radioactive source. “When we are aware that someone is taking a waste stream that would have those elements we would require them to do appropriate sampling and monitoring for that,” she explained.

When a resident pointed out that Seneca Meadows takes Marcellus drill cuttings, Peachey challenged the source of that information. “If they were taking fracking waste now I think we would know it,” she said. When told that the information came directly from the Pennsylvania DEP database, Peachy replied: “I would question that ... I would like to substantiate that more with what’s currently going on there.”

DEP records show that Peachey is technically correct. Seneca Meadows is not currently taking waste from shale gas wells. But she failed to tell the group – in a meeting that was purportedly intended to inform the public and set the record straight – that the Pennsylvania record also shows the landfill did accept cuttings from nearly 200 wells over a two-year period. In bureaucratic form, Peachey fixated on timing and semantics while ignoring the essence of the matter.

While Peachey’s response could be explained as an attempt to disarm a source of PR headaches for the agency, it did nothing to address the issue at hand: drill cuttings in the Seneca Meadows landfill and their influence on the leachate. And it circumvented the original question – is the leachate from that landfill being checked for radioactivity as it rolls into Endicott?

The answer (as eventually revealed – sort of) is no, and perhaps there is a good reason that it is not. (Addressing a later question from the audience, Peachey explained that it is up to landfill operators to check for radio-activity.) But Peachey’s failure to acknowledge, much less explain, the record of shipments of cuttings from Pennsylvania gas wells to Seneca Meadows does not inspire trust. The error of omission could be a misguided attempt for damage control. Or it might be evidence that the department is out of the loop in what she pointed out was a “transaction between one private company to another private company.”

Another possibility, no more reassuring, is that the Pennsylvania records are untrustworthy. Before gaining access to the DEP website, visitors must agree to this disclaimer that notes that the data is self-reported, unchecked, unverified, and possibly incomplete:

DEP makes no claims, promises or guarantees regarding the accuracy, completeness or timeliness of the operators’ data that DEP is required to post. DEP expressly disclaims any liability for errors or omissions related to the production data contained within these reports. No warranty of any kind is given by DEP with respect to the production data contained within these reports posted on its website.

All of this uncertainty points to an overarching problem: the industry’s exemption from federal laws that mandate a clear tracking and specific kind of handling of hazardous waste. States are left with that job, and more often than not, state officials – citing a lack of resources -- defer to the industry to get the job done.

The issue of where the waste goes, which I have written about in several posts, is especially pressing these days, as tens of thousands of shale gas wells come on line in Pennsylvania and Ohio, and tens of thousands more elsewhere in the country.In the absence of federal hazardous waste laws and lack of regional planning, placing the waste becomes a process of default as various states consider legislation to ban it. (New Jersey legislators are crafting a second attempt at a ban after the first was vetoed by Gov. Chris Christie, and the issue is also being considered in New York and Connecticut.) Hence, rather than guided by a master plan, the waste is following the path of least social and political resistance. Much of what comes from the Marcellus, as far as we can tell from industry’s self policing records, goes to injection wells in Ohio, and various landfills and private treatment plants in Pennsylvania and New York.

In addition to Seneca Meadows, DEP records show that New York destinations for waste from the Marcellus Shale include Hyland in Angelica, the Hakes Landfill in Painted Post, the Chemung Landfill near Elmira, Seneca Meadows Landfill in Waterloo and the Allied/BFI Waste Systems landfill in Niagara Falls.

Communities like Niagara Falls (and notably Love Canal) tied to a history of toxic waste disposal are especially sensitive to the possibility of a future tied to more of the same. Even though the Buffalo area does not sit over a viable shale reserve, I have found during book signings there that community members are keenly attuned to the issues of shale gas development and, specifically, the lack of assurances about its waste stream.

Endicott is also one of those places. People in the village are angry that they were not notified about waste imports to the i3 Electronics plant. Matters were made worse last year when a corroded tank holding the contents of a Seneca Meadows shipment failed and at least 6,000 gallons of leachate spilled out, much if it soaking into the ground. Residents were not informed of the shipments or the spill. They were left piecing together information until a year later, when John Okesson, Peachey’s colleague at the DEC, explained details at the February meeting after sustained community pressure for the agency to account for it.

Rick White, a community member and labor advocate, summed up feelings at the end of the meeting. He referred to decades of spills, a pattern of secrecy, and a resulting legacy of environmental problems that, in his words, “stack up.” He continued:

This whole community is very sensitive to the idea that if there is additional toxic fluid, whether it is fracking waste or landfill waste or whatever it might be, and it’s coming into the village of Endicott for whatever the reason, whether it’s to make money or to enrich somebody’s pockets or it its simply to do a good service to the community, the negatives outweigh the positives. And this is why we are asking these questions.

His comments were met with applause from the 50 or so people in attendance.

Saturday, March 29, 2014

Ruling allows Scroggins back on Cabot-leased land Fracking activist will fight buffer zone in May trial

Update, April 30 2104: Scroggins V. Cabot trial, set for May 1 in Montrose, Pa., postpomed until July 2.

A ruling Friday by a Pennsylvania judge to allow activist Vera Scroggins back on land leased by Cabot Oil & Gas is a “big win” according to her legal team, but the fight will continue in a trial scheduled for May 1.

An order, drafted by Cabot attorneys and handed down by Judge Kenneth Seamans in October, barred Scroggins from setting foot on land owned or leased by Cabot, “including but not limited to” well sites, well pads, and access roads. That language kept Scroggins from approximately 200,000 acres -- nearly 40 percent -- of Susquehanna County where Scroggins lives, including property of friends, neighbors, stores, parks, schools and health care providers.

After a hearing Monday, Judge Seamans modified the injunction to restrict Scroggins only from work areas designated by no-trespassing signs and a 100-foot buffer zone. The new order, issued on Friday, allows Vera to enter other land leased by Cabot, including markets, public spaces, physicians offices, and hospitals. It also allows her to use public roads that go by work sites, but the ruling stipulates that she cannot stop or linger at the entrances to access roads.

In an interview Friday with Associated Press reporter Michael Rubinkam, Scroggins’ attorney Scott Michelman characterized the revised order as “a big win,” but he added that the 100-foot buffer could pose unjustified restrictions. Scroggins said the revised order was “a step in the right direction. ” She told me today that she and her legal team will fight the buffer zone at a trial scheduled for May 1.

Scroggins’ vantage point was mostly from public roads by drilling sites, although Cabot claims that she also trespassed onto private land under lease by the Texas drilling company, posing a safety risk to herself and others. In a statement Friday, Cabot officials said they were "satisfied” with the ruling to maintain an injunction against Scroggins that “protects Cabot and its employees, contractors and others” and “keeps landowners from being exposed to liability that could arise from Scroggins' actions."

One of the main questions to be resolved: Is a buffer zone, which does not apply to other citizens, necessary to protect the health and safety of Scroggins and others, as Cabot claims, or is it being used by Cabot to discourage anti-fracking activists from filming or viewing Cabot operations from legitimate vantage points, as Scroggins claims.

Scroggins has taped and posted hundreds of video files on You Tube showing drilling operations in Susquehanna County since 2009, including spills, clean-ups, and discharges. The videos cast operations in a way that runs counter to the industry’s portrayal as clean and safe. Scroggins has also lead tours for political action groups, academics, journalists, and other interested parties visiting the area to learn more about drilling and the controversial practice of high volume hydraulic fracturing to stimulate the gas wells.