Friday, December 28, 2012

Will Obama’s EPA pick pursue efforts to police fracking? Jackson’s replacement will signal country’s direction

Lisa Jackson’s recent resignation from President Obama’s cabinet leaves open a seat with substantial influence over the outcome of a rush to drill for unconventional sources of gas and oil unfolding across the lower 48 states.

Jackson was Obama’s top environmental policy maker. As head of the Environmental Protection Agency she oversaw, among many other things, the federal government’s efforts to assess environmental impacts of shale gas development. The focus is on fracking, the controversial process of injecting well bores with pressurized chemical solutions to fracture bedrock and stimulate the flow of gas and oil. It’s been a hot topic, rife with partisan special interests that, as with gun control and taxation, split the country among ideological lines. Obama was re-elected, partly on a platform that identified shale gas development as “a priority” in his plan to stimulate the economy and encourage energy independence. With that, he has to balance mounting pressure from an anti-fracking movement that has highlighted risks associated with unconventional methods to produce oil and gas, and renewed debate over fossil fuel dependence and issues of economic and ecological sustainability.

Under Jackson’s watch, the EPA came out on the losing end of several battles with an industry threatened by the prospects of federal oversight of its operations. Before I get into those, I offer this background: Fracking has been around for a generation to develop conventional gas reserves. With technological breakthroughs around the turn of this century, the practice was successfully applied to unconventional wells bored horizontally through shale formations. The newly accessible shale resources are large, typically spanning multiple states in regions throughout the country. With this the scope and intensity of on-shore drilling has expanded proportionately, along environmental and economic stakes, and the interest of federal regulators. To discourage EPA involvement, the Bush/Cheney administration crafted policy – known among critics as the Haliburton Loophole -- exempting fracking from the Safe Drinking Water Act that requires federal approval for injecting substances into the ground.

Now for a few examples of the EPA’s battles with industry under Jackson: Facing stiff resistance, the agency withdrew an administrative order last spring that alleged Range Resources Corp. had polluted water wells in a rural Texas county west of Fort Worth. Industry push back also compelled the agency to revisit its assessment that an aquifer in Pavilion, Wyoming was polluted by shale gas development. Early this month, ProPublica’s Abrahm Lustgarten reported that the surge in domestic drilling and an unrelated rush for uranium resulted in a spike in applications for exemptions to federal rules that protect aquifers from pollution, as well as political pressure for agency officials to stand down. Lustgarten reported:

"The energy policy in the U.S is keeping this [refusing exemption applications] from happening because right now nobody — nobody — wants to interfere with the development of oil and gas or uranium," said a senior EPA employee who declined to be identified because of the sensitivity of the subject. "The political pressure is huge not to slow that down."

Lustgarten’s report squares with what I have heard regarding the EPA’s response to pressure from the shale gas industry, which is looking for disposal points for large and growing volumes of liquid waste associated with drilling.

But Jackson’s tenure was not all bad for the environmental groups counting on the federal government for help, nor was it all good for the industry looking for freedom from regulations. With the help of Congress, the EPA was commissioned and funded in 2010 to conduct a review of fracking’s impact on groundwater. Last week the agency issued a progress report outlining the scope of the project, which will look at water withdrawals, chemical mixing, well injection, spills, and waste water disposal methods related to shale gas development. The final report, scheduled for release and peer review in 2014, may provide a blueprint for gauging long-term and cumulative impacts and provide a foundation for discussion about regulations.

The EPA has also made some progress in addressing concerns over air emissions. In April, the agency unveiled the first-ever regulations to reduce air pollution from shale gas operations, ranging from releases from excessive pressure vented from wells to emissions from compressors, oil storage tanks and other oil-and-gas sector equipment. In the face of industry resistance, the EPA altered the final regulations to allow the current practice of flaring until 2015 -- a key concession.

So how will Obama move forward as Jackson departs? At the moment, he is consumed by a battle with Tea Party Republican’s over taxes and the fiscal cliff. That same right-wing base in the House of Representatives can sink an EPA nomination that could foreshadow an effort to take on Big Oil. The buzz from Washington insiders suggests Obama’s short list includes these names:

Bob Perciasepe: Appointed by Obama in 2009 as EPA’s Deputy administrator, the number-two position behind Jackson. Perciasepe – a career civil servant -- is known as a pragmatist, adept manager, and government problem solver more than a boat rocker. For this reason, he would likely not face confirmation opposition, but he also would be an unlikely candidate to lead a charge to federally regulate fracking. Perciasepe was first appointed to the EPA by Bill Clinton, where he served as the nation’s top water official and later as the senior official responsible for air quality. Prior to being named to his current position by Obama, he was chief operating officer at the National Audubon Society.

Gina McCarthy: As head of the EPA’s Office of Air and Radiation, McCarthy is another agency leader with extensive practical experience dealing with Obama’s agenda. While she had little experience with drilling issues in her previous job as commissioner of the Connecticut Department of Environmental Protection (DEP), McCarthy is now well seasoned in the fracking fight after heading the department that established the first air regs for the industry. She is well respected in the White House, having overseen the development of landmark policy to update fuel efficiency standards of vehicles.

Christine Gregoire: As governor of Washington, Gregoire has pushed for policies to reduce coal dependency and supported the president’s vision of “clean energy,” which happens to include natural gas development. Washington has no drilling legacy to speak of and Gregoire has not had to deal with the practical aspects of managing shale gas development and the related conflicts. Her name has come up as a candidate for other cabinet positions, including Secretary of the Interior. Prior to serving as Washington’s governor, Gregoire served three terms as the state’s attorney general.

Dan Esty: Esty is commissioner of the Connecticut Department of Energy and Environmental Protection, which was created in 2012 to bring together what had been DEP, the Department of Public Utilities Control (DPUC) and an energy policy group from the state’s Office of Policy and Management. The merger was intended to integrate energy and environmental policies with a sustainable economy. Prior to that, Esty was a professor of environmental law and policy at Yale University.

None of these candidates, as far as I can tell, would appear to have backgrounds that would threaten their confirmation chances. But given the political climate in Washington, who knows?

Friday, December 21, 2012

Promised Land something more than it’s fracked up to be Damon film entertaining, complex, but no China Syndrome

The forthcoming release of "Promised Land" -- Hollywood’s portrayal of the divisive shale gas drama unfolding in rural America -- is by all accounts producing high expectations among anti-frackers and anxiety among drilling supporters.

Directed by Gus Van Sant, the drama portrays the life-altering prospects of natural gas development in the fictional town of McKinley, Pennsylvania. Sound familiar? It does to me. I’ve been writing non-fiction accounts of the impact of gas development on Small Town USA for five four years, and so I was delighted to get an invitation from Focus Features to view a screening of "Promised Land" in Manhattan on Wednesday. The movie is set to open in certain New York City theaters next week and nationally in early January. It’s been hyped as an anti-fracking movie, and much of this hype originates with industry sources who have admittedly not seen the film but who are, judging by the trailer, bracing for a blockbuster-sized publicity headache.

I was eager to see how Hollywood’s rendition of the gas rush stands up against real life. I also wanted to understand how the movie might influence the discussion in a nation learning about shale gas and the risks and rewards of the controversial process that makes unconventional resource recovery possible – high volume hydraulic fracturing. After viewing the trailer myself, I expected to see a movie with sensational and vivid depictions of both fracking and its consequences. Upon seeing the movie, I was happy to see that "Promised Land" offers neither of these but something more complex. Yes, the movie portrays Global Energy, the company that is trying to lease land from McKinley residents, as an uncaring, exploitive and divisive force. But the story is more interested in exploring the dynamics of life in a small town within the context of these outside economic forces. The movie is not, despite what some hope and others fear, a case against shale gas development in general or fracking in particular.

The screenplay features a small town official who is corrupt, an energy company that is duplicitous and controlling, a sage high school teacher who advises the community to be cautious and do its homework, and an environmental activist and community organizer with questionable motives. It features plenty of other stakeholders in lesser roles, many of whom I find to be faithful archetypes of their counterparts in the real word, including a roguish and likeable gun shop owner eager to do whatever he can to encourage the economic growth of the town and support the efforts of Global Energy. The stars of the film, however, are two leasing agents. Steve Butler (Matt Damon) is a star rookie landman and all American country boy from Iowa. Butler is concerned about the decline of the family farm and, in his words, the “delusional self mythology” that modern day farming communities are economically self standing, when in fact, “without industry, there is nothing.” The supporting role is Sue Thomason (Frances McDormand), a wily industry veteran cast as Butler’s mentor, and a career mom who misses time away from her adolescent son. Both characters are driven by their own ambition and the bidding of their employer, Global Energy. Both have conviction, a work ethic, a sense of purpose, and good humor and charm – qualities that inspire empathy for characters that would be easy to script as simple villains.

Butler’s antagonist is Brian Noble (John Krasinksi), an environmentalist who, like the leasing agent duo, is an out-of-towner. He arrives on the scene with dire warnings about the ills of fracking as he begins organizing community efforts against the company. Both Noble and Butler are strangers vying for the loyalty of the residents in bars, pastures, and kitchens of McKinley. Each are bad-boys behaving in the Hollywood bad-boy kind of way (well suited to the actors’ strengths) that compels you to like them on a gut level even though your brain tells you maybe not to trust them. The emotional success of the film hinges on the Ying and Yang of their rivalry.

The plot follows the exploits of Butler and Thomason, with some predictable and not so predictable twist and with ample humor delivered through a nuanced screenplay, crisp acting and Van Sant’s keen eye. There is a sense of right and wrong that crystallizes as the film progresses, but the line between hero and villain is murky, with only a few exceptions.

The prominent theme is the outsider being pulled in beyond original intentions and the insider dealing with the influence of outside pressure. The insider story is personified partly through the character of Alice (Rosemarie DeWitt), a hometown girl and schoolteacher who serves as the romantic interest for Butler and possibly for Noble. For me, a scene when Butler passes through the white picket fence in Alice’s yard conjures the stylistically distant but thematically similar tale of The Music Man: Professor Harold Hill, the likeable shyster who attempts to sell the dream of a marching band to a local community along with non-existent uniforms and instruments, and the ensuing complications wrought by his involvement with the good-hearted local librarian. The theme is timeless and irresistible – hometown girl falling in love with the outside stranger – but I found that if the movie had a weak point dramatically, it was here, perhaps because it’s execution seemed more formulaic than the rest of the film.

The most compelling scene for me captures the true-life essence of the story and exhibits the strength of the film. It takes place early, when Butler visits a farm and is somewhat surprised at how warmly he is received as an agent of the gas company, even as the farmer helps him remove a tag on the landman's new flannel shirt he purchased in his attempt to fit in. As they sit across the kitchen table, the farmer – a hardworking and earnest family man struggling to preserve his way of life against the flow of economic forces - clearly knows why Butler has come, and he implores Butler to say what he wants to hear. Butler, a little surprised at how easy this all is, obliges: “You could be a millionaire.” The farmer’s reaction is what I find compelling. No words, but only a look of humble sincerity and raw hope that I found heart rending. This was probably not intended to be one of the emotional highpoints, but I found the farmer’s hope and the landman’s willingness to indulge it to be poignant and accurate portrayal of the non-fiction story covered by myself and other journalists chronicling the early days of the gas rush in Pennsylvania.

That coverage resulted in Under the Surface, Fracking Fortunes and the Fate of the Marcellus Shale, and other non-fiction narratives of the Pennsylvania Gas Rush, including Seamus McGraw’s End of Country. The non-fiction versions of the story lack the Hollywood finish of "Promised Land", a finish that is achieved by a plot contrivance that is fundamental to the workings of the script. That contrivance, possible in the creatively boundless realm of fiction, will be a sure point of criticism or acclaim that the movie will garner from both biased and neutral critics. I can’t say much more without spoiling the move, but I will suggest that "Promised Land" shares a trait of "The Da Vinci Code" – director Ron Howard’s adaptation of the Dan Brown novel about the Catholic Church’s attempt to destroy evidence of Christ’s familial legacy. By this I mean both movies use a real world setting and circumstances as a foundation for a fictional premise that makes the specific story dramatic. Most – but not all -- viewers will be fine with this.

Prior to seeing "Promised Land", I did not expect to be comparing it to The Da Vinci
Code. But I did expect – based on reports and the previews – to compare it with "The China Syndrome" – the 1979 movie about a cover-up at a nuclear power plant. The movie, starring Jane Fonda, was released with the No-Nukes movement (of which Fonda was a part of) in full swing, and just prior to the Three Miles Island disaster. The movie, riding the wave of these events -- appeared to mark the beginning of the end of the U.S. nuclear industry.

Impacts of "The China Syndrome", dramatically and politically, were derived by the portrayal of impending disaster. By contrast, there are no disasters in the month-long period covered in the story of "Promised Land" – no industrial accidents, explosions, cancer clusters, or foul water. Because the movie explores the leasing rather than the development phase of a shale gas play, there is in fact no fracking, and only superficial treatment given to the process itself in a way that invites suspicion. The potential for fracking raises fears, but the practice ends up being irrelevant to the outcome of the film. There is little if any moralizing and no clear rallying point to galvanize public opinion among audiences.

If "Promised Land" makes a point, it’s that the industry employs questionable practices to gain control of the land, and residents have a duty to themselves and to their neighbors to be informed and engaged.

So how will audiences react to the movie? "Promised Land" is sure to provoke an outcry among the pro-drilling faithful. The industry seems to be preparing to go into full-on attack mode based on reaction to the trailer, but I doubt that will amount to much as there is little about the factual presentation in the movie to be challenged. In this regard, "Promised Land" is unlike Gasland, the 2010 documentary by Josh Fox that challenges the industry on tangible aspects of policy and science and consequentially became a natural target for rebuttal.

“Promised Land” will raise awareness of the types of issues landowners and communities face in attempting to manage or ban shale gas development. But I will be surprised if it moves the needle in the broader debate over the environmental and health impacts of fracking, any more than "The Da Vinci Code" spurred meaningful debate or influenced public opinion over the morality of the Catholic Church. For anti-drilling activists who are expecting a searing condemnation of shale gas development, "Promised Land" will fall short of expectations. But I also expect that it will be received with general favor by this group. Conversely, the movie is bound to draw fire from the faction of shale gas boosters who get cross when the industry is portrayed in anything other than a positive light. As for the movie's main market, mainstream audiences -- I suspect they will see it as a good story about small town values.

Monday, December 17, 2012

‘30-days of fracking regs’ deconstructs New York policy NY, Pa differ in assessing blame when things go wrong

For those reflecting on the prospects of shale gas development in New York State, Governor Andrew Cuomo and his staff have this holiday message for you:

See: High Volume Hydraulic Fracturing Proposed Regulations 6 NYCRR, Parts 52, 190, 550-556, 560, and 750.

Happy New Year!

Last week, a 30-day countdown began toward the Jan. 11 deadline for public-comment on New York’s draft regulations to oversee shale gas development. The timing of the process drew complaints from activists that the Cuomo administration is railroading the regs under cover of holiday bustle and without meaningful context. Still missing is a full accounting of environmental and health considerations in a document yet to be released in final form. This document, called the Supplemental Generic Environmental Impact Statement (SGEIS), is designed to provide the foundation on which the regulations are based.

The regulatory package in question is intended to provide rules to settle key questions. How close can a well bore be drilled to a water supply or dwelling, and how is accountability assessed when things go wrong?

Anti-fracking activist Sandra Steingraber has offered to help those finding it difficult to squeeze in this extra fracking homework amid the holiday rush. She has produced “30-days of fracking regs,” an exercise she described as a “fun-yet-deadly-serious approach to commenting” on New York’s policy prior to the Jan. 11 deadline. Steingraber – an author and ecology professor at Ithaca College – uses this Advent-calendar approach in an attempt to demystifying issues such as set-backs, well construction specifications, spacing requirements, and abandonment policy. As an example, I have opened Steingraber’s Dec. 13th advent box: NYCRR Subchapter B, Part 560, Operations Associated with High-Volume Hydraulic Fracturing, Section 560.4, Setbacks. In the interest of balancing Steingraber’s informed but one-sided analysis, I have also asked experts in the pro-fracking camp to comment. In this post, Terry Engelder, a geologist at Penn State University who specializes in shale formations, provides a counterweight.

Here is Steingraber’s Dec. 13th assessment:

Today, day 2 of the regs comment calendar, falls in the second week of Advent. In the Christian calendar, Advent is a season of waiting, alertness, and reflection on the myriad injustices of the Roman occupation. In that spirit, and continuing yesterday's focus on setbacks, let's reflect on the proposed allowable distances between fracking wells and our drinking water. Take a close look at Section 560.4(a)(1 and 3-5):

Section 560, subdivision 560.4 -- Setbacks

(a) No well pad or portion of a well pad may be located:
(1) within 500 feet from a residential water well, domestic supply spring or water well or spring used as a water supply for livestock or crops;
(2) within 500 feet from an inhabited dwelling or place of assembly;
(3) within a primary aquifer and a 500-foot buffer from the boundary of a primary aquifer
(4) within a 100-year floodplain; and
(5) within 2,000 feet of any public water supply municipal or otherwise, or the boundaries of any public water supply reservoir, natural lake or man-made impoundment (except engineered impoundments constructed for fresh water storage associated with fracturing operations).

Primary aquifers are underground pools of water that supply drinking water to major municipalities. There are 18 of them in our state. Principal aquifers, by contrast, provide drinking water to smaller communities and to families with private wells. Note that setback protections for principal aquifers do not exist at all. Thus, people living in large municipalities are afforded more protection than citizens in rural communities. Also, setbacks apply only to the well pads on the surface, not to the underground wellbores: horizontal drilling underneath both kinds of aquifers is allowed. Drilling under lakes and rivers is also allowed. No consideration is given to natural faults in the bedrock, which can act as pathways for the migration of methane and other chemicals.

One peer-reviewed study found elevated levels of methane in drinking water wells that were located up to a kilometer away from a gas well. The regs do not require monitoring wells. (Mandated for other industries, a monitoring well is used to obtain samples of groundwater to periodically test for the presence of pollutants.) Thus, New Yorkers who rely on groundwater - and there are nearly five million of us - would only know we have a problem when we develop rashes after showering or discover that our tap water is flammable. In essence, under these regulations, the kitchen faucets of homeowners would serve as monitoring wells for the gas industry. And last: as recent weather patterns show us, the 100-year-floods that define 100-year floodplains are now arriving with much greater frequency than once per century.
Engelder offers a response to the question of setbacks in the context of Pennsylvania laws developed with recommendations by an advisory committee set up by Governor Tom Corbett:

The Commission recognized that there will always be some inherent risk to gas drilling regardless of the setback distance. Because setbacks are arbitrary, the Commission felt that a greatly expanded radius of liability was appropriate when it came to exploitation of Marcellus gas. [‘Radius of liability’ is the area within a given distance of a gas well where drillers must accept accountability for problems unless they can prove otherwise.]

Engelder explained that Corbett’ administration passed laws that increased the minimum setback from a private water well from 200 feet to 500 feet, and from a public water supply (water well, surface water intake or reservoir) to 1,000 feet, unless waived in writing by the water works administrator. Moreover, the laws also expanded an operator’s “presumed liability” for water pollution to within 2,500 feet of a gas well. Previously, the distance was 1,000 feet. In other words, when water wells suddenly go bad within 2,500 feet of an oil and gas drilling or fracking operation, the burden falls to operators to prove that drilling did not cause the problem, rather than to the homeowner to prove that drillers did it. The time frame for “presumed liability” on drilling companies was increased from 6 months to 12 months of completion or alteration of the well. He expains:

Even in rural portions of Pennsylvania, the Commission recognized that increasing setback distances beyond, say, 500 feet could potentially limit resource recovery. Because the true risk can never be known ahead of time, any setback distance is arbitrary. So, rather than greatly limit or even stop resource recovery because of some perceived risk, the Commission greatly expanded the explicit presumption of liability.

Now, the State presumes operator liability if anything goes wrong with, for example, private water wells within an area that covers the better fraction of a square mile centered on a well pad. Assuming that the full development of the Marcellus requires about one well pad per square mile, this means that presumed liability may extend over virtually all surface area under which the Marcellus is to be extracted in Pennsylvania. In other words, the Commission resolved the contentious issue of expanding setbacks because of some perceived risk in favor of placing the onus of liability on industry through an expanded radius of presumed liability should something unpredictable happen that adversely affected public health and safety.

The Commission recognized that problems were greatest in the top 500-1000 feet penetrated by the vertical portion of Marcellus well. This is the zone of fresh drinking water. The Commission also recognized the geological factors reduced the risk from horizontal portions of wells to near zero, with the exception of encountering abandoned wells. Because the risk of encountering abandoned wells is not zero, the operators are developing protocols for dealing with this situation in a way that assures public safety. The expanded radius of presumed liability covers situations in which unknown, abandoned wells are caused to flow by stimulation of horizontal wells.

Tied to the issue of presumed liability is baseline testing. That is, testing to assess ground water conditions before, during, and after drilling. Shifting the burden of proof onto operators in Pennsylvania encourages them to thoroughly document water quality data throughout the process as a defense against claims.

The New York regulations do not by default hold gas drillers responsible for problems within set distances to wells. But they would require baseline testing of aquifers within 1,000 feet. If there are no private water wells within 1,000 feet, they require baseline testing up to 2,000 feet. The thinking here is that data sets collected under the state’s protocol will provide proof of guilt or innocence of charges of water pollution.

The regulations regarding set backs and testing involve just a few pages of a regulatory process that takes up volumes in New York alone. They deal with questions about air pollution, public land use, record keeping protocol, spacing, waste management, disclosure requirements, and many other issues. I have asked other stakeholders to highlight points that they see as critical, and I hope to return to the issue in future posts.

In the meantime, Happy Holidays, and happy reading.

Tuesday, December 11, 2012

Federal report gives thumbs up to shale gas exports Scenarios would help investors, hurt wage earners

Exporting the country’s shale gas reserves would drive up prices and drive down wages, according to a report commissioned by the U.S. Department of Energy. Yet drawbacks would be more than offset from gains to economic stakeholders in the natural gas extraction and exporting industries, the report concludes.

The report by NERA Economic Consulting was forwarded last week to Christopher Smith, Deputy Assistant Secretary of the Department of Energy. It shows that policy to encourage exportation of domestic energy reserves, thought by some to be a political non-starter, is being weighed by an administration that has identified on-shore drilling as a priority to stimulate energy independence.

With 20 different plays, the collection of shale gas reserves in the lower-48 United States is thought to be among the largest in the world. President Obama’s support of shale gas development comes despite opposition from some environmental organizations and grass roots campaigns that argue drilling poses risks to public health and the environment while channeling resources away from sustainable energy development.

Wrapped up in the exporting question is a debate over the merits of high volume hydraulic fracturing, a controversial practice to fracture bedrock and release gas by injecting well bores with pressurized chemical solutions. In 2005, the Bush/Cheney administration encouraged shale gas development by making fracking exempt from the Safe Drinking Water Act. That exemption -- known to critics as the Haliburton Loophole -- came in addition to exemptions from hazardous waste laws enacted by Congress in both the Carter and Reagan years. The report issued last week is a sign that, despite a growing anti-fracking movement lead by progressives, the Obama administration could be thinking less about repealing exemptions and more about stimulating demand for the country’s shale gas.

The risks and merits of shale gas development are the subject of a polarizing national debate, including unresolved prospects of the Marcellus and Utica shale’s underlying parts of New York state. While fracking has lead to an onshore drilling boom in Texas, Pennsylvania, Louisiana, Ohio, Colorado, Arkansas, West Virginia and other places, New York, has held off on permitting shale wells as it reexamines policy in light of concerns about impacts on environment and public health. While governor Andrew Cuomo’s administration is shooting for a deadline in late February to finalize regulations, it is awaiting analysis from an independent panel of health experts, and Cuomo has left the door open to shelving the process.

To make it suitable for exporting in tankers, gas is converted into liquid (Liquid Natural Gas or LNG). The idea of exporting domestic supplies to lucrative overseas markets in Europe and Asia is sure to spur more controversy. As prices drop domestically with increased supply, companies have proposed more than a dozen projects to build coastal exporting facilities. These include a $6 billion liquefied natural gas export terminal, already approved, at Sempra Energy’s existing import terminal at Hackberry in southwestern Louisiana, with permits for other projects pending. Gas exports would stimulate more shale gas development by easing a market glut and raising prices. Higher prices, in turn, provide incentive for more exploration, development and infrastructure build out. Critics warn that unconventional extraction methods have outpaced science and regulations to understand and mitigate the costs, even without the catalytic affect of exports.

“Exporting means more fracking, and there are a lot of regulations that need to be developed before this is even close to safe,” said Craig Segall, an attorney for the Sierra Club. “You haven’t done an analysis of the cost to the public and the environment. This is a huge one and you have to think about it.”

Jim Smith, a spokesman for Independent Oil & Gas Association of New York, said the agency would not be inclined to support policy that raises costs to manufacturers, which are a mainstay of the agency’s membership. “We have to look carefully at both sides of the equation,” he said.

Nationally, any gas exporting policy is sure to meet resistance from the manufacturing sector. Gas and its derivatives are used as both fuel and feedstock for domestically produced goods ranging from textiles to fertilizer to packaging. Domestic petro-chemical manufacturers, including DOW Jones and the Koch Industries, have already successfully lobbied against proposed federal subsidies to use natural gas to fuel vehicles because, the argument goes, increased demand would raise prices and hurt manufacturing.

Yet operators and investors can fetch much higher prices in overseas markets due to global demand. The winners and losers under exporting scenarios break down accordingly, with the winners being the natural gas industry and those who invest in it, and the losers being manufacturing, transportation, service, and agriculture sectors.

Under exporting scenarios, according to the NERA report:

“Wage income decreases in all industrial sectors except for the natural gas sector. Services and manufacturing sectors see the largest change in wage income in 2015 as these are sectors that are highly labor intensive.” The report explains that “the overall effect on the economy depends on the degree to which the economy adjusts by fuel switching, introducing new technologies, or mitigating costs by compensating parties disproportionately impacted.”

The most viable “fuel-switching” scenario is this: Plants that might otherwise burn gas would likely be more inclined to burn coal as gas prices rise. Critics argue that could leave the U.S. with both the environmental consequences of air and water pollution (including methane emissions) from unconventional shale gas development, plus CO2 and mercury pollution associated with burning coal.

Updated Dec. 12 Jannette Barth, an economist, consultant and shale gas industry critic, issued a critique today charging that the DOE study did not account for hidden costs -- ranging from increased demands on municipal resources to environmental degradation -- on local communities to produce gas. Barth argues that gas exports will benefit shareholders in gas extraction companies who tend to be affluent. “Only 54% of Americans own stock of any kind, retirement savings or otherwise. Clearly, not all of the 54% own natural gas stock.” Most who do “likely hold tiny numbers of shares in mutual funds.” Additionally, according to Barth’s assessment, many shareholders in the U.S. domestic shale gas play are from outsides the U.S.

What other reports and considerations are relevant to the discussion? What do you think?

Friday, December 7, 2012

Anti-fracking celebs bring road show to Albany tonight Concert film summons folk tradition to politics

Dear Governor Cuomo”, a film by Jon Bowermaster documenting the celebrity-lead anti-fracking protest movement in New York state, will debut in Albany tonight, with a screening at the Linda Theater at 7:30 p.m. The film is part of a broader event featuring singer/songwriter Natalie Merchant, Bowermaster, and others who will join a panel discussion with Alan Chartock, journalist, publisher, and CEO of WAMC public radio. 

What impact will this event and the broader efforts of the anti-fracking movement have on New York State fracking policy? In search of answers, I decided to write to the governor myself:

Dear Governor Cuomo:

Do you like Natalie Merchant, The Horse Flies, Joan Osborne, and Mark Ruffalo? Just curious, but your taste in music and film is beside the point. I’m guessing that you, an astute politician, are aware that these and other celebrities who call New York State home have marshaled an impassioned collection of talent and creative energy to urge you to ban hydraulic fracturing and leave the carbon reserves locked in bedrock below the state alone.  You also probably know that the latest centerpiece of this effort is the film “Dear Governor Cuomo”, produced exclusively to get your attention or, perhaps more accurately, to apply popular pressure to leverage the anti-fracking cause.

Members of this delegation will be in Albany tonight to inspire fans with a potent mix of music and visuals condemning shale gas development as a reckless and exploitive endeavor that comes at the expense of public health and the environment.  Albany is one of many stops. After debuting the film at the Woodstock Film Festival in October, director Jon Bowermaster brought his show on the road. He is accompanied by Natalie Merchant and a network of performers, speakers, and scholars who are recruiting and rallying fans to take up the anti-fracking cause in cities throughout New York, New Jersey, Maryland, Pennsylvania and California.   

I have interviewed many of these activists. My impression is that they are ready to sustain their efforts against fracking by showcasing events in New York state and Pennsylvania, the border of which has become the front line of the national conflict over the merits and risks of shale gas development. The musician/activists are following a tradition that has successfully channeled reform through the pull of popular music in generations past: Woody and Arlo Guthrie… Sam Cooke… Pete Seeger...  Graham Nash… Jane Fonda…. The list goes on and on, of course. Celebrities seeking to influence policy ranging from Civil Rights to the Vietnam War to the Labor Movement, to nuclear power regulation have long used the allure of art to shape both social consciousness and conscience.

Your father can relate personal memories of some principal standard bearers of this tradition, I’m sure. Speaking of that, Bowermaster’s film features a clip of Pete Seeger who recalls your father’s legacy and directs some pointed thoughts about fracking your way. You must have seen that …?

My primary question, though, is how much will all this influence the outcome of energy policy in New York state.  You are both the state’s figurehead and most influential administrator, and it starts with your policy directives, which are still incomplete as far as anybody can tell, although its hard to know without a more public accounting of where things stand. How much leverage can the celebrities and the popular opinion they reflect and influence apply to your decision to ban or embrace fracking (which, if we are to believe statements from your administration, is still pending)? How much will your decision be influenced by efforts of the Independent Oil and Gas Association of New York State and other industry groups and landowner coalitions who champion shale gas development as economic salvation and independence?

Please don’t say that it all depends on science. People are beginning to see through that. Science is being summoned by both sides with little consensus and resolution likely in the near or distant future. So you will be left to make your decision in the realm of politics, with an imperfect and incomplete body of science as your guide. The issues and ethics in play are global, of course. The world is needy for energy – especially wood and coal-burning third world countries trying to clutch freedoms and living standards that we have enjoyed in this country for generations, accompanied and enabled by the indiscriminate burning of carbon.  You lead one of the most energy hungry states in the world sitting over one of the largest carbon reserves. So all eyes are on you for leadership, not just within New York state, but around the world.

Are you still weighing this issue? The price of gas has been low, and the next gubernatorial election has been distant. But you’re now facing a pivotal point.  If you allow permitting before the next election, are you ready to deal with the political repercussions from a sustained movement these activists have promised to lead? Are you ready to accept the prospects of a legacy outlasting the life of the reserve? Will you close exemptions that allow the industry to dispose of waste without a full accounting of its hazards?

If you ban it, will you be able to deliver an energy plan that overcomes the inertia preventing renewable energy and conservation from flourishing? Or will you default to policy tied to coal or nuclear sources, or continue with a disproportionate dependence on unhealthy energy sources from outside of the state and even the country?

These are big questions, and hard to answer with generic statements issued through the various offices of public affairs within your administration, which has become your primary vehicle for communicating fracking matters these days. But I guess we will find out soon enough.


Tom Wilber

Tuesday, December 4, 2012

Reading the regs: missing pieces confound NY gas policy Some happier than others with signals from Albany

With a keystone policy document still under wraps, stakeholders are having a hard time assessing merits and drawbacks of New York’s fracking regulations issued in draft form last week.

The missing piece is a compilation of environmental and health considerations that will be a primary tool for issuing permits under Gov. Andrew Cuomo’s administration. Those considerations are the focus of a 1,500-plus page document called the Generic Supplemental Environmental Impact Statement (SGEIS), which has been a work in progress since 2008. The document addresses health and environmental impacts of developing the Marcellus and Utica shale reserves as determined by the Department of Environmental Conservation and the Department of Health, and offers a plan to manage them. In response to concerns by activist late last year, the DEC commissioned an independent panel of health experts to review the DEC’s work in the SGEIS. With that review pending, the Cuomo administration has said it is still leaving the door open to shelve the entire process.

After two drafts, the final SGEIS is expected to be made public within a three month deadline the state now faces to finalize its regulatory package. The deadline to get rules in place, originally Nov. 29, was extended after the DEC issued a draft of the regulations last week, minus the pivotal environmental and health reviews in the SGEIS. In the meantime, as fracking critics continue to pore over the draft regulations issued last week, they are finding little to like. Industry proponents, on the other hand, see encouraging signs.

Anti-frackers lodged complaints regarding form, content and timing of the draft regulations, which they see as a reflection of haphazardness common to the entire process. A collection of elected officials, public health advocates, and environmental activists gathered in Albany Monday to call for transparency in developing policy. In particular, the group is concerned over the lack of explanation regarding how the state is assessing health risks. Joined by assemblywoman Barbara Lifton, Binghamton Mayor Matt Ryan, and ecologist and anti-fracking activist Sandra Steingraber, they called on Gov. Andrew Cuomo to make public the scope of the health review and schedule a public comment period and hearing to air testimony specifically dealing with health-related concerns.

In talking with representatives of some of the agencies in a position to legally challenge the DEC’s regulatory approach, I found this salient charge: The process is characterized by confusion, lack of transparency, and inaccessibility, and critics cite as a prime example the release of the regulations before the health and environmental assessment. While fracking opponents gathered for the Albany press conference, Deborah Goldberg, an attorney for EarthJustice, studied the draft regulations in her office in New York City. (Note Goldberg's first name has been corrected from the original version of this post.) She found problems from the start with organizational flaws that make the technically dense documents inscrutable. Because changes are not redlined, reviewers have to flip back and forth between existing regulations developed decades ago for conventional gas development, early drafts of proposed amendments for shale gas, and the current documents. Moreover, the changes could not be considered in context of the broader health and environmental reviews that remain unfinished. This has made the process unnecessarily cumbersome for professional and citizen reviewers who face a 30-day deadline to comment.

“It’s extremely unhelpful to issue these to the public with no references or context and with a compressed public comment period over the holidays,” Goldberg said. “You would think you would make this as easy as possible, but they’re asking us to critique the regs without key components made public, and rushing the entire process.”

The regulations deal with the how of shale gas development, from spacing units to containment measures to setbacks. They inform, for example, that pads and discharges are not allowed within 500 feet of a primary aquifer or within 2000 feet of primary municipal water supplies. But they don’t address the qualitative issues – purportedly addressed in the SGEIS -- that have been at the center of the fracking debate. What will the cumulative impacts be? What rights do local governments have? How can this affect public health” And who will bare the cost of enforcement?

Some representatives of environmental agencies told me they were disappointed that the new regs apparently did little to sanction environmental safeguards expressed by DEC staff members during meetings earlier this year. The safeguards include green completion -- a process to minimize pressurized releases of methane and other pollution by banning development of wells before infrastructure is in place to capture, contain and transport gas; and wells to monitor ground water conditions around gas operations. It was unclear whether these types of safeguards would be detailed in the SGEIS and stipulated under permitting conditions.

“It’s bizarre that we are being asked to comment on something without seeing the compendium of its meaning,” said Roger Downs, executive director of the Atlantic Chapter of the Sierra Club.

Not everybody was unhappy about the regs, however. Drilling proponents were encouraged that the DEC met the deadline to allow the process to move forward rather than expire. Gas drilling proponents have pointed to the four-and-a-half year review process, with multiple comment periods and hearings reflected in previous drafts of the SGEIS, as a sufficient effort to publically air concerns and develop policy. Proponents feel that, by meeting the deadline last week, the agency continues a good faith effort to allow the review to proceed.

“They kept the regulations alive, which was a surprise,” said Tom West, an industry lawyer. “It’s a light at the end of the tunnel. It’s good to see we are nearing the end.” West added that drilling proponents had reservations of a different sort. Specifically, he found rules that ban drilling in watersheds that feed New York City, Syracuse and other major aquifers to be too restrictive. “It raises questions about access to the resource,” he said.

If regulations are completed in three months, West estimated that it may take a half a year or more after that for permits to work their way through the new regulatory system.

Assuming the other pieces fall in place before the 90-day extension for the draft regs expires, and assuming the governor then gives a green light to permitting, there are several wild cards that cannot be accounted for, including possible legislative initiatives and legal challenges that could still delay or derail the process.

Saturday, December 1, 2012

Cuomo buys more time for New York fracking decision DEC: draft regs do not signal commitment to shale gas

It’s been another frenzied week on the fracking front in Albany – with much sound and fury signifying nothing.

Or not?

Another deadline came and went amid confusion and contention about the timing and protocol of issuing draft regulations for shale gas development in New York. To clear things up, Governor Andrew Cuomo’s administration issued a statement Friday saying everything is still up in the air.

We learned, after the administration filed draft regs to avoid a deadline that would have derailed the epic policy process, that the Governor is still undecided. The draft regulations over which officials at state Department of Environmental Conservation have toiled for the past year are not a reflection of the governor’s intentions to embrace or reject shale gas.

“If DEC decides that hydraulic fracturing cannot be safely done in New York, these regulations will not have any practical effect and the process will not go forward,” read the statement from DEC spokeswoman Emily DeSantis. “If DEC decides that the process can be done safely, these regulations would be adjusted in accordance with the health and safety requirements and issues addressed in the Supplemental Generic Environmental Impact Statement.”

The statement came two days after the administration kept alive the prospect of shale gas development by quietly issuing the pending regulations – still a work in progress -- to meet a Nov. 29th administrative deadline. Failure to meet the deadline would mean the rulemaking process would expire. That would be a relief to fracking opponents, because it would send the administration back to the drawing board and re-open the process to the contentious public hearings that have built momentum for a well organized and motivated anti-fracking movement. The movement has gone nationwide, and New York occupies center stage. For that same reason, missing the deadline would have been a blow to fracking proponents – including groups of landowners eager to lease their land, backed by conservative business interests and the industry’s advertising and lobbying muscle. (Proponents see high volume hydraulic fracturing – a process to extract natural gas from bedrock by injecting large volumes of pressured chemical solution -- as vital to economic development and energy independence. Opponents see it as environmental ruin and building dependence on fossil fuels.)

Nobody knew right up to and following the final hour of the deadline what course Cuomo’s DEC would take, and when the hour came and went, not everybody was even sure whether the state had filed the regs because no official notice was given. While there was no attempt by the governor’s office to defuse the matter, I know from sources close to this that their was a frenzied push by DEC staff to meet the deadline even as representatives from influential environmental groups made last ditch calls to urge them to hold off, at least until the agency could receive analysis of a panel of independent health experts commissioned to review DEC’s policy.

So why didn’t the DEC issue a statement to clear things up in advance of all this rather than switch to damage control amid protest that followed?

An obvious read of the situation is that meeting the deadline represents a step toward rather than a step away from shale gas development. Why would the agency be sweating the details over thousands pages of dense policy – flawed in the eyes of some and sound in the eyes of others and certain to meet legal challenges from many angles -- if officials were ready to shelve the entire regulatory project that has been under fire for more than four years?

The answer is that Cuomo himself -- two years away from a gubernatorial election and/or possibly four years away from a presidential bid -- is buying as much time as he can while attempting to manage the political forces at work that will influence his career and shale gas development in particular. Regardless of the outcome, he will have to answer two critical political constituencies. Well-healed and internationally renown environmental groups such as the National Resources Defense Council (among others) and Big Oil and the business lobby. Both of these institutional forces are backed by impassioned grass roots bases. Adding to the complications: Cuomo cannot yet gauge Legislative positions, as control of the Senate remains undecided.

The action of the last week tells us, if anything, that Cuomo is taking the fracking conundrum day-by-day if not hour-by-hour. The decision to meet the deadline by issuing a draft of the regs sends a signal to industry supporters that the administration is moving forward in good faith to get policy in place that would allow shale gas development. The statement that came retroactively to explain the decision was clearly intended to calm an uprising with the anti-fracking movement by suggesting that the administration has not passed the point of no return.

Here is the entire statement from the DEC:

The New York State Department of Environmental Conservation DEC has filed a Notice of Continuation with the Department of State to extend the rulemaking process by 90 days in order to give New York State Commissioner of Health, Dr. Nirav Shah, time to complete his review of the draft Supplemental Generic Environmental Impact Statement. This extension is necessary, in part, because Commissioner Martens requested and Dr. Shah agreed to provide an additional review, in consultation with outside experts, of whether DEC has adequately addressed potential impacts to public health. This filing with the Department of State merely extends the rulemaking period to enable Dr. Shah to complete his review and DEC time to take into account the results of Dr. Shah’s review and continue to consider the potential impacts of high-volume hydraulic fracturing.

In order to receive the needed extension, DEC was required by law to refile the draft regulations along with responses to public comments received during the public comment period, and preliminary revisions, responsive to those comments. The refiled rule does not reflect current DEC policy with respect to whether or not hydraulic fracturing can be done safely in New York. That determination will be based on the findings of the environmental impact statement and Dr. Shah’s public health review of that document.

DEC will not take any final action or make any decision regarding hydraulic fracturing until after Dr. Shah’s health review is completed and DEC, through the environmental impact statement, is satisfied that this activity can be done safely in New York State.

If DEC decides that hydraulic fracturing cannot be safely done in New York, these regulations will not have any practical effect and the process will not go forward. If DEC decides that the process can be done safely, these regulations would be adjusted in accordance with the health and safety requirements and issues addressed in the Supplemental Generic Environmental Impact Statement.

Thursday, November 29, 2012

New York’s fracking clock reset for end of February

The Cuomo administration has met a deadline to file a draft of its regulations to govern shale gas development, giving the state Department of Environmental Conservation an extra 90-days to finish the job that it began in 2008.

Several sources close to developments told me that today that the regs were filed with the Department of State yesterday, although the process has inexplicably been kept out of the public eye. According to protocol spelled out in the State Administrative Procedures Act (SAPA), the draft regulations will have to be publically posted by December 12 – two weeks after they were filed.

[Update 11/30/12: The regs are now available online by clicking here. Thirty-day public comment period will begin Dec. 12]

The state filed for the 90-day extension to allow time for an independent panel of health experts to review draft policy after environmental groups raised concerns it insufficiently addressed concerns over fracking’s impact on public health.

The regs are being developed as the state works on a review of the impacts of hydraulic fracturing that it began in the summer of 2008, called a Generic Environmental Impact Statement (SGEIS). While there is no firm deadline to complete the SGEIS, the Administrative Procedures Act prevents rules from being finalized before the environmental review is complete. Although Cuomo has been silent on the controversial issue, his administration’s compliance with the rulemaking deadline sends a signal that he intends to complete the review and the regulations by March, at which time permitting for High Volume Hydraulic Fracturing could begin in New York after being on hold since the shale gas rush began four and a half years ago.

There are other scenarios, however. If the work is not completed within 90 days, the administration could still let the process expire and reopen the process for public hearings. (Public hearings allow residents to speak in front of DEC staff in an open forum while their comments are recorded on the record and tends to be a much bigger tool for activists than a public comment period, which allows comments in writing only.)

The administration’s efforts to meet yesterday’s deadline shows that officials are doing what they can to keep the process from expiring and reopening the hearing process. The biggest wild card, however, remains with the Legislature, which has been under pressure from both drilling opponents and proponents. Leadership in the Democratic controlled Assembly have shown a willingness to ban fracking, while the Republican controlled Senate has been supportive of drilling. While Democrats still control the Assembly, control of the Senate following the recent election will be unknown for some time.

Wednesday, November 28, 2012

Can citizen watchdogs effectively shape shale gas era? Dealing with global reality begins in our back yards

With declining government resources to police a growing shale gas industry, can activists armed with cameras and notebooks pick up the slack?

In a series of New York Times Dot Earth posts earlier this month, blogger Andrew Revkin examines the possibility of a Do It Yourself approach to shale gas oversight, using the Web as a primary tool to create “… unparalleled opportunities to foster transparency and awareness, point out best and worst practices and share and shape ideas.” Revkin cites success stories – and Skytruth – grass roots sites that have facilitated and informed the shale gas discussion by compiling and distilling relevant industry information by and for D.I.Y.ers. The scope of problems and problem-solving ambitions is broad, but Revkin focuses on methane leaks that are alarmingly visible when using infrared cameras pointed at wells, compressor stations, and other production areas.

The pros and cons of this call to action are expressed in subsequent posts by Walter Hang, an anti-fracking activist in Ithaca New York and owner of a firm that compiles environmental data for governments and engineers, and Frank O’Donnell, a clean-air campaigner in Washington. O’Donnell choses citizen action rather than “endure the long long wait” of a government regulatory revival to curb air emissions. He cites other precedent-setting examples of grass roots environmental oversight, encouraged by the Clean Water Act, including “watershed watchdogs” that spur government to address water pollution; and he raises the possibility that cash awards could be available for the work of volunteers that leads to convictions:

Similar watchdog patrols (“methane monitors?”) could be deployed with some financial incentives under the Clean Air Act. A little-known and, to my knowledge, never used, provision of the Act is designed to spur citizen action.

Hang is less optimistic. The complexity of the task invites quality control problems leading to bad analysis. “Citizen mapping efforts sound good, but they are plagued by serious limitations and spatial errors that advocates gloss over and the public does not know about… Citizens might review data that are mislabeled, mischaracterized, outdated or incomplete. This happens all the time.”

Having some experience with citizen activists, watchdogs, regulators, and industry, I offer my two cents. Spotting problems is one thing. Classing them as violations is another. Enforcing them is still another. For methane leaks, the first two of these three tasks will be somewhat more doable after the Obama administration passed the first federal regs for air emissions related to fracking operations earlier this year. Unsurprisingly, these were watered down in the face of industry resistance, and it will be at least two more years before they go into effect. Even then, expect continued resistance from the industry, as expressed by this quote by an American Petroleum Institute official in a Huffington Post report:

We don't need (the EPA) to come and tell our members we will save you money," said Howard Feldman, the institute's director of regulatory and scientific affairs. "Their business is natural gas. They get it that they are trying to capture as much gas as they can.

There are many compelling case studies of citizens attempting to enforce environmental laws and spur government to action, some of which I document in my book, Under the Surface. I count John Hanger, the former Pennsylvania DEP chief under the Rendell Administration, as a gauge on issues related to the effectiveness of regulatory enforcement of Big Oil. Hanger generally supports shale gas because he sees it as a practical alternative to coal. Yet he has not backed down from fights to hold operators accountable for pollution. Hanger was a main figure in a battle against Cabot Oil & Gas over methane migration that, according to his staff, permanently ruined an aquifer in Susquehanna County. Hanger demanded the company pay for an $11.4 million pipeline to bring fresh water to residents. Cabot fought back, and he ended up with a settlement that gave homeowners systems to treat the pollution in their homes and funds for the long-term maintenance of the devises The settlement cost the company a third of what the pipeline would cost.

Hanger has identified methane migration from abandoned wells as the most pressing problem with shale gas development, yet he also lost the fight for companies to post bonds to cover expenses of plugging and capping wells. This is a task that generally falls to government – or to no one in particular -- when companies go broke, walk away from problems, or the issue of legacy becomes mired in the complexity of multiple parties arguing over undocumented circumstances of past and present accountability.

Regarding active wells, there is an argument that companies are self-motivated to fix methane leaks. It’s simply a matter of good business sense because it prevents product from escaping. If this is true, why hasn’t it happened yet? Answer: because the cost of fixing often outweighs the return on investment, especially if gas remains cheap and plentiful. While some businesses can be counted on to serve public interest even when it runs counter to their bottom line, others cannot. Civic duty is not their charter, nor should we expect it to be. The it’s-good-business-to-be-a good-neighbor principal is applied as a matter of discretion, and many times it’s a public relations calculation. Regulators at the EPA and the Pennsylvania DEP (among other agencies) know through bruising defeats (example here) that enforcing environmental law can be a frustrating and difficult task when the industry digs in its heals. Past experience tells us the industry – by in large -- is ready to resist accountability for methane emissions and methane migration in the same way it is resisting mandates to make the chemicals it uses a matter of public record. (More on that here)

Before we can count on volunteer policing efforts to become a meaningful supplement to enforcement, a fundamental imbalance has to be addressed. It starts with this: The industry is dependent on policy that exempts it from federal laws to identify and track production, handling, and disposal of environmental hazardous. The uncontrolled, undocumented release of gases – in both the ground and the air -- accounts for one of three critical areas of concern. Others involve discharges of waste into the ground and water. For most industries, these discharges are regulated through the federal Resource Conservation and Recovery Act, which provides a cradle-to-grave accounting of toxic substances. The policy became relevant in the late 1970s - the era of the iconic Love Canal disaster caused by unregulated chemical dumping. Discharges are also controlled through the Safe Drinking Water Act, which regulates what can be injected into the ground. Exemptions from these restrictions are critical to the viability of shale gas development because hazardous waste is an expensive thing to dispose of, and because our government, with few exceptions, doesn’t allow the injection of poisonous chemicals into the earth.

In addition to providing operational advantages, the industry’s exemption from hazardous waste laws take care of another potential showstopper for drilling companies – Public Relations. Waste that includes glycols, acids, hydrocarbons, volatile organics, radio nuclides and hundreds of other additives or naturally occurring compounds deemed hazardous when produced by another industry are considered non-hazardous in the eyes of the government when flowing from oil and gas wells. Selling natural gas as a clean alternative would be a much taller order if that pitch were burdened with the PR nightmare of a hazardous waste label – the very thing that doomed the advancement of the nuclear power industry in this country.

The overriding issue, though, is that conforming to these laws would severely limit legal options for waste disposal for an industry that creates a lot of it. To date, shale gas developers have produced more than 1.5 billion gallons of liquid waste from Pennsylvania well fields alone, according to a recent study by researchers at Cornell University and Penn State. And while the paper notes that the industry has increased “reuse and reliance on industrial and on-site treatment,” recycling of shale gas waste remains a process that is unregulated, self-reported, and self-defined. The study, Wastewater Management and Marcellus Shale Gas Development: Trends, Drivers, and Planning Implications, found the state’s records were incomplete and prone to error, with the endpoint of 13.4 percent of waste volumes listed as “undetermined.” (Note. That figure was for 2008. Brian Rahm, one of the authors, noted after this post that "The database has arguably done a better job tracking waste in more recent years although ... there are still a variety of errors, as well as evidence of under-reporting." See Rehm's full response below.)

Meanwhile, the industry will continue to do what it can to discourage or refute independently produced science that suggests the possibility that this unregulated waste can end up in places over the near or long term where it causes harm. I have spoken to various researchers at universities who – proposing studies with their own funds — have been denied access to drill sites to conduct “before” and “after” water tests on their terms, rather than concede to industry stipulations. The EPA ran into similar problems in national study to evaluate the impact of fracking on groundwater. (More on that here) Without the “before” picture, it’s difficult to hold industry accountable for water pollution.

There is good reason for the resistance. Science that could encourage a regulatory crack-down on the oil and gas industry would likely threaten its economic viability, especially if gas prices remain low. This could happen in New York state, where the policy battle for access to world-class gas reserves, featuring both the Marcellus and Utica shales under the Southern portion of the state, has raged for more than four years, under two administrations, without resolution. In the meantime, permitting for shale gas wells remains on hold. The National Resources Defense Council is among an influential contingent of environmental groups looking for stronger regulations if not an outright ban. Specifically, the NRDC is urging Governor Andrew Cuomo’s administration to adopt hazardous waste rules spelled out in RCRA for shale wells operating within the state’s borders. In support of this, the agency has issued a report that includes a list of toxic substances found in samples from drilling wastewater. They include varying concentrations of benzene, toluene, xylene, volatile organic compounds, heavy metals, and radionuclides. The list is itemized in Table 1 of the report, titled “In Fracking’s Wake: New Rules are Needed to Protect Our Health and Environment from Contaminated Wastewater. “ (The report is one of several position papers the NRDC has published that characterize the agency’s regulatory approach to the fracking, including full disclosure of fracking chemicals.)

I’ve heard this strategy called strangulation by regulation, and if successful in New York, it would be a victory for an anti-fracking movement that has flourished under the Empire State’s brand of celebrity-lead activism. But if shale gas development Is to be strangled, the act will require some urgent soul searching and rapid (some would argue unfeasible) practical adjustments by a public that has long enjoyed the benefits of cheap abundant energy without having to look too closely from where it comes.

Where energy comes from is the question of this century, and the on-shore drilling revolution taking place in America’s back yard is forcing us to take a good close look. Anybody eager to ban fracking in New York state, though, owes it to themselves to consider the global picture. John Cronin, Senior Fellow for Environmental Affairs at Pace Academy for Applied Environmental Studies, summed it up neatly in a recent email exchange. (Note, Cronin was responding to a query from Revkin about relying more on coal if Governor Cuomo is to eliminate shale gas and nuclear power production in New York. I find his point provides context for the fracking debate, and post it here with his blessing)

We are privileged to have the available time to debate a risk-free, domestic energy future. And whom do we owe for the breathing space to indulge our ruminations? The developing and war-torn nations to which we outsource the big risk, in return for boatloads of oil.

The energy tradeoff debate cannot be contained by the perimeter of the United States. Every megawatt provided us from out of country causes as much or more harm in those nations as domestic energy production causes at home. Our current energy policy has already made us complicit in and dependent upon significant environmental destruction outside our borders. The short-term campaign to dispatch with traditional energy sources in pursuit of a no-risk, long-term energy future for Americans is directly dependent upon a continuation of, even an increase in, some of the worst environmental problems on the planet, conveniently all in other nations. This is the crime of externalization we like to roll out when fighting domestic polluters -- only writ much larger.

Consider Nigeria, where Americans are a dominant oil customer, importing 40% or more of that nation's petroleum. Hundreds of billions of dollars of environmental damage to the Niger River Delta. Devastating human health consequences. Massive corruption. An unstable, almost bankrupt state government. A life expectancy of 51. Daily wages of $5 - $8. Loss of indigenous industries. Civil unrest. Environmental and political terrorism. Incursions by Al Qaeda. In brief, current American energy policy includes the environmental, political, economic and social destruction of Nigeria.

Call it the Law of Conservation of Risk. For the foreseeable future, we cannot destroy the risk inherent in energy consumption and production. If we eliminate it at home. it simply shows up elsewhere, in most cases in nations where laws are weaker, and citizens subservient to their governments.

Developing a globally sufficient and sustainable energy supply is one of the primary problems of our age, and it extends beyond ecological issues to human rights and environmental justice. And before we can address these problems, we first must be able to see them clearly and then be willing to take a hard look. That starts with buy-in on a grass roots level, whether it is thinking about whether you really need two cars, or that extra stuff you buy this Holiday season, or whether it involves getting out in the field with an infra-red camera to help advance the understanding methane leaks.

During visits to universities to talk about what I’ve learned as a reporter covering shale gas development in New York and Pennsylvania, I’ve been inspired by students and faculty taking D.I.Y. approaches to problems. One example: The Finger Lakes Institute at Hobart William and Smith coordinates outreach programs to enlist high school students to collect water samples in the Seneca Lake watershed – a prospective shale development zone that includes a project to warehouse gas and propane in reclaimed salt mines. Because of the changing dynamics of watersheds and the geographical expanse they tend to cover, tracking water conditions over hill and dale is an ambitious and painstaking job. Yet this is not a function that is likely to be covered by industry or government anytime soon. And without an accurate “before picture” of all the likely points of impact, it will be difficult to document environmental changes related to shale gas development and establish the groundwork for accountability.

Whether from a “neighborhood watch” approach outlined by Revkin, field work by students, or through watchdog journalism, bringing public pressure to bear on flagging problems where government falls short is never a bad idea. But neither is this: Embracing the vision of reformists who champion energy conservation while pushing with all their might against the technical and social inertia keeping this generation from advancing beyond the fossil fuel age. That’s a tall order, especially when accounting for developing countries aspiring to the standard of living and freedoms that U.S. citizens have enjoy for generations, but like D.I.Y. patrols, it’s a start, and it can start in our own back yards.

Tuesday, November 27, 2012

NY to file 90-day extension to finalize fracking rules

With a deadline imminent, New York State environmental officials will file for an extension to allow fracking regulations to be finalized while officials finish evaluating health risks associated with the controversial practice to extract gas from bedrock.

DEC spokeswoman Emily DeSantis conveyed the information in an email late this afternoon. The plan to file for an extension comes as an alternative to letting the rulemaking application expire and starting again – an option that would require reopening the process to public hearings that have become a lightening rod for dissention.

The deadline is Thursday, a year after the last public hearing on the issue. Filing for an extension seems logical from an administrative standpoint, but it comes with a key requirement: releasing a draft of the regulations for public comment. That requirement is at the center of a new upwelling of protests by environmental groups who don’t want any regulations released – even in draft form-- before a panel of independent experts have assessed how effectively the state has addressed health risks associated with high volume hydraulic fracturing.

Kate Sinding, senior attorney for the National Resources Defense Council, responded in a post on the agency’s blog, the Switchboard, that the decision to move forward rather than step back from the deadline

would also make the governor the Grinch who stole yet another Christmas from New Yorkers by delivering a set of unfinished revised rules – ones that don’t reflect the results of the on-going health and environmental reviews – and asking the public to weigh in on them over the holidays. This means fewer people are likely to be able to voice their concerns in time for the state to consider them as it finalizes the rules.

The choice will be welcomed by industry proponents eager for shale gas development to begin in New York because it sends a signal that the Cuomo administration is determined to push ahead with a plan to finalize regulations by the end of February – timing that corresponds with the completion of the health review. The Join Land Coalition of New York, a group of property owners lead by Broome County Landowner Dan Fitzsimmons who are eager to secure gas leases, issued a statement that the group is “cautiously optimistic” that the four and a half year process is nearing an end, and that “We are encouraged that the Governor and DEC have a plan to avoid expiration of the regulatory review.”

The process to adopt regulations – governed under the State Administrative Procedures Act – has progressed concurrently with an environmental review of fracking, called a Supplemental Generic Environmental Impact Statement (SGEIS). But unlike the SGIES, the SAPA rulemaking process must be completed within a year or restarted. The SGEIS, which is used to establish permitting guidelines in the absence of regulations as well as a tool to inform policy makers who are drafting regulations for a new industry, has been revised multiple times since 2008 after contentious public hearings and comment periods. Permitting remains on hold until the SGEIS is complete. That also could be in February, depending on the assessment and recommendations issued by the panel of health experts.

“DEC will file a notice for a 90-day extension allowed by state law to continue to work as [Department of Health Commissioner] Dr. Shah’s health review of the SGEIS comes to completion,” Emily DeSantis said in an email this afternoon.

Tuesday, November 20, 2012

NY's fracking struggle moves past Nov. 29 policy deadline Questions on health could prompt indefinite delay

Mired in controversy and unable to make a Nov. 29 deadline to finalize New York's shale gas regulations, Gov. Andrew Cuomo’s administration now has to decide whether it will seek a 90-day extension or simply back away and start again.

One thing we know, the administration is sharing very little of the internal mechanics of the policy struggle, leaving stakeholders to connect the dots and read what they can into the governor’s vague statements. In an interview with radio host Fred Dicker on WGDJ AM today, Cuomo confirmed what was widely anticipated -- that the administration would be unable to meet a Nov. 29 deadline to finalize shale gas regulations.

“We want a proper process,” Cuomo said. “We want it expeditiously as possible. I don't see how we get it done by next week."

The administration now faces the choices of letting the rulemaking application expire and restarting the contentious process – including more public hearings. Or it can file for a 90-day extension, which will require releasing a draft of the regulations and opening the process to public comment. (More on those options here.)

Regardless of future options, missing the deadline sends a signal that the state is unprepared to move foreward with shale gas development.

Kate Sinding, senior attorney for the National Resource Defense Council, has met with DEC officials regarding the process in previous months. Sinding reported that the agency has promised the NRDC and several other influential environmental groups that it would not move forward with policy decisions until it had accounted for health risks associated with high volume hydraulic fracturing. To that end, the agency has commissioned a group of experts to review the DEC’s work and make recommendations, possibly by late February. (More on that here)

Sinding said today she believes the DEC will not seek an extension, because that would require releasing regulations that have not taken into account recommendations from the health panel. And that would be acting in bad faith.

“The anger they would provoke (among environmental groups and ant-fracking activists) would be very significant,” Sinding said. “The agency has taken the position that is not going to be subject to pressure or rush this through, and I don’t expect that to change.”

Cuomo, meanwhile, has already provoked the anger of industry supporters by conceding the Nov. 29 deadline. Drilling proponents and industry groups, including the Joint Landowners Coalition of New York and the Independent Oil and Gas Association of New York, have been urging the administration to finalize regulations to open access to New York’s portion of the Marcellus and Utica shales – two of the largest shale gas reserves in the world -- sooner, rather than later. Today Dan Fitzsimmons, head of the Join Landowners Coalition, wrote in an open letter to the governor that the state has already considered 80,000 comments, and delay beyond the Nov. 29, deadline "is a breach of faith in our government and flies in the face of the promise that New York is beyond its dysfunction and truly open for new business investment.”

Sunday, November 18, 2012

As health panel reviews NY fracking policy, what’s next? Timing, scope, personnel signal Cuomo’s ambivalence

After being leaked to the press last week, the names of a blue-ribbon panel commissioned to evaluate the soundness of the state’s policy on shale gas are finally public. And with that, Governor Andrew Cuomo continues the appearance of moving his policy on fracking forward while remaining fundamentally uncommitted. (See previous post about his ambivalence here.)

At stake is exploitation of the Utica and Marcellus shales, world class carbon reserves extending under the Southern part of New York. Joe Martens, Commissioner of the state’s Department of Environmental Conservation, announced in mid-September that he was calling on the Department of Health to review public health risks associated with high volume hydraulic fracturing, in part to fend off possible law suits seeking to challenge the integrity of the state’s controversial policy development, now in its fifth year. The health review is headed by DOH Commissioner Nirav Shah, who is overseeing the work of an ad hoc panel of independent experts to advise the state.

The names and qualifications of the panel have been a matter of speculation since the review was announced in September until this past week, when an anonymous state official leaked the names to the Associated Press. Now we know panelists are John Adgate, chairman of the Environmental and Occupational Health Department at the Colorado School of Public Health; Lynn Goldman, dean of George Washington University’s School of Public Health and Health Services; and Richard Jackson, chairman of the Department of Environmental Health Sciences at the University of California Los Angeles’ Fielding School of Public Health.

The credentials and integrity of the group were lauded by fracking critics, fearful Cuomo would use the panel to rubber stamp questionable policy. Drilling proponents criticized the choices. That reaction, like the reaction of partisan parities to the appointment of a judge, in itself gives clues regarding the panel members’ professional predisposition and sympathies. More on that in a moment.

Who they are is important. But equally important is the task to which they have been assigned, the time they have been given to do it, and the influence they could bring to bear on the process. The governor’s office is sharing none of this publically, leaving reporters to piece together possible scenarios.

Technically, the state faces a November 29th deadline to finalize the regulatory framework for shale gas development in New York. If it misses the deadline, the rulemaking process will expire and officials will have to revamp proposals and reopen the public hearings that have become a lightening rod for well-organized public opposition. But it most certainly will take longer than 12 days to put New York’s regulatory house in order. How much longer depends on a collection of unresolved administrative and legislative issues. Economic pressures tied to the price of natural gas, now very low, may also come into play.

Here are some possible outcomes:

Meeting the Nov. 29 deadline: The state issues its regulations later this week or early the following week, narrowly sidestepping the mandate to restart the contentious and time-consuming public process. For this to happen, the advisory panel would have to fast-track a complicated and controversial review, exposing the administration to more criticism from activists that the panel was never intended as anything more than political window dressing. The state could also issue the new rules before the health review is complete without technically violating the law. That would come with a political cost to Cuomo because Martens has told influential environmental groups that the state would not proceed until health issues were taken into account.

Seeking an extension: The administration could file paperwork this week or early next week for a 90-day extension. That would require submitting updated drafts of the proposed rules and allowing 30-days for written public comment. This would open the door for more criticism and delays, but to a lesser degree than would public hearings. As reported by Jon Campbell of Gannett’s Albany Bureau, panelists expect their work to be finished in mid February, timing that would fit with a possible extension. Moreover, the extension would allow Cuomo to test the political water of the new Legislature. Control of the Senate still remains up in the air weeks after the election. Legislation that will influence shale gas policy in New York on issues ranging from moratoria to health studies to home rule depends on the outcome. Regardless, waiting for the Legislature to pick up the political hot potato may deflect some pressure from Cuomo. Or not.

Letting the proposed rules expire: This would essentially send the rank and file policy makers, who have already spent years attempting to evaluate and account for environmental risks of shale gas development, back to the drawing board. Updated policy would have to be re-introduced and subject to more public hearings, which have proven to be an effective tool for fracking opponents to derail or slow shale gas development. The process has already been delayed for years by 80,000 comments submitted in previous hearings and comment periods by critics on both sides of the issue.

Cuomo’s selection of panelists, when finally revealed last week, was met with approval from fracking critics and disapproval from supporters.

Energy in Depth, a gas-industry-funded group, questioned the integrity of previous work by Adgate, co-author of a Colorado School of Public Health study in March implicating shale gas development as a public health threat. As reported by Campbell: “It’s simply hard to imagine how a panel including the author of the most controversial health impact study in the nation ... will produce anything that resembles an objective review,” said Energy in Depth spokesman John Krohn. The Joint Landowners Coalition of New York, a pro-fracking group, issued a statement along similar lines: “We … are concerned that one member of the committee is the author of a Colorado study which has been widely criticized.”

Public health experts and anti-frackers, meanwhile, praised the panel’s qualifications. Sandra Steingraber, an ecologist and founder of New Yorkers Against Fracking, characterized panel members as “luminaries” in the field of public health, and well equipped to fully assess the risks of fracking. But, she added, the limited scope and timeframe of their charter does not appear to allow that. “The people are luminaries,” she said. “The process is a dismal fog. There is no transparency whatsoever.”

Lack of more detailed information about the scope and mechanics of the process also drew criticism from other quarters. On Thursday, more than 90 medical professionals publically called for a more independent thorough and transparent process. “New York’s community of medical professionals reiterate our call for an independent, comprehensive health impact assessment of these risks and their attendant costs,” Andrew Coates, a physician at Albany Medical College, said in a statement.

So we approach the holidays with state agencies spread thin with Hurricane Sandy recovery efforts, the shale gas dilemma far from resolved, political stakes higher than ever, and an important deadline looming.