Diesel not allowed for fracking, except when it’s allowed State, federal policies leave door open for petro-distillates

Conventional wisdom and certain regulations suggest that injecting diesel fuel into the ground is generally not an environmentally sound idea. Diesel fuel, to nobody’s surprise, contains toxic and carcinogenic chemicals, including The Big Four: Benzene, Toluene, Ethylbenzene, and Xylene, collectively known in regulatory terms as BTEX. While part of a potent energy formula that has added vitally to the industrialization of our country – these compounds cause serious risks when let loose in nature. They can cause cancer, damage vital organs and wreck nervous systems. They dissolve easily in water. They are toxic at very low levels. Their individual dangers are compounded when they are mixed.

Diesel fuel contains all of these compounds, and despite calls for an outright ban of diesel as a primary fracking agent, it’s allowed with a Class II injection permit from the Environmental Protection Agency. There are also ways around the federal permitting process. Operators can add BTEX to fracking fluids and avoid federal regulations as long as the hydrocarbon mix doesn’t meet the technical definition of diesel. It’s up to states to regulate fracking, and because fracking is exempt from the federal Safe Drinking Water Act, there are few restrictions on additives or requirements for their public disclosure.

The well service industry likes to use petroleum distillates because they are cheap and effective. According to a report from a U.S. House Committee on Energy and Commerce, BTEX compounds appeared in 60 hydraulic fracturing products between 2005 and 2009. During that period operators knowingly injected 11.4 million gallons of products containing at least one BTEX chemical. Despite all the talk about “green fluids” from the PR branch of the industry, many operators favor petroleum distillates to produce shale gas, and have fought hard to keep them in the mix.

Recent legislation passed in Illinois, a place where state officials have touted rules as the toughest in the land, is an example. What I find striking, after being tipped by comments from several SGR readers on my last blog-post, are eleventh hour revisions to the Illinois statute dealing with the issue of petroleum compounds as fracking agents. HB 2615, the original version of the bill, would have made it “unlawful to perform any high volume horizontal hydraulic fracturing operations by knowingly or recklessly injecting diesel or any petroleum distillates.” (Emphasis my own.) In the face of industry resistance, the final bill (SB 1715) dropped the term “petroleum distillates” and, further, defined diesel as any one of six particular chemical profiles listed by the Chemical Abstracts Service, or as “additional substances regulated by the United States Environmental Protection Agency as diesel fuel.” (The National Resources Defense Council, one of many environmental groups with mixed reviews of the Illinois regs, characterized them as falling short of safeguards, but better than "a very bad situation" of proceeding with no policy at all. You can read NRDC staffer’s Ann Alexander’s blog here. Sandra Steingraber, an environmental activists, characterized the Illinois legislation as a lame compromise at the expense of open government and public health.)

That federal policy, meanwhile, remains inconclusive and incomplete after a history of ineffectiveness.  After determining in 2004 that fracking with diesel “may pose environmental concerns,” the EPA worked with delegations from some of the largest well service companies, including Halliburton, who agreed in a memorandum of understanding to voluntarily remove diesel fuel from fracking fluids. But when the companies found that diesel suited their needs in the field, they used it anyway. According to an ensuing Congressional investigation, oil and gas service companies injected over 32 million gallons of diesel fuel or hydraulic fracturing fluids containing diesel fuel into wells in 19 states between 2005 and 2009. For this, there were no permits issued, nor were fines levied. Since then, the EPA has begun a process to update its regulations on diesel and fracking and to provide a statutory definition of diesel. A precise definition is still pending along with final policy.

New York, the only state with major shale gas potential where permitting remains on hold, is also working on regulations that state officials have touted as the “best in the country.” Yet these regulations, as proposed, do not outlaw BTEX and other petroleum distillates. Nor do they forbid diesel fuel unless it is used as “a base fluid.” In other words, diesel can be added to fracking recipes, as long as the fluid is not the base ingredient. (In that case, operators would have to get a permit under the still undeveloped federal policy.)

The use of petroleum distillates to serve our lives is not unusual or categorically dangerous – Gasoline after all contains BTEX and inherent risks, and there is little doubt about consequences of using it improperly. Yet most of us encounter the handling and burning of gasoline in our workaday travels. This is because the use of gasoline – and risks related to spills or dumping – are tightly controlled.

With fracking, the regulatory controls are much weaker, due largely to the failure of state and federal governments to keep pace with the rapid advancement of the domestic shale gas industry along with its monumental stakes on public welfare.

Anti-frackers score victory on upstate NY home front... Town of Sanford board forced to repeal fracking gag law

Under legal pressure from anti-fracking groups, the Town of Sanford has repealed a law that prohibits people from publically discussing fracking at town meetings.

With the repeal, officials from The Natural Resources Defense Council announced this week they are dropping their case against the town.

In September, members of the Sanford Town Board passed a resolution banning the discussion of fracking during the public comment period at town meetings. The NRDC filed the lawsuit in February with the Catskill Citizens for Safe Energy in the U.S. Court of the Northern District of New York. The Town of Sanford resolution is unconstitutional, according to the complaint, because it bans speech at public meetings “about a matter of substantial public interest that has generated significant political activity.”

Several of the board members have direct financial stakes in the outcome of fracking and, be extension, policy being influenced in town halls on the controversial practice of extracting gas from bedrock using high volumes of undisclosed pressurized chemical solutions. Town Supervisor Dewey Decker is among those who signed a lease with XTO Energy to produce gas from the Marcellus Shale under his land. Decker leads a coalition of farmers who negotiated a deal with XTO Energy in 2008 to lease 50,000 acres for $110 million plus 13.5 percent royalties. Since then, development has been on hold pending a policy review on the impacts of shale gas development by state health and environmental officials

Sanford Town board meetings were becoming a draw for outspoken activists and residents opposed to fracking. Acting in the capacity of Town Supervisor, Decker sent a letter to Gov. Andrew Cuomo last fall urging the state to expedite the pending health and environmental policy review, and complaining that a delay was “only empowering opponents.” Prior to that, the board passed a resolution urging the state to move forward, and rejecting calls for the town to ban fracking.

Decker was out plowing his fields today and unavailable. He doesn’t carry a cell phone and he takes his lunch with him, his wife Dawn told me. I will update this post after I reach him.

“This is a vindication of the right to free speech,” NRDC attorney Kate Sinding said in a statement. “And it sends a message to communities everywhere. As Americans, we have the right to speak up when we feel threatened. And it is our government’s responsibility to listen.”

Status report: In my last post a stated my “next post” would be about injections wells in Ohio. To finish that, I’m waiting for some records from the Ohio Department of Natural Resources, which I expect by early next week.

DEC meeting with enviros suggests SGEIS unfinished Cuomo's staff wrestles with fracking health questions

Governor Andrew Cuomo’s top health and environmental administrators invited members of five environmental groups to Albany recently to discuss the state’s developing policy on fracking. In contrast to a raucous demonstration by grass roots groups a day prior, the meeting on August 28 at the state capitol between heads of state and members of the country’s most influential environmental groups was held quietly and privately, minus media or press statements. A delegation representing the Sierra Club, Environmental Advocates, the National Resources Defense Council, the Environmental Defense Fund, and Riverkeepers met with DEC Commissioner Joseph Martens and Department of Health Commissioner Nirav R. Shah, and their aides. There was no formal agenda, according to those who attended the meeting. Rather, the commissioners were seeking the groups’ input on health considerations in the state’s regulatory overhaul on which the future of shale gas development in New York is pending.

For those wondering about the status of shale gas development in New York, the meeting is the latest sign that the Cuomo administration is not yet ready to finalize its policy, despite reports to the contrary in the mainstream press.

Members of the groups told Shah and Martens that the most recent draft of the state’s policy – the Supplemental Generic Environmental Impact Statement – falls short of adequately addressing public health considerations that should be taken into account with full-scale gas development. While the SGEIS details economic gains that communities can expect from shale gas development, critics feel it has not delved far enough into liabilities – many of them related to public health –that a gas drilling region can expect over time. In addition to environmental groups, a diverse collection of mainstream medical and health agencies are seeking the continuation of New York’s moratorium on high volume hydraulic fracturing until both impacts of health and environment can be better documented. The groups include New York State Association of County Health Officials, the American Academy of Pediatrics, the New York State Nurses Association, and the Medical Society of the State of New York.

The simple fact that the environmental delegation was summoned to meet with the commissioners of the state’s health and environmental agencies is another sign of the governor’s ambivalence (discussed in a previous post) amid growing pressure on the administration. Grass roots groups have been protesting routinely in the halls of the Capitol, and a bevy of protestors have also flanked Cuomo during his public appearances in recent months, including a visit to the state fair on Labor Day, and an event in August called a Yogurt Summit to promote upstate dairy interests. Pro drilling groups have also been active, but not as visibly or as routinely as the opposition. More about that in a bit.

Unlike the grass roots groups, which are seeking a ban, the mainstream environmental interests are generally pushing for a moratorium to allow time to construct a more comprehensive regulatory framework to handle fracking – the controversial process to extract gas from bedrock which has enabled shale gas development. Groups such as the Sierra Club, NRDC, and EDF have met with environmental regulators in briefings about specific policy points, including proposals to mandate water monitoring wells at each gas well site, and to outlaw gas well completion prior to pipeline construction. It’s worth noting here that some drillers have already slowed their rate of expansion in Pennsylvania amid a market glut and storage limitations, and that requirements along these lines would discourage companies to aggressively expand operations into New York without a significant rise in demand and corresponding prices.

The state’s review of shale gas development, now in its fifth year, has focused on the environmental impacts of high volume hydraulic fracturing, ranging from water depletion to waste production. The August 28th meeting --first reported on an August 31 post by New York Times reporter Mireya Navarro on her blog, Green -- is the latest call for an independent assessment of health impacts. Prior to that, the New York State Association of County Health Officials called for an “expert, independent, and evidence-based study of potential public health impacts, preventive approaches to mitigate human health risks, and estimated related costs prior to lifting the moratorium on permits.” That request was included in a January report prepared for an advisory panel commissioned by Martens to help evaluate the resources needed to allow fracking. The report references several studies assessing impacts from shale gas development in other areas, including the Battlement Mesa Health Impact Assessment, by the Colorado School of Public Health, which takes into account issues ranging from volatile organic compounds from drilling operations posing risks of respiratory, skin and eye ailments, to potential impacts on women and children from repeated benzene exposures. The county health department assessment also references, among others, a report by Duke University’s Nicholas Institute for Environmental Policy Solutions that cites “adverse effects” on communities related to reused drilling wastewater and “the availability and quality of locally grown foods, recreational sites, and jobs.”

At the August 28th meeting in Albany, the delegation of environmental groups asked for an independently conducted health review of shale gas development along the lines of what was proposed by the association of county health officials. Although details were not discussed, it could potentially take into account chemical exposure risks from air and water emissions, industrial accidents, community stresses related to noise, traffic, housing, and population changes, as well as considering the resources necessary to manage them.

The commissioners seemed receptive to the ideas, according to participants.

“No commitments were made, but I think they heard our concerns and are taking them very seriously,” said Kate Sinding, a senior attorney with the NRDC who attended the meeting. Sinding added that she was satisfied with the review process so far. “This is already a success story. This is a policy review with a level of consideration and deliberation that we have not seen anywhere else.”

While administrators may be willing to beef up their review of health consequences of shale gas development, it’s unclear what form the review would take. A formally sanctioned review – called a Health Impact Assessment – would require a preliminary plan to outline both the scope of the initiative and the resources to pay for it. The multi-step process would be open to hearings and public review that could add years to the overall review process. The administration could also work on a less formal plan to addresses health concerns with existing tools and resources and tack them on to the SGEIS, a document that already exceeds 1,500 pages.

Regardless, the simple fact that a health review is on the table at this point suggests a final decision of fracking in New York is not imminent.

Other factors loom. The Democratic controlled Assembly has already passed a bill legislating a health impact assessment as part of the state’s review, and in the absence of considerable and unexpected change in the Assembly composition this November, it will likely have the votes to do so again next session. The bill went no where in the Senate, which is controlled by Republican’s by a thin margin. But Republican control of the Senate is more vulnerable than the Democrats’ control of the Assembly, and Cuomo might be anticipating various permutations of how the issue could play out in the next Legislature.

While Cuomo has been vague about the status of the SGEIS and noncommittal about its release date, reports in the mainstream press have fueled expectations that the document would be released by Labor Day or shortly after. The meeting between the top staff and the environmental groups is hard to reconcile with expectations reported in the mainstream press -- most recently by CBS News and Fred Lebrun of the Albany Times Union – that we could expect a final SGEIS by the end of summer to open the door for shale gas exploration in New York. Now, as mid-September approaches, advocates both for and against drilling are reporting that any decisions may be pushed off until after elections. Days after the commissioners of the DOH and DEC met with the environmental groups, the Joint Landowners Coalition of New York reported on its website that the governor was considering postponing a decision:

Despite all of the positive news about the potential release of the final SGEIS, we have been advised by credible sources that the Governor has been asked to delay the release of the SGEIS until after the November elections.

Signs of a delay also were reported by those in the anti-fracking camp.

“It seems to be on a slower track with a willingness to look at new issues,” said Rob Moore, executive director of Environmental Advocates, summing up a view that I heard from stakeholders involved with recent talks with the DEC.

Predictably, prospects of a delay have been praised in the anti-fracking camp and criticized by groups of landowners eager to lease their land to gas companies. Tim Whitesell is a landowner and supervisor of the Town of Binghamton – an area just north of the Pennsylvania border that sits over rich shale gas reserves, including the Marcellus and the Utica. Whitesell and 21 other town supervisors in this gas rich region sent a letter to Cuomo on Wednesday urging him “to direct the DEC to move forward as soon as possible with rules and regulations governing the process and to begin permitting.” Last week Whitesell told AP reporter Mary Esch “It’s very frustrating that we see this economic boom just south of us in Pennsylvania and we’re not able to take part in it.”

Some municipalities, including the Town of Binghamton, have passed resolutions favoring drilling, while others, such as the City of Binghamton, have passed resolutions opposing it. The issue playing out in local communities is legally known as Home Rule. Cuomo has said that when gas drilling begins, his administration would begin permitting in areas that want it and not in areas that oppose it; but the approach is rife with legal implications – about where and how the state can intervene to allow mineral extraction in some areas and not others -- that go well beyond the politics of the matter.

While proponents may be discouraged by Cuomo’s lack of commitment to shale gas development, they can take heart in President Obama’s bullish attitude on natural gas development nationally, expressed most recently during the president’s Convention speech. But in the short term, at least, there are market factors at work against the industry that transcend politics. A glut has driven prices down and dampened the pace of the rush that was going full bore in 2008, when gas companies were offering between $3,000 and $5,000 dollars an acre to lease land up front, plus royalties of 15 percent of more. Now the value of the mineral resources has fallen, raising questions whether shale gas extraction in New York is even economically viable. There is important and controversial work ongoing to develop infrastructure, however, including converting salt mines on the west side of Seneca Lake into a facility to warehouse surplus gas coming on line in Pennsylvania and Ohio until prices rise. In the meantime, Obama’s speech suggests the federal government will do what it can to support expanding markets for domestic natural gas, which would drive up prices and incentives to drill. Expect nothing less from a Mitt Romney administration, and probably much more in the way of deregulating the industry to lower the cost of extraction.

Breaking News: NY officials consider plan to begin fracking Cuomo’s approach squares with NRDC advice

New York state environmental regulators are considering a plan to begin shale gas development – and the controversial process of fracking – in certain locations within the Marcellus Shale drilling fairway on a trial basis.

A proposal to allow fracking in some parts of the state but not others was spelled out in a Jan. 11 memo to state environmental regulators from attorneys with the National Resources Defense Council. The memo urged officials to consider keeping “special places off limits” to fracking, due to risks to the water supply, while allowing it in other areas. The special places include the New York City and Syracuse watersheds, Catskill parks, the Finger Lakes regions, and “primary” aquifers.

The Marcellus drilling fairway -- the area with the greatest potential for shale gas development – extends from northern Pennsylvania into south central New York, including Tioga, Broom Counties, Delaware, and Chemung Counties. Beneath the Marcellus is the Utica Shale, which encompasses the same area, but extends much further north and west. Permits allowing for shale gas development in New York are on hold pending a review by the state Department of Environmental Conservation on the environmental impacts. The review, called the Supplemental Generic Environmental Impact Statement (SGEIS), is expected to be finalized later this year

As part of that review, the NRDC memo asked regulators to consider a three-year demonstration project in several “geographically limited areas.” Depending on the outcome, the state could then decide whether to “advance further a broader HVHF (High Volume Hydraulic Fracturing) program.” The memo was signed by NRDC senior attorneys Eric Goldstein and Kate Sinding, and consultant Craig Michaels.

According to an article by Danny Hakim in this morning’s New York Times, Gov. Andrew Cuomo’s administration is considering issuing permits in specific areas after the SGEIS is finalized. Hakim reported that “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.” Hakim’s story did not specifically link Cuomo’s approach to the NRDC proposal, although Cuomo’s plan appears to square with the NRDC recommendations, and activists are disappointed with the environmental organization for putting it on the table to begin with. Robert Kennedy Jr. serves as a senior attorney for the NRDC and sits on a panel that advices the DEC on it’s approach to shale gas.

Sinding said that the comments on the SGEIS were not an endorsement of plans to move ahead with shale gas, but a product of legal due diligence in evaluating all options. “We were clear that we were neither specifically endorsing any of these alternatives nor were we presupposing that any level of development should be approved – simply that the state cannot fully evaluate fracking here without an in-depth analysis of any and all scenarios that could take place here.” Sinding added: “We regret that these comments have created concern and confusion. We stand with our partners across New York State in calling for a continued moratorium on new fracking until the environmental and health risks are fully and properly considered.”

Nevertheless, the NRDC recommendation for regulators to consider a demonstration project in the context of the state's broader review has drawn criticism from activists, who argue that if drilling is unsafe in one watershed, it’s unsafe in others. Sandra Steingraber, founder of New Yorkers Against Fracking, characterizes the places where drilling would be permitted on a trial basis as “sacrifice zones.” Areas likely to see the first permits for fracking include Broome and Tioga counties, which sit in the center of the fairway, where shale gas development has been promoted as the foundation of an economic renaissance for impoverished communities.

"Partitioning our state into frack and no-frack zones based on economic desperation is a shameful idea, and we will actively oppose its implementation," Steingraber said.

The DEC suspended shale gas permitting in 2008 due to concerns over the safety of fracking, short for high volume hydraulic fracturing. The process involves injecting millions of gallons of proprietary chemical solution into the ground under high pressure to fracture bedrock and stimulate gas productions from a given well. Fracking has raised questions about the potential drain on water resources, the toxicity of the chemicals used, and the handling and disposal of waste --called flowback -- by an industry exempt from state and federal laws governing hazardous waste.

The governor’s office has been under pressure both from landowners groups and businesses pressing for shale gas development, and environmental groups opposed to it.

Steingraber, author of several books about toxic exposure relating to children, accused the NRDC of a compromise that would concede the development of shale gas in some communities to spare others. “Instead of defending these communities, which is NRDC's self-appointed charge, the organization provided to the DEC in great detail a plan that sounds a lot like the very plan that is today being floated by the Cuomo administration: partitioning the state into frack and no frack zones in a way that will, if implemented, place the Southern Tier on the far side of the shale gas curtain.”

Others welcomed signs that shale gas permitting could move forward in the Southern Tier. Jim Worden is a dairy farmer, drilling proponent and leader of the Windsor Landowners Coalition, which he helped organize to leverage bargaining power with shale gas companies seeking land leaes for gas development. Worden lives in an area of Broome County where several municipalities have passed resolutions asking the governor to begin issuing permits. “I agree, if it (fracking) is unsafe in one watershed, it is unsafe in others,” Worden said. “But this is not about safety. It’s about politics. I think it’s safe. This deal (to exclude some areas and include others) was made just to appease the people who don’t want it. Hopefully, this will get things going.”

The NRDC, with 1.3 million members and annual donations approaching $100 million, is one of the country’s most influential environmental institutions. It has international offices, but with its headquarters in New York City, it has a special stake in the shale gas controversy in New York state. NRDC Founding Director John Adams is a life-long resident of the Catskills, one of the areas where fracking would be prohibited.

The controversy involving the NRDC is emblematic of the problem large, mainstream environmental groups have had defining their positions on hydraulic fracturing. The Sierra Club once supported shale gas development as a clean alternative to coal and even accepted $26 million in donations from Chesapeake, one of the country’s largest gas drillers. After facing heavy criticism from local chapters, it changed its position. It now opposes shale gas development as environmentally unsound.