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*UPDATE* Shale Delivers for Middle (and Middle-Class) America
In the ongoing conversation over America’s abundance of natural gas, one thing is becoming very clear: The continued development of our nation’s oil and natural gas resources is helping advance our economy where it matters most – in the pocketbooks of middle class Americans.

johnkrohnJD
Communications Director

 

UPDATE (5/03/2013; 9:43 A.M. ET):The Atlantic and Business Insider filed reports this week that make abundantly clear the profound economic impacts oil and natural gas development provides to middle class Americans. Reporting on the economic advancements in two states that couldn’t be more different – North Dakota and Pennsylvania – the reviews provided a succinct picture of how shale development is not only transforming U.S. energy prospects, but is also dramatically improving the quality of life for the nation’s blue collar workers.

The Atlantic reports the entire economic landscape has changed for many residents in the Peace Garden State:

The Bureau of Labor Statistics recently produced a breakdown of job growth during North Dakota’s oil rush, and it’s pretty remarkable. In counties where oil rigs have sprouted up to drill from the Bakken Shale Formation — a few of which are actually in Montana — employment grew by 35.9 percent from 2007 to 2011, from about 78,000 jobs to more than 105,000. But much as in Texas’s shale country, the impact on local job growth has actually been dwarfed by the impact on local income. Total wages more than doubled from $2.6 billion to $5.4 billion. Average pay jumped by more than half, from $33,040 to $50,553.

Blue-collar men suddenly finding high-paying work in the fields is a big part of the story. But jobs and paychecks have surged across industries.

While this story is compelling, it’s not unique. Business Insider also took a closer look at the economic benefits shale development has provided one formerly rural poor Pennsylvania county. According to reporters who visited the area, “lots of people [are] grateful for the infusion of commerce injected into a local economy that had stagnated.” From Business Insider:

The 35-year-old Susquehanna County, Penn. native was scraping by supplying construction contractors with cut bluestone when the gas industry arrived to his sleepy corner of Pennsylvania in 2009.

Four years later, Diaz now owns seven different companies, including a home furnishings manufacturer and a timber harvester — that bring in $50 million a year and employs 250 people.

By one count, county residents have taken in a total of $300 million in gas royalties.

Jay Agkinson, a lifelong county resident who runs Montrose’s Shell station, said morning fill-ups can sometimes resemble truck meets.

“A lot of people who never had money have money now,” he said.

In countless communities across the country, Americans are seeing their economic prospects transformed for the better thanks to the responsible development of the nation’s shale resources. That’s welcome news for thousands of blue collar Americans, many of whom have seen their incomes and opportunity stagnate and decline in recent years.

—Original post, February 20, 2013—

In the ongoing conversation over America’s abundance of natural gas, one thing is becoming very clear: The continued development of our nation’s oil and natural gas resources is helping advance our economy where it matters most – in the pocketbooks of middle class Americans.

In fact, a growing body of evidence highlights that oil and natural gas development is a key element in reaching the “North Star” that President Obama recently noted should be the goal of our nation’s economic policies; namely, a growing economy that creates good middle class jobs.

In 2011, the oil and natural gas industry provided $545 billion to the U.S. economy in the form of capital expenditures, wages and dividend payments. This supported nine percent of all new jobs that year, according to the World Economic Forum.

Such growth, in turn, is transforming entire regional economies. Take, for example, the city of Pittsburgh, Pa.  This once reveled blue-collar city was a symbol of U.S. economic strength until the collapse of U.S. steel and manufacturing in the early 1980s. Thereafter, the city struggled to right its course, with only limited success. But now wages are rising, unemployment is falling and many are attributing this growth, at least in part, to a stronger economy supported by Marcellus Shale development.

Kurt Rankin, an economist and assistant vice president at the PNC Financial Services Group, sees Marcellus development as “providing the defining force for Pittsburgh’s local economy,” according to a recent feature by E&E News. Other experts have similarly observed that shale development is boosting wealth, increasing local spending and reversing a “brain drain” that has plagued the region for years.

Rankin has good reason for his optimism, too. Houston, Tex. has seen rapid growth as major energy Companies have relocated to, or increased their presence in, the Space City due to  $120 billion worth of investments in refineries, pipelines and export terminals expected to be constructed along the Gulf Coast.

Similar expansions have been witnessed in smaller U.S. cities like Williamsport, Pa. This medium sized central Pennsylvania city, long known for hosting the Little League World Series, became the 7th fastest growing city in the United States in 2011 thanks to Marcellus Shale development.

Of course, these economic advancements haven’t just accrued in our nation’s metropolitan areas.  In fact, they are most evident in areas where a majority of middle class Americans reside: our nation’s rural and suburban communities. This was noted in a recent USA TODAY story, which found that oil and natural gas development is increasing personal income in small towns across the nation, reversing a decade’s long trend and shifting significant wealth toward areas of the country that can use the boost. Specifically, the USA TODAY analysis noted these areas saw their incomes rise by 3.8 percent, driven by spending in the nation’s oil and gas fields.

But the story doesn’t end there. A San Antonio Express-News review of economic data supported by Eagle Ford Shale development noted that income in LaSalle County, Tex., rose by 31 percent since shale development began.  In fact, the review found that counties hosting Eagle Ford development saw an average increase in per capita income of 13.62 percent between 2008 and 2011. These counties include Atascosa,Bee, DeWitt, Dimmit, Frio, Gonzales, Karnes, La Salle, Live Oak, Maverick, McMullen, Webb, Wilson, and Zavala. For comparison, Texas saw an increase in per capita income of 1.3 percent over that time.

Eagle Ford income rais chart

Eagle Ford Shale development drives personal income growth. source: http://bit.ly/Y75fxh

What’s making this rise possible is a significant increase in good paying jobs being provided by a growing domestic oil and natural gas industry.  A recent independent review found that wages for the mining, oil and natural gas sector increased by 5.8 percent between the last quarters of 2011 and 2012, an amount greater than any 12-month period since 2006. Examining employment data from two states makes this phenomenon very clear. In Pennsylvania, Marcellus Shale development is directly supporting more than 30,000 jobs in the state.  These jobs pay $89,116 per year, which exceeds the average compensation of all other Pennsylvania industries by $41,000 according to state data. According to the 2010 Census, this even exceeds the Keystone State’s average household income of $51,651.

PA Income chart

PA wages comparison. Source: http://bit.ly/WuUVtW

A similar story is taking shape in Ohio, where Utica Shale development began ramping up in 2012.  According to a recent state report, shale development is directly employing nearly 7,300 individuals who are earning an average wage of $74,000 a year. This figure exceeds the wages of all other Ohio industries by approximately $30,000.

What’s making this development even more profound is that at the same time shale development is increasing wages, it’s also decreasing expenses for most Americans. Wholesale electricity prices in the United States have dropped more than 50 percent since 2008 thanks to affordable natural gas supplies made possible by shale development.  Another review by IHS-CERA found that lower natural gas prices are saving every American household an annual average of $926. All of this, and more, led the President to recently declare in the State of the Union, “We produce more natural gas than ever before — and nearly everyone’s energy bill is lower because of it.”

So, as it turns out, the President doesn’t need to look too far to find that North Star he referenced in the State of the Union Address. From providing millions of jobs, to increasing paychecks while decreasing expenses, our ability to develop our nation’s oil and natural gas resources seems to be the compass that is pointing to a stronger middle class.

 

Debunking Gasland, Part II
Three years after the release of Gasland – a film panned by independent observers as “fundamentally dishonest” and a “polemic” – the main challenge for director Josh Fox in releasing Gasland Part II was manifest: Regain the public’s trust by discarding hyperbole and laying out the challenges and opportunities of shale development as they actually exist in the actual world. In short, do everything he did not do in Gasland. Unfortunately, Josh eschewed that path entirely with Gasland Part II, doubling down on the same old, tired talking points, and playing to his narrow base at the exclusion of all others.

steve_everleySteve
Team Lead

 

Three years after the release of Gasland – a film panned by independent observers as “fundamentally dishonest” and a “polemic” – the main challenge for director Josh Fox in releasing Gasland Part II was manifest: Regain the public’s trust by discarding hyperbole and laying out the challenges and opportunities of shale development as they actually exist in the actual world. In short, do everything a documentary filmmaker should do, but which he chose not to do in Gasland.

Unfortunately for those who attended the premiere of Gasland Part II this past weekend (we were there), Josh eschewed that path entirely, doubling down on the same old, tired talking points, and playing to his narrow base at the exclusion of all others. The Parker County case? It’s in there. Dimock? Probably receives more focus than anything else. Pavillion and EPA? You bet. And yes, that damned banjo of his makes an appearance or two as well.

This isn’t Gasland Part II, folks. It’s Gasland Too.

Sure, the sequel has some new cast members and a few new claims. Somehow, Fox discovers that shale is actually worse than he previously thought: Earthquakes. Methane leaks. Well failures. Hurricanes. Heck, viewers were probably waiting for swarms of locusts to appear – fracking locusts, to be sure.

And there was plenty of spectacle, too. Yoko Ono was in the audience. So was former Rep. Maurice Hinchey (D-N.Y.), the congressman who lent his name to the infamous “FRAC Act” that Josh so desperately wants to become law. After the movie, they joined him on stage, along with the Lipskys, John Fenton, Calvin Tillman, and the rest of the “cast.”

But the emotion-filled remarks afterwards – including a plea to push for Mark Jacobson’s “100% renewables” plan as the way to stop natural gas development – were also the perfect bookend to a movement that was always based on sensationalism over substance (Jacobson’s plan is, quite simply, pure fairy tale). The call to action was more of a cry of desperation (“Please, keep us relevant!”) by a filmmaker, and indeed an entire ideology, whose time has come and gone. As an early review of the film puts it, Gasland Part II “runs longer than the earlier installment, but ultimately it has less to say.”

So, beyond the bigger picture about the waning credibility of the anti-fracking movement, what was in Gasland Part II? Where did Fox travel, and with whom did he speak? Given that issues relating to Dimock have been explained ad nauseum over the past several years, we won’t go into detail explaining why opponents’ claims about that town are untrue. If you want the real story about Dimock, please go here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, and here.

Similarly, the Lipsky case in Parker County, Tex., has been in the news for years, and most of it deals with fraud on the part of local activists, who strategized for months on how to deceive the public and get the EPA involved. The EPA dropped its case, too – not because of election year politics or industry pressure (as Fox alleges), but because real scientific evidence disproved any link between natural gas development and the methane in the Lipsky water well. In fact, most of what Fox tried to spin out of the case paralleled what several media outlets previously tried to manufacture as a story line, and each one has been completely debunked. It’s unclear why Fox would rest his laurels so heavily on a case that the public has moved past, but when you’re desperate to remain relevant, you often have to grasp at straws.

However, let’s look at some of the case studies and subjects that appeared in the film, and a full discussion about why reality, once again, tells a completely different story.

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John Fenton (Pavillion, Wyo.)

Summary: Mr. Fenton was also featured in Gasland, providing clarity from the beginning that Gasland Part II is little more than a retread of the same themes explored in the first movie. Fenton has said: “When we turn on the tap, the water reeks of hydrocarbons and chemicals,” which he blames on nearby hydraulic fracturing. The town of Pavillion itself has become a flashpoint in the debate over shale development in the United States, premised chiefly on an unreviewed, draft EPA report from December 2011 that theorized a link between hydraulic fracturing and test results from two deep monitoring wells the agency drilled. In Gasland Part II, the EPA report is presented as proof that hydraulic fracturing causes water contamination, and Fenton (along with a curse word-laden scene with Louis Meeks) is the vehicle through which Fox presents it.

The Facts: Since at least the 1960s, the U.S. Geological Survey has documented poor water quality in the Wind River Formation, over which Pavillion sits. The reasons vary from naturally-occurring compounds to pesticide and agriculture runoff. Here are a few examples:

Fenton is described in the movie as a person fighting back against the oil and gas industry, a cause he asked the viewers at the premiere to take up themselves. According to Bloomberg News, Fenton receives about $2,000 per year for each of the 24 gas wells on his property – a fact that neither Josh nor Fenton gave nary a mention.

Meanwhile, EPA’s report on water quality in Pavillion has been exposed as flawed by Wyoming state regulators, the U.S. Bureau of Land Management, and the U.S. Geological Survey. Don Simpson, a high ranking official for BLM, pointed to the possibility of “bias in the samples” from EPA’s research. In fact, Simpson says that EPA’s findings

“…should not be prematurely used as a line of evidence that supports EPA’s suggestion that gas has migrated into the shallow subsurface due to hydraulic fracturing or improper well completion until more data is collected and analyzed.”

Due to concerns over the EPA’s methods, the agency agreed to retest the wells, and the U.S. Geological Survey was brought in to do its own sampling. When the USGS completed its tests, the EPA prematurely declared that USGS’s findings were “generally consistent” with its own. The only problem? More than 50 of the EPA’s measurements were discredited by the findings of the USGS. In fact, the USGS effectively disqualified one of the EPA’s two monitoring wells due to low flow rates and poor construction.

These mistakes are critically important, because they show the EPA may have contaminated the very water the agency was trying to sample. For example, the Wyoming Department of Environmental Quality observed mineral accumulation within one of EPA’s monitoring wells, which “indicates the well casing was not constructed of stainless steel as originally reported by EPA. This has been confirmed by EPA.” Using the wrong material for well casing can introduce new compounds into groundwater, which will then register in the samples taken from that well.

A Wyoming DEQ geologist added:

“You have low flow rates that increase the time water is in contact with those drilling materials [from the construction of EPA’s monitoring well], and materials used in drilling mud can affect groundwater quality. You don’t know if it’s biasing the results up or down.”

Indeed, photos and video from the Wyoming DEQ actually show some of the mineral accumulation and drilling materials found inside the monitoring well, which contributed to the refusal by USGS to take water quality samples from it.

Then there’s the issue of the depth of the EPA’s monitoring wells themselves. Pavillion’s drinking water wells are typically less than 300 feet deep, because state officials have known for decades that drilling deeper could result in striking one of the area’s shallow hydrocarbon deposits. But EPA officials drilled two monitoring wells to almost 1,000 feet. That’s important for at least two reasons.

First, EPA’s theory absolutely hinges upon on the detection of hydrocarbons in those monitoring wells — but you would expect to find hydrocarbons in a monitoring well that was drilled below the aquifer and into a hydrocarbon reservoir. Second, the test results from the area’s shallow drinking water wells simply don’t match what the EPA says it found in the deep monitoring wells. That means the EPA’s test results from the deep monitoring wells, however flawed, don’t have any connection to the shallow wells that actually provide people with drinking water.

Unsurprisingly, when the draft Pavillion report became public in late 2011, then-EPA Administrator Lisa Jackson said: “We have absolutely no indication right now that drinking water is at risk.” And several months later, Jackson told reporters, “In no case have we made a definitive determination that the fracking process has caused chemicals to enter groundwater.”

Furthermore, in response to the criticism of its methods, the EPA announced in January 2013 yet another delay in starting the peer-review process for the draft Pavillion report. The announcement of the eight-month postponement also noted: “This draft research report is not final … and should not be construed to represent Agency policy or views.”

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The Parr Family (Wise County, Tex.)

Summary: Bob Parr moved into his home in Wise County, Tex., in 2001. In 2008, Bob and Lisa Parr were married, after which Lisa and her daughter moved into Bob’s house. Shortly thereafter, the Parrs claimed to experience health impacts, including nosebleeds, nausea, headaches, and breathing difficulties. In Gasland Part II, several photos of the Parrs are shown for dramatic effect, including their daughter’s nosebleed and Lisa’s skin welts. The Parrs filed complaints with the Texas Commission on Environmental Quality (TCEQ) in 2010, which investigated and took air samples in the area. The Parrs, meanwhile, relocated to live in Bob’s office in Denton. The Parrs also filed a lawsuit against local operators, seeking punitive damages for environmental and health impacts.

The Facts: Since at least 2010, the Parrs have been working closely with Earthworks, an environmental organization known for its intense and ideologically-driven opposition to oil and gas development. Unsurprisingly, Earthworks has an entire page devoted to publicizing the Parrs’ story, and Lisa Parr was even a featured speaker at an Earthworks event. Sharon Wilson, a north Texas organizer for Earthworks (who also played a role in “educating” former EPA regional administrator Al Armendariz), flew to the U.S. EPA’s North Carolina office to present the Parrs’ story as one of four “case studies of health impacts caused by natural gas extraction in the Barnett Shale.” Wilson also paid a visit to the Parrs’ hometown (and blogged about the same company that the Parrs would later complain about) around the time the Parrs notified TCEQ of their problems.

Earthworks links to air sampling from TCEQ to support the Parrs’ case, which was completed in July 2010 (the group also referenced that test in a report submitted to the U.S. Department of Energy during a public hearing). Earthworks claims an outside environmental specialist’s tests “detected chemicals in [Lisa’s] blood and lungs that match the results of TCEQ’s air sampling.” For some reason, the Parrs’ own lawyer declined to identify the specialist who conducted the blood tests, although Earthworks identified him as William Rae from Dallas.

Of course, Earthworks did not include the full TCEQ sampling report in its write-up of the case study — just the table of measurements. Earthworks also omits any mention that TCEQ completed followup tests a few months later. It was a critical omission, because in the July 2010 results, TCEQ states the following:

“Preliminary review of the available literature indicates that short-term adverse health effects such as respiratory irritation and central nervous system depression related to these chemicals usually occur at concentrations greater than those reported. However, based on the observed adverse health effects experienced by the citizen and the regional investigator, the Toxicology Division (TD) strongly advises emission reduction from this facility.”

TCEQ went on to mention that it ordered the company “to reduce emissions” and requested a “follow-up sampling event to monitor ambient air near this facility.” Two months later, Earthworks claimed the exact opposite, alleging that TCEQ’s response was limited only to “laughably small fines” and no requirements to compensate the Parrs. A few days after Earthworks’ baseless critique, TCEQ released its followup sampling. From that TCEQ report:

“Reported concentrations of target volatile organic compounds (VOCs) were either not detected or were detected below levels of short-term health and/or welfare concern.”

To recap: A citizen complaint to TCEQ resulted in an investigation of local activity, and regulators ordered the company to reduce emissions. Two months later, all measurements were below any threshold that would trigger public health impacts.

Of course, Earthworks also cites TCEQ testing done on behalf of the Ruggiero family (who live near the Parrs) as evidence of high VOCs and other emissions in the area. More specifically, Earthworks references a January 20, 2010 test; one from February 5, 2010; and a test from March 16, 2010. Once again, Earthworks decided only to post the raw sampling data — not TCEQ’s conclusions and interpretations, which tell a completely different story.

In the January and February tests, TCEQ detected certain compounds, but added this statement (which Earthworks failed to mention):

“None of the reported concentrations would be expected to cause adverse health effects.”

For the March test, TCEQ came to an even more benign conclusion:

“Reported concentrations of target volatile organic compounds (VOCs) were either not detected or were detected below levels of short-term health and/or welfare concern.”

TCEQ also mentioned in all three tests that benzene concentrations were below health thresholds.

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Calvin Tillman (DISH, Tex.)

Summary: Mr. Tillman, a former mayor of DISH, Texas, played a prominent role in Gasland, and regularly tours the country to recite talking points about the supposed dangers of shale. Tillman claims that natural gas development in his community created a range of health problems for local residents, and that those impacts will affect residents in other parts of the country where development is or will be occurring. Tillman decided to get active on the issue after a series of natural gas compressor stations were built near DISH, and he most frequently cites benzene concentrations as the key problem. In Gasland Part II, Tillman’s story was retold as if it were new, and he is shown driving around his (former) community, pointing out houses of residents who are suing the natural gas industry.

The Facts: The Texas Commission on Environmental Quality (TCEQ) – which is responsible for regulating air emissions in the state – evaluated Tillman’s claims, specifically a report from Wolf Eagle Environmental that supposedly found harmful levels of benzene concentrations in DISH. As mayor of DISH, Tillman had contracted Wolf Eagle to conduct that test.

TCEQ’s investigation, however, found that the “highest potential 1-hour maximum benzene concentration is below the health effects level,” although the agency did stress the need for additional research. The problem was that the Wolf Eagle team measured benzene over an incredibly short period of time, which led TCEQ to conclude that it “was not possible to determine if residents were exposed” to the concentrations that Tillman had claimed.

In other words, Tillman’s consultants took a snapshot measurement and suggested it was what residents were being exposed to over a long period of time. That’s just not how credible scientific air sampling and analysis works.

It’s worth noting, too, that Wolf Eagle Environmental used to go by the name Wolf Eagle Environmental Engineers and Consultants, but later shortened its name after it was revealed that the company did not actually employ a single licensed professional engineer on staff. Wolf Eagle Environmental is also the firm that, through its employee Alisa Rich, helped devise a “strategy” with Parker County, Texas activists to get the EPA involved in a now-infamous water contamination case in 2010 – a strategy that involved creating a deceptive video to make regulators think a landowner’s water was on fire, which they blamed on nearby shale development.

In addition to the TCEQ’s findings, the Texas Department of State Health Services (DSHS) later collected blood and urine samples from residents in and around the town of DISH to assess whether Tillman’s claims were accurate. DSHS concluded:

“Although a number of VOCs [volatile organic compounds] were detected in some of the blood samples, the pattern of VOC values was not consistent with a community-wide exposure to airborne contaminants, such as those that might be associated with natural gas drilling operations.”

DSHS added that the sources of exposure were likely tobacco (those who registered elevated levels of benzene were smokers), public drinking water systems, which include disinfectant byproducts, and even household products like cleaners and lubricants. Although there were limitations to DSHS’s review (VOCs are only present in blood for a short period of time), the agency nonetheless stated that its findings “did not indicate that community-wide exposures from gas wells or compressor stations were occurring in the sample population.”

In early 2013, Tillman’s organization – ShaleTest – claimed to have found high levels of benzene in DISH once again, and cited a TCEQ report that found elevated benzene levels in Fort Worth. TCEQ, however, explained that neither reading crossed the threshold for health impacts. Tillman was once again guilty of using short-term readings to suggest a long-term exposure problem, a decision that TCEQ said was “not scientifically appropriate.”

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Deborah Rogers (Fort Worth, Tex.)

Summary: Ms. Rogers resides in Fort Worth, Tex., and she previously managed investments for Prudential Bache, Merrill Lynch and Smith Barney. She currently owns a business of her own (Deborah’s Farmstead). This combined experience led to a three-year appointment to the Small Business and Agricultural Advisory Council of the Federal Reserve Bank’s Eleventh District in Dallas. This experience also got her into Gasland Part II, where she discusses the industry’s plan to export natural gas.

The Facts: Gasland Part II suggests exporting a portion of America’s abundant natural gas supplies is a conspiracy: get consumers “hooked” on natural gas with rhetoric about “energy independence,” then raise prices (by selling to markets where natural gas is more expensive) to boost profits – all at the expense of hardworking Americans. But like most conspiracies, this one requires a willful suspension of disbelief, and a substantial one at that.

First of all, despite the eerie and dark tone of the film in discussing “industry’s plan” to sell natural gas to our trading partners, proposed export facilities are actually in the public domain. They’re right on the Energy Department’s website, for anyone to see. The entire export debate has taken place in the public sphere, too – largely because U.S. law requires that government approval or denial be based on the public interest. Furthermore, the Department of Energy recently held a public comment period on the exports issue, which generated over 180,000 responses. If folks were trying to keep this behind closed doors, it’s quite possibly the most poorly executed conspiracy in history.

Second, and more importantly, the “rising prices” angle is just not credible. Fox references a report from the U.S. Energy Information Administration and says in the film that prices could rise “by more than 50 percent.” Of course, that was just one of many scenarios considered, and was the least likely of all of them. It assumes, for example, an export scenario that rapidly materializes (which isn’t going to happen) and a resource base dramatically less than what the United States knows it has. In fact, the Potential Gas Committee’s latest report on technically recoverable natural gas in the United States showed the highest estimate in the organization’s 48-year history. The numbers were, predictably, driven chiefly by shale gas. The EIA assessment that Fox quoted, meanwhile, was based on old data, which EIA has even updated to show even more supply and production coming online in the coming years.

That’s why analyses from Brookings and Deloitte, as well as a landmark report commissioned by the U.S. Department of Energy, all found that the benefits of exports would outweigh the costs, and that any price impacts would be modest. The DOE report concluded specifically that exports would deliver “net economic benefits” under all scenarios modeled. A recent study by the Bipartisan Policy Center also found a compelling case for exports, driven largely by projected price impacts that were minimal.

As it turns out, allowing companies in the United States to access markets overseas actually helps the U.S. economy. For most, that’s basic economics. In Gasland Part II, it’s the Illuminati and the Freemasons working together.

So, the conspiracy behind the conspiracy – the man behind the curtain behind the man behind the first curtain: companies in the United States want to sell products to other countries. For the sequel to Gasland, could there possibly be a more pathetically fitting conclusion?

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Methane ‘Leaks’ and Climate Change

Summary: Critics of natural gas development, armed primarily with research from activist professors at Cornell University, have suggested that natural gas developed from shale – due to alleged methane “leaks” – actually increases net greenhouse gas emissions. According to this theory, high leakage rates throughout the production, mid-stream distribution, and delivery systems negate the lower CO2 profile of natural gas. Cornell professor Robert Howarth is the “star witness” for this claim in Gasland Part II, going so far as to claim that shale gas is actually the “worst” form of energy in terms of greenhouse gas emissions, due to high methane leakage rates.

The Facts: The basis for virtually all claims about methane “leaks” through the development of natural gas from shale comes from a paper written in 2011 by Cornell professors Robert Howarth and Anthony Ingraffea (both of whom appear in Gasland Part II, the latter of whom is also presented as an “expert” in well casing). Within months of its release, the paper had been debunked by experts at the U.S. Department of Energy and within the academic community. This includes a paper from researchers at Carnegie Mellon University, which was commissioned by none other than the Sierra Club, an entity that opposes natural gas development. Subsequent reports by experts at MIT – including a lead author of the Fifth Assessment Report of the IPCC – and the Dept. of Energy’s National Renewable Energy Laboratory demonstrated that life cycle GHG emissions of natural gas developed from shale are not significantly different from those produced by so-called “conventional” natural gas development, contrary to the Howarth thesis.

Here are just a few of the statements from the expert community responding to the Howarth/Ingraffea research:

If all that weren’t devastating enough to the Howarth/Ingraffea paper, data released by the U.S. EPA in April 2013 (more specifically, the week before the premiere of Gasland Part II) confirm that methane emissions from natural gas systems actually declined as gas production rapidly expanded. Howarth and Ingraffea used methane emission data from EPA to arrive at their estimates, drawing from data that were published in 2011. But in its latest Greenhouse Gas Inventory, EPA actually revised downward its methane emissions estimates from natural gas systems. The revision was based on better data and the recognition that certain emissions-reducing technologies are far more widely used than previously thought.

As such, the basis for the “shale is worse than coal” talking point has not only been debunked by experts across the board, but it’s also premised entirely on inflated and outdated information.

The reality is that natural gas is providing net benefits in terms of greenhouse gas reductions. The United States did not sign the Kyoto Protocol, nor did it approve a government sanctioned cap-and-trade program. And yet it is the United States that is currently leading all developed nations in reducing CO2 emissions on an annual percentage basis.

The reason? There are actually several – but one of the biggest is that the U.S. power sector is using more natural gas, an increasing share of which is being developed from shale. According to IEA:

“US emissions have now fallen by 430 Mt (7.7%) since 2006, the largest reduction of all countries or regions. This development has arisen from lower oil use in the transport sector … and a substantial shift from coal to gas in the power sector.”

The U.S. Energy Information Administration agrees with IEA’s assessment. As EIA noted in April:

“U.S. carbon dioxide (CO2) emissions resulting from energy use during the first quarter of 2012 were the lowest in two decades for any January-March period. Normally, CO2 emissions during the year are highest in the first quarter because of strong demand for heat produced by fossil fuels. However, CO2 emissions during January-March 2012 were low due to a combination of three factors…[including] a decline in coal-fired electricity generation, due largely to historically low natural gas prices.”

EIA also observed that total CO2 emissions from energy consumption were at their lowest level since 1992.

For this reason, some of our country’s leading officials, regulators, and academics have contested the assertion that the utilization of natural gas in power generation doesn’t provide net environmental benefits. For example:

Contrary to what opponents have claimed, the facts clearly show that increased utilization of natural gas – regardless of how it is developed – is helping to reduce greenhouse gas emissions.

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Hydraulic Fracturing and Earthquakes

Summary: Josh Fox (and a host of other anti-energy activists) recently leaped into a new area of criticism of hydraulic fracturing, claiming that it causes earthquakes. Predictably, Gasland Part II brings up the seismicity issue, chiefly in the context of California and the numerous known faults in the state. Fox previously adopted this talking point after seismic events that occurred in Youngstown, Ohio, in early 2012. In one interview, Fox declared “there is a clear link between earthquakes and fracking,” adding that the use of the technology in the Baldwin Hills (Calif.) oil field could “trigger a 7.4 earthquake,” a claim repeated in Gasland Part II to suggest nothing short of the apocalypse for southern California. Seismic events tied to injection wells, which were receiving wastewater from oil and gas development, have even given the media a license to link earthquakes to fracking.

The Facts: According to Bill Ellsworth, a geophysicist with the U.S. Geological Survey who authored a landmark report on seismicity and oil and gas development in 2012, the “clear link” that Fox alleges does not exist. “We find no evidence,” Ellsworth said, “that fracking is related to the occurrence of earthquakes that people are feeling.” Ellsworth later stated: “We don’t see any connection between fracking and earthquakes of any concern to society.”

The National Research Council has confirmed the USGS findings: “The process of hydraulic fracturing a well as presently implemented for shale gas recovery does not pose a high risk for inducing felt seismic events.” NRC added that “only a very small fraction of injection and extraction activities among the hundreds of thousands of energy development sites in the United States have induced seismicity at levels noticeable to the public.”

The reason for this is simple: the amount of energy needed to complete the hydraulic fracturing process is miniscule compared to what’s recorded during actual seismic events that can be felt by people.  So small, in fact, that Stanford University geophysicist Mark Zoback (himself a member of the Dept. of Energy’s shale gas advisory team) told the U.S. Senate that the seismic energy released by the hydraulic fracturing process is “about the same amount of energy as a gallon of milk falling off a kitchen counter.”

Instead, what much of the press has failed to report accurately is that the stories of “fracking-related earthquakes” are actually seismic events resulting from wastewater disposal into injection wells. The U.S. EPA is in charge of regulating these wells (those used for oil and gas are designed as “Class II”), and often grants states “primacy” for enforcement – the well-established system in federal environmental laws since they were passed in the 1970s, which reflects the crucial role of states in regulating industry activity. EPA considers injection wells to be a “safe and inexpensive option” for disposing of wastewater, be it from oil and gas development or manufacturing or any other process.

Moreover, the link between injection wells and seismicity is actually well-understood and has been acknowledged by federal officials for decades, according to the U.S. Department of the Interior. For example, a series of small earthquakes around Denver, Colo., in the 1960s were traced back to wastewater disposal from a nearby chemical plant.

The risk of such seismic events, however, is incredible low, and in fact can be easily managed by making simple changes (i.e. reducing flow rates). As proof, there are more than 150,000 Class II wells in the United States. Only about 40,000 of them are used specifically for wastewater disposal (others are used for things like enhanced oil recovery), and only a handful of those 40,000 have been linked to seismic events of any significance.

Not surprisingly, the media has often failed to contextualize these facts, opting instead to use the search engine bait of “fracking” in the headlines. When he released a major study on induced seismicity in 2012, Ellsworth (of USGS) actually criticized the media’s role in misrepresenting his work and suggesting he linked fracking to earthquakes. “I was greatly surprised,” Ellsworth told E&E News, “to see how words were being used in the press in ways that were inappropriate.” Ellsworth added: “The public has legitimate concerns for which it needs good information.”

While academic and government experts alike note that seismicity is not a major concern associated with hydraulic fracturing, that’s not the case with every energy source.  In fact, some of the very sources Josh Fox wants to implement on a wider scale have a much larger risk of causing seismic events. In 2011, Fox noted, “we’re for renewable energy …You know, I was just in Iceland, and there, it’s almost all geothermal and hydroelectric power.”

What Fox either doesn’t know, or conveniently omits, is that hydraulic fracturing is used in conjunction with geothermal power. For precisely that reason, France is now dealing with the repercussions of promoting geothermal while maintaining a ban on hydraulic fracturing.

And, whereas credible scientists have stated that hydraulic fracturing a well for natural gas recovery does not pose a major risk of creating seismic events, the same cannot be said for geothermal power. Researchers at the Lawrence Berkeley National Laboratory noted that the nation’s largest geothermal facility – The Geysers just north of San Francisco – was responsible for creating 30,000 seismic events in a span of less than three years – more than 300 of which were above magnitude 2, and six of which were magnitude 4.

The National Research Council also observed that The Geysers “has the most historically continuous and well documented record of seismic activity associated with any energy technology development in the world.”

We look forward to Josh’s next movie: the perils of the same geothermal power that he wants to expand.

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Well Failures and Casing Leaks

Summary: Opponents of shale development often cite a statistic that 60 percent of all shale wells will fail, which will result in polluted underground aquifers and damage to the environment. The claim originates from Cornell professor (and anti-natural gas activist) Anthony Ingraffea, who claims to have “industry documents” as his source. Ingraffea’s appearance in Gasland Part II was thus a foregone conclusion, and Fox spent nearly as much time running through Ingraffea’s CV as he gave to Ingraffea to repeat that talking point.

Riding on Ingraffea’s coattails, Josh Fox also cited the statistic in an op-ed last summer, as did Yoko Ono in a recent letter to the New York Times. Fox even made the talking point a key part of his short film “The Sky Is Pink,” released last summer. The actual source is a decade-old article that examined what’s known as sustained casing pressure, or SCP.  There is indeed a graph on the second page detailing that, over a 30 year time span, 60 percent of wells will be affected by SCP. The graph appears in Gasland Part II, as well.

The Facts: The problem for Ingraffea – who fashions himself an objective scientist – is that the statistic he’s waving around has absolutely nothing to do with shale development. How do we know that? The caption under the graph from which Ingraffea pulled the statistic (and which the camera in Gasland Part II does not provide viewers enough time to read) actually states the following:

“Wells with SCP by age. Statistics from the United States Mineral Management Service (MMS) show the percentage of wells with SCP for wells in the outer continental shelf (OCS) area of the Gulf of Mexico, grouped by age of the wells. These data do not include wells in state waters or land locations.” (p. 63)

Read through that again. Notice that it is referring to activity in the deep waters of the Gulf of Mexico. Notice as well that it explicitly excludes any sort of data from onshore development. Shale wells in the United States are drilled onshore, not thousands of feet deep in the Gulf of Mexico – a fact that Ingraffea, Fox, Yoko, and all the other activists apparently hope the public never discovers.

This would be like preaching about the dangers of convertible automobiles based on statistics relating only to the performance of heavy-duty trucks. It reflects a fundamental ignorance of the very industry that these activists so desperately want to malign. It’s also hilarious that Ingraffea makes this claim in Gasland Part II immediately after Fox spends several minutes describing how the professor is the world’s most renowned expert on well casing and cementing. If that were the case, wouldn’t he be able to recognize something as basic as the difference between an onshore and offshore well?

As for sustained casing pressure (SCP), it’s actually a term that refers to the buildup of pressure between casing strings in a well. It does not necessarily refer to a leaking well, or even to a well that soon will be leaking. There are a variety of technologies and processes that can address SCP if it appears, too. Ironically, SCP reduction is the whole point of the document that Ingraffea believes is some sort of smoking gun. If you read the article in its entirety, it actually highlights what’s available to the industry to prevent, minimize and even fix SCP.

Once again, Fox and his disciples have demonstrated they do not understand the basic processes they’re trying to explain; and yet, they claim we should trust them anyway.

Let’s take a closer look at the onshore well “failure” issue, though, and this time with data that are actually relevant. An August 2011 report from the Ground Water Protection Council (GWPC) actually examined data that is relevant to shale development. GWPC reviewed more than 34,000 onshore wells drilled and completed in Ohio between 1983 and 2007. The data show only 12 incidents related to failures of (or graduate erosions to) casing or cement – a failure rate of 0.03 percent. Most of those incidents (more than 80 percent) occurred in the 1980s and 1990s, long before the current technology and updated state regulations that came online over the past decade.

The report also looked at more than 187,000 wells drilled and completed in Texas. The incident rate there: 0.01 percent.

So, far from shale wells suffering from a failure rate of 60 percent, data from hundreds of thousands of wells show that casing failures occur at a rate of no more than three one-hundredths of one percent. Of course, failure rates – however low they may be already – can always be made lower still. But can we at least agree that folks who rely on the “leaky shale wells” talking point should at least have a grasp of the basic facts – like, for instance, which data do and do not refer to shale wells?

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Lobbying and ‘Polluting Our Democracy’

Summary: The first Gasland wanted the public to believe that hydraulic fracturing was polluting drinking water. Gasland Part II suggests that the companies developing oil and natural gas from shale are also polluting our democracy through targeted lobbying and backdoor meetings with regulators. For that reason, supposedly “proven” cases of water pollution in Dimock, Pa., and Parker County, Tex., were swept under the rug by EPA, and President Obama vocally supported shale gas as merely a clever political move in an election year.

The Facts: Indeed, President Obama now touts the environmental and economic benefits of natural gas, something that Fox references as if to say “even he has turned against us!” The U.S. Environmental Protection Agency – which Fox had hoped would be the vehicle to shut down shale gas development – now openly says natural gas is a part of America’s “clean energy future.” A study commissioned by the Sierra Club found considerable environmental benefits from natural gas developed from shale, as compared to other energy options. Shale development has also expanded considerably since the release of Gasland.

Gasland Part II makes the audience believe that those facts are all essentially a conspiracy (notice a trend, here?), a series of back room deals and coordinated industry pressure that forced our regulators and elected leaders to abandon their responsibilities. Politics trumps science, Fox might say.

It’s a bold position to take, especially for a guy who claims membership in a group that stands accused of avoiding lobbying laws.

It’s also a fact that, even though some of the big organizations that oppose hydraulic fracturing do not include lobbying as explicit portions of their budgets, the line between explicit lobbying and what is, in effect, lobbying by another name is quite hazy.

Anti-fracking groups bring state lawmakers on “tours” of Pennsylvania to explain to them how supposedly dangerous shale development is. For a single statewide race, the League of Conservation Voters funneled $50,000 to its candidate of choice. We all know how those opposed to energy development use multiple conduits to fund their objectives, and also toss around lots of cash during campaign season. The head of the Sierra Club has even joined a broader “Democracy Initiative” in alliance with left-leaning groups to influence the public debate about a range of issues, many of which have nothing to do with the environment.

At its core, though, the “democracy denied” allegation in Gasland Part II is supported by little to no actual evidence. He interviews members of Congress who have vocally opposed oil and gas development (former Rep. Dennis Kucinich, Sen. Ben Cardin, Rep. Lois Capps, etc.), and correlates an election year to EPA’s “reversal” of decisions about water contamination in Texas and Pennsylvania. Since the evidence just isn’t there, though, Fox simply asserts it as truth. Because corporations, or something.

The real reason that shale development has expanded is not because of some nefarious plot on the part of industry leaders wearing black robes. Rather, it’s because people across the United States have recognized that there are massive environmental and economic benefits to be reaped: substantially lower air emissions, reduced reliance on imported energy, hundreds of thousands of new jobs, and a revitalization of American manufacturing. Both political parties are pushing for increased responsible natural gas production, and it’s because of the facts, not because they’ve been “captured” by Corporate America. Even Rep. Ed Markey (D-Mass.) – certainly no shill for the oil and gas industry – has pushed back against groups who oppose domestic natural gas development. “I think environmentalists should want natural gas on the table as an option,” Markey said.

The emblematic example of Fox’s determination to see a conspiracy was his discussion of Pennsylvania Governor Tom Corbett’s election in 2010. Gasland Part II explains that Corbett ran on a pro-shale platform, mentions that Corbett was elected, and then continues to suggest there’s a broader back room plan that’s subverting democracy. Left unanswered: If Corbett, a Republican, ran explicitly on a pro-shale platform as Fox alleged, then wouldn’t voters take that into account? It’s not as if Pennsylvania is a bastion of right-wing Republicanism, either; the state hasn’t gone for a GOP presidential candidate in more than two decades.

What Fox sees as democracy denied is actually an example of democracy confirmed – it’s just that Fox didn’t like the results.

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*UPDATE III* The Eagle Ford Soars
On January 10th, 1901, the Lucas No. 1 well made history when it began gushing oil in the town of Spindletop, Texas. It didn’t take long before the heretofore unassuming well was producing more than 100,000 barrels of oil per day, redefining production rates and catapulting Texas to the front stage of America’s new energy frontier.

 *UPDATE III*  (Mar.28, 2012; 5:21 p.m. ET): Not only is the Eagle Ford soaring – it’s flying out of sight. This week, ongoing research from The University of Texas at San Antonio Institute for Economic Development found that development of the Eagle Ford Shale in 2012 added more than $61 billion in total economic impact across 20 counties in Central and South Texas. It also was responsible for creating more than 116,000 jobs, including 46,000 direct jobs in the field. According to the study, Eagle Ford development also generated:

The full study on the Eagle Ford’s economic impact can be found HERE .

*UPDATE II*  (Mar.13, 2012; 5:03 p.m. ET): This week, Commissioner David Porter and several state officials announced the release of a major project: the Eagle Ford Shale Task Force Report.  Recognizing the importance of community involvement and stakeholder engagement, Commissioner Porter formed the 24-member Task Force in 2011, assembling a group of stakeholders from various interests and areas of expertise – from community leaders and energy producers to water representatives and environmental interests — to ensure the continued, successful, safe development of the Eagle Ford Shale. According to the report:

“In 2011, the Eagle Ford Shale supported almost 50,000 full-time jobs in 20 counties and contributed over $25 billion dollars to the South Texas economy. From  2011 to 2013, daily hydrocarbon liquid production, including natural gas liquids, increased from 100,000 to 700,000 barrels per day. These developments have made South Texas one of the most prominent energy producing regions in the United States.”

After over a year of work, the report provides solutions to issues like workforce development, infrastructure (roads, pipelines, housing), water quality, state regulations, air emissions, and social services, among many others.

*UPDATE*  (Dec. 11, 2012; 11:30 a.m. ET): A report from Wood Mackenzie found that companies will invest an estimated $28 billion in capital expenditures in the Eagle Ford over the course of 2013.  As the report highlights, investment in the Eagle Ford will be the top energy investment across the globe, surpassing even the Kashagan Project in Kazakhstan – one of the largest oil fields found in the past 30 years.

As Wood Mackenzie research analyst Callan McMahon noted, Eagle Ford activity is “now in full swing” and “shows no sign of slowing down.” This means real jobs and real opportunities for the United States economy, thanks to Shale. Just look to neighboring San Antonio where new growth, business and jobs are emerging every day. The Houston Chronicle and San Antonio Business Journal have the full story.

- Original post, May 23, 2012 -

On January 10th, 1901, the Lucas No. 1 well made history when it began gushing oil in the town of Spindletop, Texas. It didn’t take long before the heretofore unassuming well was producing more than 100,000 barrels of oil per day, redefining production rates and catapulting Texas to the front stage of America’s new energy frontier.

Over a century later, a lot has changed for the Lone Star State – new technologies, seismic testing, well log analysis, the Dallas Cowboys – but one thing has remained the same: From Spindletop to George Mitchell’s ingenious combination of hydraulic fracturing and horizontal drilling in the Barnett Shale, Texas has long stood as the hub of America’s energy industry.

So it’s no surprise, then, that the Eagle Ford Shale in South Texas has become one of the new, premier sites for oil and gas development, as a recent study by the University of Texas at San Antonio highlights.

The growth in the Eagle Ford has been nothing short of amazing: Oil production has increased more than six-fold since 2010, condensate production has tripled, and natural gas production has more than doubled. Those numbers are impressive enough in and of themselves, but the increasing availability of domestic, affordable energy isn’t the only benefit that the Eagle Ford is delivering.

Consider: The 14 county region encompassing the Eagle Ford Shale development area was boosted by nearly $20 billion in economic growth in 2011. According to the UTSA study, the specific benefits to the state and local economies are:

•           38,000 full-time jobs supported

•           $2.6 billion in salaries and benefits paid to workers

•           $10.8 billion in gross regional product (value added)

•           $211 million in local government revenues

•           $312 million in state revenues, including $120.4 million in severance taxes

In the 20 county region surrounding the play – inclusive of the producing counties plus six others experiencing substantial indirect activity — development provided approximately $25 billion in economic impact, including more than 47,000 full time jobs, $12.63 billion in gross regional product (value added), and over $600 million in local and state government revenues. The study also found that Eagle Ford development could support 116,972 full-time jobs, $42 billion in gross regional product, and more than $2.75 billion in state and local government revenues in 2021.

As this report again confirms, the development of America’s oil and natural gas resources has created real and tangible benefits across the nation, reinvigorating communities, and generating millions in state and local revenues.  And with one in every 10 new jobs created as a result of oil and natural gas development in 2011, the job-creating potential of continued production is truly extraordinary across the nation.

As for Texas’ future? More jobs, more economic growth, and more tax revenues to pay for vital public services. Without question, the Eagle Ford Shale is and will continue to be an economic engine for South Texas for years and years to come.

Putting to Rest the Silly Theories about Parker Co.
In recent weeks, several news outlets have attempted to rewrite the narrative about EPA’s December 2010 endangerment order against Range Resources in Parker County, Texas. The theories have run the gamut, from industry allegedly “pressuring” EPA to drop the order to the availability of “scientific analyses” that EPA supposedly discarded or ignored. What ties all of these theories together? They change literally nothing about the facts of the case, which show that Range’s operations were not responsible for water contamination in Parker County.

steve_everleySteve
Spokesman

 

In recent weeks, several news outlets have attempted to rewrite the narrative about EPA’s December 2010 endangerment order against Range Resources in Parker County, Texas. The theories have run the gamut, from industry allegedly “pressuring” EPA to drop the order to the availability of “scientific analyses” that EPA supposedly discarded or ignored.

What ties all of these theories together? They change literally nothing about the facts of the case, which show that Range’s operations were not responsible for water contamination in Parker County.

The stories are based solely on “new information” about the case, which is unfortunately being conflated with “relevant information.”  Nothing that has been uncovered changes the fact that there was a lack of scientific merit in EPA’s original order. Additionally, none of this “new information” provides a credible alternative to the scientific testing that exonerated Range’s activities. In some cases, the “new information” isn’t actually new at all, but rather a rehash of what regulators already examined and refuted based on the evidence.

Let’s explore these theories in depth, shall we?

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THEORY: Range Resources pressured the EPA into dropping the endangerment order in exchange for granting the agency access to its wells.

FACT: It’s difficult to get past the sheer ridiculousness of the claim itself, but several outlets have seen fit to advance this theory as if it is a credible explanation – including the venerable Associated Press – so let’s examine the facts.

As we’ve explained before, the crux of this argument is that the EPA wanted access to Range Resources’ well sites for its ongoing study on potential water impacts from hydraulic fracturing. (With thousands of companies able and willing to participate, why the EPA would be insistent on gaining access to Range’s is never explained by adherents to this theory.) Since the EPA was involved in a legal dispute with Range Resources over the endangerment order in Parker County, Tex., the theory contends that Range didn’t want to work with EPA while that dispute was ongoing, so they offered to cut a deal behind closed doors: EPA drops the order, and Range allows access to its wells.

First of all, notice how this theory assumes – by a priori means – that the original endangerment order was scientifically justified? Let’s look at why that’s absurd:

These facts – convenient omissions by the EPA, scientific tests exonerating Range – would conceivably undermine the case that EPA had against Range, and yet they get little to no attention in the reports suggesting Range pressured EPA to drop the case. Why let facts get in the way of a great story?

Second, for this theory to be plausible, the EPA would have had to seek access relatively quickly after the order was withdrawn. After all, if this were a quid pro quo, wouldn’t you expect each party to at least try to get what the other promised? Instead, all we have is a letter from Range Resources, sent after the endangerment order was dropped, saying it can work with the EPA again. Is it really so alarming that a company, after recognizing that a government agency — with which it is involved in a legal dispute — has changed its policies to focus on sound science, would embrace the idea of working with that agency in the future?

And nearly a year later, guess what? The EPA has not taken up Range on its offer of access to its wells.

Legal disputes, regardless of the industry, typically involve a variety of negotiations along the way. Both parties have an interest in justifying their actions, but they often see little value in a costly and prolonged affair. But the bottom line, regardless of the circumstances or details of those discussions, is that if the EPA were so motivated by a give-and-take backroom negotiation, it wouldn’t wait a year or even several months before trying to get its end of the “deal.”

And remember, the EPA tried to justify its order on the basis that “there were at least two families whose homes were in immediate danger of explosion and who had no safe household water from the aquifer.”

Would the EPA really toss aside something it viewed as protective of public safety just to gain access to a few well sites – which, of course, it never tried to access anyway? There are literally thousands of companies with whom the EPA could work on its study, but we are to believe the agency absolutely had to gain access to Range’s sites?

The agency did not do that, because the theory is as baseless as the endangerment order itself.

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THEORY: A previously unreleased study suggests Range Resources was responsible for methane in Parker County water wells.

FACT: This “scientific evidence” was actually little more than a draft report that did not even credibly examine the possibility that the gas could have come from other formations. It was also authored by someone unfamiliar with the scientific analyses delivered to the Texas Railroad Commission that exonerated Range.

The draft report, authored by Geoffrey Thyne, looked essentially only at the possibility that the gas could be originating from the Barnett Shale – one of many facts left out of the AP story that first highlighted it. As explained earlier, the composition of gas from the Barnett is similar to what’s in the Strawn, so if you’re looking only at gas in the Barnett and the methane found in the affected wells, you’ll notice a lot of similarities. This is why it’s crucial to look at multiple formations in the region, and closely examine distinguishing features like the presence of nitrogen. That’s what the scientists did in the reports that exonerated Range, but it’s not what Dr. Thyne (or the EPA) did.

Thyne’s report relied on hydrogen and carbon isotopic fingerprinting to suggest that Range’s activities in the Barnett Shale were impacting Lipsky’s water, because the isotopic readings in the water well were similar to what is encountered in the Barnett Shale. But as geochemist Mark McCaffrey (B.A., Harvard; Ph.D., MIT) of Weatherford Labs determined in his investigation:

“The geochemical parameter used by the EPA to determine a thermogenic origin of the Lipsky gas (e.g., the C isotopic composition of methane) does not differentiate gas in the Barnett Formation from gas in the Pennsylvanian reservoirs.” (emphasis added)

In other words, carbon isotopic fingerprinting (which Thyne used) will not correctly determine the source of the gas; instead, nitrogen content must be used to distinguish between Barnett gas and shallower (Pennsylvanian) formation gases.

As Dr. McCaffrey noted during the January 2011 Railroad Commission hearing:

“Specifically high nitrogen, low CO2 samples are characteristic of gasses produced from the shallower Pennsylvanian reservoirs. The natural gas component of the most recently collected Lipsky well headspace gas samples, which is the two that were shown in the previous table on the previous slide, contain higher nitrogen than is in Barnett gas.”

Interestingly, Thyne’s draft paper found that Barnett gas “has low nitrogen content of about 1%,” whereas the impacted water wells had nitrogen readings “between 4 and 31%.” Although Thyne was relying more on the carbon isotopic readings (which was a flawed model), even his tests showed that the nitrogen content in Lipsky’s water wells was at least four times higher than Barnett gas.

Given the centrality of nitrogen fingerprinting in determining the source, one could even suggest that Thyne’s findings validated the reports that exonerated Range – albeit unintentionally.

After examining all of the evidence in the case, in early 2011, the Texas Railroad Commission concluded:

“The EPA’s investigation compared gas produced from the tubing of the Butler well (Barnett Shale gas) to gas found in the Lipsky water well. The carbon isotopic finger print analysis of the gases were found to be very similar and both gases were determined to be thermogenic. Range demonstrated that use of the carbon isotope in the EPA analysis was inappropriate because the Barnett Shale is the source rock for all gas bearing zones above the Barnett Shale, including the much shallower Strawn formation. All gas produced from the same source rock would be expected to have a similar carbon isotope. The EPA did not attempt to identify any other potential source of the gas produced from the Lipsky well. Range further showed the appropriate geochemical parameters to use for fingerprinting in this case are nitrogen and carbon dioxide. Published literature confirms that Pennsylvanian age gases, including the Strawn, have higher nitrogen and lower carbon dioxide than Barnett Shale gas.

“…The fingerprinting analysis performed by Range demonstrates that gas found in all of the water wells had elevated nitrogen concentrations, indicating Pennsylvanian gas, not Barnett Shale gas. Additionally, gas produced from the Barnett Shale in the Butler and Teal wells contained no microbial gas, but the bradenhead samples from each well did contain microbial gas. These differentials confirm that the Barnett Shale is not in communication with any other zone, including the much shallower Strawn.” (emphasis added)

Finally, it’s worth noting that Thyne’s draft report – by the author’s own admission – was assembled without any knowledge of the scientific tests using nitrogen as the distinguishing characteristic (see Range Resources’ letter to EPA Region 6 administrator Ron Curry for more details). Given how science builds upon prior research, a lack of knowledge of what was essentially the most definitive scientific analysis of the affected wells to date is a significant and newsworthy fact.

It’s unfortunate that every recent report has failed even to consider this fundamental flaw, in addition to the other failings described above.

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THEORY: A former employee of the Texas Railroad Commission found that Range’s activities forced Strawn gas into Steven Lipsky’s water well.

FACT: Richter’s theory is absurd – based not only on the facts about Range’s activities, but also what Richter previously said about the case. (This latest “news,” by the way, is also just a retread of the same theory that was reported on more than a year ago.)

On November 9, 2011, Richter testified that he was aware of other water wells in close proximity to Steven Lipsky’s, all of which contained naturally occurring methane – one that had so much that it was actually flaring gas in 2005. Yet, he also admitted that he had seen no baseline data regarding the presence of methane in the Lipsky’s well prior to Range’s activities:

Q: Have you made any study about whether there was actually methane in the Lipsky water well as far back as 2005, in some amount?

RICHTER: I haven’t made such a study.

Q: You don’t have any water tests or head space gas tests from the Lipsky water well going back prior to 2010 that you’ve seen, correct?

RICHTER: I have not seen any such data.

Q: As you sit here today, you don’t know for a fact whether or not the Lipsky water well had any amount of methane in it prior to 2010, do you?

RICHTER: I do not know that as a fact because I have seen no data.

So, despite the prevalence of naturally occurring methane in virtually every other well in the region (a fact confirmed by Railroad Commission findings), Richter wants us to believe that the methane in Lipsky’s water is there because of Range’s activities – even though he has “no data” on what Lipsky’s water contained in the past. Was there methane in Lipsky’s water before Range drilled its wells, just like the dozens of other water wells in the area? Richter doesn’t know.

Richter further speculates that by drilling through the Strawn formation (before reaching the Barnett), Range Resources “possibly” created a pathway by which gas in formations between the Strawn and the Barnett, which could then travel up the annulus of the well and through thick drilling mud. After accomplishing that feat, according to Richter’s analysis, the gas would have had to exit the annulus and enter the Strawn formation, then create such significant new pressure in an underground rock layer that the gas already located in the Strawn formation was pushed toward the Lipsky’s property a half mile away. En route, somehow the gas also bypassed every other water well located between Range’s wells and Lipsky’s water well, and only impacted Lipsky’s well.

And what ultimately created this chain of highly unlikely events? According to Richter, Range Resources did not case and cement the well below the water aquifer, and thus Range did not comply with the state law (known as “Rule 13”) for setting surface casing.

The only problem with that? State regulators said Range was in compliance with Rule 13 for both of its wells – which Richter himself admitted in his deposition.

According to his testimony, Richter acknowledged that official state documents showed Range’s wells were in compliance (see p. 59-60). But he contends that Range was actually not in compliance because the wells were not cemented below the base of the formation containing groundwater (Cretaceous), which supplies water to Lipsky’s well. Richter alleges regulators were wrong to declare Range’s wells in compliance because the base of the water aquifer was actually deeper than official records stated.

Yet in his deposition, Richter admitted that, in Parker County, the distance between the surface and the base of the Cretaceous can vary, and he wasn’t even sure what the depth was. “I don’t know what the various elevations are,” Richter testified (p. 63).

In other words, Richter admits that regulators found the company in compliance with Rule 13, and the only basis for his disagreement is pure speculation about what the depth of the groundwater formation may or may not be.

But wait, there’s more.

According to E&E News, Richter says the Texas Railroad Commission determined Range was not at fault without even considering other arguments:

“Richter also noted the Railroad Commission made its decision based on information presented by Range, which went unchallenged at the hearing. That essentially made it a default judgment. Since it was an ‘unprotested’ case, Richter said, the agency assigns the decision less value than it would to a ‘protested’ case.”

From later in that same story: “But Range drilled through other gas-producing formations on its way to the mile-deep Barnett, and [Richter] said the commission didn’t account for that.”

First of all, remember: The EPA was invited to that hearing and refused to attend. Interestingly, the EPA even tried to prevent Range from gathering testimony on why the EPA issued its order, but a court thankfully denied the EPA’s request. If EPA had a credible scientific argument, it certainly could have presented it at the Railroad Commission hearing to which it was invited – and it wouldn’t have tried to squelch the company from investigating the events that led to the order. In any event, the lack of EPA’s presence at the Commission hearing is not the Commission’s fault; if anything, it speaks volumes about the case the EPA actually had against Range, and reflects unwillingness on the part of EPA to defend its own position.

Second, and more importantly, the claim that Range’s evidence went unchallenged by the Railroad Commission is simply untrue. In fact, one of the arguments considered at the hearing was the exact same theory Richter now espouses, and it was raised by the none other than a representative from the Texas Railroad Commission.

At the hearing in January 2011, Range’s witnesses were cross-examined by an attorney, David Cooney, who represented the Railroad Commission’s Oil and Gas Division. Cooney asked John McBeath, a petroleum engineer and well integrity expert, whether “the actual surface casing [for Range’s wells] was through the base of usable quality water as the conditions occurred in the field.” McBeath’s response?

“That is right. The Cretaceous is protected by the surface casing and the cement.” (Hearing transcript, Vol. II; p. 25)

McBeath also testified that the base of the Cretaceous was 324 feet deep at the location of the two Range wells in question. According to official records, surface casing for each well was set at approximately 400 feet, which Richter also confirmed in his deposition (p. 258).

This directly contradicts Richter’s theory that the wells (cased at around 400 feet by his own admission) were not cased deep enough to run past the base of the Cretaceous (depth: 324 feet). It also debunks his claim that the Railroad Commission failed to consider that possibility.

Indeed, according to the Railroad Commission’s determination after that hearing:

“Surface casing on both wells exceed the requirements of the TCEQ. Range’s experience in the area is that the Cretaceous generally extends to approximately 320 feet.”

The Commission added:

“The surface casing in each well is set below the base of the Cretaceous and is cemented to surface. The surface casings and production casings of both wells were tested when set during the drilling process. Further, Range performed a mechanical integrity test on the Butler well at the request of the RRC to demonstrate that the low bradenhead pressure on the well was not related to any type of casing problem. The cement behind the production casing is verified by a cement bond log in both wells.”

And yet despite all of this, we’re supposed to believe a guy when he says that Range’s wells weren’t cased and cemented deep enough to isolate themselves from the base of an aquifer, the depth of which he even admitted he did not know?

Finally, it’s worth noting that Richter’s theory is not that Barnett gas was reaching Lipsky’s water – as the EPA contended and Mr. Thyne’s draft report alleges – but rather gas from some other formation. This contradicts EPA’s John Blevins, who said the agency’s order was based on gas found in Lipsky’s water being “sufficiently similar to the gas that we found in the Butler [well] production stream.” The Butler well was producing natural gas from the Barnett Shale, which means EPA’s order was based on a supposed link between Barnett Shale gas and the gas found in Lipsky’s water.

And yet E&E News says Richter’s theories “make the most coherent case for EPA’s accusations,” a claim that by definition cannot be true.

EPA, Thyne, and Richter can’t all be right. In fact, the evidence shows that they’re all wrong. If Richter’s theories make “the most coherent case” for EPA’s actions, then the endangerment order was quite clearly baseless from the beginning.

—

In withdrawing the order against Range Resources, EPA never said that it was doing so based on a lack of scientific basis, even though anyone who has being paying attention knows that to be the case. Nor did the agency ever truly admit that the actions leading up to issuance of the order (including working closely with local activists) compromised the integrity of its actions.

But it’s also that refusal to admit the obvious that has created a vacuum, which has been filled with “alternate explanations” based on literally anything – regardless of its merits – that has since become public. As stories have come out, a consistent pattern of manufactured timelines also emerges, where intervening periods are selectively cast aside or punctuated in order to retroactively fit a particular narrative.

Range offered EPA access to its wells after the agency withdrew the order? Proof of industry pressure – even though nearly a year elapsed and the EPA never took them up on the offer.

A draft report that suggests a link between Range’s activities and methane contamination in water wells? Proof that Range was at fault – even though the report did little more than repeat EPA’s original argument, which was debunked by nitrogen fingerprinting at a hearing more than two years ago.

A former state employee who said his former agency didn’t consider an alternate theory? EPA’s case is validated – even though the agency did consider that theory back in 2011, and tossed it aside due to a preponderance of evidence proving otherwise.

What is interesting, however, is that in all of the recent reporting on this case — much of it derived from emails obtained in various FOIA requests to EPA — the most striking details were either buried or left unreported.

In an email sent more than a year after EPA issued its endangerment order against Range, then-administrator of EPA Region 6 Al Armendariz was still searching for data to validate EPA’s claims and even discussing the possibility that Range was not at fault. That’s notable in and of itself, but it’s even more significant when you consider what EPA scientist Dr. Doug Beak said about EPA’s data in November 2010, before the endangerment order was ever issued:

“[T]his is not conclusive evidence because of the limited data set…The only way now to compare the data would be to make assumptions to fill in data gaps and I don’t believe we have enough experience at this site or data to do this at this time.” (emphasis added)

So, prior to the issuance of the order, a geochemist within EPA had concluded there was a limited data set and not enough to make a connection to Range’s activities without filling in gaps based on “assumptions,” which he explicitly said the agency did not have the experience or data to do. More than a year later, the EPA was still looking for data to validate its case against Range Resources — which of course aligns with the concerns Dr. Beak raised in the weeks leading up to EPA’s order.

Shouldn’t EPA have had that data in hand before imposing a significant order of endangerment? If they didn’t have it, then on what was the order based? And why have a grand total of zero of the recent stories rehashing EPA’s endangerment order given this anything more than a passing mention?

Everyone is entitled to his or her own opinions about the events that transpired in Parker County in 2010. But if we’re interested in the truth, the facts should be what guide us – not the latest shiny object that can make for a great headline and increased site traffic.

It’s time to put an end to the silly theories and conspiracies. The facts speak for themselves.

*UPDATE XX* EPA Official: “Crucify” Operators to “Make Examples” of Them
According to a recently released video, EPA Region 6 administrator Al Armendariz told an audience during a city council meeting in DISH, TX, that his philosophy of enforcement was, to put it nicely, less than objective.

Steve
Spokesman

 

UPDATE XX (2/22/2013, 9:33 am ET): As part of his last desperate defense of the baseless endangerment order against Range Resources, then-EPA Region 6 administrator Al Armendariz circulated a list of alleged casing problems due to Range’s operations — in Pennsylvania. Why a regional administrator would seek to highlight potential issues of a company operating in a different geological formation (and in a different EPA region) is unclear, although Armendariz’s comments about wantonly “crucifying” operators suggests a personal animosity could have been a factor. How else could one explain his decision to tarnish the company’s reputation in a manner that had absolutely nothing to do with operations in Parker County, Texas?

The list was uncovered in the latest EnergyWire report (subs. req’d) on the Parker County case, although it was buried several paragraphs deep in the story.

UPDATE XIX (2/8/2013, 10:51am ET): New emails obtained by EnergyWire show that then-administrator of Region 6, Al Armendariz, was discussing with others inside the EPA the possibility of Range not being at fault for methane concentrations in the Parker County water wells. Here’s how Mike Soraghan summarized the correspondence in his story earlier this week:

On Dec. 27, 2011, Armendariz outlined a position to take to Washington officials. His “least preferable” option included settling without requiring Range to provide water. But EPA would reserve the right to go after Range again with penalties if testing showed the company had contaminated the aquifer. (emphasis added)

So, a little over a year after Armendariz gleefully emailed local activists to “Tivo channel 8″ to see his agency impose a baseless endangerment order against Range Resources, and 11 months after clear scientific evidence was presented to state regulators confirming Range was not at fault, the EPA finally began quietly and confidentially discussing the possibility that their order was without merit.

This also raises important questions: Shouldn’t the EPA have had clear testing results showing contamination from Range’s activities before issuing its endangerment order against the company? And what does that say about the EPA’s own case against Range if the agency itself didn’t have enough evidence even a year after the fact? Of course, given Armendariz’s stated willingness to “crucify” gas companies solely so he could more easily control them, perhaps this strategy was bizarrely consistent with his method of enforcement.

UPDATE XVIII (1/15/2013, 9:02am ET): EnergyWire has obtained data from the EPA — made available through a FOIA request, full story here — showing naturally occurring methane in the water wells that now-former EPA Region 6 administrator Al Armendariz had claimed beyond all doubt were contaminated by natural gas development. The data came from tests conducted by Range Resources as part of an agreement with the EPA, and the specific findings suggest water quality is consistent with historical conditions in Parker County. Put differently, data obtained directly from the EPA even show that Armendariz’s endangerment order against Range Resources was baseless, a fact already strongly suggested by nearly all scientific evidence that was available to the EPA when the order itself was issued in 2010.

Perhaps Armendariz, who now works for the anti-natural gas Sierra Club, should have paid more attention to credible evidence instead of working behind the scenes with local activists to “crucify” oil and gas companies.

UPDATE XVII (10/31/2012, 10:45am ET): At a recent event sponsored by the Society of Environmental Journalists, Al Armendariz doubled down on his baseless finding of water contamination in Parker County. In response, Range Resources has sent a letter to the former EPA official, reminding him that his recent comments are “contradicted by facts, science, independent expert analysis, the final adjudicated decision of the Railroad Commission of Texas, the EPA’s internal documents, and sworn testimony from EPA’s sole witness to testify about [his] order.” The letter further requests that Armendariz stop making “false and disparaging comments” about the company that he wrongfully maligned.

UPDATE XVI (6/7/2012, 3:11pm ET): This week, Al Armendariz was scheduled to testify on Capitol Hill, but canceled his appearance at the last minute. No one really knew why — until today:

It’s not clear why Al Armendariz, recently removed from a top post at the Environmental Protection Agency for saying that the government should “crucify” bad actors in the energy industry, abruptly canceled plans to testify before a House panel on Wednesday.

But it is clear that he was in Washington that day and met with someone — at the Sierra Club, the nation’s largest environmental organization.

On Wednesday afternoon, when a reporter visited the Sierra Club’s Washington headquarters just a few blocks from Capitol Hill, Armendariz’s name was written on the sign-in sheet as having been the last person to visit the office. The visit apparently came only a few hours after Armendariz had infuriated Republicans on the House Energy and Commerce Committee when he canceled his scheduled testimony on EPA enforcement issues without offering a reason.

So, just to recap: Prior to becoming Region 6 administrator for the EPA, Al Armendariz’s claim to fame was authoring a study about air emissions that, even at the time, air quality regulators for the state strongly disavowed, and since then have definitively debunked. As administrator, he maintained a close relationship with anti-shale activists, said his method of enforcing regulations was to “crucify” oil and gas companies, and even issued an endangerment order against Range Resources that was so lacking in scientific merit that the EPA itself had to withdraw the order. And now, instead of attending a hearing in front of a House committee at which he had agreed to appear, he chooses to meet with the Sierra Club, an activist organization that has made no apology for being for natural gas before it was against it.

Tough day for those who claim Mr. Armendariz has never been improperly swayed by professional opponents of oil and gas development.

UPDATE XV (5/4/2012, 8:21am ET): A must-read editorial from the Washington Post says the EPA is “earning a reputation for abuse,” citing the Sackett case and the events surrounding Al Armendariz. The final two sentences are particularly apt:

The agency’s officers must have a clear sense when to deploy its mighty power and when to exercise discretion. That’s true for the sake of the economy and to ensure that the EPA will be able to continue its necessary work for years to come.

Also be sure to check out Kim Strassel’s piece in the Wall Street Journal today, which has much more on the preceding events in Parker County than what most other outlets have included in their stories.

UPDATE XIV (4/30/2012, 3:42pm ET): Armendariz’s replacement will be Sam Coleman, who served as EPA’s point man in New Orleans during the response to Hurricane Katrina. EPA Administrator Lisa Jackson, meanwhile, issued the following statement: “I respect the difficult decision he made and his wish to avoid distracting from the important work of the agency. We are all grateful for Dr. Armendariz’s service to EPA and to our nation.”

UPDATE XIII (4/30/2012, 12:04pm ET): The Dallas Morning News reports that Al Armendariz has resigned, and has posted his letter of resignation (which is also below):

Dear Friends,
I have been honored to serve as your regional administrator for EPA’s region 6 office the last 2 and 1/2 years. I never once forgot that the reason I was appointed was to serve you, to act as your voice, and to work day and night to better protect the environment and your safety.

Today I am resigning my position as regional administrator. This was not something that was asked of me by Administrator Jackson or the White House. It is a decision I made myself. I had become too much of a distraction, and no one person is more important than the incredible work being done by the rest of the team at EPA.

I leave with an incredible sense of pride for the things the Agency accomplished and it was fantastic to be a part of the effort. Administrator Jackson has overseen a renaissance in the Agency and it is again the global leader in environmental protection. President Obama has been incredibly supportive of me and my work and the Agency. He’ll undoubtedly go down as the most environmental president we have ever had.

Thank you all for letting me into your homes and communities, and showing me the challenges you face every day from pollution and lack of infrastructure. Your stories are now part of my fabric and the fabric of the Agency.

Best always,
Al Armendariz

UPDATE XII (4/27/2012, 3:50pm ET): EPA Region 6 covers five states — Louisiana, Arkansas, Oklahoma, Texas, and New Mexico — and now more than half of the U.S. Representatives from those states are calling for Armendariz to “be relieved of his position” as administrator. In a letter signed by 29 of the 42 U.S. Representatives from Region 6, as well as by Iowa Rep. Steve King and Arizona Rep. Trent Franks, the members of Congress also state: “We are deeply disappointed in not only the statements of Mr. Armendariz, but also the abrasive, hostile posture that his office has struck during his tenure.”

UPDATE XI (4/27/2012, 12:12pm ET): EPA Administrator Lisa Jackson has now weighed in, calling Armendariz’s comments “inflammatory,” “disappointing,” and “not representative” of the Agency. She also declined to say whether any disciplinary actions would be taken, noting only that she and the EPA “will continue to review” the situation.

This once again begs an important question, though: Armendariz described his comments as “my philosophy of enforcement,” so if those comments are “not representative” of the EPA, then how does the Agency continue to reconcile two diametrically opposed views by allowing Armendariz to remain as Region 6 administrator?

UPDATE X (4/27/2012, 9:39am ET): The case of the missing video just got a little more interesting. Apparently the video was originally uploaded by a gentleman named David McFatridge, who posted the video to a YouTube page called “Citizen Media for We The People.” But McFatridge cited a copyright infringement, so the website yanked the video. It’s little wonder why McFatridge wanted the video pulled down, though: he’s apparently a member of the Sierra Club Activist Network. And when it comes to opposing oil and gas development, the Sierra Club is one of the largest and most active organizations, so it wouldn’t want to have its fingerprints on this at all. Too late? (h/t Lachlan Markay)

UPDATE IX (4/27/2012, 8:33am ET): Some pretty big developments overnight, starting with former Obama White House economic adviser Jared Bernstein calling Armendariz’s comments “absolutely reprehensible” on CNBC (his comments begin around the eight minute mark). Later in the segment Bernstein even brags, “I used to work for President Obama.”

Rep. Kevin Brady (R-TX) has also joined the growing chorus (subs. req’d) calling for Armendariz to resign.

And in another interesting twist, YouTube has taken down the video of Armendariz making his inflammatory comments, citing a copyright issue. More to come on that development, for sure.

UPDATE VIII (4/26/2012; 9:18pm ET): Four more U.S. Representatives are now calling for Armendariz’s resignation: GOP Congressmen Steve Scalise, Rodney Alexander, and Charles Boustany (all from Louisiana), as well as Rep. Pete Olson from Texas. That brings the running total to seven total members of the U.S. Congress calling publicly for Armendariz to step down or even be fired.

UPDATE VII (4/26/2012; 9:04pm ET): Add U.S. Rep. Ted Poe to the list of members of Congress calling for the resignation of Al Armendariz. The Texas Republican took to the House floor to condemn the Region VI administrator this evening by saying, in part: “He needs to be replaced with someone that cares more about the environment than personal crusades against industry.” Both the Wall Street Journal and Investor’s Business Daily have also called for Armendariz to step down.

UPDATE VI (4/26/2012; 4:42pm ET): “Unacceptable and embarrassing.” That’s the way the Texas Commission on Environmental Quality (TCEQ) is characterizing Mr. Armendariz’s remarks in a joint statement issued just now by TCEQ chairman Bryan Shaw, Ph.D, and commissioners Carlos Rubinstein and Toby Baker.

Their statement in full:  “The EPA’s ‘crucifixion’ philosophy and agenda is unacceptable and embarrassing. The EPA Region 6 director’s outlandish comments significantly cheapen the role of the state and federal regulators who strive to ensure that sound environmental rules and policies are promulgated and enforced. Furthermore, such a philosophy flies in the face of the sound science, the law, and common sense that TCEQ regularly utilizes in pursuing legitimate enforcement actions where violations do in fact exist.

“We believe the way to protect human health and the environment is through vigorous enforcement, utilizing the state’s administrative procedures that are afforded to the public and the regulated community.”

UPDATE V (4/26/2012; 4:14pm ET): Simon Rosenberg, former staffer to President Clinton and Michael Dukakis and now the president of the New Democratic Network, a leading progressive think tank in D.C., told FOX News this afternoon that Al Armendariz needs to go. According to Rosenberg: “First of all, I think this EPA official should be fired, immediately. He’s clearly not fit to be serving the country, talking the way that he is.” Clip is available here – Rosenberg’s comments come in at minute 3.

UPDATE IV (4/26/2012, 3:33pm ET): At least two members of Congress, Reps. John Fleming and Jeff Landry (both from Louisiana), are publicly calling for Armendariz to resign or be fired. This follows in the wake of comments last month from Texas Railroad Commissioner David Porter, who cited Armendariz’s use of “fear mongering, gross negligence and severe mishandling” of the Parker County case as a reason for him to be removed from his position as Region VI Administrator. We’ll be monitoring the news to see if any additional members of Congress or other officials make similar requests, so stay tuned.

UPDATE III (4/26/2012, 2:20pm ET): Ed Henry, previously with CNN but now the White House correspondent for FOX News, just asked Jay Carney, the President’s press secretary, if the administration had a response to Armendariz’s inflammatory remarks.

Henry, citing President Obama’s promise to foster and promote a “new tone” among members of his administration, posed the following question to Carney: “If somebody’s saying we should crucify the industry, why is that person still working at the EPA as a political appointee?” Carney responded: “He apologized, and what he said is clearly not representative of either this president’s belief in the way that we should approach these matters, or in the way that he has approached these matters, either from this office here in the White House or at the EPA.”

Carney’s response still begs the question, though: If what Armendariz described as “my philosophy of enforcement” is, in fact, “not representative” of what the president (who appointed him, and whom he represents) believes, then how does the White House reconcile the fact that Armendariz is still representing the administration as its EPA Region VI administrator?

UPDATE II (4/26/2012, 9:51am ET): U.S. Senator James Inhofe (R-Okla.), who is demanding an investigation into Armendariz’s comments, is not buying the Region VI Administrator’s apology. “His apology was meaningless,” Inhofe said. “You’re going to treat people like the Romans crucified the church? Get real.” The Senator also noted, as EID did below, that Armendariz has never apologized for grabbing headlines by (wrongly) accusing oil and gas companies like Range Resources of harming the environment, only to withdraw those complaints once the EPA realizes its accusations are, in fact, completely unfounded. Such actions certainly appear to reinforce the strategy Armendariz articulated in the video.

UPDATE (4/26/2012, 8:48am ET): Armendariz has issued a statement apologizing for the comments he made in the video. However, Cynthia Giles, EPA’s Assistant Administrator for Enforcement and Compliance Assurance, didn’t exactly deny the philosophy Armendariz articulated, noting in a statement: “Strong, fair and effective enforcement of the environmental laws passed by Congress is critical to protecting public health and ensuring that all companies, regardless of industry, are playing by the same rules” (full statement can be found here). Armendariz still has not apologized for his emails to activists urging them to “Tivo channel 8″ prior to his office issuing what turned out to be a scientifically baseless charge against Range Resources in 2010.

—Original post from April 25, 2012—

EID has followed closely the actions of EPA’s Region 6 office in Dallas, and specifically its decision to issue an endangerment order against Range Resources back in 2010 despite clear scientific evidence in contradiction of its charges (embarrassingly for the agency, EPA had to withdraw that order earlier this year). This includes pointing out how the Administrator for that office, Al Armendariz, gleefully emailed activists in the area (prior to the official announcement) that EPA was “about to make a lot of news” and that it was “time to Tivo channel 8.”

That news, of course, was that EPA “determined” Range Resources had contaminated drinking water in Parker County, Texas. Local anti-shale activist Sharon Wilson cheerfully responded, “Hats off to the new Sheriff and his deputies!”

But as it turns out, the story behind Mr. Armendariz’s actions is much deeper, and indeed much more troubling.

According to a recently released video, Armendariz – who also appeared in Josh Fox’s infamous film Gasland – told an audience during a city council meeting in DISH, TX, that his philosophy of enforcement as an official public servant was, to put it nicely, less than objective.

Here’s a breakdown of what Armendariz said in May 2010, a few months before Region VI issued its endangerment order against Range Resources:

“But as I said, oil and gas is an enforcement priority, it’s one of seven, so we are going to spend a fair amount of time looking at oil and gas production.”

Nothing too inflammatory there, really…other than the fact that an EPA administrator — tasked as a public servant to operate objectively in his capacity as a regulator — was essentially putting a bulls-eye on a particular industry. But the next part of what Armendariz said is where things got really interesting. And shocking:

“I was in a meeting once and I gave an analogy to my staff about my philosophy of enforcement, and I think it was probably a little crude and maybe not appropriate for the meeting but I’ll go ahead and tell you what I said. It was kind of like how the Romans used to conquer little villages in the Mediterranean. They’d go into a little Turkish town somewhere, they’d find the first five guys they saw and they would crucify them. And then you know that town was really easy to manage for the next few years.”

Armendariz went on to explain more about how this works with the oil and gas industry specifically, stating “you hit them as hard as you can and you make examples out of them” and that one should “go aggressively after them.” Of course, Armendariz knew that taking such an aggressive course would also sock it to the industry financially, adding: “Compliance can get very high, very, very quickly.”

Strangely enough, Armendariz had initially described this as his own philosophy, but after he finished explaining how to “make examples” out of hardworking oil and gas workers, he said “that’s our general philosophy.”

One U.S. Senator has already sent a letter to EPA Administrator Lisa Jackson asking (among other things) if Armendariz’s statements about sacking Turkish villages are, in fact, reflective of EPA’s “general philosophy” when it comes to regulation and enforcement.

So, not only was Armendariz working closely with ideological opponents of oil and gas development before issuing a scientifically-baseless endangerment order against a particular oil and gas company, he was also operating under a broader philosophy that sees the industry as villagers who can and indeed ought to be crucified, for the sole purpose of making an example out of them.

But the story, tragically, doesn’t end there.

One of Armendariz’s original claims to fame — or infamy, perhaps — was his paper in 2009, which found that “the oil and gas sector likely has greater emissions than motor vehicles” in the five counties comprising the Dallas-Fort Worth region (“emissions,” in this case, referred to nitrogen oxides [NOx] and volatile organic compounds [VOCs]). That paper, written while Armendariz was a professor at Southern Methodist University, was widely celebrated by activists, who — possibly as a “thank you” to the professor — actively pushed for Armendariz to be appointed Administrator of EPA’s Region VI office. Upon assuming office, groups like the Sierra Club celebrated, calling it “great news” because the industry was “having an ‘oh sh–’ moment” about the appointment. Other shale opponents, including area resident Sharon Wilson, appeared happily in pictures with Armendariz.

To this day, opposition groups still cite the talking point that oil and gas production generates more emissions than all the cars and trucks in the DFW region, a claim that ultimately gets traced back to Armendariz’s paper.

But as it turns out, Armendariz’s original claim to fame — that snazzy talking point about cars and trucks — is just as dubious as the headline-grabbing endangerment order his office issued against Range Resources.

According to the Texas Commission on Environmental Quality (TCEQ), Armendariz’s conclusion that oil and gas operations emit more smog-forming emissions than mobile sources is simply not true. In 2009, TCEQ wrote that Armendariz’s paper provided “an incomplete picture” of emissions in the area, adding that several critical flaws contributed to “misleading conclusions” in the paper. In addition, the Barnett Shale Energy Education Council (BSEEC) took a hard look at the Armendariz paper and dismantled its underlying premises, noting along the way that Armendariz’s conclusions were based on “an inaccurate and flawed interpretation of the facts.”

Furthermore, TCEQ recently responded to an inquiry about regional emissions levels (the full response was obtained by EID and can be found here), which included an updated assessment of sources of emissions in the DFW area. TCEQ pointed out that VOC emissions from oil and gas production are less than half those from mobile sources (63 tons per day [tpd] vs 129 tpd). For NOx, TCEQ states that mobile source emissions “are approximately 15 times higher” than those generated from oil and gas production.

Sure, TCEQ’s latest findings are much more current than what Armendariz published back in 2009. One would expect (and, frankly, hope) that technological developments over time would facilitate more accurate readings.

But it’s also difficult to lend much credence to the argument that Armendariz’s findings were simply due to a methodological or technological difference, especially in light of the fact that his two most significant actions in attempting to “crucify” and “make examples” of the oil and gas industry have been rendered completely and unequivocally bogus by actual scientific inquiry.

The question is, with Al Armendariz’s troubling and offensive “philosophy of enforcement” no longer a secret kept by activists, but rather a part of the public record, does the Region VI office — and indeed the entire EPA — have any credibility as long as he remains in his current position?

*UPDATE III* What the AP Forgot to Mention about Parker Co. Case
Associated Press reporter Ramit Plushnicik-Masti’s most recent assessment of the Parker County case appears to have been designed from the very beginning to ignore the validity of the EPA's endangerment order itself, and instead weaves a dubious narrative of industry manipulation of the regulatory process.

Steve
Spokesman

 

UPDATE III (1/23/2013, 10:57am ET): A U.S. House Representative from Texas is now calling out the AP for its flawed report on Parker County. Congressman Pete Olson (R) writes in the Houston Chronicle that last week’s story “falls well short of the AP’s claim to journalistic standards” and omitted important facts about the case it attempted to describe, including the vast scientific literature that exonerated Range Resources. Olson adds that the central allegation — that Range pressured EPA to drop the order in exchange for cooperation in the agency’s hydraulic fracturing study — is “ludicrous and not supported by facts.”

Olson concludes:

“The AP has a duty to give the public accurate and balanced information that includes all of the facts. The debate on the safety of hydraulic fracturing, a technological breakthrough that is revolutionizing our energy supply and providing energy security, is critically important. The public deserves the truth and an organization like the AP should live up to its reputation of honest reporting. Excluding relevant facts to claim that EPA dropped its case because the company threatened to withhold cooperation with a national study is dishonest. This article is a blatant disservice to the public on an important national issue.”

Be sure to read the full op-ed by clicking here.

UPDATE II (1/22/2013, 9:04am ET): Will Brackett, Managing Editor of the Powell Shale Digest (which is headquartered in north Texas), has an excellent editorial detailing the flaws in AP’s reporting on Parker County. Among many of his salient points is the observation: Why, with so many companies available to cooperate with EPA on its hydraulic fracturing study, would the agency withdraw its allegation of contamination merely to get one company on board? If the EPA had a concrete scientific case — or even a marginally acceptable one — how is it plausible that the agency would ever abandon that, especially as they still cling to a fundamentally flawed conclusion in Pavillion, Wyoming? From Brackett:

…Given the EPA’s track record, does anyone really believe industry and political pressure could sway the EPA to back down if the federal agency really did have solid scientific evidence against the natural gas industry and hydraulic fracturing? Get serious here.

The assertion that the EPA changed course against Range because the company refused to cooperate in the EPA’s hydraulic fracturing study is just as absurd and defies common sense. With hundreds of oil and gas companies available, why would the EPA be so desperate that it would drop its order just to cut a deal for its frac study?

UPDATE (1/16/2013, 3:39pm ET): The Fort Worth Star-Telegram has posted a version of the AP’s story, but with some additional details that the official Associated Press version neglected to include:

Thyne’s report appears at odds with evidence introduced by Range at a hearing into the matter before the Texas Railroad Commission in 2011. At that hearing, which the EPA did not participate in, the agency’s examiners found that the gas in Lipsky’s well and other water wells in the area was “most likely” from a much shallower formation called the Strawn.

Examiner Gene Montes said geochemical fingerprinting analysis of the gas in the contaminated wells indicated that it likely came from the Strawn, and didn’t match Barnett Shale gas. The three-member Railroad Commission in March 2011 ruled Range was not at fault.

How did the AP characterize that portion of the story? By merely stating: “state regulators declared in March 2011 that Range Resources was not responsible” for the presence of methane in the Lipsky’s well. No discussion of the fingerprinting analysis – a process that was given attention with respect to Thyne’s paper, though, as if it were some new and never-before-used technique in this case – and certainly no mention of the hearing where experts presented scientific evidence disproving the link between Range’s operations and methane found in the water.

Also of note: Range Resources is not part of the EPA’s hydraulic fracturing study. That begs a pretty important question: How could Range “pressure” the EPA to drop its endangerment order in exchange for participating in the study if Range is not, in fact, participating in the study?

Finally, for those interested, the now-infamous Thyne paper – which we are supposed to believe is a slam dunk, and that the enormous data sets showing otherwise do not exist – can be accessed here.

—Original post, January 16, 2013—

Back in 2010, then-administrator of EPA Region 6, Al Armendariz, appeared before an audience in north Texas and explained that his method of enforcing the law against oil and gas operators was similar to hostile Roman takeovers of outer territories. “It was kind of like how the Roman used to conquer little villages in the Mediterranean,” he explained. “They’d go into a little Turkish town somewhere, they’d find the first five guys they saw and they would crucify them. And then you know that town was really easy to manage for the next few years.”

Later that year, working behind the scenes with activists who had developed a “strategy” to make a water well appear to be on fire so they could get the EPA to blame natural gas development, Armendariz sent a friendly heads-up email to folks opposed to oil and gas development. “We’re about to make a lot of news,” Armendariz wrote to his friends and allies, some representing the most active anti-shale organizations in Texas. He added: “There’ll be an official press release in a few minutes … time to Tivo channel 8.”

That news was the issuance of an unprecedented “endangerment order” against Range Resources, which accused the company of contaminating drinking water. The order was a direct result of the aforementioned “strategy,” which consisted of a hired consultant suggesting people attach a garden hose to a gas vent and lighting it on fire, then filming the whole thing to make it appear that a household’s drinking water posed a threat of explosion. Doing so, they reasoned, would get the more aggressive EPA involved. “It is worth every penny,” the consultant wrote, “if we can get jurisdiction to EPA.”

After a lengthy court battle, a judge ruled that the resident himself created a “deceptive video” designed to attract attention. The judge wrote: “This demonstration was not done for scientific study but to provide local and national news media a deceptive video, calculated to alarm the public into believing the water was burning.”

Of course, you literally wouldn’t know any of this from reading Associated Press reporter Ramit Plushnicik-Masti’s most recent assessment of the Parker County case – a story that appears to have been designed from the very beginning to ignore the validity of the endangerment order itself, and instead weave a narrative of industry manipulation of the regulatory process.

For context, here’s Plushnick-Masti’s point of view:

At first, the Environmental Protection Agency believed the situation was so serious that it issued a rare emergency order in late 2010 that said at least two homeowners were in immediate danger from a well saturated with flammable methane. More than a year later, the agency rescinded its mandate and refused to explain why.

Now a confidential report obtained by The Associated Press and interviews with company representatives show that the EPA had scientific evidence against the driller, Range Resources, but changed course after the company threatened not to cooperate with a national study into a common form of drilling called hydraulic fracturing. Regulators set aside an analysis that concluded the drilling could have been to blame for the contamination.

So it’s pretty clear that this AP story hinges entirely on the validity of that supposed “scientific evidence” linking Range Resources’ operations to water contamination. Unfortunately for the AP, that “confidential report” was authored by Geoffrey Thyne, a known quantity in the world of poorly-written – and anti-industry – “scientific” papers.

Most notable was Thyne’s 2009 research in Colorado, which attempted to link natural gas development with degradation of water quality (anyone noticing a trend here?) in Garfield County. Thyne claimed that chloride and methane concentrations in groundwater were increasing as the number of gas wells increased, suggesting a causal link between the two. But in research presented to Colorado regulators, the Bill Barrett Corp. pointed out that those compounds were not actually increasing over time, based on actual data.

Thyne’s other observation was that the only source for the methane and most of the chloride was the formation into which the gas wells were drilled – the Williams Fork. But Bill Barrett analysis patiently explained that the Wasatch Formation contained elevated chloride levels prior to the start of drilling, as well as thermogenic methane. In response to Thyne’s report, Colorado regulators even noted that one “cannot ignore alternate mechanisms that explain the observations.”

Finally, Bill Barrett Corp. explained that the methane detected in groundwater didn’t match the fingerprint of methane from the producing formation – the final nail in the coffin to Thyne’s thesis.

Of course, this is also the same Geoffrey Thyne who claimed that the Colorado School of Mines threatened to fire him based solely on his opinions of hydraulic fracturing research and regulation. CSM pointed out that “no one in the Mines administration recalls having anything but cordial conversations” with Thyne, but CSM officials did contact Thyne to remind him that he needs to be clear that his opinions are his and not necessarily those of the school for which he works (his comments on the subject to NPR, for example, were not bracketed with any such disclaimer). Thyne has also done work for the Oil and Gas Accountability Project (OGAP), a program of the anti-development group Earthworks that receives funding from the Park Foundation. Remember them?

Once again, none of this would have been known from reading the AP’s latest story, even though the validity of Thyne’s research is the basis for the entire piece.

After ignoring the fundamental flaws with the endangerment order itself, and Dr. Thyne’s questionable history of dubious research and association with anti-drilling groups, the AP makes the stunning claim that Range refused to participate in EPA’s ongoing hydraulic fracturing study based upon the Agency’s continued prosecution of the endangerment order. That, according to Plushnick-Masti, served essentially as a bullying tactic, and the EPA thus decided to ignore the “scientific evidence” provided by Dr. Thyne and rescind the order.

What the AP refuses to acknowledge, though, is the mountain of scientific and peer-reviewed evidence showing that Range’s activities were not responsible for the methane found in the water wells, and thus Plushnick-Masti ignores even the possibility that EPA rescinded its order based on credible scientific findings.

That includes data submitted directly to the EPA – which E&E News’ Mike Soraghan recently obtained in a FOIA request – showing water quality in the affected wells was consistent with historical trends. That data also showed methane at a concentration half that of what would be considered an “action level.” Even Duke University’s Rob Jackson – whom the AP cited as an “expert reviewer” for the Parker Co. story – said the readings “are not dangerous levels.”

And what about all of the data presented at that January 2011 meeting with the Texas Railroad Commission (the entity in Texas that regulates oil and gas development) – the same meeting that the EPA, having been invited to present its evidence, flat out refused even to attend?

Those of us who have followed this case for more than a couple of days will remember that it was this meeting where experts showed conclusively that nitrogen fingerprinting of methane – a detail the EPA completely ignored in its analysis, by the way – proved that the gas was coming from the Strawn Formation, not the Barnett Shale, and thus not due to Range’s activities. Research from Collier Consulting from way back in December 2003 even identified a significant presence of Strawn-based methane in the region’s water wells – long before Range arrived on the scene.

But again, if you willfully ignored the details and validity of the actual endangerment order – which the AP piece quite clearly did – then that sort of evidence isn’t really important. For those interested in understanding why the case against Range was scientifically bankrupt from the very beginning, however – an audience that likely includes many if not most of AP’s actual readers – information showing a lack of cause for the EPA’s order in the first place would be considered quite relevant.

On a concluding note, and perhaps indicative of the intent of the story itself, this particular line from AP’s Plushnick-Masti stood out:

The method [hydraulic fracturing] has contributed to a surge in natural gas drilling nationwide, but environmental activists and some scientists believe it can contaminate groundwater. The industry insists the practice is safe.

Just the industry insists it is safe? We know that’s not the case, as federal officials, independent experts and state regulators have affirmed time and again. But what’s more notable is that the standard Associated Press description includes mention of regulators’ opinions, probably because the AP typically has an interest in accuracy.

Take, for instance, this AP story from January 11th, which states: “Regulators contend that water and air pollution problems are rare…”

Or this AP story from January 6th: “The industry and many federal and state officials say fracking is safe when done properly…”

Or this AP story from November 27, 2012: “Regulators nonetheless contend that overall, water and air pollution problems related to fracking are rare…”

Or this AP story from November 8, 2012: “Regulators contend that overall, water and air pollution problems related to gas drilling using hydraulic fracturing are rare…”

Or this AP story from October 14, 2012: “The industry and many federal and state officials say the practice is safe when done properly…”

Spurning the publication’s own established and well-vetted characterization, Plushnick-Masti chose to suggest only “the industry insists” hydraulic fracturing is safe. That’s hardly an accurate characterization, but given the rest of the story, I guess that’s just par for the course.

Shale and HF: A 50 State Jobs Plan
When we talk about shale development, states like Maine and Connecticut aren’t normally a part of the conversation. But this week, a new report shows that the benefits of shale development extend all across the nation – even in states without any actual shale resources to speak of.

Dana
Staff Geologist

 

When we talk about shale development, states like Maine and Connecticut aren’t normally a part of the conversation. But this week, a new report shows that the benefits of shale development extend all across the nation – even in states without any actual shale resources to speak of.

The second stage of a study co-sponsored by the U.S. Chamber’s Institute for 21st Century Energy takes an in-depth look at the state-by-state economic contributions of shale development. Here are some of the key findings:

Certainly some welcomed news for the American economy, and even better news for state coffers. Producing states have seen a surge in employment with tens or even hundreds of thousands of new jobs coming online. In Texas, shale development has created over 575,000 jobs to date, which is expected to grow to nearly 930,000 in 2020. Close behind is Pennsylvania with 102,600 jobs, California with 96,500, Louisiana with 78,900 and Colorado with 77,600.  And by 2020 those numbers all nearly double. No wonder USA TODAY found that “of all the places that America’s new jobs are, the emerging energy business, directly or indirectly, might be responsible for more of them than almost anything else.”

And as for revenues, production is generating billions of dollars for state’s, allowing for new (and much needed) investment in schools, hospitals, roadways and more. In California, 2012 production generated  nearly $3 billion in taxes for state and federal coffers, which is roughly the equivalent of 10 percent of the state’s deficit. Colorado also saw $3 billion brought into the state, Louisiana $2.5 billion, and North Dakota a whopping $6.8 billion – with expected growth to $13 billion in 2020.

Even non-producing states are seeing major benefits as a result of shale development. As the report highlights, “less well-known are the economic benefits that accrue to non-producing states that lack oil and gas resources but nonetheless host firms that sell goods and services that are critical to the lengthy supply chain supporting unconventional oil and gas development.”  Some of the biggest winners are New York with 44,400 jobs, Illinois with 38,600, Michigan with 37,800, Missouri  37,700, and Florida 36,500. Even Connecticut is seeing growth with 8,300 jobs in the state already supported by production, and an estimated 14,100 by 2035. And with many of those states having shale deposits of their own, it’s only a matter of time before even more job opportunities find their way to areas in desperate need of them.

From new public revenues to jobs for American workers, shale development is truly reinvigorating the American economy – even where we don’t expect it.  Make sure to check out the Chamber’s rollover map to see how shale may be bringing these benefits to your state today.

Read more:

ISSUE ALERT: Shale Putting America Back In Motion (10/24)

ISSUE ALERT: Development of Shale has Saved Consumers $250 Billion Since ’09 (5/29)

EID-ILLINOIS: Hydraulic Fracturing Could Create 47,000 New Illinois Jobs (12/13)

 

Clearing the Air on HF Laws in Texas
Recently, a media outlet with a track record of aggressively protecting its own proprietary information published an article that called into question how some contractors have chosen to use the Texas hydraulic fracturing fluid disclosure provision since the law became effective in February of this year. The article contained numerous quotes from well-known anti-energy development activists and politicians with long track records opposing responsible development of our nation’s bountiful oil and natural gas reserves.

Elizabeth Ames Jones
Immediate Past Chairman, Texas Railroad Commission

 

**This op-ed originally appeared on Forbes.com**

Texas became the first state in the union to require well-by-well disclosure of all ingredients of fracturing fluids being used anywhere in the state when Governor Rick Perry signed into law House Bill 3328, the Texas Hydraulic Fracturing Fluid Disclosure bill, in June, 2011.  As Chairman of the Texas Railroad Commission, the nation’s premier energy oversight agency, I made sure that the prompt enactment of rulemaking to implement the statute supported our very important dual mission of ensuring responsible production of Texas’s bountiful energy resources, protecting the environment, and ensuring the safety of Texans.

Like every other law governing fluid disclosure, the Texas law contains a provision that allows contractors to protect chemical ingredients or compounds that qualify as proprietary information. It does so using a process governed by the State Attorney General’s office that has been a feature of Texas law for decades, and it contains a process for concerned parties to file challenges if they believe the process is being abused.

This provision of Texas law that assigns oversight of proprietary information to the Attorney General  has proven to be fair and effective over time. That is why the sponsors of HB 3328 decided to use it as the procedure for the hydraulic fracturing disclosure law.

Recently, a media outlet with a track record of aggressively protecting its own proprietary information published an article that called into question how some contractors have chosen to use this provision since the law became effective in February of this year. The article contained numerous quotes from well-known anti-energy development activists and politicians with long track records opposing responsible development of our nation’s bountiful oil and natural gas reserves.

Substantively, though, perhaps the story’s biggest failure is that it fails to report on the fact that a process for appealing company decisions on disclosure actually exists assuming a spill occurs, and the need for disclosure becomes immediate. Unfortunately, the article is chock full of hyperbole and frightful accusations, but precious little evidence that any wrongdoing has actually taken place, or that protecting proprietary information is dangerous for the public.

Texans, including those working in the oil and gas industry, want this law to be effective, and everyone wants service providers to comply with not just the letter of the law, but its spirit as well. An overwhelming majority of oil and natural gas producers supported this law and the subsequent rulemaking at the Railroad Commission. These companies want to make sure that their fellow Texans can be confident that energy produced in Texas – and all the states for that matter – is produced responsibly. They and their families live here, too.

Opponents of the oil and gas industry can’t have this argument both ways.  After all, they support passage of a federal FRAC Act but what you seldom hear from supporters of that federal act is that it, too, contains a provision to allow providers of fracturing services to protect trade secrets. Protection of trade secrets is as American as apple pie. Here’s why.

Service providers spend millions of dollars each year on research and development designed to optimize the effectiveness of the fluids they use. Much of that R&D investment is geared toward finding ways to reduce or even eliminate the need for the use of chemicals, and companies like those negatively mentioned in the article in question have made enormous strides in that direction over the last few years. As we all know, no company – regardless of industry – will invest millions of dollars in research into any cutting edge technology if a competing company can uncover the blueprints and license it as their own.

So the supporters of the federal FRAC Act understand what the sponsors of HB 3328, Governor Perry, I and my two fellow Railroad Commissioners, who are directly elected by the people of Texas, understood at the time: If we don’t allow these service providers to protect legitimate trade secrets, the value of their R&D efforts will be dramatically diminished, and that’s not good for anyone who supports technological progress.

If service providers in Texas are abusing the disclosure law’s trade secret provision, then there is a longstanding, very workable process in place for challenging them on it. I would suggest that, rather than running to the media to complain, opponents of the oil and gas industry should encourage qualified parties to take advantage of that provision and participate in the process in good faith.

That would be a change in behavior we would all welcome, and certainly one that would truly be in the spirit of public transparency.

Elizabeth Ames Jones served on the Texas Railroad Commission from 2005-2012.

*UPDATE* Computer Models, Actual Data, and Smog
A new study by Eduardo B. Olaguer of the Houston Advanced Research Center (HARC) purports to show that emissions from oil and gas operations will prevent nearby metropolitan areas -- particularly Dallas-Fort Worth -- from meeting federal ozone standards. Fortunately for people in the Metroplex, empirical data shows that such a conclusion is simply unsupported by the facts.

Steve Everley
Spokesman

 

UPDATE (11/5/2012, 12:02pm ET): A piece in the Austin American-Statesman also examines the flaws in Olaguer’s report, likening it to a person’s doctor suggesting he or she is suffering from health problems despite medical tests showing the opposite — all based on a computer simulation using actuarial data and medical histories. The author then asks, “Wouldn’t you want a second opinion from someone who knows the difference between a computer model and the real world?” The piece adds an important conclusion to the whole debate about supposed smog-impacts from any process: “Citizens legitimately concerned about healthy air should ask for the real-world facts — facts more accurately revealed by monitored measurement of ambient conditions.”

—Original post, September 5, 2012—

A new study by Eduardo B. Olaguer of the Houston Advanced Research Center (HARC) purports to show that emissions from oil and gas operations will prevent nearby metropolitan areas — particularly Dallas-Fort Worth — from meeting federal ozone standards. Fortunately for people in the Metroplex, empirical data shows that such a conclusion is simply unsupported by the facts.

It’s worth noting, however, that the “ozone/smog issue” is a central plank in the anti-shale crowd’s agenda (part of its gradual shift of emphasis toward air quality). It began in earnest when Al “crucify them” Armendariz released a report in 2009 alleging that emissions of ozone precursors from oil and gas operations in the Barnett Shale were more than twice those emanating from mobile sources (i.e. cars and trucks). Given Dallas-Fort Worth’s well-known air quality problems, the study was cited far and wide.

The problem with Armendariz’s study — and other recent research suggesting harmful emissions from shale development — is that it relied on a modeling exercise that extrapolated an outlier of data into a broader trend. Proof of that has come from the Texas Commission on Environmental Quality (TCEQ), which has used state-of-the-art air quality monitors in the region to conclude not only that emissions from mobile sources are a larger contributor to smog, but that oil and gas operations have a minimal-at-worst impact (more on that below).

Against that backdrop, it’s unsurprising that the HARC study — distributed to the press by none other than Downwinders at Risk, one of the most vocal anti-drilling organizations in the area — relied on modeling in lieu of observable data to reach its conclusions, which were wholly predictable based upon the report’s stated objectives.

Below is just a sampling of the errors and oversights found in the HARC study.

–

Olaguer: “We used a neighborhood scale (200 m horizontal resolution) three-dimensional (3D) air dispersion model with an appropriate chemical mechanism to simulate ozone formation in the vicinity of a hypothetical natural gas processing facility, based on accepted estimates of both regular and nonroutine emissions.” (HARC study, p. 966; emphasis added)

FACT: To summarize, the author himself has described this report as a modeling exercise that simulates ozone formation from a hypothetical facility. It’s not data collected from actual air monitors, nor is it an analysis of existing infrastructure — exactly the kind of work that state regulators, most notably TCEQ, have been doing for years. In fact, available data from TCEQ directly rebuts claims about high emissions levels from oil and gas activity in the Barnett Shale. Here’s what TCEQ Chairman Bryan Shaw said about DFW area emissions:

“After several months of operation, state-of-the-art, 24-hour air monitors in the Barnett Shale area are showing no levels of concern for any chemicals. This reinforces our conclusion that there are no immediate health concerns from air quality in the area, and that when they are properly managed and maintained, oil and gas operations do not cause harmful excess air emissions.” (emphasis added)

This kind of definitive conclusion is probably why opponents have to rely on hypotheticals and modeling exercises; reality simply doesn’t support their thesis.

Olaguer: “Using these methods, Armendariz (2009) estimated peak summer emissions of ozone precursors in 2009 from all oil and gas sources in the Barnett Shale to be 307 tons per day (tpd). By comparison, he estimated on-road mobile emissions from the five counties in the DFW ozone nonattainment area with significant oil and gas production in 2009 to be 121 tpd.” (HARC study, p. 967)

FACT: If the name Armendariz sounds familiar, it should. But it’s also worth noting that it was Armendariz’s study that gave anti-drilling activists a self-proclaimed license to claim Barnett Shale development is worse for DFW area ozone than all the cars and trucks on the road. The only problem, of course, is that air sampling data debunked his modeled scenario.

TCEQ data shows quite clearly that emissions of volatile organic compounds (VOCs) from oil and gas operations are considerably less than those from mobile sources. In fact, VOCs — which Armendariz and others continue to emphasize — aren’t even the proper focus in assessing ozone formation. Instead, emissions of nitrogen oxides (NOx) are a much more significant source, and TCEQ has found that NOx emissions from mobile sources are “approximately 15 times higher” than those from oil and gas development.

As the Barnett Shale Energy Education Council (BSEEC) has pointed out: “Even if all man-made VOCs were eliminated in this region, there are more than enough naturally occurring VOCs from trees, plants and other organic sources to combine with NOx to cause smog.”

To be fair, Olaguer listed Armendariz’s paper in the context of other available research on this subject. But he also neglected to mention what TCEQ — through actual air monitors — has determined with respect to smog precursors in the region, and how that real-world data rebuts Armendariz’s computer model. Whether deliberate or accidental, that’s an omission that unfortunately speaks volumes.

Olaguer: “Figure 1 shows 1-hr ambient monitoring data collected at a pipeline compressor station in Lake Arlington, Fort Worth, during the BSEEC study. Note the very large short-term concentrations of formaldehyde (HCHO) approaching or exceeding 100 ppb around the site. Such large concentrations may be cause for concern, not only because of short-term health impacts such as nosebleeds, vomiting, and skin irritation, but also because of formaldehyde’s capacity to release radicals and thus contribute to rapid ozone formation (Olaguer et al., 2009).” (HARC study, p. 967; emphasis added)

FACT: Large concentrations of formaldehyde could indeed be cause for concern, so let’s see what the above-mentioned study (conducted by TITAN Engineering) actually said about those HCHO concentrations:

“Formaldehyde concentrations exceeded the short-term AMCV in several samples at the Lake Arlington compressor station. TITAN determined that formaldehyde at this site originated from off-site sources.” (emphasis added)

This is important for a couple of reasons. First, Olaguer is clearly misrepresenting the findings in that study by suggesting the concentrations are from the compressor station analyzed, even though the authors of the study came to a completely different conclusion. Second, Olaguer concludes his paper by saying the oil and gas industry needs more regulation, including the “control of formaldehyde emissions” (HARC study, p. 976). In other words, based partially upon a clear misreading of a separate study, Olaguer is trying to make the case for costly new regulations — hardly the kind of sound scientific basis that should guide policymakers (take note, Dallas City Hall).

Olaguer: The author states the study set out to answer a series of questions, including: “How far from the source are significant ozone impacts likely to be seen?” (HARC study, p. 968; emphasis added)

FACT: It’s probably not a great idea to use leading questions to guide your research — unless, perhaps, you’ve already determined what the answers are before you conduct the study. For example, Olaguer asks “how far” away from the source will “significant” impacts be seen, instead of asking the obvious question: “Are there significant ozone impacts from oil and gas activities?” Clearly, Olaguer had already decided what the answer to that question would be, and his decision clearly did not mesh with what the available data actually show. So, instead of even trying to explain that away, he simply leaped from hypothesis to supposition.

Olaguer: “To answer these questions, we conducted a schematic modeling exercise that was not intended to implicate any actual operational facility, but only to provide reasonable quantitative bounds.” (HARC study, p. 968; emphasis added)

FACT: The language above says it all — this isn’t an assessment of what’s actually in the field, and it’s certainly not an aggregation of real-world data. And yet, Downwinders at Risk director Jim Schermbeck said the report is “proof” that industry facilities are improperly managed, and that “our air is not getting cleaner because gas pollution is still under-regulated.” Again, it’s a hypothetical situation shaped by carefully constructed inputs in a computer model…which is fitting, because that’s perhaps the only realm where opponents can possibly validate their claims.

Olaguer: “Given the possible impact of large single facilities, it is all the more conceivable that aggregations of oil and gas sites may act in concert so that they contribute several parts per billion to 8-hr ozone during actual exceedances.” (HARC study, p. 976; emphasis added)

FACT: In addition to the lack of definitive conclusions about actual air quality — to be expected from a modeling exercise — data from the past few years actually contradicts Olaguer’s “maybe, possibly” conclusion. For example, here’s a graph showing 8-hour ozone levels in the Dallas-Fort Worth area between 1999 and 2009, along with the substantial increase in natural gas production.

Gas production increased between the years 1999 and 2009. The eight-hour ozone value declined. Data is in the table below.

If natural gas production were a significant contributor to area ozone — which the HARC paper tried to establish essentially by decree — then ozone concentrations would increase along with an expansion in natural gas production. But that’s simply not what the data show — inconvenient as that may be for those claiming otherwise.

Olaguer: “Our findings suggest that improved regulation of the upstream oil and gas industry in nonattainment areas should include reporting of emission events, and more aggressive deployment of control strategies, such as vapor recovery to avoid flaring, and the use of oxidation catalysts on stationary engines.” (HARC study, p. 976; emphasis added)

FACT: It’s well known that natural gas in much of the Barnett Shale — especially in Dallas County — is what’s known as “dry gas” since it contains little if any associated liquids. Mandating the use of vapor recovery technology on gas that isn’t producing vapor reflects a poor understanding of the subject matter itself. Even if liquids were present, strict regulations are in place for the Barnett Shale (details can be found here) that mandate the use of vapor-recovery systems.

As Ed Ireland from BSEEC has noted:

“[M]ost of the natural gas produced in and around the 9‐county DFW NAA [non-attainment area] is very “dry” gas. The reason, geophysicists say, is that this part of the Barnett Shale is “thermally mature”, meaning that these natural gas wells produce no associated oil or other liquids. This means that the vast majority of Barnett Shale wells in the 9‐county DFW NAA do not require tanks for condensate storage. Little or no VOC is emitted from these gas wells.”

Olaguer said that his findings constitute “a severe challenge to oil and gas producers in the DFW area,” and Downwinders at Risk said the Dallas city council specifically “has a chance to react positively to this new evidence.” But what does it say that at least one of the recommendations behind those claims is something that literally makes no sense for Dallas County?

–

Some might argue that TCEQ is only one source of information, so there’s plenty of room for additional research. That’s certainly a valid point. But in the absence of other meaningful assessments that rely on empirical data instead of computers models, TCEQ’s findings have to be seen as the benchmark.

It’s also worth stressing that this isn’t meant to demonize the use of computer models in research. Indeed, when gaps in available data exist for a given subject, modeling exercises can play an important role in estimating impacts (or the lack thereof). But in this case, that data actually do exist, and it’s unfortunate that people choose to believe hypothetical emissions estimates are more valid than easily-accessible readings from actual air monitors.

*UPDATE II* Public Health and Hydraulic Fracturing: A Review of the Data
We’ve all seen the frightening headlines and read about so-called “experts” linking any number of negative health impacts to oil and gas development, specifically hydraulic fracturing. But what’s more telling about these allegations is what they are missing, namely: a basis in fact.

Steve
Spokesman

 

UPDATE II (9:53 am ET, 10/26/2012): New data released from the Bureau of Labor Statistics show that injuries in the oil and natural gas industry declined in 2011 by an amazing 33 percent — from a rate of 1.2 to 0.8 for every 100 workers. A story from E&E News (subs. req’d) points out that the injury rate for oil and gas extraction (and indeed for the entire mining industry) is also “below the national incidence rate of 3.5 cases per 100 workers.”

UPDATE (10:21 am ET, 5/17/2012): NPR has been running a series of stories about the alleged horrors of hydraulic fracturing, relying mostly on anecdotal reports about health impacts to say there “isn’t an answer” to questions about whether the wells are emitting hazardous levels of pollutants (news flash: there is an answer, it’s just not convenient to folks who want to write scary stories.) Nonetheless, one of NPR’s segments actually let the cat out of the bag, specifically in reference to the town of Dish, TX (which was featured in Gasland and was also where Dr. Al Armendariz made his infamous “crucify” comments). From NPR (emphasis added):

Quite a few of the 225 people who live in Dish, Texas, think the nation’s natural gas boom is making them sick.

They blame the chemicals used in gas production for health problems ranging from nosebleeds to cancer.

And the mayor of Dish, Bill Sciscoe, has a message for people who live in places where gas drilling is about to start: “Run. Run as fast as you can. Grab up your family and your belongings, and get out.”

But scientists say it’s just not clear whether pollutants from gas wells are hurting people in Dish or anywhere else. What is clear, they say, is that the evidence the town has presented so far doesn’t have much scientific heft.

It’s truly amazing the kinds of conclusions one will reach when relying on scientific facts.

—Original post from April 18, 2012—

We’ve all seen the frightening headlines and read about so-called “experts” linking any number of negative health impacts to oil and gas development, specifically hydraulic fracturing. But what’s more telling about these allegations is what they are missing, namely: a basis in fact.

The claims have also made us wonder: If suggestions about negative health impacts were true, wouldn’t the men and women who are working in the industry – many as long as 60 to 70 hours per week, year round – be suffering from some of the worst health conditions? After all, if hydraulic fracturing or shale development as a whole were emitting dangerous levels of pollutants, then those working on the well pads day in and day out would be more exposed than anyone else. Right?

As it turns out, the facts tell a completely different story than what we’ve read in the newspapers or heard from opponents of shale. And to clear the air, we’ve done the research so you don’t have to. All of the information that follows, we should point out, is not based on anecdotal horror stories or unverifiable reports, but rather easily accessible data via the U.S. Bureau of Labor Statistics (BLS). No smoke and mirrors, no secret decoder rings, just the facts.

According to the BLS:

This data also matches the conclusions of scientific research for specific areas across the country, including for two of the largest shale-producing areas in the country.

An air quality report for northeastern Pennsylvania, which was issued by the Pennsylvania Department of Environmental Protection (DEP), “did not identify concentrations of any compound that would likely trigger air-related health issues associated with Marcellus Shale drilling activities.” And although the report’s scope did not include an assessment of longer-term impacts, it did conduct air sampling for carbon monoxide, nitrogen dioxide, sulfur dioxide, and ozone. The sampling “did not detect concentrations above the National Ambient Air Quality Standards at any of the sampling sites.” A DEP report issued two months earlier for southwestern Pennsylvania came to the same conclusions.

In addition, the Texas Commission on Environmental Quality (TCEQ) has conducted extensive air monitoring for the Barnett Shale in North Texas. Here’s what TCEQ Chairman Bryan Shaw said of TCEQ’s findings:

“After several months of operation, state-of-the-art, 24-hour air monitors in the Barnett Shale area are showing no levels of concern for any chemicals. This reinforces our conclusion that there are no immediate health concerns from air quality in the area, and that when they are properly managed and maintained, oil and gas operations do not cause harmful excess air emissions.”

In addition, a report issued by the Texas Department of State Health Services (DSHS) collected blood and urine samples from residents in and around the town of DISH, which is located over the Barnett Shale. Here’s what the report concluded:

“Although a number of VOCs were detected in some of the blood samples, the pattern of VOC values was not consistent with a community-wide exposure to airborne contaminants, such as those that might be associated with natural gas drilling operations.”

DSHS concluded that the sources of exposure were likely tobacco (all those who recorded elevated levels of benzene were smokers); public drinking water systems, which include disinfectant byproducts; and common consumer products such as cleaners and lubricants. DSHS did note some limitations (including the fact that VOCs only stay in the body for a relatively short period of time), but nonetheless concluded that their assessment “did not indicate that community-wide exposures from gas wells or compressor stations were occurring in the sample population.”

A separate assessment of the Barnett Shale area took an in-depth look at health statistics, specifically in Denton County, Texas. The researchers concluded that “even as natural gas development expanded significantly in the area of the past several years, key indicators of health improved across every major category during those times.” The researchers also made this important observation:

“Health records indicate that while production increased, fewer residents were diagnosed with serious illnesses such as cancer, respiratory disease, strokes, and heart disease. This improvement occurred even as the population of residents age 65 or older increased by over 13,000, a significant uptick for any population segment.”

Bottom line: It’s easy to claim that any sort of nearby business or industrial activity – be it oil and gas, the construction of an apartment complex, or the opening of a new hardware store – has correlated with an increase in nosebleeds, headaches, or any other ailment. But that doesn’t mean such accusations are based in fact. More importantly, we’re not doing any justice to those suffering from those ailments – and we’re certainly not solving any problems – if we misallocate blame and focus attention on activities that are not responsible, merely because it’s convenient to do so.

How Earthworks Missed the Mark on State Regulation
Last week, Earthworks released a report that attempted to show lax state regulation of oil and gas development. The purpose was clear: build a case for more federal regulation, and by extension delay approval for additional production – if not ban it outright. Unfortunately for Earthworks, anyone with an Internet connection has access to information that proves Earthworks’ goal was not to shine on a light on a problem, but rather to repeat its old talking points in a new way.

Steve
Spokesman

 

Last week, Earthworks released a report that attempted to show lax state regulation of oil and gas development. The purpose was clear: build a case for more federal regulation, and by extension delay approval for additional production – if not ban it outright. Unfortunately for Earthworks, anyone with an Internet connection has access to information that proves Earthworks’ goal was not to shine on a light on a problem, but rather to repeat its old talking points in a new way.

That objective was hardly buried or hidden in the document, either. On the second page of the report, Earthworks says, “this work could not have been undertaken without the generous support of The Heinz Endowments.” For those unfamiliar with Heinz, they – along with the Park Foundation – have been one of the chief financial backers of efforts to stop natural gas development. To put this in poker terms, Earthworks revealed its hand before the betting even began.

What’s more amazing, though, is the sheer lack of understanding of the oil and natural gas industry that Earthworks put on display for everyone who read their report. From mischaracterizing state regulatory systems to failing to account for the fact that well pads often have multiple producing wells, Earthworks’ latest report stands high as a monument to mediocrity in the world of anti-drilling activism.

Below you’ll find a list of some of the biggest problems with Earthworks’ report. Feel free to add any other discrepancies or problems in the comments section at the end of the post.

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PROBLEM 1: Manipulates and misstates data to achieve predetermined result.

FACT: A single inspection of a particular well pad can include multiple wells, and an honest look at the appropriate numbers tells a different story than the narrative Earthworks wants us to believe.

PROBLEM 2: Claims state regulatory bodies are ill-equipped and “unprepared” for future or even existing development.

FACT: Experts have confirmed that state regulatory bodies are well-managed and have the tools necessary to do their jobs – and do them right.

PROBLEM 3: Pushes for legal system defined by guilty until proven innocent.

FACT: Evidence doesn’t support accusations made by opponents, and the presumption of innocence has been a hallmark of the American legal system for more than 100 years.

PROBLEM 4: Claims spills and violations are increasing.

FACT: Spills in Colorado are decreasing, while violations in Ohio and Pennsylvania are on the decline.

PROBLEM 5: Wants to punish oil and gas development for government deficits.

FACT: Rules and regulations are designed to prevent problems, not merely to increase government funding. Additionally, oil and gas development is already a major source of public revenue.

–

So, in summation, the Earthworks “report” was essentially a rehash of common talking points used by critics of oil and gas development, many if not all of which have been widely debunked. Given that lack of seriousness, it’s unsurprising that the report arrived at conclusions contradicted by easily accessible data.

Did Earthworks think those who read the report would be unable to find that information, or were they merely hoping that readers wouldn’t?

The report is riddled with transparently baseless accusations, and its central recommendation that those accusations be considered valid by decree is absurd by any legal standard. Given these facts, perhaps the bigger question is how so many news outlets allowed themselves to be used as a promotional vehicle for Earthworks’ activism, all without giving the report the kind of critical analysis – or even cursory review – that one would expect.

Fact-Checking the Dallas Drilling Debate
The temperature has been 105 degrees in the Metroplex for what feels like 105 straight days, but this afternoon, the Dallas City Council attempted to let cooler heads prevail in a briefing it organized on natural gas development. EID decided to lend some facts to the debate, which opponents are fighting tooth and nail to obscure.

The temperature has been 105 degrees in the Metroplex for what feels like 105 straight days, but this afternoon, the Dallas City Council attempted to let cooler heads prevail in a briefing it organized on natural gas development. For months, the Council has been considering changes to the city’s oil and gas ordinance, and today it invited two panelists to speak about the proposed changes (And no, J.R. and the rest of the Ewings were not invited; they were too busy plotting their revenge against the Venezuelans who beat up John Ross).

The two panelists were Ed Ireland, with the Barnett Shale Energy Education Council, and Terry Welch, a Dallas lawyer with Brown & Hofmeister, LLP. You can view Mr. Ireland’s prepared slides here, and Mr. Welch’s can be found here.

Ed’s presentation focused on several important facts about shale development, particularly in the Barnett Shale of north Texas: It’s a major source of employment (100,000 jobs over the past decade, including direct and indirect jobs), has generated billions of dollars in tax revenue, and boasts an impressive safety record. There have been more than 18,000 wells drilled into the Barnett Shale (including several thousand in the floodplains of the Trinity and Brazos Rivers), and there hasn’t been a single confirmed case of ground water contamination from hydraulic fracturing. And thanks to state-of-the-art air monitoring from the Texas Commission on Environmental Quality (TCEQ), we also know that Barnett development is not producing air emissions at a level that would impact public health.

That’s great news, and certainly something we should embrace and even encourage, right?

Not according to Mr. Welch. Indeed, Welch’s presentation focused on negative health and environmental impacts from development. Actually, to clarify, his presentation was all about impacts that may happen; little to no evidence was actually provided. Yet, Mr. Welch still wants the Council to believe that the impacts are very real – he’s just not sure if or even when they’ll ever materialize.

It’s also worth pointing out that Mr. Welch, as a member of the Gas Drilling Task Force, was actually presenting a minority report of the Task Force, which other members of the city’s Task Force felt was unfair. Those other members weren’t afforded the same opportunity to present their problems with the Task Force’s recommendations to the full City Council, a problem that Task Force Chair Lois Finkelman identified at the conclusion of the hearing.

But because we think evidence is important, here’s a sampling of the claims and recommendations made in Mr. Welch’s prepared slides, along with some important facts that folks in the Dallas area, including the City Council, might find useful:

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WELCH: “Scientific studies currently differ as to the effect of gas drilling/hydraulic fracturing on human health, and doubt should be resolved in favor of public health and safety.” (Welch prepared slides, Aug 1, 2012)

WELCH: “Imagine these setbacks in a Dallas neighborhood.” (Welch prepared slides, Aug 1, 2012)

WELCH: “Floodplains by definition are subject to flooding, and flooding of gas well sites may result in release of undisclosed hazardous chemicals, along with significant amounts of salt and hydrocarbons, into water channels.” (Welch prepared slides, Aug 1, 2012)

WELCH: “Drilling in the floodplain would allow drilling in the Trinity River corridor.” (Welch prepared slides, Aug 1, 2012)

WELCH: “Dallas development regulations currently allow landfills and electrical substations in the floodplain; however, those activities are subject to several existing federal water pollution prevention laws that gas drilling and hydraulic fracturing operations are exempt from.” (Welch prepared slides, Aug 1, 2012)

WELCH: “All parkland is valuable and a limited public commodity, and if drilling is allowed, that area may be diminished or effectively eliminated as parkland for decades.” (Welch prepared slides, Aug 1, 2012)

WELCH: “If these concerns are later determined to be without merit, the City Council may amend its ordinances accordingly.” (Welch prepared slides, Aug 1, 2012)

It’s one thing to exercise caution when making decisions, but it’s quite another to hide behind a wall of uncertainty (real or perceived) to justify serious restrictions or even outright bans on certain types of activity. What Mr. Welch has presented is not a list of proven impacts of development, but is instead largely a series of hypotheticals designed to frighten the City Council through manufactured uncertainty. And then he suggests that if his proposals end up being too burdensome, they can just be adjusted later – as if there are no repercussions in the interim. Does anyone really believe that would be the case?

Because the facts and the data don’t back them up, opponents of development in Dallas (and across the country, really) are trying to shift the burden of proof away from themselves and onto the industry. They suggest that it’s not necessary to prove their statements about negative impacts, but it is the responsibility of the industry to prove a negative (i.e. “There’s no evidence of water contamination? Prove it!”). This is not only absurd; it’s also not a legitimate basis for any meaningful public policy discussion.

Besides: If the damage and destruction to which Mr. Welch repeatedly alluded in his slides (and which opponents have similarly referenced) were actually happening, wouldn’t he have mentioned the specific examples?

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For Josh Fox, the Sun Also Rises
They say that 82.3 percent of statistics are made up on the spot. Watching the video released by Gasland star Josh Fox this week – cleverly titled “The Sky is Pink” -- one wonders whether that figure might be in need of a slight upward adjustment.

They say that 82.3 percent of statistics are made up on the spot. Watching the video released by Gasland star Josh Fox this week – titled “The Sky is Pink” — one wonders whether that figure might be in need of a slight upward adjustment.

Set aside the distracting, out-of-focus camerawork and characteristically creepy, overwrought narration, and the argument that Josh and his team attempt to put forth goes something like this: No natural gas well is safe. All of them fail and leak. And most damning: Industry studies and memoranda – memos previously buried in industry “drawers” — prove it. Memos so confidential, it took us a full three minutes to find them online (more on those later).

In fairness, Fox doesn’t say that every well is destined for failure. In a column submitted to the USA Today last summer, Fox argued that five percent of wells experience “an immediate failure of the concrete casing.” Eight months later, in February, that figure had jumped eight-fold, with Fox telling DemocracyNow! that “casing that protects the groundwater cracks in 40 percent of the cases.” That same month, he suggested to Al Jazeera that the actual failure rate was closer to “50 percent” (20:16). In his new film (09:23), he settles on a new number: 16.7 percent. Hey, at least we’re improving, right?

Of course, not mentioned anywhere in the new 18-minute film is the Aug. 2011 report issued by the Ground Water Protection Council (GWPC), a study that draws on real-world field data and case descriptions from regulators representing two of the most heavily drilled states in the country: Texas and Ohio. According to that study, more than 220,000 oil and natural gas wells were drilled and completed (fractured) in these two states over the past 25 years, 16,000 of them horizontal wells targeting deep shale formations.

Take your pick from any of the failure rates that Fox has cited over the past year: If he’s right – or even close to right – shouldn’t there be thousands of confirmed cases of water contamination from faulty wells and compromised casings? Unfortunately for Josh (but fortunately for everyone else), the GWPC report tells a very different story.

According to the report, available here, more than 34,000 wells were drilled and completed in Ohio over a 25-year period from 1983 to 2007. In total, 184 incidents were recorded over that span in which oilfield activities – all categories – were found to have contributed to an adverse impact to groundwater. That’s one incident for every 184 wells drilled.

Break the numbers down further, though, and you find that of those 184 incidents, only 12 were related to failures of or gradual erosions to casing or cement. That’s one recorded incident for every 2,833 wells drilled, representing a failure rate of 0.03 percent. And according to the report, greater than 80 percent of all incidents happened in the 80s and 90s – with very few problems registered as modern technology and updated regulations came online over the past decade. Of note: not a single event relating to the fracturing process was found to have affected groundwater.

From the report (p. 46):

Stimulation by hydraulic fracturing has been a routine part of completing most oil and gas wells in Ohio since 1951. During the study period (1983-2007), the DMRM estimated that 27,969 oil and gas wells were stimulated by hydraulic fracturing. … During the 25 year study period, the DMRM did not identify any groundwater contamination incidents caused by hydraulic fracturing.

So that’s the story in Ohio, how about Texas? According to GWPC and the Texas Railroad Commission, more than 187,000 wells were drilled and completed in the Lone Star State from 1993 to 2008, including 16,000 horizontal wells. Two-hundred and eleven cases of groundwater disturbance tied to oilfield activities were recorded in that span, or one incident for every 889 wells drilled.

Just as in Ohio, none of those were related in any way to hydraulic fracturing. And very few were generally related to the integrity of the well either – a total of 21, according to the report. That boils down to an error rate of 0.01 percent – a far cry from the estimates put forth by Josh and his gang.

Speaking of those estimates: from whence did they actually come? In his video, Fox cites five “industry” documents – memos and PowerPoint presentations he says reinforce his view that mass well failures are not only a common occurrence, but an inevitable one. In the film, he says these documents “fell off the back of a truck” (07:35) – implying that they were previously kept secret, locked away in the “drawers” of the industry (presumably he means the wooden variety!).

In fact, every one of these documents is readily available online – here, here, here, here and here. As you can see, most of them are modeling papers; short, technical commentaries in petroleum engineering journals (some more than a decade old) that deal with best practices mostly in the context of well integrity issues (in abandoned wells, mostly) far offshore.

In one such document, prepared almost a decade ago, and which essentially runs as an advertisement, the authors argue that their products can help operators reduce casing pressure volumes in the Gulf of Mexico.

To Fox, this represents evidence of well failures en masse. But as any legitimate petroleum engineer will attest, detection of pressure in a casing string doesn’t necessarily mean that the well doesn’t work – and it certainly doesn’t portend environmental ruin. Thanks to remedial actions referred to in the industry as “work-over” activities, these issues are commonly and easily addressed. Which is why, in contrast to what Fox says, it’s simply not the case that thousands of wells are failing every day, contaminating tens of thousands of potable water sources. No matter how much he may wish it were so.

Another document that elicits great excitement in the Fox video is a PowerPoint deck delivered by Mark Boling of Southwestern Energy in Nov. 2010 – a presentation in which EID’s Lee Fuller and Scott Anderson of the Environmental Defense Fund also participated.

As you can see in the video of the event itself, there were no earthshattering revelations that came to light on this panel. It is indeed true, as Mr. Boling indicated, that a well that’s improperly cased and/or cemented can in rare cases act as a conduit for methane gas (which is not considered a health threat by EPA) to migrate into formations where it otherwise wouldn’t belong. No news there.

Of course, that’s true whether you’re talking about an oil well, a gas well, a geothermal well, or a well that’s intended to produce water. But in a typical sleight-of-hand, Josh represents these remarks as major, monumental news – suggesting in his video that the same conduits that could allow methane to migrate are also allowing fracturing fluids to emerge from two miles down up into potable drinking water supplies above.

Incidentally, that’s a charge that has been categorically rejected by dozens of state regulators and engineering and academic experts. Even EPA administrator Lisa Jackson has called it out for what it is — a lie – telling reporters in April that “in no case have we made a definitive determination that the [fracturing] process has caused chemicals to enter groundwater.”

Of course, no mention of any of this is made in the film released this week. But then again, the film’s really not about hydraulic fracturing, is it? A quiet concession by Fox, perhaps, that his previous strategy of focusing his entire campaign on attacking a well completion technology with a demonstrable, 65-year track-record of safety probably isn’t the best play moving forward.

Faced with what’s become a mountain of evidence and steady stream of credible testimonials that directly contradict just about every single thing he says, Fox has decided to double-down on his thesis, continuing to fly around the country (and even the world) with an eye on promoting his upcoming sequel to Gasland. We suppose that’s his right. But that doesn’t mean he is right. In this case, as it turns out, the sky is actually pink – presaging the twilight of a national campaign that, from the start, has been built on a foundation of distortion and disinformation.

Or, at least, isn’t it pretty to think so?

States Continue Effective Regulation of Shale
It's a tired refrain (and demonstrable fiction) used incessantly by opponents of responsible shale development in their press releases and fundraising pleas: The industry, they claim, is unregulated. But for those of us interested in facts, we know better. And news this week from Colorado and Texas provides yet another example of how states are doing a more than adequate job in regulating the industry: both states' primary regulatory bodies overseeing oil and gas development moved forward with rules requiring disclosure of fluids used during hydraulic fracturing.

It’s a tired refrain (and demonstrable fiction) used incessantly by opponents of responsible shale development in their press releases and fundraising pleas: The industry, they claim, is unregulated. But for those of us interested in facts, we know better. And news this week from Colorado and Texas provides yet another example of how states are doing a more than adequate job in regulating the industry: both states’ primary regulatory bodies overseeing oil and gas development moved forward with rules requiring disclosure of fluids used during hydraulic fracturing.

In Texas, the Railroad Commission (RRC) adopted its rule on December 13th to comply with a law passed earlier this year by the state’s legislature. That rule will require companies to use the FracFocus.org website to disclose chemicals used during hydraulic fracturing. The requirement will apply to all wells permitted by RRC on or after February 1, 2012, the date the rule goes into effect.

Companies across the country have been voluntarily utilizing Frac Focus for chemical disclosure for months, and anyone who visits the site can look up well-specific data. Of course, FracFocus.org has been available since this past spring to anyone with Internet access, a fact lost on professional opponents of development who still choose to believe that hydraulic fracturing fluids are a mystery.

It’s also worth noting that the new RRC rule was praised by a range of interests, from America’s Natural Gas Alliance (ANGA) to the League of Conservation Voters.

A similar story unfolded in Colorado, where the Colorado Oil and Gas Conservation Commission (COGCC) approved its own disclosure requirement for operators in the Centennial State. As in Texas, companies must use FracFocus.org, and both states have provisions to protect proprietary information. The new rule in Colorado was similarly embraced by diverse group of stakeholders, ranging from the Colorado Oil and Gas Association (COGA) to the Environmental Defense Fund.

Texas and Colorado are two of the largest oil and gas producing states in the country (Texas being the largest), and the new rules approved by their respective regulatory bodies demonstrate yet again that state governments — not bureaucrats inside the Environmental Protection Agency — are more than capable of tightly and effectively regulating shale development.

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