Bloomberg News: Lack of Evidence Constitutes Existence of Evidence

We’ve cataloged on more than one occasion how Bloomberg News has developed a bit of reputation of consistently missing the mark when reporting on shale development in the United States. A few recent examples:

  • They conducted and then reported on a tendentious survey written in a way to lead respondents toward a particular conclusion with respect to increased regulation.
  • They gleefully reported on a study from Duke University researchers theorizing a link between Marcellus development and water contamination in Pennsylvania, but decided to “pass” on a landmark study from those same researchers (who teamed with the U.S. Geological Survey) finding no such contamination in Arkansas.
  • They printed without scrutiny EPA’s silly claims about another agency’s water tests in Wyoming, which differed from EPA’s own tests in at least 50 different measurements.
  • They’ve used terms like “fracking pipelines,” which literally make no sense.
  • Bloomberg’s Businessweek magazine ran 4,600-word diatribe against oil and gas development in Colorado, which hysterically concluded “once a gas and oil company gets into your valley, they own you. They own the hospital. They own the commissioners. They own your mountains, and they will do what they want.”
  • They even ran an opinion piece in the “news” section, in which the author claimed the Marcellus Shale underlies states like Colorado and Louisiana – an assertion that’s metaphysically and obviously quite demonstrably untrue, but one that the publication nonetheless refuses to correct.

Granted, not everything from Bloomberg News has showcased such carelessness. But as the above examples attest, Bloomberg has all too often printed stories that appear almost designed to increase alarm, regardless of what the full context tells us about the events in question.

That brings us to their latest “investigative report,” in which they accuse the oil and gas industry of hiding behind non-disclosure agreements to keep information about supposed impacts concealed from the public. It’s an interesting story for Bloomberg to pursue, given the publication’s recent embarrassing admission that its own reporters were snooping on customers’ secret and proprietary information, including login histories and other data.

In any event, Bloomberg’s latest piece suggests that the scientific and regulatory consensus about the safety of hydraulic fracturing is actually built on wet sand, because details in non-disclosure agreements could, maybe, possibly, potentially include examples of harm.

Let’s take a step back right there. The case against hydraulic fracturing (i.e. that the process supposedly contaminates underground drinking water supplies) has always been that it poses an inherent threat. In other words, wherever it takes place, there’s not just a risk of water contamination, but that such contamination is inevitable.

But regulators, scientists, and federal officials in the Obama administration have repeatedly and categorically denied such a claim. The safety record of hydraulic fracturing speaks for itself, but the fact that dozens of experts have also affirmed it shows that claims to the contrary were based on something other than science, geology, facts, or even a casual interest in accuracy.

So, lacking any evidence to support their claims, we’ve now jumped the proverbial shark into claiming that a lack of evidence for a claim is actually proof of that claim – that private agreements between operators and landowners could contain information showing water contamination, and therefore there clearly are examples…we just don’t know about them yet!

With the scenario defined, let’s now take off our tin foil hats and examine the facts.

A settlement between landowners and operators is, by definition, an agreement between the two parties. These are prompted obviously by disagreements, which can vary from claims of contamination and harm to nuisance problems, even monetary disputes. But a settlement means that the two parties have settled their differences. As such, a non-disclosure agreement is just that: an agreement.

So why would these types of agreements exist in a shale development context? Well, as it turns out, legal settlements are ubiquitous across the country, in pretty much every industry across the board. Companies accused of wrongdoing or who could face a prolonged legal battle over a particular claim will assess risk, including the overall cost of litigation, and they often find it less costly for everyone to settle the matter with the parties involved.

As for non-disclosure and so-called “secrecy,” the Uniform Law Commission — an association of lawyers, judges, and other legal experts — has recommended the Uniform Mediation Act (drafted in part by the American Bar Association) as a model law for states. According to a summary of UMA:

“Parties engaged in mediation, as well as non-party participants, must be able to speak with full candor for a mediation to be successful and for a settlement to be voluntary.”

In addition, in an article published by the Litigation Counsel of America, northern California trial lawyer Guy Kornblum explains why confidentiality is so important in the context of legal negotiations and settlements:

“Confidentiality is also critical to the process. It encourages both communication and candor. The parties must understand that they will not be prejudiced by their exchanges, and that such will not be used against them in subsequent proceedings in the litigation. This assurance of confidentiality is at the heart of negotiations, whether direct or supervised.” (emphasis added)

Even in cases that lack merit, companies often come to a settlement agreement to avoid attorney fees and to allow their employees to focus on their jobs instead of spending months or even years filling out legal paperwork. Sometimes claimants will push for settlements if they realize that their allegations are not going to hold up to extensive scrutiny, or if their lawyers advise them to do so (remember, plaintiffs’ attorneys can advertise cash settlements they’ve negotiated to prospective clients).

Interestingly, the case that leads off Bloomberg’s latest “report” is that of the Hallowiches in Pennsylvania, who had blamed industry activities for adverse health conditions, even claiming that their children had been affected. All parties involved eventually reached a settlement, the details of which were later unsealed and made public.

And what did we discover from those documents? As the Associated Press reported in March of this year:

“The documents released Wednesday also show the Hallowichs agreed there was no medical evidence that drilling harmed their health or their children’s health. The family had also previously acknowledged that it was receiving royalty payments from hydraulic fracturing on the property.” (emphasis added)

Although Bloomberg led with the Hallowich case, it’s not until 1,500 words into the story (the middle of the third page) that the reporters let readers know the claims stated in the opening paragraph actually lacked medical evidence – and even then it’s phrased as if the companies pressured them to make such an admission.

There are other issues that Bloomberg either refused to acknowledge or just overlooked.

The agreements described in the Bloomberg story focus on those specifically regarding groundwater. It’s right there in the headline: “Drillers Silence U.S. Water Complaints With Sealed Settlements.” But we know that claims of harm are sometimes either overblown or, in the case of the Hallowiches, entirely unsubstantiated by evidence.

We also know, thanks to repeated testing by regulators and other experts, that areas with shale development suffer from extensive water quality problems due to natural phenomena and have existed long before drilling ever began. Private water wells are often not governed by the kinds of regulations that cover, say, municipal water supplies (or the activities of oil and gas companies that case and seal their wells to isolate the wellbore from groundwater). Thus, many landowners discover that the water they’ve tapped for family use actually requires additional treatment.

As it turns out, terrible water quality in underground aquifers tends to reduce the value of homes that utilize that water. If a company is accused of fouling water supplies and proves through its testing that the culprit is actually natural contaminants, publicizing the testing and conclusions could impact the homeowner’s property values.

Would you want to buy a home that, after investigation, is shown to have significant water quality problems that require expensive treatment? What would that do to other homes in the areas that suffer from similar natural contaminants in their water? Would landowners agree to keep information private that could impact the value of their homes? And would anyone enjoy letting the public know that his or her accusations were found to be without merit – but accepted payment anyway for making such claims?

These are, of course, just hypotheticals, although the prevalence of water testing in areas with shale development – and the paucity of evidence confirming critics’ claims about hydraulic fracturing – suggests that such questions are at least worth asking. Naturally, Bloomberg did not, choosing instead to just blame the industry as a convenient scapegoat.

From a practical standpoint, if water aquifers across the country were being routinely fouled by hydraulic fracturing, it would require the greatest corporate cover-up in the history of the world for companies to work together and guarantee that each of those cases was kept under lock and key. If there were widespread water contamination from hydraulic fracturing, it would also require that state regulators and officials in the Obama administration have been in on the supposedly rigged game, carefully examining each case and filing the “confirmed contamination” claims in a lockbox, while touting the others that lack evidence.

The idea that such incidents could be widespread across multiple states, caused by numerous individual operators, and yet somehow all carefully kept secret doesn’t even pass the smell test — although apparently it’s the bombshell reporting assignment for the intrepid “journalists” at Bloomberg News.

But while we’re on the subject of non-disclosure agreements, let’s see what Bloomberg’s editor-in-chief has to say about the company’s own policies:

“Like all other Bloomberg employees, our reporters, upon hiring, enter into a confidentiality agreement that strictly prohibits them from discussing non-public Bloomberg documents and proprietary information about the company and its clients in their reporting.”

What, exactly, is Bloomberg hiding in those non-disclosed, non-public, secret documents? We could probably formulate a dozen or so different theories – but that wouldn’t be based on actual evidence, would it?


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