“Divestment” Coalition Claims Oil and Gas Companies Not Disclosing Risks – But the Facts Show Otherwise

This week, a number of groups whose primary focus is “divestment” from all fossil fuels – including As You Sow, Boston Common, and Investor Environmental Health Network – released an update to a report they have published every year for the past few years.  The report claims “most of the industry — 70 percent of the companies assessed – continue to leave investors substantially in the dark about their policies, practices, and impacts.” In other words, they argue, oil and gas companies are not disclosing enough about the risks of their operations.

Before we go any further, it’s important to remember that these groups are all part of the Ceres coalition, whose members include prominent anti-fracking organizations like the Sierra Club, Friends of the Earth, Natural Resources Defense Council (NRDC), and American Rivers.  The report itself was written by Richard Liroff who was a Senior Program Officer at the anti-fracking World Wildlife Fund and Danielle Fugere who was previously the Legal Director and Regional Program Director of Friends of the Earth.  Further, the report was peer reviewed by folks like Amy Mall of the NRDC and Samantha Rubright of FracTracker Alliance, and funded by the Park and Tides Foundations, which both give millions of dollars to dozens of anti-fracking groups.  The Ceres coalition itself is funded by the Rockefeller Brothers Fund, perhaps one of the most prolific donors to the anti-fracking cause.

It’s also worth noting that the groups that put out the report are also close allies with activist Bill McKibben who is spearheading the effort to get companies and universities to “divest” from fossil fuels.  As You Sow even touts this partnership on its webpage:

“By early 2012, student interest sprouted at six more campuses, catching the attention of Bill McKibben and, who joined and broadened the divestment focus from coal to all fossil fuels. Through a pivotal Rolling Stone article and “Do the Math” speaking tour, the movement took fire, spreading to hundreds of universities. The movement has now spread to cities, foundations, states, faith based organizations and corporations, with over two billion dollars’ worth of divestment commitments thus far.”

In other words, what we have here is a number of groups that have a clear interest getting folks to “divest” from fossil fuels, who are claiming oil and gas companies aren’t properly disclosing risks. To be sure no energy development is without risk, but this report tries to suggest that risks are either far greater than they are or that they aren’t being effectively managed, which is a far cry from the truth.  Here are some examples:

Claim: “Diesel fuel does not appear to be widely used in fracturing fluids, yet many companies are silent on whether they have a policy to avoid it.”

FACT: Diesel fuel has been effectively phased out of drilling operations and even data from anti-fracking groups show that.  When the Environmental Integrity Project (EIP) released a report claiming that oil and gas producers were using diesel in epic proportions, it was immediately debunked, not only by Energy In Depth, but also the Ground Water Protection Council, Arkansas and North Dakota regulators, and even the Environmental Protection Agency (EPA) Office of the Inspector General (IG).  In fact, the EPA IG released a report that confirms what EID said: that the small number of wells EIP claimed were fracked with diesel were actually fracked with kerosene, which EPA didn’t even consider “diesel” until Feb. 2014, or after many of the examples EIP cited. The EPA IG explains in a footnote in the report:

“Many of the wells noted in the Environmental Integrity Project’s analysis as hydraulically fractured without a permit were done so with kerosene, which EPA did not clarify as a diesel fuel until after the EPA issued its interpretive memorandum and revised permitting guidance in February 2014.”

Diesel fuel has been effectively phased out.  But As You Sow and company would like investors to believe otherwise.

Claim: “Naturally occurring radioactive material waste has surfaced as an issue, especially in Pennsylvania and North Dakota, but few companies discuss straightforward procedures for reducing radioactivity risks.”

FACT: The As You Sow researchers cite a Johns Hopkins University report, which argues that high levels of radon found in Pennsylvania homes can be linked to hydraulic fracturing, as evidence of their claims.  But a closer look at that study reveals that the counties with the highest radon readings had absolutely no oil and gas wells, not even conventional ones.  In other words, the researchers’ own data debunk their claim that higher readings of radon are in areas with oil and gas development.

The As You Sow researchers also cite claims of radiation in Pennsylvania streams even though the Pennsylvania Department of Environmental Protection (DEP) has released several studies finding that this is not a credible threat.  One recent DEP peer-reviewed study found, after several years of research, that “there is little potential for harm to workers or the public from radiation exposure due to oil and gas development.”  The DEP also just released a report finding no indication of any elevated radioactivity in Tenmile Creek, an area activists had claimed had high radioactivity from fracking. According to John Stefanko, DEP Executive Deputy Secretary for Programs:

“Ultimately, there were no surprises in the environmental samples we took. The radiological results were in line with expected background radiation readings. The non-radiological samples were consistent with what we regularly see in flooded underground mines in this region.”

Claim: “Due to the high volume of water and toxic chemicals used during hydraulic fracturing, risks related to water quality are a significant concern for companies, their investors, and the public.”

FACT: This claim has long been put to rest, especially with the release of the Environmental Protection Agency’s (EPA) five-year study, which finds “hydraulic fracturing activities have not led to widespread, systemic impacts to drinking water resources.” While EPA found some instances where contamination occurred from activities other than the fracking process itself, the researchers noted that these cases were “small” compared to the tens of thousands of wells put into operation every year. To wit:

“Of the potential mechanisms identified in this report, we found specific instances where one or more mechanisms led to impacts on drinking water resources, including contamination of drinking water wells. The number of identified cases, however, was small compared to the number of hydraulically fractured wells.”(ES-6)

EPA’s study is the latest in a long string of studies to come to the same conclusion. It follows a “landmark study” by the U.S. Department of Energy in which the researchers injected tracers into hydraulic fracturing fluid and found no groundwater contamination after twelve months of monitoring. It is also in line with reports by the U.S. Geological Survey, the Government Accountability Office, the Massachusetts Institute of Technology, and the Groundwater Protection Council, to name just a few.

Claim: Hydraulic fracturing of horizontally drilled wells typically requires millions of gallons of water per well, which can be an issue in water stressed areas.”

FACT: The EPA’s groundwater study also found that hydraulic fracturing only accounts for a small percentage of overall water use.  From the report:

“Cumulatively, hydraulic fracturing uses and consumes billions of gallons of water each year in the United States, but at the national or state scale, it is a relatively small user (and consumer) of water compared to total water use and consumption.” (4-8; emphasis added)

EPA also finds that, in the vast majority of counties it studied, the amount of water required to support local oil and gas activity is less than one percent of the total amount of freshwater available for all uses. From the EPA report:

“Overall, hydraulic fracturing water use represented less than 1% of fresh water availability in over 300 of the 395 counties analyzed (see Figure 4-5a). This result suggests that there is ample water available at the county scale to accommodate hydraulic fracturing in most locations.” (4-30; emphasis added)

Even the driest counties, where water usage for oil and gas development exceeds the amounts EPA considers “available,” can still obtain water from other sources to be used for hydraulic fracturing. The EPA report goes on:

“In Texas counties with relatively high brackish water availability, hydraulic fracturing water use represented a much smaller percentage of total water availability (fresh + brackish +29 wastewater) (see Figure 4-5b). This finding illustrates that potential impacts can be avoided or reduced in these counties through the use of brackish water or wastewater for hydraulic fracturing; a case study in the Eagle Ford play in southwestern Texas confirms this.” (4-22)

But the even more important point is that the increased use of natural gas has actually meant that far less water is needed for electricity generation.  As a report by Climate Central noted, thanks to the increased use of natural gas,

“Water withdrawals for power generation dropped by more than 1.5 trillion gallons per year in Ohio, New York, and Illinois; 10 states had decreases of 1 trillion gallons or more. Electricity generated from natural gas increased 370 percent on average in those 10 states, with the largest absolute increases coming in Alabama and New York.”

Climate Central’s report echoes a report from the University of Texas, which found that hydraulic fracturing is actually helping to shield Texas from water shortages because it is allowing the state to move away from using more water intensive energy resources.

Further, even if a well requires several million gallons, the amount of water used for hydraulic fracturing across the United States is still only a fraction of one percent of total water use.   Agriculture, car washes and golf courses use billions of gallons more water than oil and gas producers.  Even in the states that USGS says have the most water use – like Pennsylvania and Texas  – fracking still only uses a fraction of a percent of each state’s total water use.

That fraction is being reduced even further as companies continue to develop new technologies to mitigate their water footprints.  According to the Pennsylvania DEP, producers in the Marcellus are now recycling 90 percent of their flowback water.

Claim: “Well integrity remains a core issue. There have been a sufficient number of documented incidents of water contamination to merit investor concern about well integrity.”

FACT: Well integrity failure – when a well actually leaks into the soil or water – can occur only if all layers of thick steel and cement (often up to seven separate layers) break or fail.

But the data show that instances of this are exceedingly rare.  Data from the Pa. DEP show that only a fraction of one percent of all the wells drilled since 2006 had any issues.  The Associated Press also completed an investigation of water contamination in four major oil and gas producing states.  Based on Pa. DEP data, the well failure rate in Pennsylvania is only about one-third of one percent (0.33 percent) of all the oil and natural gas wells drilled in the state since 2005.

In 2011, the Ground Water Protection Council looked at more than 34,000 wells drilled in Ohio from 1983 to 2007 and more than 187,000 wells drilled in Texas between 1993 and 2008.  The GWPC data reveal a well failure rate of 0.03 percent in Ohio and only about 0.01 percent in Texas.

Most recently, researchers at Cape Breton University in Nova Scotia released two reports finding that the risk for water contamination and well integrity failure from hydraulic fracturing is quite low.  As one study puts it, “[t]here is a low likelihood of casing integrity loss.”

Claim: “Air contaminants are emitted during multiple stages of oil and gas development. (See Figure, “Air Emissions from Oil & Gas Development in the Eagle Ford”). Of particular concern for their contributions to regional smog are volatile organic compounds (VOCs) and nitrogen oxides (NOx).”

FACT: The researchers cite a report by the anti-fracking InsideClimate News, which Energy In Depth has thoroughly debunked, to back up their claims.  Meanwhile studies that have actually measured emissions directly on well pads have shown that development is protective of public health:

  • The Texas Commission on Environmental Quality conducted months of testingin the Barnett Shale region of North Texas, and its samples showed “no levels of concern for any chemicals.” TCEQ added that “there are no immediate health concerns from air quality in the area.”
  • reportby the West Virginia Department of Environmental Protection which found no major health threat from shale. According to that report: “Based on a review of completed air studies to date, including the results from the well pad development monitoring conducted in West Virginia’s Brooke, Marion, and Wetzel Counties, no additional legislative rules establishing special requirements need to be promulgated at this time.”
  • The Colorado Department of Public Health installed air quality monitorsat a well site that activists had complained about. CDPHE concluded: “The monitored concentrations of benzene, one of the major risk driving chemicals, are well within acceptable limits to protect public health, as determined by the U.S. Environmental Protection Agency. The concentrations of various compounds are comparatively low and are not likely to raise significant health issues of concern.”
  • The Pa. DEP conducted air monitoringnortheast Pennsylvania and concluded that the state “did not identify concentrations of any compound that would likely trigger air-related health issues associated with Marcellus Shale drilling activities.” A similar report for southwestern Pennsylvania came to the same conclusion.

Further, since the shale revolution began, and natural gas use has ramped up, a number of key criteria pollutants have dramatically declined, having a profoundly positive effect on public health for families across the country. In fact, data from EPA show that from 2005 to 2013 emissions of PM 2.5 have decreased by 60 percent; emissions of SO2 decreased by 68 percent; and emissions of NO2 decreased by 52 percent. As regulators and scientific experts have noted, this progress is largely due to the skyrocketing production and use of natural gas.

Claim: “From a global perspective, emissions of the greenhouse gases methane and carbon dioxide is a key concern. Natural gas extracted from the earth, when burned to generate power, produces less carbon dioxide than coal and has negligible emissions of sulfur dioxide and mercury. However, these benefits can be offset by leakage of methane into the atmosphere in the natural gas production, transmission, and distribution life cycle.”

FACT: This claim has long been debunked. Study after study has shown that methane emissions from natural gas production are very low – far below what is required for natural gas to have significant climate benefits.

The Environmental Defense Fund (EDF) released about a dozen studies this year, which all found very low methane leakage rates (between 1.2 and 1.9 percent).  Scientists have long maintained that natural gas maintains a strong climate advantage if methane emissions are kept below 3.2 percent.

Before EDF released that package of studies, it teamed up with researchers from the University of Texas (UT) in 2013 to produce a study that looked at 190 onshore natural gas production sites in the United States.  The researchers found a leakage rate of 1.5 percent and noted that emissions were “nearly 50 times lower than previously estimated by the Environmental Protection Agency.” UT and EDF followed up with two more studies, which also found very low methane leakage rates.  These studies concluded that methane emissions from the upstream portion of the supply chain are only 0.38 percent of production. That’s about 10 percent lower than what they found in their 2013 study.

In addition, researchers from the University of Colorado at Boulder and the National Oceanic and Atmospheric Administration (NOAA) recently released a report, which found a methane leakage rate of 1.1 percent in areas that collectively represent over half of the United States’ total shale gas production.

Perhaps most importantly, the Intergovernmental Panel on Climate Change’s (IPCC) latest climate assessment noted that it’s largely thanks to hydraulic fracturing and natural gas that the United States has been able to reduce its greenhouse gas emissions dramatically:

“A key development since AR4 is the rapid deployment of hydraulic fracturing and horizontal drilling technologies, which has increased and diversified the gas supply…is an important reason for a reduction of GHG emissions in the United States.”

On methane emissions specifically, the IPCC states,

“While some studies estimate that around 5% of the produced gas escapes in the supply chain, other analyses estimate emissions as low as 1% (Stephenson et al., 2011; Howarth et al.,2011; Cathles et al., 2012). Central emission estimates of recent analyses are 2%─3% (+/‐1%) of the gas produced, where the emissions from conventional and unconventional gas are comparable.” (emphasis added)

The IPCC also clarifies that even “[t]aking into account revised estimates for fugitive emissions, recent life cycle assessment indicate that specific GHG emission are reduced by one half” as more power plants are powered by natural gas.

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