Marcellus Shale

The Ordinary Opinions of James “Chip” Northrup

Jim Willis
Marcellus Drilling News

Sitting on a porch near the edge of Otsego Lake in Cooperstown, New York sits James “Chip” Northrup, discussing what has become the preeminent issue of upstate New York–hydraulic fracturing. With green tree leaves shimmering from a summer breeze in the background, Northrup, middle aged with a soft spoken Texas drawl, introduces himself as an oil and gas industry insider, someone who worked in the industry for 30 years (see the interview here).  He speaks intelligently and presents himself with authority, claiming that he “has some background with the technology” of hydraulic fracturing. Mr. Northrup has become a celebrity on the anti-drilling speaking circuit and with media outlets–someone from “industry” who isn’t afraid to discuss the evils of hydraulic fracturing.

Chip Northrup

James "Chip" Northrup

On that sunny afternoon in August 2010, Mr. Northrup, who “summers in Cooperstown” and “winters in Dallas” where he is from, shared some startling allegations. He said that contrary to what the industry will tell you, hydraulic fracturing of shale or “tight rock” formations requires upward of 15,000 pounds per square inch (psi) of pressure–the same pressure found six miles below the ocean’s surface in the Mariana Trench. According to Northrup, that’s “about 30 times the pressure of an air bomb or thermobaric bomb used in Afghanistan or Iraq.” Mr. Northrup says with one to three million gallons of fluid at that high pressure, you are effectively exploding a bomb underneath the ground–a “horizontal pipe bomb.”

In the interview he warns that New York is geologically different from other shale drilling locations, like Texas. In Texas, underground faults are few and well documented from seismic mapping. But in New York, there are lots of naturally occurring faults or cracks that can go all the way from bedrock up to the earth’s surface, and New York is seismically active–meaning lots of earthquakes creating new faults.

Northrup said that New York’s underground faults are not well mapped and odds are that a driller will hit a fault and not know it until it’s too late. When hydraulic fracturing fluid–water and sand and chemicals–is pumped into the well to “prop open” the small fractures made in hydraulic fracturing, that fluid along with methane (natural gas) has the potential to escape into those natural faults and travel up to aquifers, eventually contaminating people’s water wells, springs and nearby lakes. He said that once hydraulic fracturing fluid gets into drinking water, it’s game over. It’s impossible to get chemical and methane contamination out of an aquifer.

In numerous interviews and public speaking appearances, Chip Northrup paints a bleak, nightmare scenario of what will happen if horizontal hydraulic fracturing is allowed to begin in upstate New York. And because he is accorded the status of expert due to his “30 years” in the oil and gas industry, well, who are we to argue?

By all appearances, Chip Northrup is a devastating expert witness against the practice of horizontal hydraulic fracturing. He’s an industry whistle blower not afraid to stand up to multi-billion dollar energy companies. That is, until you look a bit closer at just who Chip Northrup is, and what his true motivation may be.  You also learn he has a bit of attitude, on full display here:

Industry Expert?

When speaking, Chip Northrup seems to have a great deal of detailed knowledge about hydraulic fracturing and what he calls “the cult of hydro-fracking.” But where does that knowledge come from? Most people would agree if you have a degree in geology or the physical sciences, that would qualify you as an expert. In addition, if you have a long history of practical, hands-on experience, that also would qualify you as an expert. Chip claims to be a 30-year veteran of the oil and gas industry, so let’s examine his credentials.

Chip has a bachelors degree from Brown University, and an MBA from the Wharton School at the University of Pennsylvania. We don’t know what Chip’s undergraduate major was in, but we know that his MBA was in accounting (according to Chip’s LinkedIn profile). You typically don’t get an advanced accounting degree without first obtaining an undergraduate degree in the same field, so it’s a pretty good guess that Chip’s undergraduate degree was something other than the physical sciences–likely accounting or business. So it appears he had no college training in the physical sciences or engineering–his status as an expert on hydraulic fracturing technology does not come from academe.

What about Chip’s decades-long experience in the oil and gas industry? His first energy industry experience came when the company his father founded, Northrup Energy, was sold to Atlantic Richfield (ARCO). Chip apparently held a minority ownership interest in his father’s company and so he makes the claim that he “sold his company” to ARCO. When Northrup Energy was sold, Chip went to work for ARCO as a planning manager in alternative energy (i.e., solar energy), perhaps as part of the deal. Although Chip worked for ARCO, a huge multinational oil company, he did not actively oversee oil and gas drilling projects while at the company, as many mistakenly assume when they hear the story of how he “sold his company” and went to work for ARCO.

In the Cooperstown interview, Chip says after he left ARCO he was an independent oil and gas producer, owning offshore and onshore oil rigs for about 20 years. But when pushed on that claim, he responded via a comment on an Energy in Depth post that he was a private investor in oil and gas rigs, mainly offshore, and that he “never was an operator.”

So the sum total of Chip’s many years of so-called experience in the oil and gas industry was first as a planning manager of alternative (non-oil and gas) energy, and later as an investor in oil and gas drilling operations. He never actually ran an active drilling operation. One can invest in uranium mining, but uranium investing does not make you a nuclear technology expert.

Family Ties

To fully understand Chip, you need to understand his family. Chip’s dad was (and still is) a prolific and talented inventor with 14 patents to his name. Leonard “Lynn” Northrup, Jr. got his start in automotive and residential air conditioning (see Lynn’s biography here). In the late 1960s he bought a controlling interest in Donmark Corporation, a residential air conditioning and heating manufacturer. While experimenting with ways to increase the efficiency of his air conditioning systems, Lynn Northrup’s experiments eventually led him into solar technology, spurred on by the Arab Oil Embargo and high oil prices in the early 1970s.

The ever-active inventor Lynn, along with other experts he had hired at the renamed Northrup Energy, made break-through discoveries in solar technology. In the late 1970s, Lynn sold Northrup Energy to Atlantic Richfield (ARCO) and the new subsidiary was called ARCO Solar. In the early 1980s, ARCO Solar was sold first to Seimens, and eventually to British Petroleum. BP Solar, still around today, has become the largest solar photovoltaic company in the world, built on the early success and innovations of Lynn’s company.

When Lynn sold Northrup Energy (along with Chip’s share of the company) to ARCO, Chip went to work for ARCO and Lynn switched gears to become a real estate developer in the Dallas area. When Chip left ARCO Solar a few years later, he started twin careers of investing in oil and gas companies, and working in real estate development with his dad.

Let Me Build in Your Back Yard…

One of Chip’s first real estate development projects was with his dad Lynn and personal friends Charles Mayhew and son Chuck Mayhew. Together, the four of them proposed a housing project in Sunnyvale, Texas, a small Dallas suburb. Sunnyvale was one of the few remaining communities not overrun by urban sprawl from Dallas.

The Mayhews were a family institution in Sunnyvale, living there since the early 1950s. Charles Mayhew led the effort to get Sunnyvale incorporated so it would not be annexed by bordering municipalities. Charles was mayor of Sunnyvale when the town passed a zoning restriction that no more than one house could be built per acre–a restriction he would later ask the town to modify.

The Mayhews had amassed 1,200 acres of farmland in the Sunnyvale community over the years, and along with the Northrups, they wanted to turn that land into a huge housing project. The original plan submitted in 1985 called for up to six houses per acre–5,200 houses total. At the time, Sunnyvale’s entire population was 1,800–people, not houses.

The town council, citing zoning restrictions and a desire to keep a rural feel in the town, rejected the project. The Mayhews and Northrups scaled the project back to 3,600 homes, but the town council rejected that too. After more than a year of negotiations, project revisions, and town meetings with opposition from Sunnyvale residents so intense it required police officers to be present, Chip and his dad Lynn, along with the Mayhews, sued the town for $15 million, accusing it of “illegal takings” by limiting their land use.

In 1992, after years of lawsuits, a judge ruled in favor of the Mayhews and Northrups, ordering Sunnyvale to pay them $8.5 million. The town’s entire yearly budget at the time was $1 million. The town appealed, and in 1998 the Texas Supreme Court ruled in favor of Sunnyvale, finally settling the matter, but not before the town had spent hundreds of thousands of dollars on legal fees.

…But Don’t Build in My Back Yard

Nowadays, Chip splits his time between his two homes in White Rock Lake (Dallas), Texas and Cooperstown, New York. In 2008, a small controversy erupted at White Rock Lake. The parks department started to install lights along the walking trail on one side of the lake in an attempt to make it more safe at night. Chip opposed the lights. He said it would make the lake look like a prison facility at night.

Chip attended community meetings where he and other residents voiced their opposition and concerns about light pollution, the style of the lights, the color (prison orange and not white), and the necessity of having the lights at all. Perhaps the White Rock Lake meetings about lights were like the meetings in Sunnyvale some 20 years earlier? Except this time Chip was on the other side of the light pole, so to speak.

Ideologically Driven

Imposing your views on other people is nothing new for folks like Chip. He, and his supporters in New York, are increasingly critical of an abundant supply of clean-burning natural gas because they perceive it to be a threat to alternative and “sustainable” sources of energy–i.e. solar and wind. If natural gas becomes too cheap and too abundant, they fear that the unenlightened masses won’t be in any hurry to break the carbon habit.

Chip also serves on the board of Otsego 2000, a non-profit group in the Cooperstown area where Chip owns a summer home. Otsego 2000 is actively attempting to stop gas drilling in New York State and Chip has written and spoken on their behalf in that effort.

Why Does Chip Northrup Oppose Hydraulic Fracturing?

Perhaps the picture now starts to come into focus. Chip’s dad Lynn was, and is, an enormously important man. His drive and intellect helped him create a profitable solar technology company, the sale of which gave Chip a pile of money. And it was Lynn’s move into real estate that blazed a trail for Chip to follow. There’s certainly nothing wrong with silver spoons and having your children join the family business, or in giving them seed capital to help them get established. It takes a skilled hand to invest trust fund money wisely, as Chip obviously has done.

But one has to wonder, what exactly was the original deal with ARCO? And now with BP Solar? Do Chip and dad Lynn still own stock in that enterprise? If they do have solar investments, those investments would certainly be at risk from an abundance of natural gas from shale.

The honest answer to the question of why Chip opposes hydraulic fracturing is, we don’t really know why. Maybe he’s a true believer, convinced that hydraulic fracturing will do all of the nasty, horrible things he says it will do–although he has yet to produce evidence to back up his claims. Maybe he’s afraid that truck traffic and noise will spoil his idyllic Cooperstown summer home like the lights around White Rock Lake threatened to spoil his nighttime view of Dallas. Maybe he’s concerned that an abundance of natural gas will diminish the value of his solar investments if, indeed, he has solar investments. Maybe he believes,  that the hoi polloi (“the great unwashed”) must be forced into using renewable sources of energy like solar and wind for their own good and the good of Mother Earth. Or maybe it’s some of each. Who knows?

At the end of day, Chip Northrup is just like anyone else with an opinion about hydraulic fracturing. Well, almost like anyone else. He’s enormously wealthy. He sees the issue of hydraulic fracturing through his own biased lens. But he is just one voice. When he speaks about the technology and potential effects of hydraulic fracturing, he does not do so as an expert, not as someone educated in geology and the physical sciences, and not as someone with practical experience in running a drilling operation.

The next time you see Chip making the media rounds, bear in mind he’s just another rich ideologically driven individual that the mainstream media loves to fawn over because of his “industry experience”. Next time you see Chip making the rounds remember this: his  pronouncements on hydraulic fracturing are just ordinary opinions, and nothing more.

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