Marcellus Shale

*UPDATE II* A Rolling Stone Gathers No Facts

UPDATE II (Mar. 5, 2012; 11:10 a.m. ET): The New York Post’s Abby Schachter has a must-read piece responding to the Rolling Stone story, appropriately entitled “Another shale gas attack full of hot air.” Abby highlights the gross mischaracterization of Art Berman’s comments about shale supposedly being a “Ponzi scheme.” Definitely worth reading in its entirety.

UPDATE (Mar. 4, 2012; 4:25 p.m. ET): Obviously no secret by now that we disagree strongly with Art Berman’s much-publicized thesis on the resource potential of shale. But as we’ve written before, he’s actually a lovely guy to be around in person, and, when things need to be corrected, a stand-up guy as well — taking to his blog over the weekend to set the record straight on how Jeff Goodell “mischaracterized” comments attributed to him in Rolling Stone. From Berman’s blog: “I never said that Chesapeake or any other company involved in shale gas drilling is involved in or resembles a Ponzi scheme. That may be what Goodell thinks but that is not what I said, think or imply.” Read the complete post here.

If you happen to oppose the responsible development of clean, affordable and enormously abundant reserves of natural gas from shale, it’s tough to imagine the past month-and-a-half being a period upon which you, when it’s all said and done, will look back fondly.

For these folks, the unraveling began in earnest on the evening of Jan. 24, when the president devoted a portion of his State of the Union address to the promise and potential of shale, suggesting that advancements in technology are “proving that we don’t have to choose between our environment and our economy.” A couple weeks later, the Univ. of Texas released a 414-page, fact-based report on hydraulic fracturing, rendering judgment on whether fracturing technology is connected to adverse impacts on water (it isn’t) and providing new evidence of the presence of naturally occurring methane in drinking water. The study, out for nearly a month now and widely reported on in the press, has been met by a cacophony of crickets from the other side.

Back in Washington, the U.S. Secretary of the Interior derided as “urban legend” the myth of fracturing-qua-environmental scourge, lamenting to a House committee the “hysteria” that has come to distort the debate. On Feb. 9, the U.S. Secretary of Energy, winner of the 1997 Nobel Prize in physics, suggested to an audience in Pittsburgh that the development of shale “can free [the] nation.”

Last week, the International Business Times characterized EPA administrator Lisa Jackson as striking a “bullish tone” on the safety of fracturing at a forum in New Jersey. And just this week, President Clinton, himself up for a Nobel Prize, said the country needed to end its “ambivalence” over clean-burning natural gas, judging it a clear winner for our country. New York City mayor Michael Bloomberg followed that up with his own positive comments, suggesting that “with appropriate safeguards, I think fracking is something that on balance is better for this country.”

Against this backdrop, as serious people continue to cite serious evidence in support of the proposition of responsible development, a fundamentally unserious account of the current debate was posted this week on the website of Rolling Stone magazine. Coming in at 6,200 words on the dot, the piece can most charitably be described as a not-so-quick (but plenty dirty) rehash of previously debunked charges and talking points, offered up by the same usual cast of characters that’s frequently wheeled-out and introduced anew any time a hit-piece is in the offing.

But in the end, the story fails not because its original reporting is bad, though it is. It fails because nothing resembling original reporting can be found anywhere in it. According to an item posted on Friday by John Hanger, former Pennsylvania DEP secretary and CEO of PennFuture, a leading environmental group: “[Rolling Stone’s] Jeff Goodell … should split his pay with the NYT gas reporter, because Goodell regurgitates all the NYT’s greatest gas hits, including ones that the NYT public editor found to be misleading or false.”

Below, we take a look at some of the more obvious errors that contributed to what, in the end, was a pretty ridiculous piece.

Rolling Stone: “Fracking, it turns out, is about producing cheap energy the same way the mortgage crisis was about helping realize the dreams of middle-class homeowners.”

  • Federal Reserve economist: “Natural gas prices that slumped to a 10-year low this month could save U.S. consumers $16.5 billion on home energy bills over the course of a year, according to a senior economist at the U.S. Federal Reserve. U.S. households might see total savings from lower gas prices of as much as $113 billion a year through 2015, including tack-on effects such as lower product prices and higher wages generated by cheaper fuel.” (Bloomberg, Jan. 25, 2012)
  • IHS CERA: “If shale gas had not radically changed the picture beginning in 2007, the US would have to rely on large quantities of … imports, and US consumers would be paying over two times more for natural gas. Savings from lower gas prices amount to $926 per year in disposable household income between 2012 and 2015. In 2035, these savings would increase to nearly $2,000 per household.” (Dec. 2011, p. 37)
  • Associated Press: “A 35 percent collapse in the futures price the past year has been a boon to homeowners who use natural gas for heat and appliances and to manufacturers who power their factories and make chemicals and materials with it …. Residential gas and electric customers are saving roughly $200 a year, according to a study by Navigant Consulting.” (AP, Jan. 16, 2012)
  • Columbus Dispatch: “[Columbia Gas of Ohio] is reducing the average monthly payment per household from $82 to $53, a savings of $29, or 35percent. The savings will vary based on each customer’s energy usage. … The abundance of natural gas is behind the low gas prices.” (Columbus Dispatch, Feb. 29, 2012)
  • Harrisburg Patriot-News: “[A]ccording to a Public Utility Commission calculation, the decrease in natural gas prices has saved Pennsylvania energy consumers $13 billion in the last two years. (Patriot-News, Dec. 11, 2011)
  • Benefits extend to areas even where no development is taking place: “Natural gas heating bills are lowest in 10 years” (Milwaukee Journal Sentinel, Jan. 18, 2012)

RS: “[N]ew studies suggest that because of fugitive emissions of methane from wellheads and pipelines, natural gas may actually be no better than coal when it comes to global warming.”

  • According to (even) The New York Times, mythology behind Howarth study “fading fast”: “Lawrence M. Cathles of [Cornell] … has offered a fresh rebuttal to the conclusions of a team led by Robert Howarth, a biogeochemist at the university. … [T]he notion that gas holds no advantage over coal, in weighing the climate implications of energy choices, is fading fast (to my reading of the science and that of many others).” (Andy Revkin, NYT, Feb. 29., 2012)
  • Cornell scientist: “The data clearly shows that substituting natural gas … will have a substantial greenhouse benefit under almost any set of reasonable assumptions. Methane emissions must be five times larger than they currently appear to be before gas substitution for coal becomes detrimental from a global warming perspective on any time scale.” (Response to Howarth, et al.’s reply, Lawrence M. Cathles, Feb. 29, 2012)
  • Sierra Club-funded researcher: “We don’t think [Howarth is] using credible data and some of the assumptions they’re making are biased. And the comparison they make at the end, my biggest problem, is wrong.” (CMU researcher Paula Jaramillo, as quoted by POLITICO [subs. req’d], Aug. 24, 2011)
  • PA DEP: “I don’t know if you can find anyone these days that defends that [Howarth] study.” (Gas Business Briefing, May 26, 2011)
  • EID documents on Howarth/Cornell: April 2010 // May 2011 // Aug. 2011 // Sept. 2011 // Oct. 2011 // Jan. 2012 // This Week

RS: “’In the Marcellus, the boom has just begun,’ says [Tony] Ingraffea, the Cornell engineer. ‘The idea is to drill everywhere.’”

  • Actually, since the “Marcellus boom” began in Pennsylvania, fewer – not more – wells have been drilled across the state. According to PA DEP, the total number of wells drilled in Pennsylvania over the past six years has dropped 29 percent, even as the volume of natural gas produced on a daily basis in the commonwealth has increased roughly 12-fold in that time. (DEP end-of-year reports, 2011).
  • That drop is due in large part to advances in horizontal drilling technology, which allows producers to access significantly greater volumes of natural gas from significantly fewer wells.

RS: “According to Arthur Berman, a respected energy consultant in Texas who has spent years studying the industry, Chesapeake and its lesser competitors resemble a Ponzi scheme, overhyping the promise of shale gas in an effort to recoup their huge investments in leases and drilling.”

  • Mr. Berman is a well-known critic of resource plenitude, serving on the board of the Association for the Study of Peak Oil & Gas, which promotes “cooperative initiatives in an era of depleting petroleum resources.” Mr. Berman has written extensively on the subject, but his work has been rebutted on several occasions – most notably by the energy investment firm Tudor, Pickering and Holt in this memorandum. From the APSO: website: “If Berman is right, we will not see large increases in shale gas production through 2011.” [ed. note: He was wrong.]
  • UBS Investment Research: “Amongst publications written by research analysts, the article included findings made in a study done by Art Berman, who alleged that shale producers overstated recoverable resources per well. We do not consider research from Mr. Berman new as he has been crusading against data supporting vast shale gas resources for years, despite supply and productivity continuing to exceed expectations.” (William Featherston, UBS, June 2011)
  • “Respected energy consultant” Berman’s position on automobiles: “The idea of private transport needs to go away. The idea that you can just drive yourself anywhere you want to, whenever you want to, and – oh, well the answer is, ‘I’ll just get an electric car.’ No, that’s not the answer.” (Berman, Cornell Law School, April 1, 2011; 03:44:50 to 03:45:25)
  • In a follow-up to his piece yesterday, Rolling Stone’s Jeff Goodell cites a recent item by peak-oil author Chris Nelder as even more proof that resource estimates associated with shale are overblown. Goodell: “As Nelder points out, when you look at actual proven reserves, we have only about 11 years worth of gas.” In EID’s rebuttal of the Nelder piece, we explain the half-baked methodology Nelder uses to manufacture that number – as well as all the “bad facts” he has to ignore along the way to make it “work.”

RS: “The Oscar-nominated film Gasland exposed the dark underbelly of fracking, interviewing residents who could literally light their faucets on fire, thanks to the gas that had contaminated their drinking water.”

  • Fmr. top environmental regulator in Pa.: “In an interview with The Inquirer on Wednesday, [DEP’s John] Hanger was harshly critical of Fox, whom he called a ‘propagandist.’ … Hanger dismissed Gasland…as ‘fundamentally dishonest’ and ‘a deliberately false presentation for dramatic effect.’” (Philadelphia Inquirer, June 24, 2010)
  • Financial Times: Claims Gasland are “absurd”: “By failing to evaluate the claims of his interviewees more carefully, [Josh Fox] has left himself open to the kind of takedown carried out by Energy In Depth.” (Financial Times, Jan. 2011)
  • Colorado state regulators: “Because an informed public debate on hydraulic fracturing depends on accurate information, the Colorado Oil and Gas Conservation Commission would like to correct several errors in [Gasland’s] portrayal of the Colorado incidents.” (COGCC Gasland Debunked document)
  • Longtime NYT editor, columnist: Gasland is “one-sided, flawed … in the Michael Moore mode.” (Peter Applebome, June 9, 2010)
  • Fox in his own words: “Well, I don’t care about the reports from 1976 [about naturally occurring methane in groundwater]. There are reports from 1936 that people say they can light their water on fire in New York State. But that’s no bearing [sic] on this situation. At all. … There is methane in groundwater. It happens. … It’s not relevant.” (Fox at Northwestern Univ., May 2011)
  • PA DEP fact sheet on methane in groundwater (2002, pre-Marcellus) // Pittsburgh Post-Gazette story on methane in water wells (1983)

RS: “Last year, The New York Times documented how gas drillers were dumping millions of gallons of irradiated wastewater loaded with toxic chemicals into Pennsylvania’s rivers and streams, largely without regulatory oversight.”

  • Former DEP secretary John Hanger: “[T]esting of drinking water at the tap and in stream totally debunks the main radiation narrative of the New York Times article …  Pennsylvania American Water Company also tested drinking water at 5 of its treatment plants.  Fourteen other drinking water suppliers did the same. All tests prove the drinking water drawn from rivers and streams for public water systems has radiation at natural or background levels, is safe to drink, and has not been at risk. Of course, the NYT has refused to inform accurately or fully its readers about the results of these tests, since they destroy the article’s fundamental narrative.” (Facts of the Day blog, Feb. 20, 2012)
  • More from Sec. Hanger: “There is no radionuclide pollution of drinking water in Pennsylvania. Zero. None. See the tests results that have been documented in numerous posts in this blog. But that truth will never catch up to the lie cleverly spread and repeated.” (Facts of the Day blog, Mar. 2, 2012)
  • Current DEP secretary Mike Krancer: “We deal in facts based on sound science. Here are the facts: all samples were at or below background levels of radioactivity; and all samples showed levels below the federal drinking water standard for Radium 226 and 228.” (DEP press release, Mar. 7, 2011)
  • Fmr. PA governor Ed Rendell (D): “If the goal of your report about natural gas drilling was to gratuitously frighten Pennsylvanians, then congratulations on a job well done. If it was to deliver an evenhanded examination of the critical balance that must be achieved between job creation, energy independence and environmental protection in regions with large natural gas deposits, then it was a mighty swing and a miss.” (NYT LTE, Mar. 5, 2011)
  • NYT public editor: “My view is that such a pointed article needed more convincing substantiation, more space for a reasoned explanation of the other side and more clarity about its focus. …[It] went out on a limb, lacked an in-depth dissenting view in the text.” (Arthur Brisbane, July 16, 2011)
  • Marcellus operators in Pa. approaching 100 percent recycling: “An analysis by The Associated Press of 2011 state data released Friday found that of the 10.1 million barrels of shale wastewater generated in the last half of 2011, about 97 percent was either recycled, sent to deep-injection wells, or sent to a treatment plant that doesn’t discharge into waterways.” (Begos, AP, Feb. 17, 2012)

RS: “In January, the Energy Department cut its estimate of the amount of gas available in the Marcellus Shale by nearly 70 percent, and a group affiliated with the Colorado School of Mines warns that there may be only 23 years’ worth of economically recoverable gas left nationwide.”

  • Here’s what that “group affiliated with the Colorado School of Mines” actually said: “When the results are combined with [DOE’s] latest available determination of proved dry-gas reserves, 273 TCF as of year-end 2009, the United States has a total available future supply of 2,170 TCF, an increase of 89 TCF over the previous evaluation. … The growing importance of shale gas is substantiated by the fact that, of the 1,898 Tcf of total potential resources, shale gas accounts for 687 Tcf (“most likely” value), or approximately 36 percent.” (Potential Gas Committee, April 27, 2011).
  • MIT puts the figure at 92 times’ worth: “For this study, we have assumed a mean remaining resource base of around 2,100 Tcf [in the United States] — about 92 times the annual U.S. consumption of 22.8 Tcf in 2009. … This resource growth is a testament to the power of technology application in the development of resources.” (MIT, Future of Natural Gas, June 2010)
  • Washington Post: “The stories … all suggest that the United States might have far, far less natural gas — which is expected to provide a cheap, abundant energy source in the decades to come — than previously thought. Terrible news, right? Well, hold up. As it turns out, some of those stories may have been somewhat premature — and appear to be based on a slight misunderstanding of the USGS survey.” (“Hold Off on those Shale Gas Obituaries,” Brad Plumer, August 26, 2011)
  • Bottom line: If those opposed to shale development genuinely believed that no natural gas was down there, they wouldn’t be opponents of shale development. Because there would be no development.

RS: “’The more land they acquire, the more capital they have to spend upfront,’ says Deborah Rogers, a former investment banker who …looked into the firm’s financial statements after the company sunk wells near her property in Texas.”

  • Former investment banker? “In a telephone interview, Rogers said that she was once a model with the Ford agency, and left the job to join a one-person firm in London as an assistant. She returned to the U.S. and was briefly a stockbroker for Merrill Lynch. Now she’s raises goats and is the founder of Farmstead, a dairy that makes artisanal cheeses.” (Jon Entine, RealClearPolitics, July 1, 2011)
  • Naturally, no mention of the fact that Rogers sits on the steering committee of the fringe anti-shale group OGAP. Entine: “Imagine how the reader … would have assessed Rogers’ credibility if … she had been introduced as ‘Deborah Rogers, a goat farmer, cheesemaker and activist who has tangled repeatedly with Chesapeake and lectures for anti-fracking NGOs?’”

RS: “‘Done right, drilling and fracking does not pollute drinking water.’ This, in essence, is the mantra … Everything we do is safe and environmentally responsible. Trust us.”

Don’t trust us? How about these guys?

  • Dept. of Energy experts panel: “The Subcommittee shares the prevailing view that the risk of fracturing fluid leakage into drinking water sources through fractures made in deep shale reservoirs is remote.” (SEAB interim report, Aug. 2011)
  • Environmental Defense Fund: “I think in the vast majority of cases, if wells are constructed right and operated right, that hydraulic fracturing will not cause a problem.” (EDF’s Scott Anderson, E&E TV, Oct. 27, 2010)
  • Park Foundation-funded Duke Univ. researcher: “It’s important to remember that the Marcellus Shale is five, six, seven thousand feet underground in many cases, and a typical homeowner’s well is only a couple hundred feet underground. … Again, we did not find any evidence for contamination from [fracturing fluids].” (Duke’s Rob Jackson, Bloomberg TV, May 10, 2011)
  • Stanford Univ. professor: “It is somewhat ironic that nearly all of the reported problems associated with shale gas development have been attributed to hydraulic fracturing, when in fact the exact opposite is the case.” (Prof. Mark Zoback, Aug. 30, 2011)
  • Regulators in Pennsylvania: “There has been a misconception that the hydraulic fracturing of wells can or has caused contamination of water wells. This is false. Hydraulic fracturing is not new in Pennsylvania; it has been going on here since about the 1950s and has been standard practice since the 1980s.” (DEP testimony to U.S. House T&I Committee, Nov. 16, 2011)
  • EPA in 1995: “[G]iven the horizontal and vertical distance between the drinking water well and the closest methane gas production wells, the possibility of contamination or endangerment of USDWs [underground sources of drinking water] is extremely remote.”
  • EPA in 2004: “Although thousands of … methane wells are fractured annually, EPA did not find confirmed evidence that drinking water wells have been contaminated by hydraulic fracturing fluid injection…”
  • EPA in 2009 (hearing before Senate EPW Committee): Sen. Inhofe: “Do any one of you know of one case of ground water contamination that has resulted from hydraulic fracturing?” Peter Silva, EPA asst. administrator for water: “Not that I’m aware of, no.”
  • EPA in 2010: “’I have no information that states aren’t doing a good job already,’ Steve Heare, director of EPA’s Drinking Water Protection Division said. He also said despite claims by environmental organizations, he hadn’t seen any documented cases that the hydro-fracking process was contaminating water supplies.” (Dow Jones, 2/26/10)
  • Testimonials from environment/water regulators in PA, OH, TX, IN, MI, LA, OK, CO, KS, AK, SD, WV, WY, and more – all pulled together in a single fact sheet.

RS: “It’s also impossible to know what chemicals are flowing out of the wells, or how toxic they are, because companies … are not required to disclose the compounds they use in fracking operations. Providers of fracking fluids … claim that the composition of such fluids can’t be revealed without disclosing trade secrets. In 2005, the industry lobbied hard for what’s known as ‘the Halliburton loophole,’ which exempts it from federal disclosure requirements.”

  • Greater than 99 percent of fluids are composed of water and sand, and the small fraction of what remains includes common industrial and even household materials that millions of American consumers use every day. By both weight and volume, the most prominent of these materials is a substance known as “guar.” Sounds scary, right? It’s actually an emulsifying agent more typically found in ice cream.
  • As it relates to disclosure on the federal level, operators are bound by requirements of the Community Right-to-Know Act (passed in 1986), which mandate that detailed product information sheets be drawn up, updated, and made immediately available to first-response and emergency personnel in case of an accident on-site. (OSHA Standards, accessed Mar. 1, 2012)
  • More recently, an effort led by the U.S. Department of Energy and the Ground Water Protection Council (GWPC) culminated in the creation of a searchable, nationwide database with specific well-by-well information on the additives used in the fracturing process. As of yesterday, the database had detailed disclosure information posted for 12,627 wells posted online (30 times the number initially up when the project went live last April).
  • Only the laziest reporters continue to perpetuate the “Halliburton Loophole” myth. The truth? Hydraulic fracturing has never in its nearly 65-year history been regulated under the Safe Drinking Water Act. In fact, SDWA isn’t even a disclosure bill; the word “disclosure” only appears twice in the entire 77,000-word text, and only in sections unrelated to underground injection (search the legislation here).
  • Language adopted in 2005 simply reaffirmed the fact that states were best equipped to regulate the fracturing process. The 2005 energy bill passed with overwhelming bipartisan support — with 74 “yea” votes in the U.S. Senate, including ones from the top Democrat on the Energy Committee; current Interior secretary Ken Salazar, then a senator from Colorado; and then-Sen. Barack Obama. In the U.S. House, 75 Democrats supported the final bill, including the top Democratic members on both the Energy & Commerce and Resources Committees.
  • Fmr. Clinton EPA administrator Carol Browner explains: “EPA does not regulate – and does not believe it is legally required to regulate – the hydraulic fracturing of methane gas production wells under its UIC program [under the Safe Drinking Water Act].” (Browner letter to David Ludder, Esq., May 5, 1995).

RS: “Last year, scientists at Duke University … published the first rigorous, peer-reviewed study of pollution at drilling and fracking operations. Examining 60 sites in New York and Pennsylvania, they found ‘systematic evidence for methane contamination’ in household drinking water … The study caused a big stir, in part because it was the first clear evidence that fracking was contaminating drinking water.”

  • Quite the opposite, actually: Duke researchers find evidence that hydraulic fracturing is not contaminating drinking water. From the paper: “Based on our data (Table 2), we found no evidence for contamination of the shallow wells near active drilling sites from deep brines and/or fracturing fluids.” (Duke methane paper, May 2011)
  • Bloomberg: “[Duke] found no evidence of the chemicals used as part of the rock-fracturing process common in natural-gas drilling.” (Bloomberg, May 9, 2011)
  • Brown Univ. geologist: “The data presented [by the Duke researchers] simply do not support the interpretation put forth that shale-gas development is leading to methane migration from the Marcellus into shallow groundwater.” (LTE in the Proceedings of the National Academy of Sciences, Sept. 2011)
  • Respected New York hydrogeologist: “[Professional hydrogeologist John] Conrad also criticized the study for not starting with ‘baseline tests for the wells they sampled’ … ‘While they point to higher methane concentrations, we don’t know what the original water quality was before drilling occurred,’ he said. ‘That’s a data gap that could be very significant for this study.’” (Philadelphia Inquirer, May 10, 2011)
  • EID documents: Duke rebuttal // “What They’re Saying” quote round-up

RS: “[Sherry] Vargson noticed not long after production began in 2009 that water in the trough out back stopped freezing on cold nights. Inside the house, the faucet began to sputter and spit. Her husband seemed to have a lot of headaches, and Vargson felt nauseous if she stayed in the shower for more than a few minutes. Acting on a tip from a friend, she had her water tested. It was loaded with methane.”

  • Water well equipped with a methane venting cap before first rig ever arrived: “A comparison of samples taken before and after drilling indicate the quality of the Vargson water to be virtually unchanged. The Vargson’s residential water well was equipped with a venting cap predating our operations. We have advised the Vargsons to clean and maintain their existing vent cap to better accommodate its intended function of venting the preexisting methane in their water well.” (Chesapeake response to Rolling Stone, posted Mar. 2, 2012)


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