Who Pays? Health and Economic Impacts of Fracking in Pennsylvania
Since the advent of unconventional shale gas drilling, some effects have been immediate, some have emerged over time, and some are just becoming apparent. Two reports recently published by the Delaware Riverkeeper Network advance our understanding of the breadth of the impacts of fracking in Pennsylvania. The first report, written by FracTracker, reviews research on the ways fracking impacts the health of Pennsylvanians. The second report by ECONorthwest calculates the economic costs of the industry.
“Fracking is heavily impacting Pennsylvania in multiple ways but the burden is not being fairly and openly calculated. These reports reveal the health effects and economic costs of fracking and the astounding burdens people and communities are carrying,” said Maya van Rossum, the Delaware Riverkeeper.
Learn what the latest science and analysis tells us about the costs of fracking, who is paying now, and what the future price is forecasted to be.
Access the full reports here:
Health Impact Report
“Categorical Review of Health Reports on Unconventional Oil and Gas Development; Impacts in Pennsylvania,” FracTracker Alliance, 2019 Issue Paper
Economic Impact Report
“The Economic Costs of Fracking in Pennsylvania,” ECONorthwest, 2019 Issue Paper
From the Experts
“The FracTracker Alliance conducted a review of the literature studying the impact of unconventional oil and gas on health. Findings of this review show a dramatic increase in the breadth and volume of literature published since 2016, with 89% of the literature reporting that drilling proximity has human health effects. Pennsylvanian communities were the most studied sample populations with 49% of reviewed journal articles focused on Marcellus Shale development. These studies showed health impacts including cancer, infant mortality, depression, pneumonia, asthma, skin-related hospitalizations, and other general health symptoms were correlated with living near unconventional oil and gas development for Pennsylvania and other frontline communities.”
–Kyle Ferrar, FracTracker Alliance Western Program Coordinator
“Fracking wells have an extensive presence across Pennsylvania’s landscape – 20 percent of residents live within 2 miles of a well. This is close enough to cause adverse health outcomes. Collectively we found annual costs of current fracking activity over $1 billion, with cumulative costs given continued fracking activity over the next 20 years of over $50 billion in net present value for the effects that we can monetize. The regional economic benefits also seem to be less than stated, as the long-term benefits for local economies are quite low, and can disrupt more sustainable and beneficial economic trajectories that might not be available after a community has embraced fracking.”
–Mark Buckley, Senior Economist at the natural resource practice at
These reports on the health effects and economic impacts of unconventional oil and natural gas development yield disheartening results. There are risks of extremely serious health issues for families in impacted areas, and the long term economic returns for communities are negative.
Arming ourselves with knowledge is an important first step towards the renewable energy transformation that is so clearly needed. The stakes are too high to allow the oil and natural gas industries to dictate the physical, social, and economic health of Pennsylvanians.
The Hidden Costs of a Plastic Planet
Plastic has been getting a lot of negative press lately.
It’s killing marine life, forming vortexes in the ocean, and being burned instead of recycled. But until recently, most of the attention has focused on plastic pollution – the waste that turns up after a product has served its purpose.
Now that’s changed- the Center for International Environmental Law (CIEL) has recently released “Hidden Costs of a Plastic Planet;” two reports that show us the consequences of plastic across its entire lifecycle. The first, Plastic & Health, explores human health impacts, while the second Plastic & Climate, tackles greenhouse gas emissions.
For the first time, we know the full scope of plastic’s impact – and it’s not looking good.
FracTracker is proud to partner with CIEL and several other organizations, including Earthworks, 5 Gyres, TEJAS, UPSTREAM, GAIA, Exeter University, and Environmental Integrity Project to release these reports.
Access the full reports and executives summaries here:
You know, now what?
These reports make it clear: the impacts of plastic are serious, and they’re everywhere. We have the evidence to justify an immediate global move away from our disposable, single-use lifestyle. Tackling this toxic crisis will require action across all levels of society- corporations must consider the full life cycle of their products, policy makers must enact plastic reduction measures, and of course, industry needs to rectify its toxic impacts. Eager to encourage these entities to take action, the FracTracker team is committed to doing our own part to solve this plastics problem, and we hope that it inspires individuals, companies, community leaders, and politicians to join in.
Here’s what we’re doing to help the world #BreakFreeFromPlastic:
1. Continue working towards a world free from oil and gas.
Since over 99% of plastic is made from oil and gas, keeping fossil fuels in the ground is the only way to eliminate all of plastic’s toxic impacts. Plastic & Climate found that extracting and transporting oil and gas for plastic production releases over 100 million metric tons of carbon dioxide equivalents per year. There are many opportunities for these releases to occur, including from methane leakage and flaring, the drilling process, deforestation of forests for pipelines and well pads, and emissions from truck traffic.
The FracTracker team will continue to study, map, and analyze the risks of this industry to encourage both a switch to renewable energy and a movement away from plastic production.
2. Expose the risks of the fracking-driven plastics boom in the Gulf Coast & Ohio River Valley
Unconventional technology has opened up access to large reserves of natural gas liquids, such as ethane, and plastic manufacturing is one way to increase demand for this glut. In fact, the oil and gas industry is hoping to increase demand for plastic worldwide by 40%! Two regions with access to natural gas liquids that are rapidly expanding plastics manufacturing capacity are the Gulf Coast and the Ohio River Valley.
Eager to justify this build-out, politicians and industries tout the ways plastic is part of a sustainable future. They say that without investing in plastic, we’re not taking full advantage of our resources, and that by using natural gas to make plastic instead of burning it, we’re keeping greenhouse gasses from entering the atmosphere. Speaking on manufacturing plastic from natural gas with public radio station WHYY, Pennsylvania’s Governor Wolf stated:
“I want to move to a point where what we’re using the gas for is for products that go into that sustainable energy future: lightweight products…so that we’re not burning this, we’re actually creating products that would make that energy future that we all want, that would address the issues of climate change in an effective way.”
But the data say otherwise.
Plastic does not address the issues of climate change. In fact, using natural gas for plastic perpetuates climate change. Climate & Plastics found that this year, “the production and incineration of plastic will add more than 850 million metric tons of greenhouse gases to the atmosphere—equal to the emissions from 136 one-thousand-megawatt coal power plants.” If plastic production grows as currently predicted, by 2030, emissions could reach 1.34 gigatons per year, or 291 new coal plants.
The rate of plastic production is directly at odds with global carbon emissions targets.
While plastic can be used for lightweight parts of electric vehicles or reusable materials, the plastic being produced by the current build out is primarily polyethylene plastic, most commonly used for packaging and single use products- plastic bags, bottles, jugs, containers, and plastic films and linings; products that countries and cities are phasing out.
3. Encourage plastic alternatives
While renewable energy is becoming increasingly available, so too are plastic alternatives. Across the world, communities are rethinking the products we use everyday. Thanks to historic legislation, zero waste stores, and towns, and plastic-free bloggers, it’s never been a better time to cut back on plastic – and the FracTracker team is doing our part.
Rebecca, our Administrative and Human Resources Specialist, has cut her plastic use by switching to toothpaste tablets and bars of soap. Karen, our Eastern Program Coordinator, makes her own reusable beeswax food wraps. And Erica Jackson and Isabelle Weber in the Pittsburgh office keep reusable utensils in their backpacks. The whole team is cutting back on single-use plastic products, and are always on the look-out for non oil and gas-based products.
We also realize that with companies like Coca Cola selling 3,000 plastic bottles every second, and Nestlé producing 1.7 million tons of plastic packaging a year, corporations play a key role in this movement.
Through the Story of Stuff’s #Messageinabottle project and Greenpeace’s #Isthisyours campaign, we’re also encouraging corporations to reimagine how the package and transport products.
Now YOU know, what will you do to help your company, community, or yourself #BreakFreeFromPlastic?
A Disturbing Tale of Diminishing Returns in Ohio
Utica oil and gas production, Class II injection well volumes, and lateral length trends from 2010-2018
The US Energy Information Administration (EIA) recently announced that Ohio’s recoverable shale gas reserves have magically increased by 11,076 billion cubic feet (BCF). This increase ranks the Buckeye State in the top 5 for changes in recoverable shale natural gas reserves between 2016 and 2017 (pages 31- 32 here). After reading the predictable and superficial media coverage, we thought it was time to revisit the data to ask a pertinent question: What is the fracking industry costing Ohio?
Recent Shale Gas Trends in Ohio
According to the EIA’s report, Ohio currently sits at #7 on their list of proven reserves. It is estimated there are 27,021 BCF of shale gas beneath the state (Figure 1).
There are a few variations in the way the oil and gas industry defines proven reserves:
…an estimated quantity of all hydrocarbons statistically defined as crude oil or natural gas, which geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions. Reservoirs are considered proven if economic producibility is supported by either actual production or conclusive formation testing. – The Organization of Petroleum Exporting Countries
… the quantity of natural resources that a company reasonably expects to extract from a given formation… Proven reserves are classified as having a 90% or greater likelihood of being present and economically viable for extraction in current conditions… Proven reserves also take into account the current technology being used for extraction, regional regulations and market conditions as part of the estimation process. For this reason, proven reserves can seemingly take unexpected leaps and drops. Depending on the regional disclosure regulations, extraction companies might only disclose proven reserves even though they will have estimates for probable and possible reserves. – Investopedia
What’s missing from this picture?
Neither of the definitions above address the large volume of water or wastewater infrastructure required to tap into “proven reserves.” While compiling data for unconventional wells and injection wells, we noticed that the high-volume hydraulic fracturing (HVHF) industry is at a concerning crossroads. In terms of “energy return on energy invested,” HVHF is requiring more and more resources to stay afloat.
OH quarterly Utica oil & gas production along with quarterly Class II injection well volumes:
The map below shows oil and gas production from Utica wells (the primary form of shale gas drilling in Ohio). It also shows the volume of wastewater disposed in Class II salt water disposal injection wells.
View map fullscreen | How FracTracker maps work
Publications like the aforementioned EIA article and language out of Columbus highlight the nominal increases in fracking productivity. They greatly diminish, or more often than not ignore, how resource demand and waste production are also increasing. The data speak to a story of diminishing returns – an industry requiring more resources to keep up gross production while simultaneously driving net production off a cliff (Figure 2).
The Great Decoupling of New Year’s 2013
In the following analysis, we look at the declining efficiency of the HVHF industry throughout Ohio. The data spans the end of 2010 to middle of 2018. We worked with Columbus-area volunteer Gary Allison to conduct this analysis; without Gary’s help this work and resulting map, would not have been possible.
A little more than five years ago today, a significant shift took place in Ohio, as the number of producing gas wells increased while oil well numbers leveled off. The industry’s permitting high-water mark came in June of 2014 with 101 Utica permits that month (a level the industry hasn’t come close to since). The current six-month permitting average is 25 per month.
As the ball dropped in Times Square ringing in 2014, in Ohio, a decoupling between oil and gas wells was underway and continues to this day. The number of wells coming online annually increased by 229 oil wells and 414 gas wells.
The ringing in of 2014 also saw an increase in the number of producing wells as a percentage of those permitted. In 2014, the general philosophy was that the HVHF industry needed to permit roughly 5.5 oil wells or 7 gas wells to generate one producing well. Since 2014, however, this ratio has dropped to 2.2 for oil and 1.4 for gas well permits.
Put another way, the industry’s ability to avoid dry wells has increased by 13% for oil and 18% for gas per year. As of Q2-2018, viable oil wells stood at 44% of permitted wells while viable gas wells amounted to 71% of the permitted inventory (Figure 4).
from the top-left to the bottom-right
To understand how quickly production is declining in Ohio, we compiled annual (2011-2012) and quarterly (Q1-2013 to Q2-2018) production data from 2,064 unconventional laterals.
First, we present average data for the nine oldest wells with respect to oil and gas production on a per day basis (Note: Two of the nine wells we examined, the Geatches MAH 3H and Hosey POR 6H-X laterals, only produced in 2011-2012 when data was collected on an annual basis preventing their incorporation into Figures 6 and 7 belwo). From an oil perspective, these nine wells exhibited 44% declines from year 1 to years 2-3 and 91% declines by 2018 (Figure 5). With respect to natural gas, these nine wells exhibited 34% declines from year 1 to years 2-3 and 79% declines by 2018 (Figure 5).
Four of the nine wells demonstrated 71% declines by the second and third years and nearly 98% declines by by Q2-2018 (Figure 6). These declines lend credence to recent headlines like Fracking’s Secret Problem—Oil Wells Aren’t Producing as Much as Forecast in the January 2nd issue of The Wall Street Journal. Four of the nine wells demonstrated 49% declines by the second and third years and nearly 81% declines by Q2-2018 (Figure 7).
Fracking waste, lateral length, and water demand
from bottom-left to the top-right
An analysis of fracking’s environmental and economic impact is incomplete if it ignores waste production and disposal. In Ohio, there are 226 active Class II Salt Water Disposal (SWD) wells. Why so many?
- Ohio’s Class II well inventory serves as the primary receptacle for HVHF liquid waste for Pennsylvania, West Virginia, and Ohio.
- The Class II network is situated in a crescent shape around the state’s unconventional wells. This expands the geographic impact of HVHF to counties like Ashtabula, Trumbull, and Portage to the northeast and Washington, Athens, and Muskingum to the south (Figure 8).
We graphed average per well (barrels) and cumulative (million barrels) disposal rates from Q3-2010 to Q3-2018 for these wells. The data shows an average increase of 24,822 barrels (+1.05 million gallons) per well, each year.
That’s a 51% per year increase (Figure 9).
A deeper dive into the data reveals that the top 20 most active Class II wells are accepting more waste than ever before: an astounding annual per well increase of 728,811 barrels (+30.61 million gallons) or a 230% per year increase (Figure 10). This divergence resulted in the top 20 wells disposing of 4.95 times the statewide average between Q3-2010 and Q2-2013. They disposed 13.82 times the statewide average as recently as Q3-2018 (Figure 11).
All of this means that we are putting an increasing amount of pressure on fewer and fewer wells. The trickle out, down, and up of this dynamic will foist a myriad of environmental and economic costs to areas surrounding wells. As an example, the images below are injection wells currently under construction in Brookfield, Ohio, outside Warren and minutes from the Pennsylvania border.
More concerning is the fact that areas of Ohio that are injection well hotspots, like Warren, are proposing new fracking-friendly legislation. These disturbing bills would lubricate the wheels for continued expansion of fracking waste disposal and permitting. House bills 578 and 393 and Senate Bill 165 monetize and/or commodify fracking waste by giving townships a share of the revenue. Such bills “…would only incentivize communities to encourage more waste to come into their existing inventory of Class II… wells, creating yet another race to the bottom.” Co-sponsors of the bills include Democratic Reps. Michael O’Brien, Glenn Holms, John Patterson, and Craig Riefel.
The above trends reflect an equally disturbing trend in lateral length. Ohio’s unconventional laterals are growing at a rate of 9.1 to 15.6%, depending on whether you buy that this trend is linear or exponential (Figure 12). This author believes the trend is exponential for the foreseeable future. Furthermore, it’s likely that “super laterals” in excess of 3-3.5 miles will have a profound impact on the trend. (See The Freshwater and Liquid Waste Impact of Unconventional Oil and Gas in Ohio and West Virginia.)
This lateral length increase substantially increases water demand per lateral. It also impacts Class II well disposal rates. The increase accounts for 76% of the former and 88% of the latter when graphed against each other (Figure 13).
This relationship between production, resource demand, and waste disposal rates should disturb policymakers, citizens, and the industry. One way to this problem is to more holistically price resource utilization (or stop oil and gas development entirely).
Unfortunately, states like Ohio are practically giving water away to the industry.
Politicians are constructing legislation that would unleash injection well expansion. This would allow disposal to proceed at rates that don’t address supply-side concerns. It’s startling that an industry and political landscape that puts such a premium on “market forces” is unwilling to address these trends with market mechanisms.
We will continue to monitor these trends and hope to spread these insights to states like Oklahoma and Texas in the future.
By Ted Auch, Great Lakes Program Coordinator, FracTracker Alliance – with invaluable data compilation assistance from Gary Allison
FracTracker is a proponent of data transparency, and so we often share the data we use to construct our maps analyses. Click on the links below to download the data associated with the present analysis:
Governor Brown’s Climate Summit Heats up Political Climate
California has become a battleground for real climate action. The state Governor, Jerry Brown prides himself in his own climate leadership, and California has pushed EU nations and countries worldwide to take climate change seriously. As a final tribute to his own tenure as a term-limited governor, Brown has organized and hosted a Global Climate Action Summit, September 12-14th. The summit convenes an international invitation list of “climate leaders” to, in their words:
“Take Ambition to the Next Level.” It will be a moment to celebrate the extraordinary achievements of states, regions, cities, companies, investors and citizens with respect to climate action. It will also be a launchpad for deeper worldwide commitments and accelerated action from countries—supported by all sectors of society—that can put the globe on track to prevent dangerous climate change and realize the historic Paris Agreement.
Meanwhile, frontline communities, community organizers, and grassroots organizations contest the perspective that real change has been made. While investors and green capitalists celebrate, frontline communities fight daily for clean air and water. In solidarity with and led by frontline communities, activists have protested the summit, in an attempt to hold policy makers accountable to those most affected by the fossil fuel industry.
Rise for Climate, Jobs, and Justice
One quarter of a million people worldwide, and well over 30,000 in San Francisco hit the streets during the Rise for Climate last Saturday, September 8th. With over 900 actions taking place simultaneously people worldwide demanded real climate action from their local leaders. FracTracker Alliance staff helped coordinate and participated in events nationwide.
In San Francisco, the march was led by members of the Indigenous community, making up the Indigenous Bloc, on the frontlines of the action. The day officially started with prayers from Indigenous leaders and a moment of silence for Indigenous Peoples that have been most harmed by the effects of climate change. Dozens of various other movements followed the Indigenous Bloc in a parade of support. FracTracker took the opportunity to document this monumental event, and photos from the march are shown below.
For California and international “climate leaders” in attendance, Rise kicked off a long week of climate action culminating with the Global Action Climate Summit. The week is full of activities geared towards movement building, including the Solidarity to Solutions Summit (#sol2sol) by It Takes Roots; Women’s Assembly for Climate Justice, hosted by Women’s Earth and Climate Action Network; and mass actions including a march and occupation of the Global Climate Action Summit!
To mark such a momentous movement, the Brown administration signed a new bill into law, SB100. The new law, authored by Kevin De León (D-Los Angeles), pledges that all of California’s electricity will come from clean power sources by 2045. Brown said, “California is committed to doing whatever is necessary to meet the existential threat of climate change.” This is the most ambitious state climate policy in the U.S. The legislation barely passed the state Legislature after nearly two years of debate, with opponents arguing that it would lead to higher electric bills for all Californians.
Opposition from Eco-Activists
In opposition to the feel-good, pat-yourself-on-the-back feelings from delegates at the summit, frontline communities and activists respond that the SB100 legislation does nothing to stop harms to frontline communities caused by extraction and the supply side of the fossil fuel economy. The Against Climate Capitalism campaign is a coalition of Diablo Rising Tide teamed up with Idle No More SF Bay, the Ruckus Society, It Takes Roots, Indigenous Environmental Network and the Brown’s Last Chance. Members of the coalition have been outspoken proponents organizing in support of real climate leadership. The coalition is pushing for Governor Jerry Brown and the California legislature to end the extraction of new fossil fuels in California. The green groups making up these larger coalition networks encompass a broad range research and advocacy groups, from international groups like Greenpeace to local grassroots movements from Los Angeles and California’s Central Valley. FracTracker Alliance is also a campaign member.
The goal of the campaign is to keep fossil fuels in the ground, and supports a just transition from a fossil fuel economy to clean energy sources. A petition to pressure California Governor Jerry Brown to end fossil fuel extraction can be found on their website. The California legislature and the Brown administration has consistently failed to address the impacts of extraction in its own backyard. While frontline communities are suffering, the Brown administration continues to take the easy way out with future legislation such as SB100, which does nothing to address the environmental justice spector of actual oil drilling and production. In response to SB100, the campaign has issued response:
- Governor Brown has consistently failed to address the supply side of oil and the drilling in California, which is an indispensable step to avoid the worst effects of climate destruction.
- Some 5.4 million Californians live within a mile of at least one oil or gas well, and this includes hundreds of thousands of children. Many suffer illnesses from toxic exposure and cannot wait for action.
- Brown’s failure to act on this issue is a massive moral failure from which no bill signing can distract. Despite his signing of an important and historical bill he did nothing to draft or support, Governor Brown can expect to be greeted with energetic and committed protest at the Global Climate Action summit this week.
With these poignant criticisms, it begs the question; how can Governor Jerry Brown continue to ignore the actual cause of climate change? Brown has passed legislation ensuring that everyday Californians will bear the costs for clean energy utilities, but has done nothing to hold accountable the actual culprits responsible for climate change, the oil and gas corporations extracting the 5.7 million barrels of oil per year from California soil.
By Kyle Ferrar, Western Program Coordinator
Cover photo: Brown’s Las Change Billboard. Photo by Liz Hafalia, The Chronicle
Missouri’s clean energy is behind in the game, but at least they’re trying
Talking about fracking all day, every day, can be a bit of a downer. Here at FracTracker, we find hope in the advances of clean energy across the country and around the world. This time around, let’s see how Missouri’s clean energy sector is fairing. Long story short – while it seems their clean energy is a bit behind in the game, at least they are trying.
The role of clean energy in Missouri’s economy is on the rise: Clean energy already supports 55,251 jobs, and the sector grew by 5.3 % over 2015-2016. This rate is over three times faster than overall jobs in Missouri. And in 2017, St. Louis approved a measure to transition to 100% clean, renewable energy by 2035, making it one of the largest cities to do so. St. Louis’ decision also puts it squarely in line with efforts from other cities to take the lead on renewable energy, especially in the face of larger federal inaction.
Clean Energy Progress in Missouri
In collaboration with our partners at Environmental Entrepreneurs (E2), FracTracker Alliance produced a series of maps investigating current clean energy businesses and sites where renewable energy is and can be generated. They aim to describe Missouri’s clean energy economy – and how much room it has to grow. Here is a sneak peak at some of these maps, below:
Map 1. Clean Energy Electric Generation
View map fullscreen | How FracTracker maps work
Map 1, above, shows clean renewable energy generation in Missouri. Solar and wind are the most dominant forms of renewable energy in Missouri. Missouri’s clean energy generating capacity is highest in the northwest corner of the state, where several large wind-energy projects are located. The state has 6 wind farms in this region including the newly-announced 100 MW Hawthorne Wind Farm and 49 MW High Prairie Wind Farm. In total, Missouri produces 1,000 MW of wind energy from about 500 turbines. Solar power is more dominant across the rest of the state, especially with schools’ solar energy generation around Kansas City and St. Louis and solar farms throughout the rest of the state, including Pulaski, Macon, and Bates counties. All in all, about 702 megawatts of wind and solar capacity are installed currently, with another 458 megawatts currently proposed to be built.
Map 2. Clean Energy Generation Potential
View map fullscreen | How FracTracker maps work
However, much more potential remains to be tapped as shown in Map 2, above. This holds true across solar, wind, and other renewable energy sources – particularly in the southwest corner of the state, where solar energy potential is the highest.
Missouri has up to 275,000 MW of wind potential energy, and these maps of energy potential show that overall, approximately 75% of the state has above-average potential for solar power. This is an important statistic since coal fueled 81% of Missouri’s electricity in 2017; only two other states burned more in 2017. Also, the new addition of bidirectional natural gas flow to the Rockies Express Pipeline means stiffer competition for renewables from the natural gas market.
Map 3. Clean Energy Businesses
View map fullscreen | How FracTracker maps work
It looks like the transition to clean energy in Missouri is happening, but there is always work to be done (nerdy “energy” joke). According to the E2 Missouri Clean Jobs Report, there is a lot of room for the clean energy sector to develop.
The potential does exist for the sector to drive economic growth in the state by being a major contributor to job growth. According the Environmental Entrepreneur’s Midwest Advocate Micaela Preskill, the industry in Missouri is slated to grow another 4.5% through 2019. Recent hires in the sector show that the workforce is very ethnically diverse, with the percentage of minority new hires doubling the average state demographics. Also 14% of new hires are veterans. Map 3, above, displays over 400 businesses, including energy efficiency contractors and renewable energy installers, which cover all 34 state senate districts. Surveys indicate that 80 percent of businesses working in clean energy in Missouri employ fewer than 25 individuals, illustrating the importance of small businesses in the clean-energy sector.
With the new state policies that support the transition from fossil fuels and the growing clean energy economy, Missouri is on a path to becoming more sustainably focused. This is particularly important because of the state’s past and present reliance on coal, and the availability of natural gas. More investment of state and federal resources in the clean energy sector could provide the boost that benefits state’s health, environment and economy through new jobs and manufacturing.
By Kyle Ferrar, Western Program Coordinator
Behind in the Game Feature Image: Wind and farm. Creative Commons license.
Divestment – A Necessary Step Towards a Climate Neutral Society
By Guest Author: Austin Sachs, Director and founder of Protect and Divest
In most major social movements where there is an imbalance power, divestment has been a necessary part for progress, whether in South Africa or now in the environmental movement against fossil fuels. Yet, too often in the environmental movement, divestment is only pursued when all other options have run their course and failed. If we want a climate neutral society for generations to come, we must pursue divestment alongside all other actions – and alongside this divestment, a reinvestment into a society we want to see.
So where does this all start? Divestment begins with each of us looking into our financial accounts and seeing who we are funding with them. And that is exactly what Protect and Divest did last year. We researched the funding of the Atlantic Coast, Mountain Valley, Sabal Trail and Atlantic Sunrise pipelines to know where our money was going.
Along the entire East Coast, the TransCo Pipeline connects all these pipelines, but this infrastructure is also all connected by the same banks who are funding each and every single pipeline project. These banks range from the US banks of Wells Fargo, JP Morgan Chase, US Bank, CitiBank, and Bank of America to the International banks of the Royal Bank of Canada (RBC), Scotiabank and the Bank of Tokyo Mitsubishi UFJ. What we truly found is that no one bank is guilty alone – The entire financial industry is banking on the destruction of our beautiful home!
So where do we go if the banking industry is against a sustainable future? Well, luckily the entire industry is not against sustainability, and some heavily promote it. One of these options is Amalgamated Bank, who has promised to never invest depositor’s money into fossil fuels. Across this nation are countless credit unions doing the same for their members, who see money as a necessary tool of sustainability.
Protect and Divest has now launched our Divest the Commonwealth campaign to take our pledge one step further and move Virginia’s government funds out of fossil fuels, as well. Over $330 million dollars of the Virginia Retirement System is invested in fossil fuels. And of the stock of Duke Energy, one of the main builders of the Atlantic Coast Pipeline, 10 state pensions plans hold over $785 million in it. If the banks are guilty, so are our government pensions and funds. And it’s not like there are no sustainable options. Blackrock, the FTSE Group, and the National Resources Defense Council (NRDC) have come together to develop the FTSE ex-Fossil Fuels Index Series, a fossil fuel free index fund.
Divest the Commonwealth is working to build grassroots effort to move this money. We have started and are supporting city council resolutions from Harrisonburg, VA to Arlington, VA to Richmond, VA and are adding more weekly. Together, the cities and counties of Virginia will begin to bring about the future we want to see. Together, we will create a future we can be proud of.
Join us today and divest today! Every dollar, signature, and voice counts in making sure our money is where our mouth is. This is the way we create a world we want to live and one that we can tell our children about!
For more information visit: protectanddivest.weebly.com, or visit their Facebook page at: facebook.com/protectandivest.
Austin Sachs is the director and founder of Protect and Divest, created to build a market solution to climate change. Brought to the environmental movement by the Standing Rock crisis, Austin has worked endlessly to create a world we can all be proud within the economic and political models existing today!
Health vs. Power – Risking America’s Food for Energy
Over 50% of land in the United States is dedicated to agriculture. Oil and gas development, particularly hydraulic fracturing or “fracking,” is taking place near many of these farms.
Farms feed us, and unfortunately they are not protected from the impacts of fracking. Even if drilling can be done responsibly, accidents happen. In Colorado, for example, two spills occur on average per day, 15% of which result in water contamination.  Risking our food supply is not only a risk to our health – it’s a risk to national security.
Domestic oil and gas production has been promoted by the industry as a means to provide the U.S. with energy independence. The argument goes something like this: “We need to be a net exporter of energy so as to reduce our reliance on foreign countries for these resources, especially countries in the Middle East.” This ignores the point that for energy security we might want to keep rather than export fossil fuels.
However, energy independence and food independence are inextricably linked.
Considering that the basic human needs are clean water, food, shelter, and safety — along with energy — we need to think about self-reliance; we can’t be dependent on foreign countries for our food. The U.S. is currently a net exporter of agricultural products, and California produces 50% of the food consumed in the U.S. But what would happen if our foodsheds became contaminated?
Drilling Proximity – Why the concern?
Over 58% of US agricultural market value and 74% of US farms – both conventional and organic – operate within shale basins, active shale plays, and the primary frac sand geologies.
Why is this so important? Why be concerned? Here are just a few reasons:
- People can be exposed to the compounds involved with oil and gas extraction through spills, emissions, and other processes. The top five health impacts associated with these chemicals are: respiratory, nervous system, birth defects, and reproductive problems, blood disorders, and cancer.
- Rural gas gathering pipelines are unregulated; operators have no obligation to publicly report about incremental failures along the pipeline that may contaminate soil and water as long as they don’t require evacuations.
- Oil and gas operators are exempt from certain provisions of several environmental laws designed to protect public health and safety, including the Safe Water Drinking Act, The Resource Conservation and Recovery Act, The Emergency Planning and Community Right-to-Know Act, The Clean Water Act, The Clean Air Act, and The Comprehensive Environmental Response, Compensation, and Liability Act. These exemptions, in a way, permit oil and gas operators to contaminate water supplies with chemicals from their operations, in particular hydraulic fracturing fluids and produced wastewater.
- The gold standard of clean, chemical-free food is the USDA National Organic Program Standards, as governed by the Organic Foods Production Act. Unfortunately, organic certification does not require testing for oil and gas chemicals in water being used in organic production. The organic standard is satisfied as long as state, water, and food safety agencies deem the water safe. To our knowledge these agencies do not test for oil and gas chemicals.
- Based on available data spills occur regularly. Recent research has identified that the mixture of chemicals from fracking fluid and produced wastewater interact in a way that can lead to soil accumulation of these chemicals. Potentially, then, the chemicals may be absorbed by plants. Fifteen chemicals often used in fracking have been identified as toxic, persistent and fast-traveling. Some farms – such as those in Southern California – are being irrigated with produced water from oil and gas operations. Additionally, every single farm in the San Jaoquin Valley is within eight miles of oil and gas operations.
- There is significant Competition for water between natural gas production and agriculture. This includes growing commodity crops for energy, such as ethanol. Natural gas operations result in removing water quantity available for agriculture, and changing the water quality, which affects the agricultural product. In drought stricken areas, water scarcity is already an issue. In addition, extreme heat as a result of climate change is putting more stress on farmers operating in already depleted watersheds. Layered on all of this is the growing realization that precipitation regimes are gradually – and in many places dramatically – transitioning from many smaller and more predictable events to fewer, more intense, and less predictable rain and snow events which is are harder for the landscape to capture, process, and store for agricultural and/or other uses.
- Operating costs: Farmers are already operating under razor- thin margins, with the cost of inputs continually increasing and the resilience of the soils and watersheds they rely upon coming into question with unconventional oil and gas’ expansion across the Midwest and Great Plains.
Over 45% of lands in the Western United States are owned by the federal government. Opening up public lands—by the Bureau of Land Management, United State Forest Service in particular—is controversial on multiple levels. As it relates to food security and independence, the issue often missed is that many headwaters to prime farmland reside on federal lands, along with the majority of cattle grazing.
There isn’t enough private land in the West for oil and gas operators to reach their production goals. They have to drill on public lands in order to scale up production and develop an export market for domestic natural gas. This means that public lands, taxpayer funded public lands, could potentially be used to irreparably harm prime agricultural and grazing lands (foodsheds). More alarming, is that the Trump Administration is focused on unfettered development, extraction and distribution of natural gas resources, including opening up public lands to oil and gas leasing and gutting regulations that protect us from pollution and public health risks.
The map we have developed shows that many of the largest farms in the West are surrounded by public lands. Sixty-percent of Colorado farms are surrounded by public lands, which are within shale basins or active shale plays. Four of the top natural gas producing counties in Colorado are also four of the top agricultural producing counties: Weld, Mesa, Montezuma, and LaPlata counties. The third, fifth, sixth, eighth and tenth agricultural producing counties in the State are surrounded by public lands within shale basins, respectively,: Larimer, Delta, El Paso, Montrose and Douglas counties. The 6,325 farms in these counties represent 17% of all Colorado farms, and 29% (nearly half) of Colorado at-risk farms for being surrounded by public lands and within shale basins.
These farms, headwaters, and public lands need to be protected if we are to maintain food independence and security. Producing potentially contaminated food is neither food independence, nor food security.
Why should policy makers and health insurers care? Chronic and terminal illnesses are on the rise. Healthcare costs have nowhere to go but up as long as the environment we live in, the food we eat, the water we drink, and the air we breathe continue to be polluted at such a large scale. Attempts to reduce healthcare costs by insuring all Americans will have no impact if they are all sick. The insurance model only works when there are more healthy people in the pool than unhealthy people.
Mapping Conventional & Organic U.S. Farms
Below is an interactive map showing agricultural production in the U.S. You can use the map to zoom in at the county level to understand better the type of agricultural production taking place, as well as the value of the agricultural products at the county level.
U.S. Conventional and Organic Farms and Their Productivity Near Shale Plays and Basins
View map fullscreen | How FracTracker maps work
This map excludes Alaska for a variety of reasons. We include over 180 unique data points for each county across five categories: 1) Crops and Plants, 2) Economics, 3) Farms, 4) Livestock and Animals, and 5) Operators. We then break these major categories into 20 subcategories.
Table 1. Subcategories Utilized in the “US Shale Plays and Basins Along with Agricultural Productivity By County” map above
|Crops and Plants||Field Crops Harvested|
|Fruits, Tree Nuts, Berries, Nursery and Greenhouse|
|Hay and Forage Crops Harvested|
|Seed Crops Harvested|
|Vegetables and Melons Harvested|
|Economics||Buildings, Machinery and Equipment on Operation|
|Farm Production Expenses|
|Farm-Related Income and Direct Sales|
|Farms by Value of Sales|
|Market Value of Agricultural Products Sold|
|Farms||Agricultural Chemicals Used|
|Farms by Size|
|Farms by Type of Organization|
|Land in Farms and Land Use|
|Livestock and Animals||Livestock, Poultry, and Other Animals|
|Operators||Characteristics of Farm Operators|
|Hired Farm Labor|
|Primary Occupation of Operator|
|Tenure of Farm Operators and Farm Operations|
In total, there are 589,922 and 1,369,961 farms in US Shale Plays and Basins, respectively, averaging between 589 and 646 acres in size and spread across 2,146 counties (Figure 1). These farm counties produce roughly $87.31- 218.32 billion in agricultural products each year with the highest value per-acre being the Monterey and Monterey-Temblor Formations of Southern California, the Niobrara Formation in North Central Colorado, Eastern Barnett in North Central Texas, the Antrim in Michigan, and the Northern Appalachian Shale Basins of Pennsylvania, New York, and Ohio (Figures 2a/2b). Roughly 52% of all agricultural revenue generated in US Shale Play counties comes from livestock, poultry, and derivative products vs. a national average of 44% (Figure 3).
Put another way, the value of US Shale Basin agricultural infrastructure would rank as the 9th largest economy worldwide, between Italy and Brazil.
Family-owned farms are at the greatest risk. While corporations tend to own larger acreage farms, only 8.2% of US farms are owned by corporations. This figure is nearly halved in US Shale Plays, with 4.5% of farms owned by corporations, or 95% owned by families or individuals.
Figures 1, 2a, 2b, and 3 above show the number of farms near drilling, as well as variations in the value of agricultural products produced in those regions.
Risk vs. Benefits in CO
Oil and gas activity is regulated on a somewhat patchwork basis, but generally it is overseen at the state level subject to federal laws. New York and Maryland are the only two states that ban fracking, while communities around the country have invoked zoning laws to ban fracking or impose moratoriums on a smaller scale. However, in Colorado, the Colorado Oil and Gas Conservation Commission has exclusive jurisdiction over oil and gas regulation in the State. There, fracking bans imposed by local communities, with a large number of farms, have been found to be unconstitutional by the Colorado Supreme Court.
Weld County is Colorado’s leading producer of cattle, grain, and sugar beets. Weld is the richest agricultural county in the U.S. east of the Rocky Mountains, the fourth richest overall nationally, and the largest natural gas producer in CO. Compare this to the North Fork Valley on the Western Slope of CO, which is home to the largest concentration of organic farms in the state, one of two viticultural (wine making) areas in the state, and has a reputation for being a farm-to-table hub. Delta County, in which the North Fork Valley is located, is known for its sustainable agriculture initiatives. Uniquely, Delta County is one of the few agricultural areas in the country so far untouched by the fracking boom – but that could all change. The Bureau of Land Management is considering opening 95% of BLM lands and minerals within and surrounding Delta County to oil and gas leasing.
Protecting Food Supplies
Oil and gas extraction is taking place on both private and public lands across the country. Prime and unique agricultural lands need to be protected from these industrial activities if we are to maintain food independence and ensure a healthy food supply. As demonstrated by the map above, agricultural communities in active shale plays may already in trouble. To prevent further damages on day-to-day food staples, it is imperative to increase awareness about this consequential issue.
How can people trust that the food they eat is safe to consume? Families trust farmers, food brands, school and office cafeterias, and restaurants to the extent that the food supply chain is regulated and maintained. If most of the food produced in the U.S. is within active shale plays, and the water/soil is not being tested for oil and gas chemicals, that supply chain is at risk. The secure production of our food – via clean air, water, and soil – is tantamount to lasting food independence.
I am the leader of Slow Food Western Slope, which functions as a chapter of Slow Food USA. We envision a world in which all people can eat food that is good for them, good for the people who grow it and good for the planet: good, clean and fair food for all. Our chapter promotes and supports over 70 farmers, orchardists, ranchers, agricultural businesses and winemakers of the North Fork Valley – all of which depend on good and clean water, air and soil. With its industrial footprint and potential damage to landscape, air, water, soil and human health, extraction industries have no place in the future of the North Fork Valley. We can build a new economy around clean food, outdoor recreation, healthy lifestyle and small nonthreatening businesses.
Agricultural land is much more valuable in the long-run than the short-term gains promised from oil and gas extraction… As farmers we are attuned to crop, soil, and water conditions especially as a result of weather. If it’s too hot, too dry, too wet, too cold then there is no food. Natural gas extraction is an undeniable factor in changing climate and is incompatible with the practice of sustainable agriculture.
References and More Information
FracTracker Alliance raised awareness of this issue in 2015 when it mapped the proximity of organic farms to oil and gas wells. In that mapping analysis, it was discovered that 11% of organic farms are within ½ mile of oil and gas development. Did you know that less than 1% of agricultural lands in the United States are used to grow crops without chemicals, and that 42% of those organic farms produce food for human consumption?
Organic Farms Near Drilling Activity in the U.S.
View map fullscreen | How FracTracker maps work
This research prompted the question of what about the other 99% of agricultural lands used to grow crops and raise livestock utilizing chemicals and other conventional methods in the United States. The majority of dairy, grains, beef, poultry, fruits, vegetables, and animal feed for livestock are produced on conventional farms. Where are they located, and do we know how they are being impacted by oil and gas development?
The majority of the US population lives in urban centers and is disconnected from the American farm, including how and where food is produced. People trust their farmer, food brands, school and office cafeterias, and restaurants to the extent that they trust their supply chain, and to the extent that the farmers trust their water supply and soils. If the majority of the food produced in the U.S. is within active shale plays, and the water and soil are not being tested for oil and gas chemicals, this research questions how people can trust that their food is safe to consume. If we are to maintain our food independence and health, not only do consumers need to understand that the food supply is at risk in order to exercise their rights to protect it at the local, state, and federal levels, but policymakers need to be informed with this data to make better decisions around oil and gas development regulations and development proposals that impact our foodsheds.
- 2015 Colorado Oil and Gas Toxic Release Tracker, Center for Western Priorities
- COMPENDIUM OF SCIENTIFIC, MEDICAL, AND MEDIA FINDINGS DEMONSTRATING RISKS AND HARMS OF FRACKING (UNCONVENTIONAL GAS AND OIL EXTRACTION), Fourth Edition, Physicians for Social Responsibility, November 17, 2016; Colborn T, Kwiatkowski C, Schultz K, Bachran M., Natural gas operations from a public health perspective, Human and Ecological Risk Assessment, 2011 17(5):1039-1056; Fracking Fumes: Air Pollution from Hydraulic Fracturing Threatens Public Health and Communities, NRDC Issue Brief, December 2014
- 49 CFR §192
- Brady, William J., Hydraulic Fracturing Regulation in the United States: The Laissez-Faire Approach of the Federal Government and Varying State Regulations, Vermont Journal of Environmental Law, Vol. 14 2012
- National Organic Program Standards, 7 CFR Part 205. Organic Foods Production Act, 7 U.S.C. Ch. 94
- Molly C. McLaughlin, Thomas Borch,, and Jens Blotevogel, Spills of Hydraulic Fracturing Chemicals on Agricultural Topsoil: Biodegradation, Sorption, and Co-contaminant Interactions, Environ. Sci. Technol. 2016, 50, 6071−6078
- AirWaterGas Sustainability Research Network, November 2016.
- Matthew Heberger and Kristina Donnelly, OIL, FOOD, AND WATER: Challenges and Opportunities for California Agriculture, Pacific Institute, December 2015.
- Issues with Alaskan agricultural data include incomplete reporting and large degrees of uncertainty in the data relative to the Lower 48.
By Natasha Léger, Interim Executive Director, Citizens for a Healthy Community and Ted Auch, Great Lakes Program Director, FracTracker Alliance
Fracking in Dairy Country
A dairy farmer in Wisconsin reflects upon a new industry in town: frac sand mining, how it is perceived, and where the industry is headed.
By Paul Jereczek
Jereczek Homestead Dairy, Dodge, Wisconsin
In 4th grade, every Wisconsin student learns about their state. Topics pertaining to Wisconsin’s economy, geography, and history along with ethnicity and traditions are introduced and explored. State facts and anecdotes are discussed and naturally memorized. The one that stood out to me the most was how Wisconsin became known as the “Badger State.”
The origin of the badger nickname is from mining. The 4th grade story I remember was that miners were too busy to build houses so they moved into abandoned mineshafts and/or dug their own burrows. These men became known as “badgers.” The 4th grade version of myself thought that was real impressive. I pictured strong, hard working men fiercely toiling away in the earth like mythical creatures, helping make Wisconsin what it is today.
It made for a great story.
Back to Reality
The reality and documentation of the times suggests something different. Most miners lived in cabins or other structures above ground. There most certainly were a few outliers on the fringe of mining society who burrowed their own holes or lived in abandoned underground mines, but the adult version of myself has a hard time imagining that the term used to describe such men – badgers – was used as a compliment.
Either way, the result is the same. Word spread and eventually Wisconsin became known as the Badger State. The state may be known worldwide for its cheese and agriculture, but there was mining in Wisconsin long before the first dairy cow. While the state was earning its nickname, mining was a prominent reason for the early success of the region.
Dairy Farming in WI
Our farm is in Trempealeau County, Wisconsin – a driftless area – meaning the land was not covered by glaciers during the last ice age. The terrain is hilly and uneven, with tree-topped bluffs and hills overlooking valleys. The valleys, ranging from deep and narrow to wide and shallow, bump and flow into each other. Over the years, our farm has received its fair share of breaker rock, crushed rock, and gravel from the prevalent rock quarries. Sandstone deposits are huge and close to the surface. As a kid, there was a ledge in the cow pasture, where I hunted through chunks of sandstone for fossils.
As with everything else in the world, dairy farming continues to change. Most barns sit derelict and hold only memories of cows as they fade into the landscape. Small farms that clung to the valley walls have been sold to bigger operations, sit vacant, or have been built over. A lot of once prime farmland has been converted into houses with ridiculously large lawns. In 1990, Wisconsin had over 34,000 licensed dairy herds. Now there are just over 9,000.
We are the last dairy farm in our valley. Parallel to the trend, my childhood herd of 40 cows has turned to 200, which is about an average-sized herd. Margins are tighter than ever. Consistent help is hard to find. Milk prices are a terrible rollercoaster ride – it seems to take forever for them to go up, but when they fall, it’s fast and sickening. In the dairy business world, survival is a measure of success.
Frac Sand Mining Perceptions
The term frac sand is relatively new to me. I always assumed sand was sand and had given the word sand a negative connotation. Sand’s large particles don’t hold moisture or nutrients well, so sandy fields tend to perform poorly. But what if that sand has value for something else? What if there is a market for this sand much like a market for corn or soybeans?
Farmers tend to be resourceful. Every asset is scrutinized and employed to the fullest. Every acre is pushed. But what about what may lie beneath the soil? Sand mining has been going on in Wisconsin for well over a hundred years, but the recent surge in fracking has created an enormous demand for frac sand – and there are many people and companies set to take advantage of the boom.
Trempealeau County has zoning and planning ordinances to protect its industries and way of life. These aggressive ordinances allow more citizen input than other county’s ordinances. Public hearings are required, and orderly processes are enforced. With the economics involved with frac sand mining, citizens got educated very quickly. Much like abortion or immigration, frac sand has become a polarizing subject. Strong emotions built up by personal ideologies have pushed this topic to a boiling point. The for and against groups trade barbs without much convincing being done on either side. Frac sand mining editorials are common in local papers with those against appearing to be the most vocal and emotional.
New Player, New Approach
One such editorial detailed the approach a sand company took to obtaining a property. A local farmer had a sand mine company representative approach him with an oversized check written out to him for a sizable amount of money for his land. It was as though the sand rep was taking a page out of the Publishers Clearing House’s playbook. The farmer turned down the check. The sand rep left and returned a short time later with a significantly larger offer. The farmer was equally surprised and insulted. He found out later a few neighbors turned down similar proposals.
So what’s the deal with such a brazen approach? Intentions from this company may well have been good. Many people believed the sand mines were a win-win opportunity. Companies were selling hype – there was no way for anything but success. Extreme optimism. Sand mines were going to increase the tax base, fund schools and roads. Concerns were minimized, and residents were told what they wanted to hear. Such talk produced plenty of skeptics.
Environmental Costs of Frac Sand Mining
With both dairying and fracking, there is an environmental cost. Whether you milk 10, 100, or 1,000 cows – there are environmental pressures. With sand mining, the environmental effects are well documented. It is important, if not just practical, to measure these with the fiscal rewards. And where does this money go and who benefits the most? But, most importantly, who must deal with the consequences?
The risks of sand mines can be mitigated if proper regulations are taken seriously. With the extra scrutiny, a magnifying glass was placed over the sand mines, and what was found only proved the skeptics right. Trapping or pooling storm water seemed to be a learning process for sand mine companies; reported in 2012, every operating sand mine in Trempealeau County had storm water runoff violations. In 2014, over half of the sand mines in all of Wisconsin had violated environmental regulations imposed by the Department of Natural Resources. Add to this loss of surrounding property values, damage to roads, and a damper on quality of life – and you’ll create a substantial amount of public backlash.
Regulations Have Their Place
As was mentioned earlier, mining Is not new to the state. There are many multi-generational mining companies who have the experience, tradition, and financial network to abide by current standards and environmental regulations. Nobody likes to be told what to do. No industry is out there begging for more regulations. Often, the rules are in place to protect – not hinder – those that use environmentally safe and humane practices. Dairying has its own unique regulations – some are good, some not so much, and some downright stupid. Yet, overall it can be argued that these regulations protect the industry and the environment.
One heated topic in the dairy industry involves the sale of raw (unpasteurized) milk. It is illegal for any dairy in the state to sell raw milk. I have been drinking raw milk straight from the bulk tank since before I can remember. Our whole family did. Now, I still drink it and so do all my children from the age of a year and a half on up. None of us has ever had trouble with it. However, I am in complete agreement that the sale of raw milk should be illegal. All it takes is for one child to get terribly sick (which most certainly would happen) and for that kid lying on a hospital bed being blasted by every news network in the nation. These images create strong negative emotions that reverberate throughout society. The potential costs far outweigh the economic benefits from such a sale. Sure, some people are upset, but the greater good is maintained by taking away a risky practice.
The same principle works for mining. Rules and regulations get negative press and reaction, but who stands to lose the most from environmental catastrophes related to mining – the company in business 90-some years or the startup mining ventures trying to capture lightning in a bottle? Some companies have built years of trust and compatibility and support for their local communities. These are businesses that will remain after the sand rush has fizzled.
Booms and Busts, Ups and Downs
The frac sand industry is going through the same economic cycle as the dairy industry. The sand companies are getting better at what they do and increase their production capacity. Like milk, sand is a commodity. As the price of sand decreased, production increased to maintain profits. The dairy industry does the same thing, by expanding and improving efficiency to get more milk to catch those dollars slipping away. However, when the market is flush with milk or bombed with sand, they’re just doing more damage to themselves. This is a simplified take on the industry, as there are many global factors that come into play, but the overall pattern tends to remain. As the dairy industry can attest, this fluctuating cycle is not sustainable for all producers.
Worse yet for the sand industry, this cycle has occurred in hyper speed. At first, just the small mines cut production. Outcompeted by larger operations, production at smaller mines was no longer profitable. Soon, the larger mines cut production due to the weakening demand. Many mines in the permit or early production phases never got started. Unlike the dairy industry, there was no rollercoaster effect because prices have yet to return to prior levels. The bubble, it seems, had popped.
With any kind of new mine developed comes the environmental impacts. Yet, I find the fervent negative reaction to such practices directly related to the end result. Fracking. Fracking isn’t magic. They’re not just mixing water with this sand and forcing oil and gas out of the ground. Harmful chemicals are being added to the mix. Worst yet, the quantity and potency of such chemicals is kept secret, closely guarded from the public. Harmful chemicals are being legally pumped into the ground. All the short-term gains will have long-term consequences. This is where I believe a significant backlash for new mines comes from. The end result. Can you imagine what the public’s perception of dairy farms would be if milk was mixed with chemicals and pumped into the ground?
The Future of Dairy Farming in Wisconsin
The 2016 presidential election has breathed some life into the frac sand industry. The new president promises to cut regulations interfering with business, and thus far has kept those promises. The environment will not be a detriment to his goals. Sand companies are returning with ads in the local papers, looking for qualified applicants and offering great salaries. In contrast, the dairy industry is stuck in a rollercoaster spiral. Milk prices have been too low for far too long. The dairy dispersal continues with some very good cows being sold and very good dairymen and women calling it quits. Naturally, some land will be sold. To what end remains to be seen. But it is a safe bet, the frac sand mining ride has not ended.
Pennsylvania Oil & Gas Fines Analysis
In March 2017, FracTracker Alliance conducted a review of the available Pennsylvania oil and gas fine data released publicly by the PA Department of Environmental Protection (DEP) to identify trends in industry-related fines over time and by particular operators. In total, the DEP has assessed nearly $36 million in fines to oil and gas extraction and pipeline operators since January 1, 2000. Such fines are associated with over 42,000 violations issued1 by DEP in that time frame, covering 204,000 known oil and gas locations,2 as well as 91,000 miles of pipelines3 within the Commonwealth.
Understanding the Data Structure
The amount of money that the Pennsylvania Department of Environmental Protection (DEP) fines oil and gas (O&G) operations is included in the DEP’s compliance report published on their website. Even though fines data are made available, they are not necessarily straight-forward, and caution must be taken not to over-estimate the total number of assessed fines.
Records of fines are associated with enforcement identification codes on the compliance report. A single fine is often applied to numerous violations, and the full amount of the fine is listed on every record in this subset. Therefore, the total dollar amount of fines assessed to O&G companies appears overstated. For example, if a $400,000 fine were assessed to settle a group of 10 violations, that figure will appear on the report 10 times, for an apparent aggregate of $4,000,000 in fines. To get an accurate representation of fines assessed, we need to isolate fines associated with particular enforcement ID numbers, which are used administratively to resolve the fines.
This process is further complicated by the fact that, on occasion, such enforcement ID numbers are associated with more than one operator. This issue could result from a change in the well’s operator (or a change of the operator’s name), a group of wells in close proximity that are run by different operators, or it might point to an energy extraction company and a midstream company sharing responsibility for an incident. Sometimes, the second operator listed under an enforcement ID is in fact “not assigned.” The result is that we cannot first summarize by operator and then aggregate those subtotals without overstating the total amount of the assessed fines. In all, 62 of the enforcement ID numbers apply to more than one operator, but this figure amounts to less than one percent of the nearly 15,000 distinct enforcement ID numbers issued by DEP.
Conventional & Unconventional Violations & Fines
Oil and gas wells in Pennsylvania are categorized as either conventional or unconventional, with the latter category intended to represent the modern, industrial-scaled operations that are commonly referred to as “fracking wells.” Contrastingly, conventional wells are supposed to be the more traditional O&G wells that have been present in Pennsylvania since 1859. The actual definition of these wells leaves some blurring of this distinction, however, as almost all O&G wells now drilled in Pennsylvania are stimulated with hydraulic fracturing to some degree, and some of the conventional wells are even drilled horizontally – just not into formations that are technically defined as unconventional. For the most part, however, unconventional remains a useful distinction indicating the significant scale of operations.
Table 1. Summary of oil and gas wells, violations, and fines in Pennsylvania
|Fines per Violation||257||2,235||2,389||848|
|Fines per Well||36||1330||–||176.27|
|Violations per Well||0.14||0.60||–||0.21|
|Wells per Violation||7.11||1.68||–||4.81|
|* The total fine amount issued is not a summary of the three preceding categories, as some of the fines appear in multiple categories|
Ninety-five (95)% of the state’s 204,000 O&G wells are classified as conventional, so it should not be surprising to see that this category of wells accounts for a majority of violations issued by the department. However, fines associated with these violations are less frequent, and often less harsh; the $7 million in fines for this category accounts for only 19% of the total assessed penalties. In contrast, the total penalties that have been assessed to unconventional wells in the state are nearly twice that of conventional wells, despite accounting for just 5% of the state’s well inventory
On the 54,412 records on the compliance report, 10,518 (19%) do not indicate whether or not it is an unconventional well. The list of operators includes some well-known conventional and unconventional drilling operators, and hundreds of names of individuals or organizations where O&G drilling is not their primary mode of business (such as municipal authorities and funeral homes). This category also contains violations for midstream operations, such as pipelines and compressor stations. Altogether, 3,795 operators have entries that were not categorized as either conventional or unconventional on the compliance report, and 124 of these operators were issued fines. One additional complication is that some of the violations and fines that fall into this category are cross-referenced in the conventional and unconventional categories, as well.
The resulting impact of these factors is that the blank category obscures the trends for violations and fines in the other two categories. While tempting to reclassify well data in this category as either conventional or unconventional, this would be a tall task due to the sheer number of records involved, and would likely result in a significant amount of errors. Therefore, the FracTracker Alliance has decided to present the data as is, along with an understanding of the complexities involved.
Most Heavily Fined Operators
Despite the numerous caveats listed above, we can get a clear look at the aggregated fines issued to the various O&G operators in the state by constructing our queries carefully. Table 2 shows the top 12 recipients of O&G-related fines assessed by DEP since 2000. Ten of these companies are on the extraction side of the business, and the total number of well permits issued4 to these companies since 2000 are included on the table. By looking at the permits instead of the drilled wells, we discover the operator that was originally associated with the drilling location, whereas the report of drilled wells associates the current operator associated with the site, or most recent operator in the event that the location is plugged and abandoned.
Stonehenge Appalachia and Williams Field Services operate in the midstream sector. Combining the various business name iterations and subsidiaries would be an enormous task, which we did not undertake here, with the exception of those near the top of the list. This includes Vantage Energy Appalachia, which was combined with records from Vantage Energy Appalachia II, and the compliance history of Rice Energy is the sum of three subsidiaries, the drilling company Rice Drilling B, and two pipeline companies, Rice Midstream Holdings and Rice Poseidon Midstream.
Table 2. Top 12 operators that have been assessed oil and gas-related fines by DEP since 2000
|Operator||Total Fines||Conventional Permits||Unconventional Permits||Violations||Fines / Violation||Fines / Permit|
|Range Resources Appalachia LLC||$5,717,994||2,104||2,206||819||$6,982||$1,327|
|Chesapeake Appalachia LLC||$3,120,123||18||3,072||754||$4,138||$1,010|
|Alpha Shale Res LP||$1,681,725||3||62||31||$54,249||$25,873|
|Stonehenge Appalachia LLC||$1,500,000||–||–||294||$5,102||–|
|Cabot Oil & Gas Corp||$1,407,275||19||902||726||$1,938||$1,528|
|CNX Gas Co LLC||$1,274,330||1,613||677||387||$3,293||$556|
|WPX Energy Appalachia LLC||$1,232,500||347||159||$7,752||$3,552|
|Chevron Appalachia LLC||$1,077,553||2||604||113||$9,536||$1,778|
|Vantage Energy Appalachia LLC**||$1,059,766||3||300||35||$30,279||$3,498|
|Williams Field Services Co, LLC||$872,404||–||–||158||$5,522||–|
|XTO Energy Inc||$739,712||1,962||461||383||$1,931||305|
|* Fines for Rice Energy here represent the sum of three subsidiaries, the drilling company Rice Drilling B, and two pipeline companies, Rice Midstream Holdings and Rice Poseidon Midstream.
** Fines for Vantage Energy Appalachia were combined with records from Vantage Energy Appalachia II.
Predictably, many of the entries on this list are among the most active drillers in the state, including Range Resources and Chesapeake Appalachia. However, Alpha Shale Resources has the dubious distinction of leading the pack with the highest amount of fines per violation, as well as the highest amount of fines per permit. Fitting in with the theme, the story here is complicated by the fact that Alpha had a joint venture with Rice, before selling them their stake in a group of wells and midstream operations that were fined $3.5 million by DEP.5 On this compliance report, the fines from this incident are split between the two companies.
Fines Issued Over Time
It is worth taking a look at how O&G related fines have varied over time, as well (Figure 1, shown in millions of dollars). Numerous factors could contribute to changes in trends, such as the number of available DEP inspectors,6 the amount of attention being paid to the industry in the media, differing compliance strategies employed by various political administrations, or changes in practices in the field, which could in turn be impacted by significant fines issued in the past.
The notable spike in fines issued from 2010 to 2012 corresponds with the peak of unconventional drilling in the state – 4,908 of these industrial scaled wells were drilled during those three years, amounting to 48% of all unconventional wells in PA. In contrast, only 504 unconventional wells were drilled in 2016, or around a quarter of the total for 2011. In this context, the reduction in fines since the early part of the decade seems reasonable.
The association with the number of unconventional wells falls apart a bit in the years 2013 to 2014, however. These two years saw an average of 1,293 unconventional wells drilled, but the fines issued amounted to only 35% of the 2011 total.
Considerable strides have been made in the public accessibility of oil and gas data available from the PA DEP since FracTracker started requesting and reviewing this information in 2009. Still, there are many gaps in the datasets, such as geolocation details for 10 of the 20 largest fines issued by the department. FracTracker hopes external analyses like this one will help to close such gaps and identify operators who, too, need to improve their compliance records.
References & Footnotes
- Pennsylvania Department of Environmental Protection (PA DEP) Oil and Gas (O&G) Compliance Database.
- PA DEP O&G Spud Database. Note: Starting date 1/1/1800 captures unknown spud (wells drilled) dates.
- Pipeline Hazardous Materials and Safety Administration (PHMSA) Pipeline Data Mart Reports.
- PA DEP Permits Issued Database.
- State Impact PA. (2016). Rice Energy fined $3.5 million for wellsite and pipeline violations.
- PennEnvironment Research & Policy Center. (2017). Fracking Failures 2017, Oil and Gas Industry Environmental Violations in Pennsylvania.
Oil & Gas Fines White Paper
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Cover Photo by Pete Stern, Loyalsock, PA