Re-imagine Beaver County meeting - Photo by Sophie Riedel

Mapping a new vision in PA: Alternatives to petrochemical development

March 24, 2017/by FracTracker Alliance

At a Re-Imagine Beaver County gathering in Pennsylvania earlier this month, static maps became dynamic in the hands of those who live in and around the region depicted. Residents of this area in the greater Pittsburgh region gathered to depict a new vision for Beaver County, PA. This county is currently faced with the proposal of a massive Shell-owned petrochemical facility – also called a “cracker” – and further build-out that could render the area a northern version of Louisiana’s “Chemical Corridor.” Participants at this event, from Beaver County and beyond, were encouraged to collectively envision a future based on sustainable development. The picture they created was one that welcomes change – but requires it to be sustainable and for the benefit of the community that makes it happen.

Re-Imagine Beaver County Group Mapping - by Sophie Riedel

Figure 1: Participants study a map of Beaver County. Photo credit: Sophie Riedel.

Re-Imagine Beaver County Participants

Panelists from municipal government, organic agriculture, and leaders and entrepreneurs of sustainable initiatives started off the event, sponsored by the League of Women Voters of Pennsylvania and endorsed by the Beaver County Marcellus Awareness Committee. After an hour, the room of 60 or so participants dove into the lively de- and re-construction of large format maps of the area. They were invited to markup the maps, created by Carnegie Mellon University graduate student of the School of Architecture, Sophie Riedel. Each table worked from a different base map of the same area – centering on the confluence of the Ohio and Beaver rivers, including the already heavily-industrialized riverside and the site of Shell’s proposed petrochemical facility.

Massive shell processing plant under construction in Beaver County PA and across the Ohio River from the town of Beaver. This massive processing plant, near residential areas, schools and hospitals, will be a serious threat to the health of the those living in the region.

Figure 2: The site of the proposed petrochemical facility in Beaver County (on left) and the Ohio River that participants hope to see reinvented as a recreational waterway buttressed by public parks. Photo credit: Garth Lenz, iLCP.

Much more than a thought exercise, the gathering represented a timely response to a growing grassroots effort around the proposed petrochemical inundation. Changes are already underway at the site, and those who live in this region have the right to give input. This right is especially salient when considering the risks associated with the petrochemical industry – including detrimental health impacts on babies before they are even born, asthma exacerbation, and increased cancer rates.

Charting a new vision

The re-invented Beaver County would be one of increased connectivity and mobility, well-equipped to provide for local needs with local means.

Many ideas included on the maps reflected a longing for transportation options independent of personal vehicles – including better, safer, more connected bike trails and walking paths, use of existing rail lines for local travel, and even the inventive suggestion of a water taxi. These inherently lower-impact means of transport coincide with preferences of millennials, according to several of the panelists, who want more walkable, bikeable communities. Ushering in such sustainable suggestions would welcome more young families to an area with an aging population. More than just about moving people, transportation ideas also included ways to get locally grown foods to those who need it, such as the elderly.

Figure 3: Participants modify maps to reflect a new vision. Photo credit: Sophie Riedel.

The value of beauty was a subtheme in many of the ideas to connect and mobilize the population and goods, ideas which often held a dual aim of protecting open space, creating new parks, and offering recreation possibilities. Participants ambitiously reimagined their river, the Ohio, from its current status as a closed-off corridor for industrial usage and waste, to a recreational resource for kayaking and fishing walleye.

Participants marked up the maps to show the resources that help sustain this community, and voiced a strong desire for development that would enable additional self-reliance. These forward-thinking changes included increased agriculture and use of permaculture techniques, and community gardens for growing food near the people who currently lack access. Ideas for powering the region abounded, like harnessing wind power and putting solar panels on every new building.

Participants were firm on local sourcing for another key resource: the labor required for these efforts, they insisted, must come from the local populace. Educational programs designed to channel learners into workers for sustainability might include training to rebuild homes to “greener” standards, and programs aimed at bringing a new generation of farmers to the fields. Perhaps a nod to the world-wide plastic glut that a petrochemical facility would add to, suggestions even included local ways of dealing with waste, like starting a composting program and establishing more recycling centers.

Whose vision?

Who is a part of this vision, both in creating it and living it out? Inevitably, the selection of panelists and the interests of the audience members themselves influenced the vision this group crafted. The question of inclusion and representation found articulation among many participants, and the hosts of the event welcomed suggestions on reaching a broader audience moving forward. Looking around the room, one man asked, “Where are all the young people, and families with kids?” Indeed, only several members of this demographic were present. Though indicative of the racial makeup of Beaver County, the audience appeared to be primarily white, meaning that the racially diverse communities in the region where not represented. Others pointed out that going forward, the audience should also include those residents struggling with un- and underemployment, who have a major stake in whatever vision of Beaver County comes to fruition. Another said he would like to see more elected officials and leaders present. Notably, Potter Township Board of Supervisors Chairperson, Rebecca Matsco, who is a strong advocate for the proposed petrochemical project in her township, was present for the first half of the event.

Local means for meeting local needs

People who welcome petrochemical development in Beaver County might believe that those who voice concerns about the proposed Shell plant aren’t forward-thinking, or simply oppose change. Quite in contrast, participants at Re-Imagine Beaver County went to work reinventing their community with optimism and enthusiasm. They didn’t seem to be resisting change, but instead, wanting to participate in the process of change and to ultimately see benefits to their community. For example, discussion of solar power generated substantial excitement. According to panel speaker Hal Saville, however, the biggest challenge is making it affordable for everyone, which suggests that the estimated $1.6 billion in tax breaks going to Shell for the petrochemical plant could be better allocated.

A key narrative from supporters of the ethane cracker centers on the pressing need for jobs in this area, though some locals have expressed concern about how many of Shell’s promised jobs would go to residents. Whoever gets hired, these jobs come with serious dangers to workers. Participants at this event proposed alternative initiatives – both ambitious and small – for creating jobs within the community, like providing “sprout funds” to encourage new business start-ups, and launching a coordinated effort to rehab aging housing stock. These ideas suggest that the people of this region feel their energy and ingenuity would be best spent making Beaver County a better place to live and work, in contrast to producing disposable petrochemical products for export around the world. The fact that so many participants emphasized local means for meeting their needs in no way downplays the need for good jobs. Rather, it points to the fact that people want jobs that are good for them and for the future of their community.

Moving the vision forward

Where do we go from here? Can the momentum of this event draw in greater representation from the region to have a voice in this process? Will these visions become animated and guide the creation of a new reality? Broader and deeper planning is in order; participants and panelists alike pointed to tools like comprehensive community plans and cleaner, “greener” industrial policies. More than anything, the group articulated a need for more deliberation and participation. As panelist and farm co-owner Don Kretschmann put it, when it comes to change, we need to “think it through before we go ahead and do it.”

The maps themselves, bearing the inspirations scrawled out during the event, have not reached the end of the road. From here, these maps will accompany an upcoming exhibition of the artworks in Petrochemical America, which locals hope to bring to the greater Pittsburgh area in the coming months. League of Women Voters, for their part, continue to move the vision forward, inviting input from all on next steps, with an emphasis on pulling in a broader cross-section of the community.

To voice your vision, and to stay in the loop on future Re-Imagine Beaver County events, contact reimaginelwvpa@gmail.com.

Many thanks to Sophie Riedel for sharing photographs from the event, and to the International League of Conservation Photographers and the Environmental Integrity Project for sharing the aerial photograph of the Shell site from their joint project, “The Human Cost of Energy Production.”

By Leann Leiter, Environmental Health Fellow

Starved Rock State Park by Michelle McCray

How Frac Sand Mining is Altering an Economy Dependent on Starved Rock State Park, IL

August 29, 2016/by Guest Author

An Ottawa, IL resident’s letter to U.S. Silica regarding how the firm’s “frac” sand mines adjacent to Starved Rock State Park will alter the local economy.

Starved Rock State Park

As is so often the case, we find that those things we have taken most for granted are usually the things we miss most when they are gone. The list of what our nation has lost to industrial and commercial concerns couldn’t possibly be compiled in a single article. The short-sighted habits of economic progress have often led to long-term loss and ecologic disaster. That is why it took a man like Abraham Lincoln, a man of long-term vision and wisdom, to sign into existence our first national park, preserving for antiquity what surely would have been lost to our American penchant for development and overuse.

With that in mind, I have always found it amazing how the gears of our own local and state governments have continually chosen the economic path of least resistance and allowed the areas surrounding Starved Rock State Park to be ravaged and destroyed for what is, ultimately, minimal gain. I am no expert but I suspect it could be argued that a full 1/3 of LaSalle County’s economic engine is funded by the simple existence of Starved Rock State Park. Beyond the 2 million plus visitors to the park each year, it cannot be forgotten that nearly every municipality in LaSalle County has directly or indirectly benefited from the countless number of businesses that prosper from the magnetism of the park’s tranquil canyons.

Photos by Michelle McCray of McCray Photography.

Preservation Not Development

As the 4-year battle with Mississippi Sand over development of the Ernat property has proved, there are many rational souls who truly acknowledge the importance of maintaining a healthy and productive park environment. With the recent sale of the Ernat property to U.S. Silica, we are again confronted with the prospect of irrational development of the eastern boundaries of Starved Rock State Park.

Given the gravity of these decisions, I would like to share a letter recently sent on behalf of many of those who have fought so hard and so long for preservation of that same eastern boundary. This letter was sent to Brian Shinn, CEO of U.S. Silica Holdings, INC. (SLCA) in Frederick, Maryland nearly a month ago, and we have yet to receive a response. In sharing this information on FracTracker’s website, I hope this letter will contribute to further discussion among our local representatives over a far more long-term vision of what LaSalle County wishes to be and what qualities, both environmental and economic, that it wishes to maintain and protect:

Letter to US Silica

Dear Mr. Shinn,

I am writing this letter on behalf of dozens of LaSalle County, Illinois residents who have, for the past several years, been intimately involved in the active pursuit of rational use and conservation of our local natural environment. As I am sure you are aware, the debate over use of the Ernat property as a functional sand mining operation has been a long and hard-fought battle. Years of litigation by the Sierra Club and other local environmental groups helped stall it’s development by Mississippi Sand, and have now led to the sale of the Ernat acreage to U.S. Silica. As irrational as the previous proposals were, the sale putting that acreage under your control has not lessened our concerns over the damaging use of that property as it relates to historic Highway 71 and the entire Starved Rock State Park area.

Obviously, sand mining operations have been a long-standing component of LaSalle County economics. Decades of mining under U.S. Silica supervision have not substantially reduced the quality of life for county residents or the natural environment as a whole. However, as can be specified by many local experts, the development and spoilage of the Ernat property will most certainly have longstanding and drastic impacts on both the ecology of Starved Rock State Park and the economic engine that it sustains. Starved Rock State Park attracts over 2 million visitors each year, with an estimated half million visitors using the Hwy. 71 entrance paralleling the Ernat farm as their main gateway into the park. The Ernat property’s river frontage has long been the tranquil eastern entry into the Illinois Canyon area, as well as an active nesting site for countless birds amidst bountiful wetlands and flat, open prairies. The Ernat property’s shared access to Horseshoe Creek has also made it essential to the entire Illinois Canyon ecosystem within the park. In short, any development of this property will most certainly have long-term negative impacts on both the economics and ecology of the Illinois River Basin.

In writing this letter, we are hoping that U.S. Silica, under your guidance, may consider the opportunity to preserve this indispensable parcel of land and examine ways in which U.S. Silica might make this land available as a gift or negotiated property to the state of Illinois. It would certainly be an important addition to the entire Starved Rock State Park area. I have included the signatures of many of our own local coalition. We hope you will consider the long-term impacts that this development would have to one of Illinois premier natural areas. Thank you.

Inspiring Action

I hope those who have signed this letter will be inspired to further action, and those who have not will reconsider their years of inaction. The natural heritage and local economies of our entire Illinois River Basin are depending on it.

Sincerely,

Paul Wheeler

Only when the last tree has died…
and the last river been poisoned…
and the last fish been caught…
will we realize we cannot eat money.

An old Cree Indian saying

Sand Mining Photos

For additional photos from Illinois, explore our online photo album.

Mr. Wheeler grew up in Oak Lawn, IL and now lives with his wife and daughter in the Ottawa, IL area and is a para-educator.

Feature image by Michelle McCray of McCray Photography.

US Oil Refineries and Economic Justice

August 24, 2016/by Ted Auch, PhD

How annual incomes in the shadow of oil refineries compare to state and regional prosperity

North American Oil Refinery Capacity (Barrels Per Day (BPD))

Figure 1. North American Oil Refinery Capacity

Typically, we analyze the potential economic impacts of oil refineries by simply quantifying potential and/or actual capacity on an annual or daily basis. Using this method, we find that the 126 refineries operating in the U.S. produce an average of 100,000-133,645 barrels per day (BPD) of oil – or 258 billion gallons per year.

In all of North America, there are 158 refineries. When you include the 21 and 27 billion gallons per year produced by our neighbors to the south and north, respectively, North American refineries account for 23-24% of the global refining capacity. That is, of course, if you believe the $113 dollar International Energy Agency’s 2016 “Medium-Term Oil Market Report” 4.03 billion gallon annual estimates (Table 1 and Figure 1).

Table 1. Oil Refinery Capacity in the United States and Canada (Barrels Per Day (BPD))

	United States	Canada	Mexico	Total
Refinery Count	126	17	6	158
Average Capacity	133,645 BPD	104,471 BPD	228,417 BPD	139,619 BPD
Low	Foreland & Silver Eagle Refining in NV & WY, 2-3K BPD	Prince George & Moose Jaw Refining in BC and SK, 12-15K BPD	Pemex’s Ciudad Madero Refinery, 152K BPD	—
High	Exxon Mobil in TX & LA, 502-560K BPD	Valero and Irving Oil Refining in QC & NS, 265-300K BPD	Pemex’s Tula Refinery, 340K BPD	—
Median	100,000 BPD	85,000 BPD	226,500	109,000
Total Capacity	16.8 MBPD	1.8 MBPD	1.4 MBPD	22.1 MBPD

Census Tract Income Disparities

However, we would propose that an alternative measure of a given oil refinery’s impact would be neighborhood prosperity in the census tract(s) where the refinery is located. We believe this figure serves as a proxy for economic justice. As such, we recently used the above refinery location and capacity data in combination with US Census Bureau Cartographic Boundaries (i.e., Census Tracts) and the Census’ American FactFinder clearinghouse to estimate neighborhood prosperity near refineries.

Methods

Our analysis involved merging oil refineries to their respective census tracts in ArcMAP 10.2, along with all census tracts that touch the actual census tract where the refineries are located, and calling that collection the oil refinery’s sphere of influence, for lack of a better term. We then assigned Mean Income in the Past 12 Months (In 2014 Inflation-Adjusted Dollars) values for each census tract to the aforementioned refinery tracts – as well as surrounding regional, city, and state tracts – to allow for a comparison of income disparities. We chose to analyze mean income instead of other variables such as educational attainment, unemployment, or poverty percentages because it largely encapsulates these economic indicators.

As the authors of the UN’s International Forum of Social Development paper Social Justice in an Open World wrote:

In today’s world, the enormous gap in the distribution of wealth, income and public benefits is growing ever wider, reflecting a general trend that is morally unfair, politically unwise and economically unsound… excessive income inequality restricts social mobility and leads to social segmentation and eventually social breakdown…In the modern context, those concerned with social justice see the general increase in income inequality as unjust, deplorable and alarming. It is argued that poverty reduction and overall improvements in the standard of living are attainable goals that would bring the world closer to social justice.

Environmental regulatory agencies like to separate air pollution sources into point and non-point sources. Point sources are “single, identifiable” sources, whereas non-point are more ‘diffuse’ resulting in impacts spread out over a larger geographical area. We would equate oil refineries to point sources of socioeconomic and/or environmental injustice. The non-point analysis would be far more difficult to model given the difficulties associated with converting perceived quality of life disturbance(s) associated with infrastructure like compressor stations from the anecdotal to the empirical.

Results

Primarily, residents living in the shadow of 80% of our refineries earn nearly $16,000 less than those in the surrounding region – or, in the case of urban refineries, the surrounding Metropolitan Statistical Areas (MSAs). Only residents living in census tracts within the shadow of 25 of our 126 oil refineries earn around $10,000 more annually than those in the region.

On average, residents of census tracts that contain oil refineries earn 13-16% less than those in the greater region and/or MSAs (Figure 2). Similarly, in comparing oil refinery census tract incomes to state averages we see a slightly larger 17-21% disparity (Figure 3).

Digging Deeper

United States Oil Refinery Income Disparities (Note: Larger points indicate oil refinery census tracts that earn less than the surrounding region or city)

Figure 4. United States Oil Refinery Income Disparities (Note: Larger points indicate oil refinery census tracts that earn less than the surrounding region or city.)

Oil refinery income disparities seem to occur not just in one region, but across the U.S. (Figure 4).

The biggest regional/MSA disparities occur in northeastern Denver neighborhoods around the Suncor Refinery complex (103,000 BPD), where the refinery’s census tracts earn roughly $42,000 less than Greater Denver residents¹. California, too, has some issues near its Los Angeles’ Valero and Tesoro Refineries and Chevron’s Bay Area Refinery, with a combined daily capacity of nearly 600 BPD. There, two California census associations in the shadow of those refineries earn roughly $38,000 less than Contra Costa and Los Angeles Counties, respectively. In the Lone Star state Marathon’s Texas City, Galveston County refinery resides among census tracts where annual incomes nearly $33,000 less than the Galveston-Houston metroplex. Linden, NJ and St. Paul, MN, residents near Conoco Phillips and Flint Hills Resources refineries aren’t fairing much better, with annual incomes that are roughly $35,000 and nearly $33,000 less than the surrounding regions, respectively.

Click on the images below to explore each of the top disparate areas near oil refineries in the U.S. in more detail. Lighter shades indicate census tracks with a lower mean annual income ($).

Conclusion

Clearly, certain communities throughout the United States have been essentially sacrificed in the name of Energy Independence and overly-course measures of economic productivity such as Gross Domestic Product (GDP). The presence and/or construction of mid- and downstream oil and gas infrastructure appears to accelerate an already insidious positive feedback loop in low-income neighborhoods throughout the United States. Only a few places like Southeast Chicago and Detroit, however, have even begun to discuss where these disadvantaged communities should live, let alone how to remediate the environmental costs.

Internally Displaced People

There exists a robust history of journalists and academics focusing on Internally Displaced People (IDP) throughout war-torn regions of Africa, the Middle East, and Southeast Asia – to name a few – and most of these 38 million people have “become displaced within their own country as a result of violence.” However, there is a growing body of literature and media coverage associated with current and potential IDP resulting from rising sea levels, drought, chronic wildfire, etc.

The issues associated with oil and gas infrastructure expansion and IDPs are only going to grow in the coming years as the Shale Revolution results in a greater need for pipelines, compressor stations, cracker facilities, etc. We would propose there is the potential for IDP resulting from the rapid, ubiquitous, and intense expansion of the Hydrocarbon Industrial Complex here in the United States.

N. American Hydrocarbon Industrial Complex Map

View map fullscreen | How FracTracker maps work | Download map data

Footnotes and Additional Reading

The Suncor refinery was implicated in a significant leak of tar sands crude associated benzene into the South Platte River as recently as 2013. According to Suncor’s website this refinery “supplies about 35% of Colorado’s gasoline and diesel fuel demand and is a major supplier of jet fuel to the Denver International Airport. The refinery is also the largest supplier of paving-grade asphalt in Colorado.”
New York Times story on the growing footprint of BP’s Whiting Refinery: Surrounded by Industry, a Historic Community Fights for Its Future

Download Map Data (zip)

By Ted Auch, PhD – Great Lakes Program Coordinator, FracTracker Alliance

Ohio Shale Country Listening Project Part 1

January 8, 2016/by Ted Auch, PhD

The below industry quote divides the world into two camps when it comes to horizontal hydraulic fracturing: those who are for it and those who are against it:

Fracking has emerged as a contentious issue in many communities, and it is important to note that there are only two sides in the debate: those who want our oil and natural resources developed in a safe and responsible way; and those who don’t want our oil and natural gas resources developed at all.
– Energy from Shale (an industry-supported public relations website)

The writer imagines a world in black and white – with a clear demarcation line. In reality, it is not so simple, at least not when talking to the people who actually live in the Ohio towns where fracking is happening. They want the jobs that industry promises, but they worry about the rising costs of housing, food, and fuel that accompany a boomtown economy. They want energy independence, but worry about water contamination. They welcome the opening of new businesses, but lament the constant rumble of semi-trucks down their country roads. They are eager for economic progress, but do not understand why the industry will not hire more locals to do the work.

In short, the situation is complicated and it calls for a comprehensive response from Ohio’s local and state policy makers.

Through hefty campaign contributions and donations to higher learning institutions, the oil and gas industry exerts undue influence on Ohio’s politics and academic institutions. Many media outlets covering the drilling boom also have ties to the industry. Therefore, industry has been able to control the message and the medium. Those who oppose oil and gas in any way are painted as radicals. Indeed, some of Ohio’s most dedicated anti-fracking activists are unwavering in their approach. But most of the people living atop the Utica Shale simply want to live peacefully. Many would be willing to co-exist with the industry if their needs, concerns, and voices were heard.

This project attempts to give these Ohioans a voice and outsiders a more accurate representation about life in the Utica Shale Basin. The report does not engage in the debate about whether or not fracking should occur – but, rather, examines the situation as we currently find it.

Listening Project Summary

The Ohio Shale Country Listening Project is a collaborative effort to solicit, summarize, and share the perspectives and observations of those directly experiencing the shale gas boom in eastern Ohio. The project is led by the Ohio Organizing Collaborative (OOC)’s Communities United for Responsible Energy (CURE), with support from the Ohio Environmental Council (OEC), FracTracker Alliance, and the Laborers Local 809 of Steubenville. Policy Matters Ohio and Fair Shake Environmental Legal Services offered resources and time in drafting the final policy recommendations.

Over the course of six months, organizers from the Laborers Local 809 and OOC worked with a team of nearly 40 volunteers to survey 773 people living in the heart of Utica Shale country. Respondents are from eastern Ohio, ranging from as far north as Portage County to as far south as Monroe County. A small number of respondents hail from across the border in West Virginia and Pennsylvania, but the overwhelming majority are from Carroll (321), Columbiana (230), Jefferson (70), Harrison (30) and Belmont (28) counties.

Respondents were asked to talk about their family and personal history in the community where they live, their favorite things about their community and what changes they have noticed since the arrival of shale gas drilling using horizontal hydraulic fracturing or fracking. They were also asked to describe their feelings about oil and gas development as either positive or negative and what they believed their community would be like once the boom ends. Finally, respondents were also asked how concerned or excited they are about 11 possible outcomes or consequences of fracking.

Summary of Recommendations

Create incentives for companies to hire local workers; and increase transparency about who drilling and subcontracting companies are employing
Tax the oil and gas industry fairly with a severance tax rate of at least 5%; use this revenue to support affected communities to mitigate the effects of the boom and bust cycle
Increase the citizen participation in county decision-making on how additional sales tax or severance tax revenue is spent and how the county deals with the effects of the drilling boom
Increase transparency around production and royalties for landowners and the public
Set aside funding at the local level for air and water monitoring programs
Mitigate noise and emissions as much as possible with mandatory sound barriers and green completion on all fracking wells
Create mechanisms to protect sensitive areas from industry activity
Levy municipal impact fees to address issues associated with drilling
Better protect landowners during leasing negotiation process and from potential loss of income due to property damage

Conclusion

The more shale gas wells a community has, the less popular the oil and gas industry appears to be. Carroll County is the most heavily drilled county in Ohio, and more than half the respondents said they view the drilling boom negatively. Moreover, many residents say they are not experiencing the economic benefits promised by the oil and gas industry. They see rent, cost of gas, and groceries rising as the drilling and pipeline companies hire workers from out of state and sometimes even out of the country. Residents see more sales tax revenue coming into their counties but also see their roads destroyed by large trucks. They say they are experiencing more traffic delays and accidents than ever before. Ohioans love their community’s pastoral nature but are watching as the landscape and cropland get destroyed. As it is playing out now, the boom in shale gas drilling is not fulfilling the promises made by industry. Locals feel less secure and more financially strapped. Many feel their towns will soon be uninhabitable. It is up to state and local governments to hold industry accountable and make it pay for the impacts it creates.

Infrastructure associated with horizontal hydraulic fracturing. Images from Ted Auch and FracTracker’s Oil & Gas Photos Archive:

North Star Class II Injection Well #10, Mahoning County, OH

Heckmann Water Resources Class II Injection Well #7, Fowler, Ohio

Consol Energy fracking waste evaporation pit

Carroll County, OH, Stark Brine Waste Trucks

Carroll County, OH Utica Well Pad Flaring

Carroll County, Ohio, Compressor Station

Inception & Evolution of the Listening Project

The Ohio Shale Country Listening Project started in February 2014 with a conversation between Ohio Organizing Collaborative (OOC) staff and a veteran organizer who once worked on mountain top removal in a large region of West Virginia. The OOC organizer lamented the difficulty of organizing across a large geography around a specific issue – in this case, fracking. How do you find out what the people want without dictating to the community? The more experienced organizer immediately responded: What about a listening project? She connected OOC to the Shalefield Organizing Project in Pennsylvania whose organizers helped OOC think through what a listening project might look like in Ohio.

The project took on several iterations. First, OOC planned to focus the listening project solely on Columbiana County, which at the time was the third most fracked county in Ohio. Next, community leaders in Carroll County, the most heavily drilled county in the state, suggested the project also focus there. Eventually, as it became clear that the shale play was moving further south in Ohio, the project expanded into other counties such as Belmont, Harrison, and Jefferson. While attending a public hearing on pipeline construction in Portage County, OOC staff met an organizer from the Laborers Local 809 out of Steubenville. The organizer expressed interest in joining the project. Meanwhile, OOC had been in discussions with the Ohio Environmental Coalition (OEC) about the need to share the stories of people living in the middle of a fracking boom. OEC agreed to join the project. Finally, FracTracker also came into the fold, eager to assist in analyzing and mapping data gathered during the effort.

A listening project volunteer surveys a shopper at Rogers Open Air Market

OOC staff solicited the help from about 40 volunteers to form the “Listening Project Team” who surveyed their friends, family, coworkers, and neighbors. Volunteers met four times over the course of six months to discuss the project and strategize about how to reach more people with the survey. Most of the volunteer team came from Columbiana and Carroll Counties. The Laborers Local 809 also distributed the surveys to their members. Members of the team canvassed neighborhoods, attended local festivals, set up a booth at Rogers Open Air Market (photo left) and distributed an online version of the survey through Facebook and email. OOC staff spoke at college classes at Kent State-Salem and Kent State-East Liverpool, and solicited input from students in attendance.

The project’s initial goal was to hit a target of 1,000 – 1,500 survey responses. In the end the team fell short of this number, but were able to reach 773 people living in the Utica Shale area. This barrier is mostly due to the rural nature of the communities surveyed, which makes it more difficult to reach a large number of people in a short timeframe. The most responses came from Carroll County – 321 surveys. Columbiana County represented the second largest group of respondents with 230 surveys. Seventy people from Jefferson County, 30 people from Harrison County, 28 from Belmont County filled out the survey. The final 80 responses came from Mahoning, Stark, Summit and Tuscarawas Counties. Finally, nearly fifty responses came from Pennsylvania and West Virginia residents who live along the Ohio border (see Figure right). We promised survey respondents that all names and information would be kept confidential with survey responses presented only in aggregate.

A Fresh Look at Oil and Gas Drilling from Europe

October 28, 2015/by FracTracker Alliance

By Ted Auch, Kyle Ferrar, and Samantha Rubright with Max Gruenig

Fourteen days is not nearly enough time to fully understand the complex differences between oil and gas drilling issues and policies in the United States and several European Union countries. The EU’s drilling policies, geography, and the industry’s level of activity are quite distinct from those of the States in some cases. Still, as part of the Our Energy Solutions project, four staff from FracTracker Alliance and Ecologic Institute attempted to understand and share as many lessons-learned in Europe as we could in the first two weeks of September. Our interest covered all aspects of oil and gas development, but focused on those relating to the use of stimulation techniques (hydraulic fracturing – fracking) in unconventional reservoirs. Even with significant differences between the US and EU, there is still much to be gleaned in sharing our regulatory approaches, community concerns, and environmental challenges.

“Chaos is merely order waiting to be deciphered” ― José Saramago, The Double

London, England Meetings

The House of Commons meeting was held in Parliament, just below London’s Big Ben. Photo by Sam Rubright

Our European tour started in London with Ecologic Institute’s Max Gruenig. The first stop was a meeting with University of Salford Professor of Regeneration and Sustainable Development Erik Bichard outside of The Palace of Westminster. Erik has worked extensively to understand and chronicle common threads that weave together community response(s) to hydraulic fracturing (fracking) proposals. Much of Erik’s research in the UK has focused on the efforts of the leading shale gas extraction company in the EU, Cuadrilla Resources, to employ hydraulic fracturing technologies, as well as local oppositions to this development. The major points of contention are in Lancashire County, Northwest England and Balcombe in West Sussex. Erik pointed to the fact that Cuadrilla admitted their claims that the 4% decline in UK energy cost was a result of Lancashire oil and gas exploitation were significantly overstated. Such manipulative statements appear to be cut directly from North American energy’s playbook.

House of Commons meeting, London. Photo by Sam Rubright

We then attended a spirited Fracking with Nature Meeting at The House of Commons hosted by 21st Century Network and convened by MP Cat Smith (photo right). Many, if not all, of the attendees were concerned about the negative impacts of fracking and oil and gas development in general, but perhaps the event’s purpose self-selected for those attendees. We found the conversations to be very advanced considering that the UK has not seen nearly the same level of oil and gas activity as the US. Most questions centered on the potential for fracking to negatively impact ground water, followed by the induction of earthquakes. Air quality was not discussed as often, despite the serious risks that oil and gas air pollutants pose to health, and the frequency and severity of ambient degradation reported in the US. With the UK’s move to cut subsidies for renewables and a push toward fracking, these concerns may soon become a reality.

We later met with one of the speakers at the House of Commons meeting, Damien Short LLB, MA, PhD, Director of the University of London’s Human Rights Consortium^[1] and the Extreme Energy Initiative.^[2] NGO’s, we learned, are on the forefront of the issue, debating the need to prioritize community health over corporate profits. They have had quite a lot of success on this front, despite Tory projections.^[3] The past state of UK politics under the direction of PM David Cameron, was supportive of extractive industries and corporate interests, blocking any attempt to introduce regulations. Even with the defeat of David Cameron’s administration, new “fast-tracking” rules to accelerate permits for fracking passed in August.^[4] The overwhelming victory of democratic socialist Jeremy Corbyn as the leader of the opposition Labour Party – means that the tenure of the current fracking moratoria in North Yorkshire, as well as in Scotland, Wales, and Northern Ireland^[5] could be brief.

Our time in London was filled with several other meetings, including one with Greenpeace UK’s new fracking coordinator, Hannah Martin. During our meeting she indicated that while Greenpeace was sympathetic to the views and tactics of Mr. Corbyn, they were concerned that his election would further divide Labour. In her opinion this change could allow the oil and gas sympathetic – and united – Tories to expedite their vision for fracking in the UK.

Regardless of the similarities between community concerns and industry tactics, however, one difference between the UK and US was crystal clear; no matter their view on the use of fracking, Brits support a substantial Petroleum Revenue Tax (PRT) rate to the tune of 50-60%. The PRT will fall to 35% in January, 2016, however. This latter figure is a sizeable decrease but would still be 40% higher than the average in the US. California for example, the fourth largest producing state, does not and has never levied a severance tax.^[6] Unfortunately, the UK is seeing similar conflict of interest issues and deliberate attempts to de-democratize the rule-making around fracking, as demonstrated in a recent move to prevent a proper parliamentary debate about drilling under protected areas in the UK.

Brussels, Belgium Workshop and Meeting

Geert, Max, Kyle, and Ted after our meeting with the European Commission in Brussels. Photo by Sam Rubright

The next phase of OES Europe took us to Brussels to host a community workshop and meet with members of the European Commission’s Directorate-General for Environment. Both events brought to light many concerns and questions about drilling’s safety.

The European Commission is currently drafting a best available techniques reference document (BREF) regarding hydrocarbon extraction for the European Union to consider in December 2015. The recommendations will build upon the “Minimum Principles,” published in January, 2014.^[7] Representatives from the European Commission asked us about a variety of concerns that have arisen from drilling in the US, and how Europe might have similar or different experiences. The Commission was most interested in environmental health risks and research focused on exposure to air pollutants, as well as other degraded environmental media (drinking water, soil, etc.). We also shared figures about water consumption, land use, and waste management. It was immediately apparent that the lack of high quality publicly accessible data in the US is making it very difficult for the Commission to make well-informed decisions or policy recommendations. This meeting was arranged by Geert De Cock, of Food and Water Europe, and – interestingly – was one of the first times that the European Commission met with non-industry representatives. (Several major oil and gas players have offices near the European Commission’s in Brussels.)

Rotenburg (Wümme), Germany Workshop

Presentations during Rotenburg Germany workshop, Sept 2015. Photo by Kyle Ferrar

Max presenting during the Rotenburg Germany workshop, Sept 2015. Photo by Kyle Ferrar

Our next stop in Germany was Rotenburg. Lower Saxony also has a long lineage of drilling, with the first well drilled in 1953 and the majority of natural gas development dating back to the mid 1980’s. Currently, this is an area were unconventional oil and gas drilling (fracking) is being heavily proposed and lobbied.

This workshop was by far the most well attended event. A variety of groups and stakeholders, including the town’s mayor, were in attendance and extremely well informed about environmental and public health risks that drilling could pose. They’ve been dealing with a series of environmental health concerns for some time, including high mercury levels in drilling waste and cancer clusters of questionable origin. A systematic statistical analysis has even suggested that cases of Non-Hodgkin lymphoma are higher in an area heavy with oil and gas wells and development.

See maps below for more information about drilling in Germany and Europe at large.

Unconventional gas production, conventional gas drilling, fracking and test boring in Europe
Map by Gegen Gasbohren (Against Gas Drilling)

View Gegen Gasbohren’s map fullscreen

A dynamic map similar to the one above was created by us to show simply where unconventional drilling is occurring in the UK and Netherlands:
View FracTracker’s map fullscreen

Rotenburg Field Tour

The following morning we set out with a local advocate, Andreas Rathjens, to tour over eight different oil and gas drilling sites and facilities in and around Rotenburg. This area is vey rural and a major agriculture hub, hosting 162k people, 200k cows, and 600k pigs according to our guide.

In recent years Germany has received very positive scores for its environmental policies and shift toward renewables. However, this tour highlighted some of the country’s lingering and poorly-regulated drilling history, which experienced a sharp increase in development here in the 1980’s. The pictures below will give you an idea of the issues that German residents are is still seeing from the country’s older oil and gas drilling operations. Click to enlarge the photos:

Rotenburg, Germany surface water runoff pond on a gas well pad in production

This pit is used to capture rainwater and runoff from the well pad. Since runoff from the pad will carry with it any contaminants spilled on the site, runoff must be quarantined for removal and proper disposal. Unfortunately, these tanks are rarely pumped and drained, and the runoff instead spills into local streams in small watersheds. Such is the case with this tank, with the spillway visible in the lower left corner of the photo.

This site was recently renovated to improve the drainage off of the wellpad. The drainage leads to an excavated waste pit used as an overflow catchment.^[8] In these types of waste pits pollutants evaporate into the air and percolate into groundwater sources. The waste from drilling in this region is known for its high levels of mercury.

Andreas showing us the site where he says 80,000 metric tonnes of solid waste from oil and gas drilling was mixed with residential waste and then disposed of in a field on top of a hill. Residents have tested the site and found troubling levels of arsenic and radioactive elements, but to Andreas’ knowledge no governmental or company testing has been done to-date.

Andreas showing us the site where he says 80,000 metric tonnes of solid drilling waste was mixed with residential waste and then disposed of in a field on a hilltop. Residents have tested the site and found troubling levels of arsenic and radioactive elements, but to Andreas’ knowledge no governmental or company testing has been done to-date.

View more photos from Germany

Andreas and community members all conveyed their support of domestic energy production but said they were disappointed in how the oil and gas industry has conducted itself historically in the region. They are very frustrated with how difficult it is to get their concerns heard, a sentiment echoed in many boomtowns across the US. One local politician even discussed the intentionally misleading statements made by the German state governments around environmental health issues. These residents are dedicated and driven despite the barriers, however. They are investigating and studying the problems directly at times, as well as searching for other technologies that can help improve their methods – such as the use of drones to measure air quality.

Badbergen, Lower Saxony, Germany Workshop

Fracking-freies Artland hosted our next workshop in Badbergen Germany. In addition to our presentation about drilling experiences in the US, these community gatekeepers led a presentation summarizing the work and struggles that have been occurring in their region due to both historic and modern drilling. The level of community engagement and activism here was quite impressive, mirroring that of NY State’s anti-drilling groups. These members help to inform the rest of the community about environmental and drilling issues, as Exxon is now considering fracking here again.^[9]

Schoonebeek Tour, Netherlands

Our final border crossing brought us to the Schoonebeek region in the Netherlands. While the Groningen gas field is by far the largest of the fields in this Western European country, Schoonebeek is the only active field being drilled unconventionally in the Netherlands.

Interestingly, the entire field was recently shut down by NAM Shell/Exxon JV to fix this wastewater pipeline. It was discovered that the pipeline was leaking wastewater in nine places due to corrosion caused by the high sulfur content of the wastewater.

Upon starting our tour we were informed of the fact that the Dutch have an even higher extraction tax than the UK! The Netherlands retains a 50% State Profit Share for revenue and taxes the remaining production at a rate of 20% on the first $225,000 in revenue and “25% on the excess.” In comparison, the highest production tax rate on oil and gas drilling in the US is in Alaska at 35%. Most states have significantly lower severance taxes.^[10]

Political support for higher taxes on the extractives industry may be explained by the fact that the state owns all subsurface mineral rights in these European countries. Regardless of other influences on perception, such high taxes disproves the notion here in the US that energy companies “won’t do business in a state [or country] with a newly-enacted punitive severance tax.” What do the states do with this extra revenue? The Netherlands and many Northern European countries have invested these monies for the rainy day when the oil and gas supply is depleted or extraction is no longer justifiable. The best examples are Norway’s $850 billion Government Pension Fund and Netherland’s $440 billion pension fund or $169,000 and $26,000 per capita, respectively.

Additional support for severance taxes is likely due to these countries’ history with oil and gas exploration. They are familiar with the boom-bust cycles that come with the initial expectations and long-term reality on the ground. When the music stops, Europeans are determined not to be the ones left standing.

About the Our Energy Solutions Project

This trip to Europe and our previous expeditions to Florida, North Carolina, Argentina, and Uruguay are part of a larger, collaborative project with Ecologic Institute US called Our Energy Solutions. OES is creating an informed global community of engaged citizens, organizations, businesses, governments, and stakeholders to develop ideas and solutions to keep our society moving forward while preserving our planet for the future. Learn more at: ourenergysolutions.org.

On a more personal note, our sincerest thanks goes out to the many groups and individuals that we met on our Europe tour, including those we did not directly mention in this article. We are forever indebted to all of the people with whom we met on these OES trips for sharing their time and knowledge with us.

Endnotes and References

Dr. Short is currently advising local anti-fracking groups in the UK and county councils on the human rights implications of unconventional (extreme) energy extraction processes such as fracking.
Dr. Short and collaborators were recently granted an opportunity to put fracking on trial at hearings to be held by The Permanent Peoples’ Tribunal (PPT) in the UK and the US.
Much of the ammunition used by the anti- or undecided fracking community in the UK – and the EU writ large – is coming from proofs of concept in states like Pennsylvania, Ohio, New York, and North Dakota.
Gosden, Emily. 8/13/15. Fracking: new powers for ministers to bypass local councils. The Telegraph. Accessed 10/25/15.
Strachan, Peter. Russell, Alex. Gordon, Robert. 10/15/15. UK government’s delusional energy policy and implications for Scotland. OilVoice. Accessed 10/25/15.
California, instead, imposes a statewide assessment fee.
European Commission. 1/22/14. Fracking: minimum principles for the exploration and production of hydrocarbons using high-volume hydraulic fracturing. Eur-Lex. Accessed 10/26/15.
A practice that is supposedly now being investigated for soil contamination issues.
Exxon originally wrote in the local/regional paper that there was to be no unconventional shale drilling (fracking), but now the company is reconsidering.
Please note that the cited article was last updated in 2012. Some tax rates have changed since the time that the article was published, but the table still adequately represents an estimation of production taxes by state.

Ohio’s Shale Oil and Gas Firms Disappoint Shareholders

June 24, 2015/by Ted Auch, PhD

By Ted Auch, Great Lakes Program Coordinator

A financial crisis seems to have been averted as the price of crude oil is beginning to stabilize – at least for now. One must wonder how such a volatile market affects oil and gas’ Wall Street, private equity, and pension fund followers, however. We have found that many oil and gas (O&G) shares have experienced steep valuation declines in the last few years for companies operating in Ohio.

Share[d] Values

To approach such a broad question, we focused our assessment on Ohio and looked at the share performance of the 17 publicly traded firms operating in the Ohio Utica region since the date of their respective first Utica permits. The Date of First Permit (DFP) ranges between 12/23/2010 for Chesapeake Energy to 3/20/2013 for BP.

Across these 17 companies there are, quite expectedly, winners and losers. On average their shares have experienced 3.75% declines in their valuation or -00.81% per year in the last several years, however. This might be why many of Wall Street and The City’s major banks have limited – or ended – their lines of credit with energy firms from Ohio to the Great Plains. Others are still picking off the highly leveraged losers one by one for pennies on the dollar (Corkery and Eavis, 2015; Staff, 2014). This cutoff of credit and disturbingly high levels of debt/leverage may explain why we found, in a separate analysis, that while cumulative producing oil and gas wells have increased by 349% and 171%, respectively, the rate of permitting needed to maintain and/or incrementally increase these production rates has been 589%.

Cross-Company Comparisons

Ohio Utica Shale Publicly Traded Companies Return

Figure 2. Annual change in share price (%) for 17 publicly traded firms operating in the Ohio Utica shale since their date of first permit

The biggest losers in Ohio’s oil and gas world include Chesapeake Energy. Chesapeake (CHK) is also the largest player in the Buckeye State based on total permits and total producing laterals, accounting for 41% and 55%, respectively. CHK has seen its shares decline on average by 9.1% each year since their DFP (Figure 2). Antero (-10.7% per year), Consol Energy (-7.8%), and Enervest (-12.1%) have experienced similar annual declines, with investors in these firms having seen their position shrink by an average of 37%. Eclipse shares have declined in value by nearly 20% per year, which pales in comparison to the 30-33% annual declines in the share price of Halcon, Atlas Noble, and XTO Energy.

Conversely, the biggest winners are clearly Carrizo (+49% per year), PDC Energy (+41%), and to a lesser degree smaller players like EQT (+22%), Hess Ohio (+8.4%), and Anadarko (+7.9%). Interestingly, the second most active firm operating in Ohio is Gulfport Energy, and their performance has been somewhere in the middle – with annual returns of 10.3%.

Out of State – The Bigger Picture

But before the big winners light up celebratory cigars, it is worth putting their performance into perspective relative to the rest of the field as it were. In an effort to be as fair as possible we chose the Dow Jones Industrial Average and S&P 500 – two indices that everyone has heard of because they are viewed as broad indicators of US economic growth. Incidentally, the DJIA includes the O&G companies Exon and Chevron. Exon is a multinational firm not involved in Ohio’s Utica development, while Chevron is involved. Additionally, the S&P 500 includes those two firms, as well as 39 other energy firms. Nine of those currently operate in Ohio. To assess these companies’ performance with the most energy-centric indices we have compared Ohio Utica players to the S&P 500’s Energy Index, which strips away all other components of its more famous metric, as well as the Vanguard Energy Index Fund. The latter is described by Vanguard as the following on the Mutual Funds portion of its website:

This low-cost index fund offers exposure to the energy sector of the U.S. equity market, which includes stocks of companies involved in the exploration and production of energy products such as oil, and natural gas. The fund’s main risk is its narrow scope—it invests solely in energy stocks. An investor should expect high volatility from the fund, which should be considered only as a small portion of an already well-diversified portfolio.

In reviewing these four indices we found that they have outperformed the 17 oil and gas firms here in Ohio or the Ohio Energy Complex (OEC), with annual rates of return (ROR) exceeding 35% (Figure 3). This ROR value was not approached or exceeded by any of the 17 OEC firms except for PDC Energy and Carrizo. However, these two companies only account for 2.8% of all Utica permits and 4.4% of all producing Utica laterals to date. Even if we remove the broader indicators of economic growth and just focus on the two energy indices we see the US energy space ROR has experienced annual growth rates of 33% or 7% below the broader US economy but impressive nonetheless. With such growth in the number of companies drilling for oil and gas, it is likely that we will see significant consolidation soon; some of the world’s largest multinationals like Exxon and Total may step in when all of the above are priced to perfection, which is something Exxon’s Chariman and CEO, Rex Tillerson, eluded to in a speech in Cleveland last June.

US Economic Performance and Energ Industry Metrics

Figure 3. Annual % Return of Two Broad Economic and Two Energy Specific Indices.

The performance of the OEC indicates investors and/or lenders will not tolerate such a performance for much longer. Just like our country’s Too-Big-To-Fail banks, boards, CEOs, and shareholders were bailed out, it seems as though a similar bubble is percolating in the O&G world; the same untouchables will be protected by way of explicit or implicit taxpayer bailouts. Will Ohioans be made whole, too, or will they be left to pick up the pieces after yet another natural resource bubble bursts?

References

Corkery, M., Eavis, P., 2015. Slump in Oil Prices Brings Pressure, and Investment Opportunity, The New York Times, New York, NY.

Staff, 2014. Shale oil in a Bind: Will falling oil prices curb America’s shale boom?, The Economist, London, UK.

Comparison of Oil and Gas Violations and the Sale of Wells

November 12, 2014/by FracTracker Alliance

Well pad spill, wetland. Photo courtesy of WV Host Farms Program

By Matt Unger, FracTracker GIS Intern

When the unconventional oil and gas extraction boom hit Pennsylvania in the mid-2000s small, local operators were among the first on the scene. As shale plays continued to develop, many of these smaller companies were bought out by larger, national corporations. Larger oil and gas development companies often maintain that they are better able to handle the expected regulatory requirements, and so FracTracker wanted to determine if there was a change in the compliance record for wells that changed hands. Does having more resources available to them translate into stronger compliance standards for oil and gas drillers, better training for their employees, and a greater burden to get things right? Investigating these questions by looking into compliance data and the sale of wells, however, was no easy task.

Analysis Methods

There are no indications in either the drilled wells or permits datasets available from the DEP that a well has changed hands; in both of these sources, one operator’s name is simply substituted for the other. It is possible to comb through old news stories, and find that East Resources sold its assets to Shell in 2010, for example. However, this approach is piecemeal, and would not lead to satisfactory results on an industry-wide analysis.

Major obstacles to our analysis included:

Lack of information on the transfer of oil and gas wells from one operator to another
There is often a lag time between the time violations occur and when they are reported
Errors in compliance reporting. For example, one API Number was found to have the operator listed as “Not Assigned” (It was later discovered that this well was never sold).

Results

Unlike wells and permits, any items on the compliance dataset are attributed to whichever company was operating the well at the time the violation was issued. So while FracTracker could not do the analysis that we wanted to because of the limitations of available data, we were able to isolate 30 wells that have changed hands between January 1, 2000 and November 4, 2014 (Table 1). One well has been bought and sold twice, with each of the three operators being issued violations.

In some instances the original well owner was reported to be out of compliance more times than the second owner. For example, API Number 013-20012 had 11 violations reported under its first owner and only 1 since it has been sold. The contrary also occurred, however, such as in the case of API Number 065-26481, which had 4 violations reported under its first owner and 14 under its second owner. There are not enough data points to determine which scenario is the trend in the data – if in fact there is one.

Due to limitations in the data, we cannot currently evaluate whether the notion that larger companies can improve the track record of problematic wells. In fact, many of the wells that were issued violations for multiple operators really just changed hands from one big operator who wanted to get out of the Marcellus to another big operator who wanted to get in. Our small sample doesn’t include any of the wells that were issued violations to only one company, of all the wells that changed hands over the years. To accurately assess the scenario, more data would have to be released, specifically the date when wells changed hands from one company to another.

Table 1. Wells with violations by API number that have changed ownership

API Number	First Owner	Last Known Date Of Ownership	Second Owner	First Known Date Of Ownership	Third Owner	First Known Date Of Ownership
013-20012	Chief Oil & Gas LLC	5/24/10	Chevron Appalachia LLC	2/5/13
015-20033	Belden & Blake Corp	4/10/09	Chesapeake Appalachia LLC	12/7/11
015-20051	Consol Gas Co	6/16/04	Range Resources Appalachia LLC	8/9/05	Talisman Energy USA Inc	11/16/11
019-21494	Phillips Exploration Inc	6/10/08	XTO Energy Inc	7/24/13
019-21680	Phillips Exploration Inc	4/6/10	XTO Energy Inc	3/13/13
065-26481	Dannic Energy Corp	5/11/11	Mieka LLC	11/10/11
065-26832	Dannic Energy Corp	3/2/11	Mieka LLC	4/11/12
081-20062	Chief Oil & Gas LLC	1/6/09	Exco Resources Pa LLC	8/16/11
081-20069	Chief Oil & Gas LLC	5/21/08	Exco Resources Pa LLC	3/28/11
081-20128	Chief Oil & Gas LLC	11/15/10	Exco Resources Pa LLC	6/27/11
081-20144	Chief Oil & Gas LLC	7/21/10	Exco Resources Pa LLC	3/15/12
081-20149	Chief Oil & Gas LLC	1/10/11	Exco Resources Pa LLC	2/21/12
081-20244	Chief Oil & Gas LLC	5/20/10	Exco Resources Pa LLC	11/15/12
081-20255	Chief Oil & Gas LLC	11/15/10	Exco Resources Pa LLC	11/29/11
081-20279	Chief Oil & Gas LLC	12/3/10	Exco Resources Pa LLC	4/20/12
081-20298	Chief Oil & Gas LLC	5/26/10	Exco Resources Pa LLC	6/27/11
083-53843	Anschutz Exploration Corp	4/7/09	Chesapeake Appalachia LLC	3/20/13
113-20025	Chief Oil & Gas LLC	2/15/11	Exco Resources Pa LLC	3/16/11
113-20049	Chief Oil & Gas LLC	11/30/10	Exco Resources Pa LLC	4/13/11
115-20052	Turm Oil Inc	9/24/08	Chesapeake Appalachia LLC	8/21/14
115-20169	Alta Opr Co LLC	11/24/09	WPX Energy Appalachia LLC	4/13/11
115-20174	Alta Opr Co LLC	4/16/10	Wpx Energy Appalachia LLC	4/29/11
115-20191	Alta Opr Co LLC	12/1/09	Wpx Energy Appalachia LLC	6/1/11
115-20214	Alta Opr Co LLC	7/19/10	Wpx Energy Appalachia LLC	8/16/10
115-20231	Alta Opr Co LLC	4/8/10	Wpx Energy Appalachia LLC	6/1/11
117-20197	East Resources Inc	4/8/08	Talisman Energy USA Inc	1/26/11
117-20280	East Resources Inc	5/19/10	Swepi LP	8/28/14
117-20330	East Resources Inc	12/18/09	Talisman Energy USA Inc	2/20/13
117-20394	East Resources Inc	12/14/09	Swepi LP	10/25/11
117-20538	East Resources Inc	12/18/10	Swepi LP	5/27/10

O&G Politics & Campaign Financing

October 8, 2014/by Ted Auch, PhD

By Ted Auch, OH Program Coordinator, FracTracker Alliance

Anyone who has been paying attention to the domestic shale gas conversation knows the issue is fraught with controversy and political leanings. The debate is made only more complicated by the extensive lobbying to promote drilling and related activities. It would be nice to look at shale gas through a purely analytical lens, but it is impossible to decouple the role of politicians and those that fund their campaigns from the myriad socioeconomic, health, and environmental costs/benefits.

As such, this article covers two issues:

Who Gets Funded: the distribution of oil and gas (O&G) funds across the two primary parties in the US, as well as the limited funds awarded to third parties, and
Funding Allocation to a Specialized Committee: industry financing to the Committee on Science, Space and Technology¹ the primary house committee responsible for:

…all matters relating to energy research, development, and demonstration projects therefor; commercial application of energy technology; Department of Energy research, development, and demonstration programs; Department of Energy laboratories; Department of Energy science activities; energy supply activities; nuclear, solar, and renewable energy, and other advanced energy technologies; uranium supply and enrichment, and Department of Energy waste management; fossil energy research and development; clean coal technology; energy conservation research and development, including building performance, alternate fuels, distributed power systems, and industrial process improvements; pipeline research, development, and demonstration projects; energy standards; other appropriate matters as referred by the Chairman; and relevant oversight.

Fig. 1. Relevant Oil & Gas PACs, Institutes, and Think Tanks – as well as Koch Industries and subsidiaries offices (Orange). Click to explore

1. Letting the Numbers Speak

“When somebody says it’s not about the money, it’s about the money.”

The above quote has been attributed to a variety of sources from sports figures to economists, but nowhere is it more relevant than the politics of shale gas. The figures below present campaign financing from O&G industry to the men and women that represent us in Washington, DC.

Data Analysis Process

To follow the shale money path, FracTracker has analyzed data from the: a) total contributions and b) average per representative across Democrats and Republicans. Our Third Party analysis included five Independents in the Senate as well as one Green, one Unaffiliated, one Libertarian, and two Independents in the House.

Results

Annual Senate compensation relative to average US Income Per Capita

Fig. 3. US Senate Salary (Late 18th Century to 2014) & Average American Salary (1967-2013).

There are sizable inter-party differences across both branches of congress (See Figures 2a-b). In total, Democratic and Republican senators have received $18.1 and $48.6 million from the O&G industry since data collection began in 1990. Meanwhile, Third Party senators have received a total of $385,632 in O&G campaign finance. It stands to reason that the US House would receive more money in total than the senate, given that it contains 435 representatives to the Senate’s 100, and this is indeed the case; Democratic members of the House received $28.9 million to date vs. $104.9 million allocated to the House’ GOP members – or a 3.6 fold difference. Third Party members of the House have received the smallest allotment of O&G political largesse, coming in at $197,145 in total.

To put this into perspective, your average Democratic and Republican senator has seen the gap increase between his/her salary and the average American from $27,536 in 1967 to $145,171 in 2013 (Figure 3).

These same individuals have also seen their political war chests expand on average by $151,043 and $412,007, respectively. Third Party senators have seen their campaign funds swell by an average of $64,272 since 1990. Meanwhile, the U.S. Capitol’s Democratic and GOP south wing residents have seen their O&G campaign contributions increase by an average of $50,836 and $188,529, respectively, with even Third Partiers seeing a $38,429 spike in O&G generosity.

Figure 2a. Total funding received by both branches of the US legislative branch

Figure 2b. Average funding received by oil and gas industry

Location is a better predictor of whether a politician supports the O&G industry than his/her political affiliation. At the top of the O&G campaign financing league tables are extraction-intensive states such as Texas, Oklahoma, North Dakota, Alaska, California, and Louisiana. (See Figures 4a-h at the bottom of this article for Average Oil & Gas Contributions to US House Representatives and Senators across the US.)

2. Committee on Science, Space and Technology

The second portion of this post covers influences related to the Committee on Science, Space and Technology (CSST). There is no more powerful group in this country when it comes O&G policy construction and stewardship than CSST. The committee is currently made up of 22 Republicans and 18 Democrats from 21 states. Thirty-five percent of the committee hails from either California (6) or Texas (8), with Florida and Illinois each contributing three representatives to the committee. Almost all (94%) of the O&G campaign finance allocated to CSST has gone to its sitting GOP membership.

The top three recipients of O&G generosity are all from Texas, receiving 3.2-3.5 times more money than their party averages – totaling $1.93 million or 37% of the total committee O&G financial support. The next four most beholden members of the committee are Frank Lucas and Michael McCaul (TX, $904,709 combined), Cynthia Marie Lummis (WY, $400,400), and Kevin Cramer (ND, $343,000). The average Democratic member of the CSST committee has received 12.8 times less in O&G funding relative to their GOP counterparts; Dallas-Fort Worth Metroplex representatives Marc Veasey and Eddie Bernice Johnson collected a combined $130,350 from industry. Interestingly a member of political royalty, Joe Kennedy III, has collected nearly $50K from the O&G industry, which corresponds to the average for his House Democrat colleagues.

See Figures 5-6 for totals and percentage of party averages of O&G campaign funds contributed to current member of the US House CSST.

Total Oil & Gas campaign funds contributed to current member of the US House Committee on Science, Space and Technology.

Figure 5. Totals

Total Oil & Gas campaign funds contributed to current member of the US House Committee on Science, Space and Technology as percentage of party averages.

Figure 6. Percentage of party averages

“Don’t Confuse Me With The Facts”

In addition to current do-nothing politicians beholden to the O&G industry, we have prospects such as Republican U.S. Senate candidate Joni Ernst going so far as to declare that the Koch Brothers various Political Action Committees (PACs) started her trajectory in politics. Promising “ ‘to abolish’ the Environmental Protection Agency, she opposes the Clean Water Act, and in May she downplayed the role that human activities have played in climate change and/or rises in atmospheric CO₂.

In Ohio it seems realistic to conjecture that OH Governor John Kasich, bracing for a tough reelection campaign, is wary of biting the PAC hands that feed him. He has also likely seen what happened to his “moderate” colleagues in states like Mississippi and Virginia, and in the age of Citizens United and McCutcheon he knows that the Hydrocarbon Industrial Complex will make him pay for anything that they construe as hostile to fossil fuel business as usual.

Close to the Action

Groups like the Koch-funded Americans for Prosperity, Randolph Foundation, and American Legislative Exchange Council (ALEC)² are unapologetically wedded to continued production of fossil fuels. Nationally and in OH, politicians appear to be listening more to the talking points and white papers of such groups than they do their own constituents.. Therefore, it is no coincidence that DC and its surrounding Virginia suburbs has been colonized by industry mouthpieces, energy policy and economic academic tanks, philanthropies, and Political Action Committees (PACs). See Figure 1 for more information.

Know Your Vote

So when you go to the polls on November 4^th, remember that politicians are increasingly beholden not to their constituents but to the larger donors to their campaigns. Nowhere is this more of a concern than US energy policy and our geopolitical linkages to producers and emerging markets. More to the point, when offered an opportunity to engage said officials make sure to bring up their financial links as it relates to how they vote and the types of legislation they write, massage, customize, or outright eliminate. As Plato once said, “The price of apathy towards public affairs is to be ruled by evil men.” Our current selection of politicians at the state and federal level are not evil, but data on O&G politics and campaign financing presented herein do indicate that objectivity with respect to oil and gas legislation has been at the very least compromised.

Figures 4a-h. Average & Total O&G Industry Contributions to US House Representatives and Senators across the US mainland and Alaska

	Average	Total
Democratic Representatives	Fig. 4a	Fig. 4b
Democratic Senators	Fig. 4c	Fig. 4d
Republican Representatives	Fig. 4e	Fig. 4f
Republican Senators	Fig. 4g	Fig. 4h

References

This committee’s minority leader Ms. Eddie Bernice Johnson (D-TX) recently proposed the H.R.5189 – Energy and Water Research Integration Act of 2014 with an as yet to be published summary.
…along with like-minded entities like the Ewing Marion Kauffman Foundation and the Chamber of Commerce’s PAC. These PACs and foundations tend to fund and greatly benefit from frackademic shops like Northwestern University’s Northwestern Law Judicial Education Program and George Mason University’s Law and Economics Center.