FracTracker’s Ted Auch coauthored a recent article in the journal Democracy & Security that considers the US shale oil and gas industry through a national security lens.
This paper was authored by Bryan T. Stinchfield , Ted Auch & Eve Bratman.
Proponents of the US shale oil and gas industry argued that American citizens’ economic prosperity and national security were at stake if the industry was not rapidly expanded. Following copious amounts of a certain type of “patriotic” rhetoric, the industry grew rapidly. Simultaneously, foreign ownership of US shale industry infrastructure occurred in tandem with calls for new policies and laws to limit US citizens’ democratic rights with regard to the industry’s activities. As a result, we argue that the development of the US shale industry has weakened national security by creating negative security externalities and eroding democratic values. We offer implications for other democratic societies rich in natural resources.
Figure 1. Vicious cycle within the US shale industry.
The intent of some of the industry’s proponents is to criminalize protest, peaceful and otherwise. When peaceful protests are intentionally lumped in with not-peaceful protests, the effect is a weakening of democracy.
Energy Security, International Investment, and Democracy: The Case of the United States Shale Oil and Gas Industry
Bryan T. Stinchfield , Ted Auch & Eve Bratman
To cite this article: Bryan T. Stinchfield , Ted Auch & Eve Bratman (2020): Energy Security, International Investment, and Democracy: The Case of the United States Shale Oil and Gas Industry, Democracy and Security, DOI: 10.1080/17419166.2020.1811969
To link to this article: https://doi.org/10.1080/17419166.2020.1811969
https://www.fractracker.org/a5ej20sjfwe/wp-content/uploads/2020/10/TAuch_infrastructure-wellpad-sandtruck-ChesapeakeAppalachia-RainSulWellpad-SullivanCounty-PA_July2020-feature-scaled.jpg6671500Ted Auch, PhDhttps://www.fractracker.org/a5ej20sjfwe/wp-content/uploads/2021/04/2021-FracTracker-logo-horizontal.pngTed Auch, PhD2020-10-15 11:24:272021-04-15 14:16:07Energy Security, International Investment, and Democracy in the US Shale Oil & Gas Industry
Fracking has been raised as an issue that could determine the outcome of the 2020 US presidential election. Republican candidates have cited erroneous figures of how many fracking jobs exist in Pennsylvania, and have falsely claimed that Democratic presidential candidate Joe Biden and running mate Kamala Harris seek to ban fracking. And while the Democratic candidates have made suggestive comments in the past, they have made their position clear. As Senator Harris stated in the vice presidential debate: “I will repeat, and the American people know, that Joe Biden will not ban fracking. That is a fact.”
The debate around this issue is not on whether or not fracking should be banned– something neither party advocates– but rather around the facts. Republican candidates have inflated the extent of fracking jobs by up to 3500 percent. But the natural gas industry and the fracking boom have failed to deliver the job growth and prosperity that was predicted by proponents a decade ago. In reality, the total number of jobs in the natural gas industry in Pennsylvania never reached more than 30,000 over the last five years and is now less with the industry’s economic decline.
The total number of jobs in the natural gas industry in Pennsylvania never reached more than 30,000 over the last five years and is now less with the industry’s economic decline.
The debate should not be around the facts- those are already firmly established. The debate should be around how to best support fossil fuel workers in the inevitable transition to cleaner energy. What does a just transition that supports workers and the climate look like?
FracTracker Alliance and The Breathe Project have compiled a fact sheet to help us answer this question based on where Pennsylvania currently stands.
Straight Talk on the Future of Jobs in Pennsylvania (September 2020)
The Breathe Project and FracTracker Alliance have crafted the following messaging for refuting the conflated job numbers being touted by pro-fossil fuel organizations and political candidates regarding fracking and jobs in Pennsylvania that, in some cases, has inflated natural gas jobs in the state by 3500 percent.
The natural gas industry and the fracking boom have failed to deliver the job growth and prosperity that was predicted by proponents a decade ago. The total number of jobs in the natural gas industry in Pennsylvania never reached more than 30,000 over the last five years and is now less with the industry’s economic decline.
FACT: The Pa. Dept. of Labor and Industry (DLI) reported that direct employment in natural gas development totaled 19,623 in 2016. This was down from 28,926 total natural gas development jobs in 2015. This includes jobs in drilling, extraction, support operations and pipeline construction and transportation. (StateImpact, 2016)
Pa. DLI calculated the employment figures using data from six data classifications at the U.S. Bureau of Labor Statistics — specifically, the North American Industry Classification System (NAICS) codes for cured petroleum and natural gas extraction, natural gas liquid extraction, drilling oil and gas wells, support activities for oil and gas operations, oil and gas pipeline and related structures and pipeline transportation of natural gas. (Natural Gas Intel, 2016)
Inflated estimates of fracking-related jobs in Pennsylvania under previous Gov. Tom Corbett included regulators overseeing the industry as gas jobs, truck drivers, and those working in highway construction, steel mills, coal-fired power plants, sewage treatment plants, and others. Pa. Gov. Tom Wolf’s administration revised the way gas industry jobs were calculated to reflect a more accurate depiction of jobs in the sector.
FACT: Food & Water Watch calculated that there were 7,633 jobs pre-boom (2001 – 2006), which rose to 25,960 oil and gas industry jobs post-boom (2016 – 2018). (FWW, March 2020)
Food & Water Watch created a more accurate model using a definition that encompasses only jobs directly involved with domestic oil and gas production, specifically: oil and gas extraction; support activities for oil and gas operations; drilling oil and gas wells; oil and gas pipeline construction; and pipeline transportation.
FACT: The Food & Water Watch analysis also reports that misleadingly broad definitions in industry-supported job reports overstated the industries’ scope. The industry analysis included broad swaths of manufacturing industries including “fertilizer manufacturing,” convenience store workers, and gas station workers, which accounted for nearly 35 percent of all oil and gas jobs in their analysis. (FWW, PwC at 5 and Table 4 at 9, 2019)
FACT: As a point of comparison, in 2019, close to 1 million state residents were working in healthcare, 222,600 in education, and over 590,000 in local and state government. (Pennsylvania Bureau of Labor Statistics, July, 2020)
FACT: To forecast fracking-related job growth, the American Petroleum Institute used a model with exaggerated multipliers and faulty assumptions, such as the amount of purchases made from in-state suppliers, and it double counted jobs, leading to wildly optimistic estimates. (Ohio River Valley Institute, August 2020)
FACT: In addition, many of the jobs claimed in a 2017 American Chemistry Council Appalachian petrochemical economic impact study would arise in plastics manufacturing, which raises two concerns. First, both the ACC study and subsequent reports by the U.S. Department of Energy assume that 90% of the ethylene and polyethylene produced by imagined Appalachian cracker plants would be shipped out of the region to be used in manufacturing elsewhere in the country and the world. Of the 10% that would presumably stay in the region, much or most of it would serve to replace supplies that the region’s plastics manufacturers currently source from the Gulf Coast. (Ohio River Valley Institute, August 2020)
The fracking and petrochemical industries create unsustainable boom and bust cycles that do not holistically improve local economies.
FACT: Economic analyses show that the oil and gas industry is a risky economic proposition due to the current global oversupply of plastics, unpredictable costs to the industry, a lower demand for plastics, and increased competition. The analyses call into question industry’s plans to expand fracking and gas infrastructure in the region. (IEEFA, August 2020)
FACT: Plans to build petrochemical plants in Beaver County, Pennsylvania and Belmont, Ohio, for the sole purpose of manufacturing plastic nurdles will not be as profitable as originally portrayed. (IEEFA Report, June 2020)
A clean energy economy is the only way forward.
FACT: The Dept. of Energy’s U.S. Energy and Employment Report (2017) and E2 Clean Jobs Pennsylvania Report (2020) shows that clean energy jobs in Pennsylvania employ twice as many people as the fossil fuel industry prior to the pandemic.
FACT: The 4-state region of Ohio, West Virginia, Kentucky and Pennsylvania has formed a coalition of labor, policy experts and frontline community leaders called Reimagine Appalachia. This coalition is in the process of addressing the vast number of jobs in renewable and clean energy industries in a report that will be published this fall.
Reimagine Appalachia seeks major federal funding packages that will create jobs, rebuild infrastructure and addresses climate change that will ensure that no one is left behind going forward.
The Breathe Project is a coalition of citizens, environmental advocates, public health professionals and academics using the best available science and technology to improve air quality, eliminate climate pollution and make our region a healthy, prosperous place to live.
FracTracker Alliance is a 501(c)3 organization that maps, analyzes, and communicates the risks of oil, gas, and petrochemical development to advance just energy alternatives that protect public health, natural resources, and the climate.
Feature image of construction of the Royal Dutch Shell cracker plant in Beaver County, Pennsylvania, October 2019. Ted Auch, FracTracker Alliance.
https://www.fractracker.org/a5ej20sjfwe/wp-content/uploads/2020/10/TAuch_Plastics-Cracker_Construction-Shell-BeaverCounty_PA_Oct2019-Feature-scaled.jpg6671500Shannon Smithhttps://www.fractracker.org/a5ej20sjfwe/wp-content/uploads/2021/04/2021-FracTracker-logo-horizontal.pngShannon Smith2020-10-14 11:54:592021-04-15 14:16:07Straight Talk on the Future of Fracking Jobs in Pennsylvania
On August 3, 2020, New Yorkers rejoiced in Governor Cuomo’s signing of legislation to protect the Empire State from Pennsylvania’s fracking waste. Although New York State has banned high-volume, horizontal hydraulic fracturing, or “fracking” within its borders, a fracking waste loophole allowed numerous landfills to received both solid and liquid waste products from drilling operations just south of its border, according to records from the Pennsylvania Department of Environmental Protection (PA DEP).
What has been at stake
A regulatory loophole in New York State’s laws exempted drilling waste from scrutiny as hazardous materials. Therefore, solid and liquid wastes from drilling operations — including many constituents which are considered secret or “proprietary” — were sent to landfills, and in some cases, spread on roads and walkways in the state. Municipalities were provided with very little understanding of the risks those materials might be posing to air and water quality in and around landfills. Until the signing of this legislation, New York State Department of Environmental Conservation has considered road-spreading of waste brine from both conventional and unconventional oil and gas wells that was spread on roads a “BUD,” or a beneficial use determination.
Nevertheless, research has shown that produced water from fracking operations can contain tens to thousands of times the allowable drinking water concentration limit of radium, strontium, barium, lead, arsenic, and other elements. Human health impacts of all phases of drilling operations were explored in a recent paper by Wollin et al. (May 2020).
Water that flows to the surface from oil and gas wells, so-called ‘produced water’, represents a mixture of flow-back, the injected frac fluid returning to the surface, and the reservoir water present in natural oil and gas deposits. Among numerous hazardous compounds, produced water may contain bromide, arsenic, strontium, mercury, barium, radioactive isotopes and organic compounds, particularly benzene, toluene, ethylbenzene and xylenes (BTEX). The sewage outflow, even from specialized treatment plants, may still contain critical concentrations of barium, strontium and arsenic. Evidence suggests that the quality of groundwater and surface water may be compromised by disposal of produced water.
Carcinogenic and radioactive wastes that are brought to the surface with both conventional and unconventional drilling technologies can have toxic impacts on human health and the natural environment, impacting the endocrine, nervous, cardiovascular, and respiratory systems, as well as air and water quality. According to the Natural Resources Defense Council, more than 75 percent of the chemicals used in fracking are associated with harm to human organs, while 25 percent are tied to cancer and other genetic mutations.
How could this be allowed?
Although the federal Resource Conservation and Recovery Act (RCRA)—passed in 1976—specifically safeguards human and environmental health, an amendment to the Act in 1980 exempted from regulation all waste from oil and gas exploration, development, and production. Despite close to 40 years of federal oversight of pollution created by countless industries, oil and gas operations have been subject to far more lax regulations. And although states can pass their own regulations to supplement the federal rule-making, this had not occurred in New York State.
The lead-up to the legislation
The recent legislation to close the fracking loophole in New York State was sponsored in 2019 by Senator Rachel May and Assemblyman Steve Engelbright. Lawmakers had been deadlocked on the issue since 2011, but through much hard work, political and public will, and a favorable complement of elected officials, after the bills finally passed both the New York State Senate and Assembly, they could move to Governor Andrew Cuomo’s desk, where they were signed into law in early August, 2020. According to EarthWorks, all oil and gas waste will be
Subject to laboratory analysis to determine whether it has the characteristics of hazardous waste (i.e., ignitability, corrosivity, reactivity, and toxicity)
Subject wastes to clearer, stronger management regulations like processing, tracking and marking of loads, recordkeeping with a manifest system, reporting to DEC, and specific requirements for clean up in the case of a spill
In addition, the law ensures that waste is disposed of only at facilities equipped to safely handle it.
Now, even wastes like brine from conventional drilling operations must undergo laboratory analysis to determine whether they have characteristics consistent with hazardous materials.
Here’s a look back at our history of accepting fracking waste from Pennsylvania into New York State.
Visualizing a long history of oil and gas waste coming to New York State from Pennsylvania
FracTracker has annually mapped the flow of drilling waste from Pennsylvania to New York State.
Since 2011, nearly 29,000 barrels of fracking liquid waste (drilling fluids, fracturing fluids, produced waters, etc.), along with close to 645,000 tons of solid waste (drill cuttings—some of it radioactive, sludge, contaminated soils, etc.) from Pennsylvania drilling operations have been disposed of in New York State. For more references on radioactivity in drilling materials, explore this resource. Drilling waste reports available from 2010 through the present show a steady decline in waste sent to New York State, beginning in 2011. Nonetheless, New York’s landfills have received as much as 11,548 barrels of drilling waste, and 214,168 tons of solid waste in a given year.
PA DEP’s records are far from complete prior to 2016, however, with disposal destinations unknown for close to 2/3 of liquid waste (see yellow portions of the bar chart in Figure 1) generated between 2012 and 2015.
In more recent years, waste products were accounted for more accurately, as well as shipped to injection wells in Ohio.
On a relatively smaller scale, one can also see how West Virginia’s acceptance of Pennsylvania’s fracking waste has skyrocketed in 2018 and 2019, particularly in comparison to states other than Pennsylvania and Ohio (Figure 2).
Figure 2. Pennsylvania’s liquid unconventional drilling waste disposal by state (excluding Pennsylvania and Ohio), 2010-2019
In general, records indicate more solid waste disposal occurring within Pennsylvania over time, with Ohio accepting varying quantities from year to year, and New York State steadily receiving less over time (Figure 3).
Now that the regulatory loophole has been closed, these numbers should drop to near zero. Data about waste coming from Pennsylvania to New York in the first half of 2020 support that assertion (Figures 4 and 5).
FracTracker applauds New York State for closing the fracking waste loophole and in doing so, continuing to set high standards to protect its residents from the human and environmental impacts created by oil and gas extraction. We hope that other states will follow suit, and develop their own stringent standards to protect human and environmental health, in particular where federal legislation like RCRA has fallen woefully short.
https://www.fractracker.org/a5ej20sjfwe/wp-content/uploads/2020/08/TAuch_Infrastructure-FrackPad_ImpoundmentPond_AccessRoad-PineCreekWatershed_PA_LightHawk_Aug2019-Feature.jpg8331875Karen Edelsteinhttps://www.fractracker.org/a5ej20sjfwe/wp-content/uploads/2021/04/2021-FracTracker-logo-horizontal.pngKaren Edelstein2020-08-28 15:38:042021-04-15 14:16:10New York State Closes the Fracking Waste Loophole
As the oil and gas industry feels pressure from former allies and see lending windows from their most loyal banking partners begin to dry up, they will be forced to cut costs elsewhere, and cut corners everywhere. This will come in the form of more industry-friendly regulations on the federal level under the current administration, as well as less stringent oversight at the state level. These trends are explicit manifestations of their desperation and influence.
The state-level laws the oil and gas industries are advocating for can easily fly under the radar. Most people just don’t have the bandwidth to educate themselves on the quiet development of these bills, nor to advocate against them. Much of the public’s attention is understandably focused on the COVID-19 pandemic, mass unemployment, and racial inequality. And, much of the critical attention around oil and gas legislation has correctly focused on the critical infrastructure legislation and related policy proposals we focused on in Part I of this series.
Below, we outline current attempts to weaken environmental regulations in Ohio, North Dakota, and Michigan. It is important to note that this is not an all-inclusive outline, but rather the bills we are aware of through our network of frontline and nonprofit contacts.
Ohio’s House Bill 545
A bill that would be hazardous to the health of all Ohioans, HB 545, intended to “Establish conditions for sale of brine as a commodity,” was introduced by first-term State Representative Adam Holmes, and second-termer Craig Riedel of Western Ohio. This bill would charge the Ohio Department of Natural Resources’ (ODNR) Division of Oil and Gas Resources Management with establishing “conditions and requirements for the sale of brine from oil or gas operations as a commodity, and to exempt that commodity from requirements otherwise applicable to brine.” What could possibly go wrong? The dangers of potentially highly radioactive fracking waste have been known for years, and were recently detailed in great reporting by Justin Nobel for Rolling Stone. Countless others have spent years crying out against radioactive fracking waste being produced, transported, and disposed of all across the Appalachian regions of Ohio, Pennsylvania, and West Virginia.
So, quite a bit could – and likely would – go horribly wrong if we allow ODNR to put lipstick on this fracking waste pig, as it were. The worst part about this is that Representative Holmes knows, (or at least should know), better, given that he lives in Nashport, roughly two miles south of a very active Class II Salt Water Disposal Well, and just a couple more miles from nearly a dozen more injection wells (Figure 1).
Figure 1. Existing and Pending Ohio Class II Salt Water Disposal Injection Wells and Proposed Fracking Waste Docks.
This change from quarterly to annual reporting will have profound implications for what little monitoring citizens are permitted. Clearly, the state has little interest or money to conduct monitoring.
An example of how great the lag could be, and how annual data will essentially be useless for any real-time concerns and/or incidents, the current year’s brine volume data will not be available until February 2021, and even then, the operator will have chances to revise the data. FracTracker has been compiling this data quarterly for years, and we will continue to make data that does exist publicly available.
One has to ask who prompted the demand for this change, and who exactly is on The Oil & Gas Division’s review committee. From the vantage point of most Ohioans concerned about this issue, this reporting change is going in the opposite direction of where a state with primacy over its Class II Wells should be going. When the US EPA has primacy over a state’s wells, as it does in Pennsylvania and Virginia, disposal volumes and pressures are reported annually, but the data are at least broken out monthly. (Note: More on Class II Well primacy and the language that allows states to maintain primacy will come in a future piece.)
As Buckeye Environmental Network Executive Director Teresa Mills and matriarch of the Ohio environmental watchdog community told me, “We have less and less and less information. While Pennsylvania’s website has its problems, it is 150% better than what citizens have access to in Ohio.”
Michigan’s Senate Bill 0431
Michigan’s Senate Bill 0431, introduced by Senate Democrat Adam Hollier in August 2019, was quickly reassigned to the Transportation and Infrastructure Committee in Lansing, after being originally introduced in the Natural Resources Committee. This is just the next step in taking away local control from communities. The language of the bill on Line ten states unapologetically that:
“A local unit of government shall not, by ordinance or otherwise, prevent, prohibit, or deny a permit, approval, or other authorization for the extraction, by mining, of natural resources from any property, by a person with property, possessory, or contractual rights to do so … if … The natural resources are valuable …[and] Very serious consequences would not result from the extraction of the natural resources … For purposes of this section, a consequence is very serious if it substantially exceeds the ordinary impacts of customary mining operations, and poses an actual and unnecessary risk to public health, safety, or welfare that cannot be avoided or ameliorated through the imposition of reasonable controls or conditions on the mining operations.”
If you ask residents of towns like Ludington and South Rockwood, Michigan, what it is like to live next to silica sand mines, they’ll tell you they have very little faith in the recently rebranded Michigan Department of Environment, Great Lakes, and Energy (DEGLE), formerly the Department of Environmental Quality (DEQ). This is the same DEQ that was responsible for the Flint water crisis, in which several of its employees plead no contest to misdemeanors related to their actions during the crisis.
When I called Senator Hollier’s office and asked what the motivation for this bill was, his staffer told me that in their eyes, if a mine proposal were to meet or exceed the rigorous requirements of DEGLE, then they felt it was important that no further hurdles be placed in the proposal’s way moving forward.
Another concern of Michiganders that I have spoken to about this bill, and silica sand mining in general, is this stipulation regarding bonding and reclamation:
“The amount of financial assurance shall be the product of $1,500.00 multiplied by the number of acres disturbed by mining operations, but not yet reclaimed, excluding roadways, plant sites, and open water areas that will remain after completion of reclamation … Reclaiming slopes of the banks of the excavation not exceeding one (1) foot vertical to three (3) feet horizontal, measured from the nearest setback line into any area disturbed by mining operations.”
Most folks believe: A) A bond of $1,500 is way too low, considering all the long-term damage from surface mining; B) The carving out for roadways, plant sites, and open water areas leaves a tremendous amount of any mine’s remaining footprint devoid of any chance of reclamation, and ensures potential environmental and human health hazards in perpetuity, and; C) The one foot rise over three feet run threshold leaves a vast amount of any mine’s footprint extremely unstable.
The general sentiment among Michigan nonprofit organizations is summed up by a note I received from Michigan Environmental Council (MEC) President & CEO Conan Smith, stating:
“I believe this bill is part of an intrigue that we’ve been monitoring as two very rich political donors fight over a proposed gravel mine [in] Metamora Township … one who owns the proposed mine, one who neighbors it and is opposed.
We are, as you might imagine, opposed to this bill. The exemption of local control and [the] presumption that an extractive operation is so necessary as to preempt other local concerns and priorities is in itself sufficiently egregious for us. However, this legislation would also leave the extractive industry almost entirely free of citing regulation, as there is no detailed process at the state level either.
The philosophical challenge we face here, as in many cases, is the tension between private property rights and public health, safety, and welfare. With this bill, the sponsors want a presumption that any activity on private land is reasonable, unless it results in a ‘very serious consequence,’ (a term which has basis in current law that this bill also erases). The new definition of seriousness would essentially be something that is not a normal part of the extractive action. Thus, for example, hundreds of trucks rolling down a dirt road might not be a very serious consequence because that’s just part of normal operations …”
In a sign of how quickly support for legislation shifts, and how elected officials will use crises like COVID-19 to push what Naomi Klein calls “Shock Doctrine,”[1] policy designed to facilitate a frictionless transition to “disaster capitalism,” MEC’s Policy Director Sean Hammond told us on May 21st of this year that, “Without the environmental community or local governments changing their positions, I see it very unlikely that this will move anywhere.” But just nine days later, MEC’s President and CEO emailed a group of those concerned about this bill, saying: “Bad news, friends. We learned yesterday that this bill has sudden new life and may be getting a hearing soon … We could certainly use help to dissuade lawmakers from taking this up.”
But much of the above has come from those at the policy level, living a healthy distance from Michigan’s mines. For the perspective of someone who actually lives next to a mine, I turned to a close friend and hero of mine, Doug Wood, and his wife Dawn, residents of South Rockwood in Monroe County, just a couple miles southwest of Detroit (Figures 3 and 4). Doug and Dawn sent me the following text regarding SB 0431:
“Ever since frac sand mining came to my community, the mine has expanded and accelerated, crushing silica 12 hours a day, right next to homes. It has been a constant battle to get the local government and the quarry to install air monitoring. Now the AGGREGATE industry is pushing to pass this law, Senate Bill 0431, which takes away all the local community’s controls, including [the control of] fugitive dust. I feel that if this law passes, it will be the end of a healthy, livable community.”
Figure 2. Current and Potential Silica Mining Activity, South Rockwood, Michigan, with Dawn and Doug Wood’s property in the southwest corner of the Light Green US Silica and Sylvanian Minerals Potential Polygon.
Figure 3. The Sylvanian Minerals/US Silica frac sand mine in South Rockwood, Michigan, in August 2017 (top) and June 2020 (bottom), with the Wood’s house to the left/west.
North Dakota’s Senate Bill 2344
North Dakota’s Senate Bill 2344 was first introduced to the Energy and Natural Resources Committee on January 21st of this year by Senators Jessica Unruh (R), Dwight Cook (R), and Donald Schaible (R). The North American oil and gas industry knows it has a massive waste issue that it can’t seem to get its collective head around, and in North Dakota, it has countered this structural uncertainty by claiming that landowners do not own the “subsurface pore space” beneath their property, and that this pore space entitles an operator to inject waste into such voids, without compensating landowners.
As Dakota Resource Council Executive Director Scott Skokos told me, “What I’ve heard from attorneys is that this is a taking. Prior to the law change, the porous ground beneath you was part of your property rights, but now it is the government’s … The reason is that it is a taking without compensation! At the legislative hearings, I’ve never seen so many ranchers and mineral owners at the legislature. They thought that because they are a privileged class they would be listened to, and they weren’t. When they got railroaded, they said, ‘What? The government doesn’t work for me?’” Many that are following this bill and associated legal efforts to challenge it think it has a good chance to make it all the way to the US Supreme Court, because it renders the state’s Oil and Gas Production Damage Compensation Act toothless.
Skokos went on to tell me that in “a prior world, where landowners actually had agency over their property in North Dakota, the state’s Century Code clearly stated in Section 38-11.1-04 that landowners were entitled to damages equivalent to ‘lost land value’ and/or ‘lost use of and access to the surface owner’s land.’”
In Mosser v. Denbury Resources, Inc.[2] in 2017, “Use of Pore Space,” and by association, SB 2344, began to percolate as a topic actually up for debate. The Mosser family did not contest the right of Denbury to dispose of fracking waste within their unitized area. This is only because they were hoping to get fair market value for waste disposal, if they would eventually have to incur the costs of damage to their property.
They alleged “claims for nuisance, for trespass and for damages under the Oil and Gas Production Damage Compensation Act.” Judge Charles Miller ruled in favor of the Mossers and stated clearly that surface owners did in fact own pore space; surface owners are entitled to the above damages resulting from pore space use; the surface owner does not have to demonstrate they are using the pore space; and most importantly, compensation per barrel that others are paying for fracking waste disposal may be used by landowners to determine damages.
This ruling was not to the industry’s liking, and they were determined to have the last word, so they worked with the aforementioned Republican Senators to write SB 2344, which contains tons of language regarding the use of pore space for natural gas and CO2 storage, as well as for Enhanced Oil Recovery (EOR) purposes. Senator Jessica Unruh, when not working on behalf of the good people of North Dakota’s District 33, is the Environmental Manager at Coyote Creek Mining Company. Also, it is important to note that Donald Schaible is the sole sponsor of HB 1426, mentioned earlier, that increased penalties for riot offenses.
The most jaw-dropping component of SB 2344 is that it would add a new definition to the state’s Century Code for the term “land,” to be defined as the solid material of earth – regardless of ingredients – but excluding pore space! Yes, those little voids in the rock beneath North Dakotans homes, or maybe up to and including cracks in the soil during dry summers, would not be classified as land, and ipso facto would not entitle landowners to damages if such voids were to be filled in with, say, radioactive fracking waste!
One can only hope that the “get off my land,” fiercely independent, and at times, Libertarian facade North Dakotans like to display will roar when this bill gets traction. I mean after all, isn’t the motto of Tea Party enthusiasts and Second Amendment zealots “Don’t Tread on Me?”
This is Part II of a two-part series on concerning legislation related to the oil, gas, and petrochemical industries. Part I focuses on repressive “critical infrastructure” bills intending to criminalize environmental protestors. Such legislation has already been passed in 11 states.
[1] Ms. Klein’s website describes the “Shock Doctrine” as the following: “It is a story about violence and shock perpetrated on people, on countries, on economies … [The Shock Doctrine] explodes the myth that the global free market triumphed democratically, and that unfettered capitalism goes hand-in-hand with democracy. Instead … it has consistently relied on violence and shock, and reveals the puppet strings behind the critical events of the last four decades.”
https://www.fractracker.org/a5ej20sjfwe/wp-content/uploads/2020/07/Sylvanian-MineralsUS-Silica-frac-sand-mine-in-South-Rockwood-Michigan-2.jpg7041500Ted Auch, PhDhttps://www.fractracker.org/a5ej20sjfwe/wp-content/uploads/2021/04/2021-FracTracker-logo-horizontal.pngTed Auch, PhD2020-07-09 09:13:242021-04-15 14:16:11Trends in Proposed State Legislation to Weaken Environmental Regulations
By Ted Auch, PhD, Great Lakes Program Coordinator and Shannon Smith, Manager of Communications & Development
The oil and gas industry continues to use rhetoric focusing on national security and energy independence in order to advocate for legislation to criminalize climate activists. Backlash against protestors and environmental stewards has only increased since the onset of COVID-19, suggesting that industry proponents are exploiting this public health crisis to further their own dangerous and controversial policies.[1]
Industry actors contributing to the wave of anti-protest bills include American Petroleum Institute (API), IHS Markit, The American Fuel & Petrochemical Manufacturers (AFPM), and most effectively, the American Legislative Exchange Council (ALEC), by way of its primary financial backer, Koch Industries (Fang, 2014, Shelor, 2017).
ALEC is the source of the model legislation “Critical Infrastructure Protection Act” of 2017, intended to make it a felony to “impede,” “inhibit,” “impair,” or “interrupt” critical infrastructure operation and/or construction. Close approximations – if not exact replicas – of this legislative template have been passed in 11 hydrocarbon rich and/or pathway states, and 8 more are being debated in 4 additional states.
The “critical infrastructure” designation in ALEC’s “Critical Infrastructure Protection Act” is extremely broad, including over 70 pieces of infrastructure, from wastewater treatment and well pads, to ports and pipelines. However, along with the 259 Foreign Trade Zones (FTZ) (Figures 1 and 4) supervised by US Customs and Border Protection (CBP), security is of such importance because over 50% of this infrastructure is related to oil and gas. According to our analysis, there are more than 8,000 unique pieces of infrastructure that fall under this designation, with over 10% in the Marcellus/Utica states of Ohio, West Virginia, and Pennsylvania. See Figure 1 for the number of FTZ per state.
Regarding FTZ, the US Department of Homeland Security doesn’t attempt to hide their genuine nature, boldly proclaiming them “… the United States’ version of what are known internationally as free-trade zones … to serve adequately ‘the public interest’.” If there remains any confusion as to who these zones are geared toward, the US Department of Commerce’s International Administration (ITA) makes the link between FTZ and the fossil fuel industry explicit in its FTZ FAQ page, stating “The largest industry currently using zone procedures is the petroleum refining industry.” (Figure 2)
Figure 1. Number of Foreign-Trade Zones (FTZ) by state as of June 2020.
Figure 2. Foreign-Trade Zone (FTZ) Board of Actions in Zones 87 in Lake Charles, LA, 115-117 in and around Port Arthur, TX, and 122 in Corpus Christi, TX. (click on the images to enlarge)
Foreign-Trade Zone (FTZ) Board of Actions in Zone 87 in Lake Charles, Louisiana
Foreign-Trade Zone (FTZ) Board of Actions in Zones 115-117 in and around Port Arthur, Texas
Foreign-Trade Zone (FTZ) Board of Actions in Zone 122 in Corpus Christi, Texas
Much of the oil, gas, and petrochemical industries’ efforts stem from the mass resistance to the Dakota Access Pipeline (DAPL). Native American tribes and environmental groups spent months protesting the environmentally risky $3.78 billion dollar project, which began production in June 2017, after Donald Trump signed an executive order to expedite construction during his first week in office. The Standing Rock Sioux tribe also sued the US government in a campaign effort to protect their tribal lands. The world watched as Energy Transfer Partners (ETP), the company building the pipeline, destroyed Native artifacts and sacred sites, and as police deployed tear gas and sprayed protesters with water in temperatures below freezing.
ETP’s bottom line and reputation were damaged during the fight against DAPL. Besides increasingly militarized law enforcement, the oil and gas industry has retaliated by criminalizing similar types of protests against fossil fuel infrastructure. However, the tireless work of Native Americans and environmental advocates has resulted in a recent victory in March 2020, when a federal judge ordered a halt to the pipeline’s production and an extensive new environmental review of DAPL.
Just days ago, on July 6, 2020, a federal judge ruled that DAPL must shut down until further environmental review can assess potential hazards to the landscape and water quality of the Tribe’s water source. This is certainly a victory for the Standing Rock Sioux Tribe and other environmental defenders, but the decision is subject to appeal.
Since the DAPL conflict began, the industry has been hastily coordinating state-level legislation in anticipation of resistance to other notable national gas transmission pipelines, more locally concerning projects like Class II Oil and Gas Waste Injection Wells, and miles of gas gathering pipelines that transport increasing streams of waste – as well as oil and gas – to coastal processing sites.
The following “critical infrastructure” bills have already been enacted:
STATE
BILL
TITLE
DATE PASSED
West Virginia
HB 4615
NEW PENALTIES FOR PROTESTS NEAR GAS AND OIL PIPELINES
3/25/20
South Dakota
SB 151
NEW PENALTIES FOR PROTESTS NEAR PIPELINES AND OTHER INFRASTRUCTURE
3/18/20
Kentucky
HB 44
NEW PENALTIES FOR PROTESTS NEAR PIPELINES AND OTHER INFRASTRUCTURE
3/16/20
Wisconsin
AB 426
NEW PENALTIES FOR PROTESTS NEAR GAS AND OIL PIPELINES
11/21/19
Missouri
HB 355
NEW PENALTIES FOR PROTESTS NEAR GAS AND OIL PIPELINES
7/11/19
Texas
HB 3557
NEW CRIMINAL AND CIVIL PENALTIES FOR PROTESTS AROUND CRITICAL INFRASTRUCTURE
6/14/19
Tennessee
SB 264
NEW PENALTIES FOR PROTESTS NEAR GAS AND OIL PIPELINES
5/10/19
Indiana
SB 471
NEW PENALTIES FOR PROTESTS NEAR CRITICAL INFRASTRUCTURE
5/6/19
North Dakota
HB 2044
HEIGHTENED PENALTIES FOR PROTESTS NEAR CRITICAL INFRASTRUCTURE
4/10/19
Louisiana
HB 727
HEIGHTENED PENALTIES FOR PROTESTING NEAR A PIPELINE
5/30/18
Oklahoma
HB 1123
NEW PENALTIES FOR PROTESTS NEAR CRITICAL INFRASTRUCTURE
5/3/17
There are an additional eight bills proposed and under consideration in these six states:
STATE
PENDING
TITLE
DATE PROPOSED
Louisiana
HB 197
NEW PENALTIES FOR PROTESTS NEAR CRITICAL INFRASTRUCTURE
2/24/20
Minnesota
HF 3668
NEW PENALTIES FOR PROTESTS NEAR GAS AND OIL PIPELINES
2/24/20
Mississippi
HB 1243
NEW PENALTIES FOR PROTESTS NEAR CRITICAL INFRASTRUCTURE
2/19/20
Alabama
SB 45
NEW PENALTIES FOR PROTESTS NEAR GAS AND OIL PIPELINES
2/4/20
Minnesota
HF 2966
NEW PENALTIES FOR PROTESTS NEAR OIL AND GAS PIPELINES
1/31/20
Minnesota
SF 2011
NEW PENALTIES FOR PROTESTS NEAR GAS AND OIL PIPELINES
3/4/19
Ohio
SB 33
NEW PENALTIES FOR PROTESTS NEAR CRITICAL INFRASTRUCTURE
2/12/19
Illinois
HB 1633
NEW PENALTIES FOR PROTESTS NEAR CRITICAL INFRASTRUCTURE
1/31/19
Desperate Backlash Against Peaceful Protest
Activists and organizations like the American Civil Liberties Union (ACLU) are framing their opposition to such legislation as an attempt to stave off the worst Orwellian instincts of our elected officials, whether they are in Columbus or Mar-a-Lago. On the other hand, industry and prosecutors are framing these protests as terroristic acts that threaten national security, which is why sentencing comes with a felony conviction and up to ten years in prison. The view of the FBI’s deputy assistant director and top official in charge of domestic terrorism John Lewis is that, “In recent years, the Animal Liberation Front and the Earth Liberation Front have become the most active, criminal extremist elements in the United States … the FBI’s investigation of animal rights extremists and ecoterrorism matters is our highest domestic terrorism investigative priority.”
It shocked many when last week, two protesters in the petrochemical-laden “Cancer Alley” region of Louisiana were arrested and charged under the state’s felony “terrorist” law. Their crime? Placing boxes of nurdles – plastic pellets that are the building blocks of many single-use plastic products – on the doorsteps of fossil fuel lobbyists’ homes. To make matters more ridiculous, the nurdles were illegally dumped by the petrochemical company Formosa Plastics.[2] This is outrageous indeed, but is the sort of legally-sanctioned oppression that fossil fuel industry lobbyists have been successfully advocating for years.
American Fuel & Petrochemical Manufacturers (AFPM) stated in a letter of support for ALEC’s legislative efforts:
“In recent years, there has been a growing and disturbing trend of individuals and organizations attempting to disrupt the operation of critical infrastructure in the energy, manufacturing, telecommunications, and transportation industries. Energy infrastructure is often targeted by environmental activists to raise awareness of climate change and other perceived environmental challenges. These activities, however, expose individuals, communities, and the environment to unacceptable levels of risk, and can cause millions of dollars in damage … As the private sector continues to expand and maintain the infrastructure necessary to safely and reliably deliver energy and other services to hundreds of millions of Americans, policymakers should continue to consider how they can help discourage acts of sabotage … Finally, it will also hold organizations both criminally and vicariously liable for conspiring with individuals who willfully trespass or damage critical infrastructure sites.”
Those organizations deemed ‘criminally and vicariously liable’ would in some states face fines an order of magnitude greater than the actual individual, which would cripple margin-thin environmental groups around the country, and could amount to $100,000 to $1,000,000. The AFPM’s senior vice president for federal and regulatory affairs Derrick Morgan referred to these vicarious organizations as “inspiring … organizations who have ill intent, want to encourage folks to damage property and endanger lives …”
One of the most disturbing aspects of this legislation is that it could, according to the testimony and additional concerns of ACLU of Ohio’s Chief Lobbyist Gary Daniels, equate “‘impeding’ and ‘inhibiting’ the ‘operations’ of a critical infrastructure site” with acts as innocuous as Letters to the Editor, labor strikes or protests, attending and submitting testimony at hearings, or simply voicing your concern or objections to the validity of industry claims and its proposals with emails, faxes, phone calls, or a peaceful protest outside critical infrastructure that raises the concern of site security. Mr. Daniels noted in his additional written testimony that the latter, “may prove inconvenient to the site’s staff, under SB 250 they would be an F3 [Third Degree Felony], and that is without someone even stepping foot on or near the property, as physical presence is not required to be guilty of criminal mischief, as found in/defined in Sec. 2907.07(A)(7) of the bill.”
Figure 3. A rally held by the Louisiana-based nonprofit RISE St. James.
This connection, when enshrined into law, will have a chilling effect on freedom of speech and assembly, and will stop protests or thoughtful lines of questioning before they even start. As the Ohio Valley Environmental Coalition (OVEC) put it in their request for residents to ask the governor to veto the now-enacted HB 4615, such a bill is unnecessary, duplicative, deceitful, un-American, unconstitutional, and “will further crowd our jails and prisons.”
To combat such industry-friendly legislation that erodes local government control in Ohio, lawmakers like State Senator Nikki Antonio are introducing resolutions like SR 221, which would, “abolish corporate personhood and money-as-speech doctrine” made law by the Supreme Court of the United States’ rulings in Citizens United v. FEC and Buckley v. Valeo. After all, the overarching impact of ALEC’s efforts and those described below furthers privatized, short-term profit and socialized, long-term costs, and amplifies the incredibly corrosive Citizen’s United decision a little over a decade ago.
Further Criminalization of Protest, Protections for Law Enforcement
Simultaneously, there is an effort to criminalize protest activities through “riot boosting acts,” increased civil liability and decreased police liability, trespassing penalties, and new sanctions for protestors who conceal their identities (by wearing a face mask, for example).
The following bills have already been enacted:
STATE
BILL
TITLE
DATE PASSED
South Dakota
SB 189
EXPANDED CIVIL LIABILITY FOR PROTESTERS AND PROTEST FUNDERS
3/27/19
West Virginia
HB 4618
ELIMINATING POLICE LIABILITY FOR DEATHS WHILE DISPERSING RIOTS AND UNLAWFUL ASSEMBLIES
3/10/18
North Dakota
HB 1426
HEIGHTENED PENALTIES FOR RIOT OFFENCES
2/23/17
North Dakota
HB 1293
EXPANDED SCOPE OF CRIMINAL TRESPASS
2/23/17
North Dakota
HB 1304
NEW PENALTIES FOR PROTESTERS WHO CONCEAL THEIR IDENTITY
2/23/17
In addition, the following bills have been proposed and are under consideration:
STATE
PENDING
TITLE
DATE PROPOSED
Rhode Island
H 7543
NEW PENALTIES FOR PROTESTERS WHO CONCEAL THEIR IDENTITY
2/12/20
Oregon
HB 4126
HARSH PENALTIES FOR PROTESTERS WHO CONCEAL THEIR IDENTITY
1/28/20
Tennessee
SB 1750
NEW PENALTIES FOR PROTESTERS WHO CONCEAL THEIR IDENTITY
1/21/20
Ohio
HB 362
NEW PENALTIES FOR PROTESTERS WHO CONCEAL THEIR IDENTITY
10/8/19
Pennsylvania
SB 887
NEW PENALTIES FOR PROTESTS NEAR “CRITICAL INFRASTRUCTURE”
10/7/19
Massachusetts
HB 1588
PROHIBITION ON MASKED DEMONSTRATIONS
1/17/19
All the while, the Bundy clan of Utah pillage – and at times – hold our public lands hostage, and white male Michiganders enter the state capital in Lansing armed for Armageddon, because they feel that COVID-19 is a hoax. We imagine that it isn’t these types of folks that West Virginia State Representatives John Shott and Roger Hanshaw had in mind when they wrote and eventually successfully passed HB 4618, which eliminated police liability for deaths while dispersing riots and unlawful assemblies.
Contrarily, South Dakota’s SB 189, or “Riot Boosting Act,” was blocked by the likes of US District Judge Lawrence L. Piersol, who wrote:
“Imagine that if these riot boosting statutes were applied to the protests that took place in Birmingham, Alabama, what might be the result? … Dr. King and the Southern Christian Leadership Conference could have been liable under an identical riot boosting law.”
FracTracker collaborated with Crude Accountability on a report documenting increasing reprisals against environmental activists in the US and Eurasia. Read the Report.
Figure 4. Photo of US Treasury Department signage outlining the warning associated with BP’s Whiting, IN, oil refinery designated a Foreign Trade Zone (FTZ). Photo by Ted Auch July 15th, 2015
In all fairness to Mr. Emanuel, he was referring to the Obama administration’s support for the post-2008 bipartisan Wall Street bailout. However, it is critical that we acknowledge the push for critical infrastructure legislation has been most assuredly bipartisan, with Democratic Governors in Kentucky, Louisiana, and Wisconsin signing into law their versions on March 16th of this year, in May of 2018, and in November of 2019, respectively.
Related Legislation in Need of Immediate Attention
In Columbus, Ohio, there are several pieces of legislation being pushed in concert with ALEC-led efforts. These include the recently submitted HB 362, that would “create the crime of masked intimidation.” Phil Plummer and George F. Lang sponsor the bill, with the latter being the same official who introduced HB 625, a decidedly anti-local control bill that would preempt communities from banning plastic bags. Most of the general public and some of the country’s largest supermarket chains have identified plastic bag bans as a logical next step as they wrestle with their role in the now universally understood crimes plastics have foisted on our oceans and shores. As Cleveland Scene’s Sam Allard wrote, “bill mills” and their willing collaborators in states like Ohio cause such geographies to march “boldly, with sigils flying in the opposite direction” of progress, and a more renewable and diversified energy future.
With respect to Plummer and Lang’s HB 362, two things must be pointed out:
1) It is eerily similar to North Dakota’s HB 1304 that created new penalties for protestors who conceal their identity, and
So, when elected officials as far away as Columbus copy and paste legislation passed in the aftermath of the DAPL resistance efforts, it is clear the message they are conveying, and the audience(s) they are trying to intimidate.
Plummer and Lang’s HB 362 would add a section to the state’s “Offenses Against the Public Peace,” Chapter 2917, that would in part read:
No person shall wear a mask or disguise in order to purposely do any of the following:
(A) Obstruct the execution of the law;
(B) Intimidate, hinder, or interrupt a person in the performance of the person’s legal duty; or
(C) Prevent a person from exercising the rights granted to them by the Constitution or the laws of this state.
Whoever violates this proposed section is guilty of masked intimidation. Masked intimidation is a first degree misdemeanor. It was critical for the DAPL protestors to protect their faces during tear gas and pepper spray barrages, from county sheriffs and private security contractors alike.
At the present moment, masks are one of the few things standing between COVID-19 and even more death. Given these realities, it is stunning that our elected officials have the time and/or interest in pushing bills such as HB 362 under the thin veil of law and order.
But judging by what one West Virginia resident and former oil and gas industry draftsman,[3] wrote to us recently, elected officials do not really have much to lose, given how little most people think of them:
“Honestly, it doesn’t seem to matter what we do. The only success most of us have had is in possibly slowing the process down and adding to the cost that the companies incur. But then again, the increase in costs probably just gets passed down to the consumers. One of the biggest drawbacks in my County is that most, if not all, of the elected officials are pro drilling. Many of them have profited from it.”
The oil, gas, and petrochemical industries are revealing their weakness by scrambling to pass repressive legislation to counteract activists. But social movements around the world are determined to address interrelated social and environmental issues before climate chaos renders our planet unlivable, particularly for those at the bottom of the socioeconomic ladder. We hope that by shining a light on these bills, more people will become outraged enough to join the fight against antidemocratic legislation.
This is Part I of a two-part series on concerning legislation related to the oil, gas, and petrochemical industries. Part II focuses on bills that would weaken environmental regulations in Ohio, Michigan, and South Dakota.
By Ted Auch, PhD, Great Lakes Program Coordinator and Shannon Smith, Manager of Communications & Development
[1] See Naomi Klein’s concept of the Shock Doctrine for similar trends.
[2] The community-based environmental organization RISE St. James has been working tirelessly to prevent Formosa Plastics from building one of the largest petrochemical complexes in the US in their Parish. Sharon Lavigne is a leading member of RISE St. James, and is an honored recipient of the 2019 Community Sentinel Award for Environmental Stewardship. Read more on Sharon’s work with RISE St. James here.
[3] This individual lives in Central West Virginia, and formerly monitored Oil & Gas company assets in primarily WV, PA, NY, VA, MD & OH, as well as the Gulf Coast. Towards the end of this individual’s career, they provided mapping support for the smart pigging program, call before you dig, and the pipeline integrity program.
For the past two years, a grand jury empaneled by Pennsylvania Attorney General Josh Shapiro has been investigating what they see as an oil and gas industry that has run amok. The Attorney General admonished the Pennsylvania Department of Environmental Protection (DEP) and to a lesser degree, the Department of Health (DOH), both of which they claim have conducted insufficient oversight of the industry, allowing serious problems to happen over and over again since the arrival of fracking in the Marcellus Shale sixteen years ago.
Mr. Shapiro claims that Pennsylvania should know better, as it is still dealing with the health and environmental impacts of mining and oil and gas operations that have been shuttered for decades. In fact, it was almost 50 years ago that the state Environmental Rights Amendment was adopted to the Pennsylvania constitution by a nearly 4 to 1 margin of Pennsylvania voters. It states:
Article I, Section 27: The people have a right to clean air, pure water, and to the preservation of the natural, scenic, historic and esthetic values of the environment. Pennsylvania’s public natural resources are the common property of all the people, including generations yet to come. As trustee of these resources, the Commonwealth shall conserve and maintain them for the benefit of all the people.
As a part of the state’s constitution, it is a fundamental part of the law of the land.
Criminal Charges
The Attorney General said that the grand jury heard hundreds of hours of expert testimony and impacted residents, and charges have already been issued against two companies – Range Resources and Cabot.
These moves are not without their critics, however. Range Resources pleaded no contest to charges of environmental crimes at several sites, which was compounded by a pattern of not informing local residents about the mishaps and potential impacts. In one of these cases, the grand jury found that the company became aware of a contamination event stemming from a shredded liner in a wastewater impoundment, for which they proceeded to do nothing about for three years, resulting in a contaminated aquifer. The company was further accused of falsifying laboratory data related to the case to affect the outcome of related civil suits.
For all of incidents reviewed, the company was slapped with a modest $50,000 fine, and agreed to a $100,000 contribution to a watershed group in the area. This can hardly be considered a deterrent; for a multi-billion dollar company in an industry where each well costs millions of dollars to drill, this amounts to nearly nothing beyond the routine cost of doing business.
Cabot’s charges stem from an infamous incident in 2008 in Dimock Township, Susquehanna County, that was highlighted in the movie GasLand. One of the wells exploded, and soon afterwards, neighbors began to notice contamination of their well water. Contaminants included methane, arsenic, barium, DEHP, glycol compounds, manganese, phenol, and sodium – a toxic cocktail consistent with hydraulic fracturing operations. As is common with many drilling contamination events, residents lost their water supplies and began to experience a series of health effects from the chemicals that they were exposed to. To this day, Cabot denies responsibility.
Obviously, it is difficult to put an entire corporation in jail, but some hold that employees who engaged in negligence or subterfuge certainly could be, or perhaps executives who oversaw or authorized such activities. Another possible outcome would include placing serious restrictions on the offending companies’ activities within the Commonwealth. As a means of comparison, please take a moment to browse through a list of operators that are banned from drilling activities in Texas. Honestly, this may take a few moments, because there are so many of them. One wonders what it would take ban a company from drilling in Pennsylvania.
But the focus of the Attorney General’s presentation was on the government’s shortcomings. Case after case of water contamination, gumming up expensive well pumps, and making water undrinkable. Many people had similar health complaints, including rashes, respiratory issues, nosebleeds, as well as pet and livestock health concerns and deaths. Mr. Shapiro’s question was clear: how were these problems were allowed to keep happening?
There is a 2020 grand jury seated as we speak, so this is certainly not the end of the story.
This map of 15,164 unconventional violations in Pennsylvania speaks to the issues presented in the report.
The grand jury developed a list of suggestions to move forward. They include:
Enact a 2,500-foot setback from homes to well sites. This is a very large increase over the current 500-foot standard, which Mr. Shapiro says is clearly insufficient to protect Pennsylvanians, as is evidenced by 16 years of documented problems.
Disallow secret injections of chemicals in hydraulic fracturing fluids. As FracTracker learned in our project with Partnership for Policy Integrity, companies injected 13,632 secret chemicals into over 2,500 wells in Pennsylvania just five years.
Enact common-sense toxic waste transportation, so that first responders and the public at large can find out when oil and gas waste has been transported. We find it interesting that the Attorney General chose the words “toxic waste” rather than “residual waste,” which we consider to be a loophole term that was invented to sidestep more stringent regulations.
Gathering lines for fracking wells need to be regulated based on risk, not size.
Reporting for air pollution needs to be aggregated by site, rather than reporting dozens of emission sources separately. This will allow researchers to better understand the cumulative risk at such locations.
A comprehensive public health study of the effects of exposure to contaminated air and water from fracking operations must be conducted. The Attorney General notes that the Department of Health has agreed with this recommendation, and preparations to conduct this study are underway.
The revolving door between regulators and industry must be stopped. Mr. Shapiro notes that at the very least, this cozy relationship creates an appearance of impropriety, which in itself erodes the public trust. He then went on to mention an instance where an operator hired seven former DEP office employees all at once.
The Attorney General’s office does not have original jurisdiction on environmental crimes, and must wait for a referral from a district attorney or the DEP. The DEP has not been making such referrals, considering civil penalties and fines to be sufficient. The Attorney General disagrees, and wants to hear directly from the people of Pennsylvania. To that end, a hotline has been setup.
Mr. Shapiro then proceeded to take DEP to task for its response to the investigation itself. The Department refused to send top staff to testify, he said, fighting with the grand jury investigation every step of the way. They then attempted to mislead the public, saying that they had no opportunity for input. What’s more, the Attorney General said that they spewed industry talking points, claiming that hundreds of hours of testimony were based on hearsay, and that a variety of the serious health impacts experienced by Pennsylvanians were, “not significant.”
In contrast, the Department of Health sent Secretary Rachel Levine to participate in the proceedings, who saw this as an opportunity to uncover her department’s shortcomings with respect to fracking over the past 16 years, and to forge a path forward in which they could do a better job in upholding their obligations.
While Mr. Shapiro characterized the response from DOH as earnest, DEP received no such accolades. “The DEP – let me be clear,” he said, “they need to clean up their act.”
By Matt Kelso, Manager of Data & Technology, FracTracker Alliance
Kern County, California has approved at least 18,356 illegal permits to drill new and rework existing oil and gas wells from 2015 – 2019 (data downloaded May 18, 2020). In a monumental decision in February of 2020, a California court ruled that a Kern County oil and gas ordinance paid for and drafted by the oil industry violated the state’s foundational environmental law. Kern County has failed to consider the environmental harms resulting from oil and gas drilling, such as water supply and air quality problems, farmland degradation, and increased noise, and communities have had enough.
Starting in 2015, Kern County used a local ordinance to fast-track the drilling of up to 72,000 new oil and gas wells over the next 25 years. The court’s recent decision allows the existing 18,356 permits to remain valid, but blocked the county from issuing any more permits after the end of April, 2020. This is an important victory for Kern County communities, but the existing permits present a public health threat that regulators have never adequately addressed.
To better understand the impacts of these illegal permits, and identify the communities most impacted, FracTracker Alliance has conducted an environmental justice spatial analysis based on the location of the permits. A map of the permits is found below in Figure 1. shows that there are 18,356 “Drilling” and “Rework” permits issued in Kern County since 2015, as well as the 1,304 permits located within 2,500’ of a sensitive receptor, including hospitals, schools, daycares, and homes.
Figure 1. Map of California Geologic Energy Management Division (CalGEM), formerly the California Division of Oil, Gas, and Geothermal Resources (DOGGR), approved drilling and rework permits, 2015-2019.
The ordinance, written by oil industry consultants, sidestepped state requirements for environmental reviews or public notices, as required by the California Environmental Quality Act (CEQA). It was used as a blanket environmental impact report (EIR), so that the threats of specific projects need not be considered.
To pass the ordinance, the county used a flawed study to hide the immense harm caused by oil and gas drilling and extraction. The appellate court that ruled against the ordinance stated it was passed “despite its significant, adverse environmental impacts.” As a result, the county allowed wells to be constructed next to people’s homes, schools, daycares, and healthcare facilities.
Permitting Summary
FracTracker aggregated, cleaned, and compiled California Geologic Energy Management Division’s (CalGEM) datasets of well permits. A breakdown of the statewide counts of permit types is shown below in Table 1. The table shows that in 2019, permits to drill new oil and gas wells made up about 34% of total permits. Over the course of the last five years, statewide permits have been distributed pretty equally between drilling wells, reworking wells to increase production (including re-drilling activities like deepening and sidetracking wells), and plugging and abandoning wells.
Table 1. Breakdown of permit types issued by California Geologic Energy Management Division (CalGEM), formerly the California Division of Oil, Gas, and Geothermal Resources (DOGGR), 2015-2019.
The illegal Kern County ordinance took effect in 2015, and permit counts for Kern County are shown in Table 2 and Figure 2 below. Note the permit count increase from 2014 to 2015 in the graph in Figure 2. The data shows that Kern County permitting counts increased in 2015 with the passage of the illegal ordinance. In 2016, a new statewide rule (State Bill 4) took effect regulating hydraulic fracturing. Since most oil and gas drilling in California was using hydraulic fracturing, permit numbers statewide, including in Kern, fell drastically. Since 2016, permitting rates have been climbing back up to pre-2016 levels. As of May 18, 2020, Kern County has already approved 1,310 new drilling permits, putting Kern County on track to meet or exceed 2015 permit numbers.
Table 2. Breakdown of permit types issued by California Geologic Energy Management Division (CalGEM) in Kern County alone, 2015-2019.
Figure 2. Time Series of drilling permits issued by Kern County, California, 2014 to present.
2015
New Kern ordinance to fast-track permits. Kern permits increase disproportionately.
2016
New SB4 statewide fracking permit requirements. Kern permits decrease as a result.
2016
2017 - 2020
Proportion of Kern permits begin to increase once again
2020
California court ruled that a Kern County oil and gas ordinance paid for and drafted by the oil industry violated the state’s foundational environmental law. State permitting continues under CalGEM.
2020
Kern County is the most heavily drilled county in the United States, and from 2015 to 2019 well permits were issued in Kern at elevated numbers as compared to the rest of the state. From the implementation of the ordinance (2014 to 2015), the proportion of drilling permits issued by Kern County increased from 82% to 94% of the state total. In Figure 3 below, the time series shows that Kern County makes up the majority of permits issued to drill new wells in California, and the proportion of wells drilled in Kern County has been higher from 2015 to 2019 than it had been prior. Not only did the ordinance allow permits to be drilled without any consideration for the community and public health impacts of Frontline Communities, but the actual numbers and proportions of wells drilled in Kern County increased as well. We have mapped these permits in Figure 3 below to show exactly where they are located.
Figure 3. Time series of permits issued to drill new wells in California from 1998 to 2019. The contribution of individual counties is shown with different colors, the area under the trend line representing the cumulative total.
Environmental Justice Mapping
The locations of well permits were mapped using GIS software and overlaid with indicators of social and environmental justice. The layers of Environmental Justice (EJ) mapping data were derived from CalEnviroScreen 3.0 census tract data, assigned to the block level, and 2015 American Community Survey demographical data, also summarized at the census block data.
Demographics
One of the major failings of the Kern County ordinance was the lack of risk communication with Frontline Communities. Not only were communities not informed of proposed drilling projects, all communications from Kern County and CalGem have been posted solely in English. Any attempts at communication of impacts and notices have excluded non-English speakers. Providing notices and information in non-English languages, at the very least in Spanish, needs to be a top priority for any regulatory body in California. The current permitting policy leverages systematic racism to preclude communities from participating in the decision-making processes that directly affect their families’ health.
As shown below in map in Figure 4, the majority of Kern County ranks high in “linguistic isolation” according to CalEnviroScreen 3.0. Our analysis shows that 11,244 permits were issued in block groups that CalEnviroscreen 3.0 has ranked in the top 60th percentile for linguistic isolation. A total 16,143 permits were issued in block groups that are 40% or more Hispanic, and that number increases to 18,000 (98.1%) permits if you include the permits issued in the Midway-Sunset Field, located on the border of one of Kern’s largest, and predominantly “Hispanic,” census block groups.
Figure 4. Map of Oil and Gas Permits with Kern County “Hispanic” Demographics and Language Disparities. The shades of yellow to red census blocks represent the 60th percentile and above linguistic isolation. Hatched census tracts are census blocks with demographical profiles over 40% Hispanic.
Within Kern County, these permits were approved mostly in low income areas, and areas with pre-existing environmental degradation. In the map in Figure 5, below, permit locations were overlaid with CalEnviroScreen 3.0 rankings for existing environmental degradation and median income data from the American Community Survey (2015) to visually show the disparity.
Our analysis shows that 17,978 0f the 18,356 total drilling and reworking permits were issued in census block groups where the median income was at least 20% lower than that of Kern County (Kern median income = $51,579). Additionally, these areas are more impacted by existing sources of pollution. In fact, 18,298 (99.7%) permits were issued in census blocks designated as the above the 60th percentile of those suffering from existing pollution burden by CalEnviroScreen 3.0.
Figure 5. Map of oil and gas permits with Kern County environmental justice areas. Shown in shades of blue are the block groups with median incomes less than 80% of that of the Kern County ($51,579). The hatched areas are above the 60th percentile for CalEnviroScreen pollution burden.
Conclusion
Our results find that from 2015-2019, very few well permits were issued in census blocks that are predominantly white, with median incomes above the median, and low rankings of linguistic isolation. The policies enacted by Kern County to fast track permits were instituted in predominantly poor, linguistically isolated, Hispanic communities already suffering from existing environmental degradation. Through systematic racism, these areas have become Kern County’s “sacrifice zones.” Moving forward, we are pressuring Kern County to adopt a permitting approach that considers the health of Frontline Communities.
Unfortunately, since the court’s decision, well permitting in Kern County has not only continued, but actually accelerated. While the appellate court ordered permitting to stop for one month, the gap was quickly filled. Between March 28 and May 18, 2020; CalGEM approved 733 permits to drill new wells and rework existing wells in Kern County. In addition, CalGEM approved 38 new fracking permits in 2020 since March 28th, all in Kern County (regulated separately under State Bill 4), increasing the environmental burden on Kern communities further. Like Kern County, CalGEM’s permitting process also deserves scrutiny, as state permitting requirements are lax.
These irresponsible policies have had a direct impact on the health of Central Valley communities. Environmental monitoring has shown time and again that emissions from oil and gas wells include a cocktail of air toxics and carcinogens, and that living near oil and gas activity has been shown to be associated with numerous health impacts such as low birth weight, cancer, skin problems, asthma, and depression, The exclusion of Spanish-speaking residents from notifications and information on decisions that affect their health is an even further condemnation of the systematic and outright racism of Kern County’s permitting approach.
There is more work to be done, but the elimination of Kern County’s fast-tracking ordinance is a major win for public health and democracy.
FracTracker Alliance would like to congratulate the organizations responsible for this legislative victory and thank them for all their hard work. They include Committee for a Better Arvin, Committee for a Better Shafter, and Greenfield Walking Group, represented by the Center on Race, Poverty & the Environment, together with the Center for Biological Diversity, and Sierra Club, who was represented by Earthjustice.
By Kyle Ferrar, MPH, Western Program Coordinator, FracTracker Alliance
https://www.fractracker.org/a5ej20sjfwe/wp-content/uploads/2020/06/CalGEM-Drilling-and-Rework-Permits-2015-2020-feature.jpg8331875Kyle Ferrar, MPHhttps://www.fractracker.org/a5ej20sjfwe/wp-content/uploads/2021/04/2021-FracTracker-logo-horizontal.pngKyle Ferrar, MPH2020-06-08 08:44:542021-04-15 14:16:46Systematic Racism in Kern County Oil and Gas Permitting Ordinance
California is once again a fracked state. The moratorium on well stimulations (hydraulic fracturing and acidizing) that lasted since June 26, 2019 has now come to an end. As of April 3rd, 2020, California’s oil and gas regulatory body, California Geological Energy Management Division (CalGEM), approved 24 new permits to frack new wells. The wells were permitted to the operator Aera Energy. Well types to be fracked include 22 oil and gas production wells and 2 water flood wells; 18 of which are in the South Belridge Field and 6 North Belridge Field. Locations of the wells are shown in the map in Figure 1, and are mapped with the rest of 2020’s approved well drilling and rework permits in Consumer Watchdog’s updated release on NewsomWellWatch.com. Please read our press release with Consumer Watchdog here!
Figure 1. Map of New Fracking Permits in California
Fortunately, these 24 approved well stimulation permits are not located in close proximity to communities that would be directly impacted by the negative contributions to air quality and potential groundwater quality degradation that result from drilling and stimulating oil and gas wells. Regardless of where oil and gas wells and stimulations are permitted in relation to Frontline Communities, these wells will still degrade the regional air quality of the San Joaquin Valley. The San Joaquin Valley has the worst air quality in the country. According to the U.S. EPA, oil and gas production is a main contributor of volatile organic compounds (VOC’s) and NOX in the Valley. In addition to VOC’s being carcinogens, these pollutants are precursors to the ozone and smog that cause health impacts such as asthma, chronic obstructive pulmonary disease (COPD), cardiovascular disease, and negative birth outcomes.
Geology and Spills
Additionally, the dolomite formations where these 24 stimulations were permitted have also experienced the same type of oil seeps and spills (known as surface expressions) as the Cymric Field just to the south. Readers may remember the operator Chevron spilling 1.3 million gallons of oil and wastewater in an uncontrollable seep resulting from high pressure injection wells.
Whereas Governor Newsom may have put a halt to unpermitted high-pressure injections, regulators have just approved permits for 24 new fracking operations, a.k.a well stimulations. The irony here is that risks inherent in the fracking process in California include the same risks associated withhigh pressure steam injection operations. Both techniques elevate the downhole pressure of a well to the point that the formation “source” rock is fractured. These techniques increase the likelihood of downhole communication with other surrounding wells, both active and plugged. Downhole communication events between wells, in this case known as “frack hits” are a major cause of well casing failures and blowouts, which in turn are the primary cause of surface expressions. Simply put, high pressure injections in over-developed oil fields result in spills, and in this case, these 24 permitted stimulations are within 1,500’ of over 7,000 existing wells, a distance specifically identified by CalGEM as a high-risk zone for downhole communication between wells.
Regulation
So how did these wells get approved? Here’s the story, as told by CalGEM:
In November, CalGEM requested a third-party scientific review of pending well stimulation permit applications to ensure the state’s technical standards for public health, safety and environmental protection are met prior to approval of each permit. To ensure the proposed permits comply with California law, including the state’s technical standards to protect public health, safety, and environmental protection, the Department of Conservation asked experts at the Lawrence Livermore National Laboratory (LLNL) to assess CalGEM’s permit review process. LLNL also evaluated the completeness of operators’ application materials and CalGEM’s engineering and geologic analyses.
The independent scientific review is one of Governor Newsom’s initiatives to ensure oil and gas regulations protect public health, safety, and environmental protection. This review, which assesses the completeness of each proposed hydraulic fracturing permit, is taking place as an interim measure while a broader audit is completed of CalGEM’s permitting process for well stimulation. That audit is being completed by the Department of Finance Office of Audits and Evaluation (OSAE) and will be completed and shared publicly later this year. LLNL experts are continuing evaluation on a permit-by-permit basis and conducting a rigorous technical review to verify geological claims made by well operators in the application process. Permit by permit review will continue until the Department of Finance Audit is complete later this year.
LLNL’s scientific review of the permit applications and process found that the permitting process met statutory and regulatory requirements. LLNL found, however, that CalGEM could improve its evaluation of the technical models used in the permit approval process. As a result, CalGEM now requires all operators to provide an Axial Dimensional Stimulation Area (ADSA) Narrative Report for each oilfield and fracture interval which must be validated by LLNL and conform to the new CalGEM permitting process. This will improve CalGEM’s ability to independently validate applicants’ fracture modeling.
While this sounds like a methodological approach to the permitting process, it is still flawed in several ways. First and foremost, there is still no process for community input, let alone community decision-making. Community stakeholders are not engaged at in point in this process. Furthermore the contribution of oil and gas extraction operations to the degradation of environmental quality is already well established. In the case of these 24 fracking permits, they will contribute to the further degradation of regional air quality and continue the legacy of groundwater contamination within the sacrifice zone surrounding the Belridge fields.
Fracking in the Age of Pandemics
While we are critical of Governor Newsom’s climate-changing oil extraction policies, FracTracker would like to recognize the leadership Governor Newsom has shown instituting responsible policies to keep Californians as safe as possible and protected from the threat of COVID-19. While there can still be more done to provide relief for the most financially vulnerable, such as instituting a rent moratorium for those that do not own their own homes, California leads as an example for the public health interventions that need to be instituted nation-wide. The Governors inclusion of undocumented citizens in the state’s economic stimulus program is a first step, and FracTracker Alliance fully supports increasing the amount to at least match the $1,200 provided to the rest of Californians.
Conclusion
Regardless, the threat of COVID-19 cannot be addressed in a vacuum. Threats of infection are magnified for Frontline Communities. Living near oil and gas operations exposes communities to a cocktail of volatile organic compounds that suppress the immune system, increasing the risk of contracting viral lung infections. Frontline Communities are therefore particularly vulnerable to the threat of COVID-19. California and Governor Newsom need to consider the public health implications of permitting new fracking and new oil and gas wells, particularly those permits within 2,500’ of hospitals, schools, and other sensitive sites, above all during an existing pandemic.
By Kyle Ferrar, MPH, Western Program Coordinator, FracTracker Alliance
https://www.fractracker.org/a5ej20sjfwe/wp-content/uploads/2020/04/Map-of-New-2020-Fracking-Permits-in-California.jpg7201500Kyle Ferrar, MPHhttps://www.fractracker.org/a5ej20sjfwe/wp-content/uploads/2021/04/2021-FracTracker-logo-horizontal.pngKyle Ferrar, MPH2020-05-07 12:48:132021-04-15 14:16:49California, Back in Frack
COVID-19 and the oil and gas industry are at odds. Air pollution created by oil and gas activities make people more vulnerable to viruses like COVID-19. Simultaneously, the economic impact of the pandemic is posing major challenges to oil and gas companies that were already struggling to meet their bottom line. In responding to these challenges, will our elected leaders agree on a stimulus package that prioritizes people over profits?
Air pollution from oil and gas development can come from compressor stations, condensate tanks, construction activity, dehydrators, engines, fugitive emissions, pits, vehicles, and venting and flaring. The impact is so severe that for every three job years created by fracking in the Marcellus Shale, one year of life is lost due to increased exposure to pollution.
Yes, air quality has improved in certain areas of China and elsewhere due to decreased traffic during the COVID-19 pandemic. But despite our eagerness for good news, sightings of dolphins in Italian waterways does not mean that mother earth has forgiven us or “hit the reset button.”
Significant environmental health concerns persist, despite some improvements in air quality. During the 2003 SARS outbreak, which was caused by another coronavirus, patients from areas with the high levels of air pollution were twice as likely to die from SARS compared to those who lived in places with little pollution.
On March 8th, Stanford University environmental resource economist Marshall Burke looked at the impacts of air quality improvements under COVID-19, and offered this important caveat:
“It seems clearly incorrect and foolhardy to conclude that pandemics are good for health. Again I emphasize that the effects calculated above are just the health benefits of the air pollution changes, and do not account for the many other short- or long-term negative consequences of social and economic disruption on health or other outcomes; these harms could exceed any health benefits from reduced air pollution. But the calculation is perhaps a useful reminder of the often-hidden health consequences of the status quo, i.e. the substantial costs that our current way of doing things exacts on our health and livelihoods.”
This is an environmental justice issue. Higher levels of air pollution tend to be in communities with more poverty, people of color, and immigrants. Other health impacts related to oil and gas activities, from cancer to negative birth outcomes, compromise people’s health, making them more vulnerable to COVID-19. Plus, marginalized communities experience disproportionate barriers to healthcare as well as a heavier economic toll during city-wide lockdowns.
Financial Instability of the Oil & Gas Industry in the Face of COVID-19
The COVID-19 health crisis is setting off major changes in the oil and gas industry. The situation may thwart plans for additional petrochemical expansion and cause investors to turn away from fracking for good.
Persistent Negative Returns
Oil, gas, and petrochemical producers were facing financial uncertainties even before COVID-19 began to spread internationally. Now, the economics have never been worse.
In 2019, shale-focused oil and gas producers ended the year with net losses of $6.7 billion. This capped off the decade of the “shale revolution,” during which oil and gas companies spent $189 billion more on drilling and other capital expenses than they brought in through sales. This negative cash flow is a huge red flag for investors.
“North America’s shale industry has never succeeded in producing positive free cash flows for any full year since the practice of fracking became widespread.” IEEFA
Plummeting Prices
Shale companies in the United States produce more natural gas than they can sell, to the extent that they frequently resort to burning gas straight into the atmosphere. This oversupply drives down prices, a phenomenon that industry refers to as a “price glut.”
The oil-price war between Russia and Saudi Arabia has been taking a toll on oil and gas prices as well. Saudi Arabia plans to increase oil production by 2 – 3 million barrels per day in April, bringing the global total to 102 million barrels produced per day. But with the global COVID-19 lockdown, transportation has decreased considerably, and the world may only need 90 million barrels per day.
If you’ve taken Econ 101, you know that when production increases as demand decreases, prices plummet. Some analysts estimate that the price of oil will soon fall to as low as $5 per barrel, (compared to the OPEC+ intended price of $60 per barrel).
Corporate welfare vs. public health and safety
Oil and gas industry lobbyists have asked Congress forfinancial support in response to COVID-19. Two stimulus bills in both the House and Senate are currently competing for aid.
Speaker McConnell’s bill seeks to provide corporate welfare with a $415 billion fund. This would largely benefit industries like oil and gas, airlines, and cruise ships. Friends of the Earth gauged the potential bailout to the fracking industry at $26.287 billion. In another approach, the GOP Senate is seeking to raise oil prices by directly purchasing for the Strategic Petroleum Reserve, the nation’s emergency oil supply.
Speaker Pelosi’s proposed stimulus bill includes $250 billion in emergency funding with stricter conditions on corporate use, but doesn’t contain strong enough language to prevent a massive bailout to oil and gas companies.
Hopefully with public pressure, Democrats will take a firmer stance and push for economic stimulus to be directed to healthcare, paid sick leave, stronger unemployment insurance, free COVID-19 testing, and food security.
Grasping at straws
Fracking companies were struggling to stay afloat before COVID-19 even with generous government subsidies. It’s becoming very clear that the fracking boom is finally busting. In an attempt to make use of the oversupply of gas and win back investors, the petrochemical industry is expanding rapidly. There are currently plans for $164 billion of new infrastructure in the United States that would turn fracked natural gas into plastic.
The location of the proposed PTTGC Ethane Cracker in Belmont, Ohio. Go to this map.
There are several fundamental flaws with this plan. One is that the price of plastic is falling. A new report by the Institute for Energy Economics and Financial Analysis (IEEFA) states that the price of plastic today is 40% lower than industry projections in 2010-2013. This is around the time that plans started for a $5.7 billion petrochemical complex in Belmont County, Ohio. This would be the second major infrastructural addition to the planned petrochemical buildout in the Ohio River Valley, the first being the multi-billion dollar ethane cracker plant in Beaver County, Pennsylvania.
Secondly, there is more national and global competition than anticipated, both in supply and production. Natural gas and petrochemical companies have invested in infrastructure in an attempt to take advantage of cheap natural gas, creating an oversupply of plastic, again decreasing prices and revenue. Plus, governments around the world are banning single-use plastics, and McKinsey & Company estimates that up to 60% of plastic production could be based on reuse and recycling by 2050.
Sharp declines in feedstock prices do not lead to rising demand for petrochemical end products.
Third, oil and gas companies were overly optimistic in their projections of national economic growth. The IMF recently projected that GDP growth will slow down in China and the United States in the coming years. And this was before the historic drop in oil prices and the COVID-19 outbreak.
“The risks are becoming insurmountable. The price of plastics is sinking and the market is already oversupplied due to industry overbuilding and increased competition,” said Tom Sanzillo, IEEFA’s director of finance and author of the report.
Oil, gas, and petrochemical companies are facing perilous prospects from demand and supply sides. Increasing supply does not match up with decreasing demand, and as a result the price of oil and plastics are dropping quickly. Tens of thousands of oil and gas workers are being fired, and more than 200 oil and gas companies have filed for bankruptcy in North America in the past five years. Investors are no longer interested in propping up failing companies.
Natural gas accounts for 44% of electricity generation in the United States – more than any other source. Despite that, the cost per megawatt hour of electricity for renewable energy power plants is now cheaper than that of natural gas power plants. At this point, the economy is bound to move towards cleaner and more economically sustainable energy solutions.
It’s not always necessary or appropriate to find a “silver lining” in crises, and it’s wrong to celebrate reduced pollution or renewable energy achievements that come as the direct result of illness and death. Everyone’s first priority must be their health and the health of their community. Yet the pandemic has exposed fundamental flaws in our energy system, and given elected leaders a moment to pause and consider how we should move forward.
It is a pivotal moment in terms of global energy production. With determination, the United States can exercise the political willpower to prioritize people over profits– in this case, public health over fossil fuel companies.
Top photo of petrochemical activity in the Houston, Texas area. By Ted Auch, FracTracker Alliance. Aerial assistance provided by LightHawk.
https://www.fractracker.org/a5ej20sjfwe/wp-content/uploads/2020/04/HoustonArea_feature.jpg6661500Shannon Smithhttps://www.fractracker.org/a5ej20sjfwe/wp-content/uploads/2021/04/2021-FracTracker-logo-horizontal.pngShannon Smith2020-03-24 15:48:412021-04-15 14:16:51COVID-19 and the oil & gas industry
Pennsylvania’s House Bill 1100, sponsored by state Rep. Mike Turzai, has passed through the House and Senate with broad bipartisan support. If approved, the bill would provide billions of dollars in subsidies to energy and fertilizer companies that use fracked natural gas as feedstock.
The Bill is part of “Energize PA,” a package of bills that encourage natural gas and petrochemical development by providing companies with streamlined permitting processes and subsidies. The Shell ethane cracker plant in Beaver County received $1.6 billion in state subsidies, the largest tax break in state history. HB1100 would provide similar tax credits to additional petrochemical and natural gas projects.
According to its Republican sponsors, HB1100 is “designed to make Pennsylvania attractive to outside businesses, create family-sustaining jobs and provide economic benefits to underserved regions, without creating any new fees or taxes.” Indeed, the cumulative wage impacts of the Appalachian basin shale gas build-out was around $21 billion from 2004 to 2016, according to a 2019 Carnegie Mellon University study.
March 25, 2020 Update
After weeks of sitting on the bill, the Pennsylvania General Assembly passed HB1100, and the Pennsylvania Senate submitted it to Governor Wolf on March 18. This came amidst the chaos of the COVID-19 outbreak. The Governor is still expected to veto the bill, after which point, the General Assembly is likely to attempt an override.
March 27, 2020 Update
Governor Wolf said in his press release:
“Rather than enacting this bill, which gives a significant tax credit for energy and fertilizer manufacturing projects, we need to work together in a bipartisan manner to promote job creation and to enact financial stimulus packages for the benefit of Pennsylvanians who are hurting as they struggle with the substantial economic fallout of COVID-19.” Read the full press release here.
However, both Energize PA and HB1100 have been criticized for their overall economic inefficacy and environmental externalities. The aforementioned CMU study found that the cumulative air pollution damage cost about $23 billion and the cumulative greenhouse gas damage reached $34 billion, leading the authors to conclude that the negative environmental and health externalities outweigh the benefits of shale gas development.
Diana Polson, Senior Policy Analyst at Pennsylvania Budget and Policy Center, has also raised concerns about the economics of the petrochemical buildout in Pennsylvania. At a recent town hall meeting in Millvale, Pennsylvania, she made the point that tax incentives are rarely a deciding factor in a company’s decision on where to operate. This means that initiatives like “Energize PA” have little impact in terms of private investment decisions. Many factors outweigh the impact that tax credits have on a private company’s bottom line, such as proximity to a strong workforce, other existing industries, and access to supply chains.
Employment
What about job creation? The Pennsylvania Department of Revenue estimates that the HB1100 tax credit program would cost the Commonwealth $22 million per plant per year over the next 30 years. Diana Polson estimates that this would equate to about $8.8 million per permanent job over the course of the tax break.
This cost-to-job ratio is unacceptable to representatives like Sara Innamorato. “According to Shell, the cracker plant in Beaver will support 6,000 construction jobs at the peak of work, but will only lead to a possible 600 permanent jobs. Each of these jobs costs $2.75 million in subsidies — money that could have sustained many more families currently struggling to make ends meet in our communities,” the State Representative wrote. “Imagine how many workers we could employ with that level of investment in rebuilding our crumbling roads and bridges, replacing lead pipes, and repairing bus-swallowing sinkholes.”
Corporate tax revenue has fallen to 14% of Pennsylvania’s General Fund revenue, about half of what it was in the 1970’s. Without these corporate tax cuts, Pennsylvania would have about $4 billion more in corporate tax revenue per year than it does today. Critics like Innamorato believe that the state should respond to an already large public investment deficit by subsidizing investments such as education, human services, infrastructure, and environmental protection. HB1100 runs counter such public investments, particularly Democratic Governor Tom Wolf’s efforts to instate a severance tax on fracking operations that would subsidize infrastructure projects.
Environmental & Climate Impacts
Critics of HB1100 also raise environmental concerns. Much of the petrochemical buildout in the Appalachian basin would produce plastics, exacerbating the problem of single-use plastic pollution. There are also worries about the industry’s contributions to climate change. A recent report co-authored by FracTracker Alliance and the Center for Environmental Integrity found that plastic production and incineration in 2019 contributed greenhouse gas emissions equivalent to that of 189 new 500-megawatt coal power plants. If plastic production and use grow as currently planned, these emissions could rise to the equivalent to the emissions released by more than 295 coal-fired power plants. Locking in these emissions for decades to come has some wondering how Pennsylvania will reach its carbon budget goal of 58 million tons of CO2 in 2050.
Health Concerns
In addition to economic and environmental concerns, HB1100 has come under criticism for its potential to worsen the health impacts associated with natural gas and petrochemical development, which range from asthma attacks, cardiovascular disease, strokes, abnormal heart rhythms and heart attacks. Research has also shown that natural gas and petrochemical development increase the risk of cancer, and there is growing evidence that air pollution affects fetal development and adverse birth outcomes.
Moving Forward
It is now in the hands of Governor Wolf to either pass or veto HB1100. Wolf’s spokesman J.J. Abbott said that the governor “believes such projects should be evaluated on a specific case-by-case basis. However, if there was a specific project, he would be open to a conversation.”
One in three jobs in Pennsylvania’s energy sector are in clean energy. Many taxpayers will continue to push for policies that support this kind of job creation and investment in public services and infrastructure. Will our Commonwealth leaders listen, or will they continue to prioritize fossil fuel companies?
Learn More
Visualize the petrochemical buildout by exploring FracTracker’s maps.
Penn Future and dozens of other groups are holding a press conference in Harrisburg on March 9th.
Harrisburg Press Conference - March 9
When: Monday, March 9, 10:00 – 11:00 AM
Where: Pennsylvania State Capitol – Main Rotunda
State and Third Street
Harrisburg, PA 17101
The list of speakers is subject to change. Current confirmed speakers include: Jacquelyn Bonomo, President and C.E.O., PennFuture State Representative Sara Innamorato, (21st House District) State Representative Chris Rabb, (200th House District) State Representative Carolyn Comitta, (156th House District) State Senator Katie Muth, (44th Senatorial District) Veronica Coptis, Executive Director, The Center for Coalfield Justice Ashleigh Deemer, Deputy Director, PennEnvironment Rabbi Daniel Swartz, Temple Hesed Briann Moye, One Pennsylvania
You can contact PennFuture Western Pennsylvania Outreach Coordinator, Kelsey Krepps, at krepps@pennfuture.org or (412) 224 – 4477 with any questions or concerns.
Cover photo showing early construction (2016) of the Shell Ethane Cracker in Beaver County, PA. By Ted Auch, FracTracker Alliance. Aerial assistance provided by LightHawk. Provided by FracTracker Alliance, fractracker.org/photos.
https://www.fractracker.org/a5ej20sjfwe/wp-content/uploads/2020/03/Shell-Ethane-Cracker-6-scaled.jpg8171500Shannon Smithhttps://www.fractracker.org/a5ej20sjfwe/wp-content/uploads/2021/04/2021-FracTracker-logo-horizontal.pngShannon Smith2020-03-05 12:57:122021-04-15 14:16:54House Bill 1100: What you need to know
Ted Auch
Photo by Ted Auch, FracTracker Alliance, with aerial support by LightHawk
