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Divestment – A Necessary Step Towards a Climate Neutral Society

By Guest Author: Austin Sachs, Director and founder of Protect and Divest

In most major social movements where there is an imbalance power, divestment has been a necessary part for progress, whether in South Africa or now in the environmental movement against fossil fuels. Yet, too often in the environmental movement, divestment is only pursued when all other options have run their course and failed. If we want a climate neutral society for generations to come, we must pursue divestment alongside all other actions – and alongside this divestment, a reinvestment into a society we want to see.

So where does this all start? Divestment begins with each of us looking into our financial accounts and seeing who we are funding with them. And that is exactly what Protect and Divest did last year. We researched the funding of the Atlantic Coast, Mountain Valley, Sabal Trail and Atlantic Sunrise pipelines to know where our money was going.

Along the entire East Coast, the TransCo Pipeline connects all these pipelines, but this infrastructure is also all connected by the same banks who are funding each and every single pipeline project. These banks range from the US banks of Wells Fargo, JP Morgan Chase, US Bank, CitiBank, and Bank of America to the International banks of the Royal Bank of Canada (RBC), Scotiabank and the Bank of Tokyo Mitsubishi UFJ. What we truly found is that no one bank is guilty alone – The entire financial industry is banking on the destruction of our beautiful home!

So where do we go if the banking industry is against a sustainable future? Well, luckily the entire industry is not against sustainability, and some heavily promote it. One of these options is Amalgamated Bank, who has promised to never invest depositor’s money into fossil fuels. Across this nation are countless credit unions doing the same for their members, who see money as a necessary tool of sustainability.

Protect and Divest has now launched our Divest the Commonwealth campaign to take our pledge one step further and move Virginia’s government funds out of fossil fuels, as well. Over $330 million dollars of the Virginia Retirement System is invested in fossil fuels. And of the stock of Duke Energy, one of the main builders of the Atlantic Coast Pipeline, 10 state pensions plans hold over $785 million in it. If the banks are guilty, so are our government pensions and funds. And it’s not like there are no sustainable options. Blackrock, the FTSE Group, and the National Resources Defense Council (NRDC) have come together to develop the FTSE ex-Fossil Fuels Index Series, a fossil fuel free index fund.

Divest the Commonwealth is working to build grassroots effort to move this money. We have started and are supporting city council resolutions from Harrisonburg, VA to Arlington, VA to Richmond, VA and are adding more weekly. Together, the cities and counties of Virginia will begin to bring about the future we want to see. Together, we will create a future we can be proud of.

Join us today and divest today! Every dollar, signature, and voice counts in making sure our money is where our mouth is. This is the way we create a world we want to live and one that we can tell our children about!


For more information visit: protectanddivest.weebly.com, or visit their Facebook page at: facebook.com/protectandivest.

Austin Sachs is the director and founder of Protect and Divest, created to build a market solution to climate change. Brought to the environmental movement by the Standing Rock crisis, Austin has worked endlessly to create a world we can all be proud within the economic and political models existing today!

Frac sand mining from the sky in Wisconsin

Fracking in Dairy Country

A dairy farmer in Wisconsin reflects upon a new industry in town: frac sand mining, how it is perceived, and where the industry is headed.

By Paul Jereczek
Jereczek Homestead Dairy, Dodge, Wisconsin

In 4th grade, every Wisconsin student learns about their state. Topics pertaining to Wisconsin’s economy, geography, and history along with ethnicity and traditions are introduced and explored. State facts and anecdotes are discussed and naturally memorized. The one that stood out to me the most was how Wisconsin became known as the “Badger State.”

The origin of the badger nickname is from mining. The 4th grade story I remember was that miners were too busy to build houses so they moved into abandoned mineshafts and/or dug their own burrows. These men became known as “badgers.” The 4th grade version of myself thought that was real impressive. I pictured strong, hard working men fiercely toiling away in the earth like mythical creatures, helping make Wisconsin what it is today.

It made for a great story.

Back to Reality

The reality and documentation of the times suggests something different. Most miners lived in cabins or other structures above ground. There most certainly were a few outliers on the fringe of mining society who burrowed their own holes or lived in abandoned underground mines, but the adult version of myself has a hard time imagining that the term used to describe such men – badgers – was used as a compliment.

Either way, the result is the same. Word spread and eventually Wisconsin became known as the Badger State. The state may be known worldwide for its cheese and agriculture, but there was mining in Wisconsin long before the first dairy cow. While the state was earning its nickname, mining was a prominent reason for the early success of the region.

Dairy Farming in WI

The 700 acre Jereczek Homestead Dairy in Dodge Township, Trempealeau County, Wisconsin first established in 1873 and now being operated by the the 6th generation of Jereczeks.

The 700 acre Jereczek Homestead Dairy in Dodge Township, Trempealeau County, Wisconsin first established in 1873 and now being operated by the 6th generation of Jereczeks.

Our farm is in Trempealeau County, Wisconsin – a driftless area – meaning the land was not covered by glaciers during the last ice age. The terrain is hilly and uneven, with tree-topped bluffs and hills overlooking valleys. The valleys, ranging from deep and narrow to wide and shallow, bump and flow into each other. Over the years, our farm has received its fair share of breaker rock, crushed rock, and gravel from the prevalent rock quarries. Sandstone deposits are huge and close to the surface. As a kid, there was a ledge in the cow pasture, where I hunted through chunks of sandstone for fossils.

As with everything else in the world, dairy farming continues to change. Most barns sit derelict and hold only memories of cows as they fade into the landscape. Small farms that clung to the valley walls have been sold to bigger operations, sit vacant, or have been built over. A lot of once prime farmland has been converted into houses with ridiculously large lawns. In 1990, Wisconsin had over 34,000 licensed dairy herds. Now there are just over 9,000.

We are the last dairy farm in our valley. Parallel to the trend, my childhood herd of 40 cows has turned to 200, which is about an average-sized herd. Margins are tighter than ever. Consistent help is hard to find. Milk prices are a terrible rollercoaster ride – it seems to take forever for them to go up, but when they fall, it’s fast and sickening. In the dairy business world, survival is a measure of success.

Frac Sand Mining Perceptions

Wisconsin Frac Sand Mines, Processing Facilities, and Related Operations

Wisconsin Frac Sand Mines, Processing Facilities, and Related Operations

The term frac sand is relatively new to me. I always assumed sand was sand and had given the word sand a negative connotation. Sand’s large particles don’t hold moisture or nutrients well, so sandy fields tend to perform poorly. But what if that sand has value for something else? What if there is a market for this sand much like a market for corn or soybeans?

Farmers tend to be resourceful. Every asset is scrutinized and employed to the fullest. Every acre is pushed. But what about what may lie beneath the soil? Sand mining has been going on in Wisconsin for well over a hundred years, but the recent surge in fracking has created an enormous demand for frac sand – and there are many people and companies set to take advantage of the boom.

Top U.S. Destinations for Wisconsin's Frac Sands Estimated from Superior Silica Sands' 2015 SEC 10Ks

Top U.S. Destinations for Wisconsin’s Frac Sands Estimated from Superior Silica Sands’ 2015 SEC 10Ks

Trempealeau County has zoning and planning ordinances to protect its industries and way of life. These aggressive ordinances allow more citizen input than other county’s ordinances. Public hearings are required, and orderly processes are enforced. With the economics involved with frac sand mining, citizens got educated very quickly. Much like abortion or immigration, frac sand has become a polarizing subject. Strong emotions built up by personal ideologies have pushed this topic to a boiling point. The for and against groups trade barbs without much convincing being done on either side. Frac sand mining editorials are common in local papers with those against appearing to be the most vocal and emotional.

New Player, New Approach

One such editorial detailed the approach a sand company took to obtaining a property. A local farmer had a sand mine company representative approach him with an oversized check written out to him for a sizable amount of money for his land. It was as though the sand rep was taking a page out of the Publishers Clearing House’s playbook. The farmer turned down the check. The sand rep left and returned a short time later with a significantly larger offer. The farmer was equally surprised and insulted. He found out later a few neighbors turned down similar proposals.

So what’s the deal with such a brazen approach? Intentions from this company may well have been good. Many people believed the sand mines were a win-win opportunity. Companies were selling hype – there was no way for anything but success. Extreme optimism. Sand mines were going to increase the tax base, fund schools and roads. Concerns were minimized, and residents were told what they wanted to hear. Such talk produced plenty of skeptics.

Environmental Costs of Frac Sand Mining

With both dairying and fracking, there is an environmental cost. Whether you milk 10, 100, or 1,000 cows – there are environmental pressures. With sand mining, the environmental effects are well documented. It is important, if not just practical, to measure these with the fiscal rewards. And where does this money go and who benefits the most? But, most importantly, who must deal with the consequences?

The risks of sand mines can be mitigated if proper regulations are taken seriously. With the extra scrutiny, a magnifying glass was placed over the sand mines, and what was found only proved the skeptics right. Trapping or pooling storm water seemed to be a learning process for sand mine companies; reported in 2012, every operating sand mine in Trempealeau County had storm water runoff violations. In 2014, over half of the sand mines in all of Wisconsin had violated environmental regulations imposed by the Department of Natural Resources. Add to this loss of surrounding property values, damage to roads, and a damper on quality of life – and you’ll create a substantial amount of public backlash.

Regulations Have Their Place

As was mentioned earlier, mining Is not new to the state. There are many multi-generational mining companies who have the experience, tradition, and financial network to abide by current standards and environmental regulations. Nobody likes to be told what to do. No industry is out there begging for more regulations. Often, the rules are in place to protect – not hinder – those that use environmentally safe and humane practices. Dairying has its own unique regulations – some are good, some not so much, and some downright stupid. Yet, overall it can be argued that these regulations protect the industry and the environment.

One heated topic in the dairy industry involves the sale of raw (unpasteurized) milk. It is illegal for any dairy in the state to sell raw milk. I have been drinking raw milk straight from the bulk tank since before I can remember. Our whole family did. Now, I still drink it and so do all my children from the age of a year and a half on up. None of us has ever had trouble with it. However, I am in complete agreement that the sale of raw milk should be illegal. All it takes is for one child to get terribly sick (which most certainly would happen) and for that kid lying on a hospital bed being blasted by every news network in the nation. These images create strong negative emotions that reverberate throughout society. The potential costs far outweigh the economic benefits from such a sale. Sure, some people are upset, but the greater good is maintained by taking away a risky practice.

The same principle works for mining. Rules and regulations get negative press and reaction, but who stands to lose the most from environmental catastrophes related to mining – the company in business 90-some years or the startup mining ventures trying to capture lightning in a bottle? Some companies have built years of trust and compatibility and support for their local communities. These are businesses that will remain after the sand rush has fizzled.

Booms and Busts, Ups and Downs

The frac sand industry is going through the same economic cycle as the dairy industry. The sand companies are getting better at what they do and increase their production capacity. Like milk, sand is a commodity. As the price of sand decreased, production increased to maintain profits. The dairy industry does the same thing, by expanding and improving efficiency to get more milk to catch those dollars slipping away. However, when the market is flush with milk or bombed with sand, they’re just doing more damage to themselves. This is a simplified take on the industry, as there are many global factors that come into play, but the overall pattern tends to remain. As the dairy industry can attest, this fluctuating cycle is not sustainable for all producers.

Primary and Secondary US Silica Sand Geologies and Existing Frac Sand Mines

Primary and Secondary US Silica Sand Geologies and Existing Frac Sand Mines

Worse yet for the sand industry, this cycle has occurred in hyper speed. At first, just the small mines cut production. Outcompeted by larger operations, production at smaller mines was no longer profitable. Soon, the larger mines cut production due to the weakening demand. Many mines in the permit or early production phases never got started. Unlike the dairy industry, there was no rollercoaster effect because prices have yet to return to prior levels. The bubble, it seems, had popped.

With any kind of new mine developed comes the environmental impacts. Yet, I find the fervent negative reaction to such practices directly related to the end result. Fracking. Fracking isn’t magic. They’re not just mixing water with this sand and forcing oil and gas out of the ground. Harmful chemicals are being added to the mix. Worst yet, the quantity and potency of such chemicals is kept secret, closely guarded from the public. Harmful chemicals are being legally pumped into the ground. All the short-term gains will have long-term consequences. This is where I believe a significant backlash for new mines comes from. The end result. Can you imagine what the public’s perception of dairy farms would be if milk was mixed with chemicals and pumped into the ground?

The Future of Dairy Farming in Wisconsin

The 2016 presidential election has breathed some life into the frac sand industry. The new president promises to cut regulations interfering with business, and thus far has kept those promises. The environment will not be a detriment to his goals. Sand companies are returning with ads in the local papers, looking for qualified applicants and offering great salaries. In contrast, the dairy industry is stuck in a rollercoaster spiral. Milk prices have been too low for far too long. The dairy dispersal continues with some very good cows being sold and very good dairymen and women calling it quits. Naturally, some land will be sold. To what end remains to be seen. But it is a safe bet, the frac sand mining ride has not ended.

Starved Rock State Park by Michelle McCray

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

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

Starved Rock State Park

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

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

Photos by Michelle McCray of McCray Photography.

Preservation Not Development

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

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

Letter to US Silica

Dear Mr. Shinn,

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

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

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

Inspiring Action

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

Sincerely,

Paul Wheeler

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

An old Cree Indian saying

Sand Mining Photos

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


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

Feature image by Michelle McCray of McCray Photography.

The BP Whiting, IN Oil Refinery

US Oil Refineries and Economic Justice

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

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

Figure 1. North American Oil Refinery Capacity

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

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

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

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

Census Tract Income Disparities

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

Methods

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

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

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

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

Results

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

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

Digging Deeper

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

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

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

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

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

Conclusion

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

Internally Displaced People

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

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

N. American Hydrocarbon Industrial Complex Map

View map fullscreenHow FracTracker maps work | Download map data

Footnotes and Additional Reading

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

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

Pipeline build out - Photo by Sierra Shamer - Oil and gas pipeline

Infrastructural Challenges: The Direction of Drilling, Pipelines, and Politics in Pennsylvania

Sierra Shamer, Visiting Scholar, FracTracker Alliance

While neighboring states New York and Maryland work to regulate the natural gas industry, Pennsylvania makes way for a pipeline build-out and continued unconventional oil and gas drilling. The industry, legislature, and state agencies claim that continued natural gas development is necessary, can be carried out safely, and will provide money, jobs, and energy to Pennsylvania. However, the price is increasingly evident, and the realization of these claims is yet to come.

PA residents are quickly learning that pipelines come with a cost; their permitting, construction, and supporting facilities infringe on private property rights, cause water and air pollution, and threaten public safety. On Friday April 29th in Westmoreland County, for example, Spectra Energy’s Texas Eastern 30″ gas pipeline exploded, severely burning one man, destroying his home, and damaging homes nearby. The local fire chief recounted his awe at the explosion. For him, it was “… like you were looking down into hell.” These costs prompt communities to consider whether the advertised benefits of pipelines will actually outweigh the costs. Active grassroots resistance has emerged throughout the state, and as it grows, it is consistently met with industry aggression and state repression.

This article provides an overview of the pipeline build-out in Pennsylvania, the political and economic environment promoting it, growing community activism, and, how the industry and state respond. An interactive map of existing and proposed pipelines in PA is featured at the end of the article.

The Shale in Pennsylvania

Pipeline build-out: Extent of the Utica (brown) and Marcellus (orange) shale formations.

Extent of the Utica (brown) and Marcellus (orange) shale formations. Click to expand.

The existing interstate pipeline network moves domestic and imported oil and gas to consumers and markets within North America. These pipelines extend from regions of conventional drilling to domestic and foreign energy markets. The recent development and expansion of unconventional drilling provides access to energy reservoirs that could not be extracted before. Within the past five years, the US overtook Russia to become the largest producer of natural gas in the world.

The Marcellus and Utica shale formations exist below the Appalachian Mountains in the northeast U.S. and into Canada. The Marcellus lies beneath Pennsylvania, Virginia, Maryland, West Virginia, Ohio, and New York. The Marcellus is now the largest region of natural gas production in the United States. Geologists estimate that 4-8,000 ft. underground, over 600 trillion cubic ft. of natural gas is accessible. The Utica formation lies underneath the Marcellus, extending north into Ontario and New York, and south into Virginia, Kentucky, and Tennessee. Geologists estimate over 38 trillion cubic ft. of natural gas is accessible – in some locations over 10,000 feet underground.

Extraction in Pennsylvania

Almost 10,000 unconventional wells in Pennsylvania produce millions of cubic feet of gas each day. This rapid extraction flooded the market, causing natural gas prices to drop dramatically. Marcellus production also outpaced the capacity of the current pipeline network. The location and flow direction of existing pipelines is not ideal for transporting Marcellus gas to markets with higher demand. Additionally, well productivity drops 70% within the first year, so new wells must be drilled to keep the gas flowing. However, the low price of gas reduced revenues, and the cost of drilling new wells remains high. Combined, these factors have paused drilling activity throughout the state. In order to overcome this, gas companies are proposing construction of new pipelines and expansions of existing ones, resulting in the current pipeline build-out.

The Economics of Pipelines

Obama discussing LNG

The dominant narrative, promoted by industry and state, weaves a story of economic prosperity gained by drilling the Marcellus, eclipsing concerns of pipeline necessity and safety. Each pipeline project claims an economic impact in dollar amounts and jobs. Williams claims that their proposed Atlantic Sunrise pipeline will “increase economic activity by $1.6 billion in project regions” and create job opportunities. Sunoco Logistics claims that the Mariner East pipeline will “add $4.2 billion to Pennsylvania’s economy, supporting more than 30,000 jobs during the construction period and … 300-400 permanent jobs.” Often, the specifics of money and jobs are not explained, and when construction begins, communities are invaded by out of state workers and left with little economic benefit.

Response to this buildout arises at all levels. Support pours down from federal and state government while resistance pushes up from the grassroots. The EPA and Obama administration work to shut down coal and promote natural gas, claiming it’s a “bridge fuel” to renewable energy. Pennsylvania’s legislature and Dept. of Environmental Protection (DEP) have battled over drilling regulations, and the push for pipelines presents a different set of challenges. While some consider the build-out necessary to maintain the natural gas industry in PA, others, such as Phil Rinaldi, envision ways in which pipelines can bring money to the state.

Philadelphia Energy Hub

Aware that interstate pipelines carry Pennsylvania shale to out-of-state markets, Phil Rinaldi, the CEO of Philadelphia Energy Solutions (PES) views the shale boom as an opportunity to maintain resource and revenue in state. In 2013 he established the Greater Philadelphia Energy Action Team (GPEAT), a group of over 80 industry, manufacturing, labor, and government stakeholders. Their objective is to capitalize on shale by promoting pipeline construction and bringing energy-intensive manufacturing to the Greater Philadelphia area. In March of this year, the GPEAT released a report titled, “A Pipeline for Growth: Fueling Economic Revitalization with Marcellus and Utica Shale Gas.” This reports details strategies to hasten the transformation of Philly into the “energy hub” of the East by inviting chemical manufacturing industries, and supporting pipeline projects to Philadelphia.

At Ground Level

2016: Columbia 26" pipeline construction near a home in Northern Maryland (Photo: Sierra Shamer)

2016: Columbia 26″ pipeline construction near a home in Northern Maryland (Photo: Sierra Shamer)

At a ground level, impacted communities, public health professionals, and environmental organizations face a ravenous industry. Unaccountable for property takings, fair compensation, and pollution, it as an industry that disregards public health and ecosystems within the shalefields. As a result, grassroots and advocacy groups organize and mobilize throughout Pennsylvania to amplify the voices of impacted residents and communities and to hold the industry and government accountable to the people.

Although pipelines bring large revenues for companies, industry, and the state, the story on the ground is different. New pipelines are either constructed on existing land easements, or new ones must be purchased from landowners along the proposed right-of-way. Pipeline operators have one goal: to find the most direct and least complicated route from supply to demand. While this lower their bottom line, new pipeline routes often disregard nearness to homes, schools, and other populated areas, and cause significant damage to farmland and ecosystems.

Frontline Communities

Pipeline companies often have the power of eminent domain, the ability to take possession of land in court if the property owner refuses a contract. Negotiating fair agreements requires landowners to hire their own appraiser and lawyer, which is not an option for everyone. Unlike drilling wells, landowners do not receive royalties for the pressurized gas flowing underneath their property, facing instead declines in property values and an inability to sell their home. As a result, landowners are left undercompensated, their land forcibly taken away in an unjust process.

Landowners along the right-of-way are the most immediately impacted, but neighbors and communities are affected as well. Each pipeline has a “potential impact radius” or “hazard zone,” the area within which an explosion causes immediate destruction. Residents within this distance experience a decrease in their property values, but currently have no legal recourse for compensation. Pipelines also require numerous compressor stations, facilities that operate 24-7 to maintain the pressure of the gas within the pipeline. Compressor stations are industrial, air polluting facilities that release greenhouse gases, neurotoxins, cancer causing agents, and other pollutants that negatively impact human health and the environment. Residents living near compressor stations experience various respiratory, sinus, and nervous system health issues. These are caused by both everyday operation and periodical gas blowdowns – facility operations when large amounts of methane and other chemicals are released directly into the air for station maintenance or emergencies.

Pipeline Regulation

FERC holds Public Meetings for the Atlantic Sunrise Pipeline (Photo: Justin Engle/The Daily Item)

FERC holds Public Meetings for the Atlantic Sunrise Pipeline (Photo: Justin Engle/The Daily Item)

In Pennsylvania, no single agency is responsible for permitting, monitoring, or regulating pipelines. The Federal Energy Regulatory Commission (FERC) permits interstate pipelines, those that cross state boundaries or carry product that does. Pipelines within the state are under the jurisdiction of the Public Utility Commission (PUC), the DEP, and/or the Dept. of Conservation and Natural Resources (DCNR).

Typically, the PUC is responsible for pipelines that provide directly to consumers. However, in 2011 Act 127 gave the PUC authority to permit and inspect gathering lines, those that move gas from well pads to larger transmission pipelines. All gathering lines have national safety standards except Class 1, those with no more than ten buildings within 220 yards. The PUC maintains a registry of the location, size, and length of gathering lines, but is only includes length for Class 1.  Over 12,000 miles of Class 1 pipelines currently exist in PA, a number expected to quadruple by 2030.

Pipeline Infrastructure Task Force

The complex regulation and unprecedented increase in proposals prompted Governor Wolf to create the Pipeline Infrastructure Task Force (PITF) in 2015. Headed by former Secretary of the DEP, John Quigley, the Task Force included regulatory agencies, industry representatives, and government officials. Their mission: to “engage stakeholders in a collaborative process to achieve a world-class pipeline infrastructure system” and to develop “policies, guidelines, and tools to assist in pipeline development.” The DEP offered live stream of meetings, provided public information, and opportunity for public input in an attempt to be transparent.

Task Force meetings eventually resulted in a final report, outlining challenges and providing suggestions for pipeline construction. First, the Task Force recommended an increase meaningful public participation and the development of long term maintenance plans to ensure safety. Second, they suggested reducing environmental impact by improving pipeline siting and construction and maximizing efficient permitting. Finally, they recommended enhancing the workforce and economic development from pipeline projects.

The Task Force openly acknowledged problems of the pipeline build-out, stating that “permits are not reviewed for the cumulative and long term impacts at a landscape level…they do not necessarily avoid sensitive lands, habitats, and natural features, nor are the impacts to natural and cultural resources, landowners, and communities…always minimized or mitigated.” Despite this, the administration and the Task Force maintain that pipelines can be built responsibly.

Community Opposition and Criticism

2016: Landowners and supporters protest the Constitution Pipeline in Northeast PA. (Photo: DC Media Group)

2016: Landowners and supporters protest the Constitution Pipeline in Northeast PA. (Photo: DC Media Group)

Challenges to the pipeline build-out exist in many forms. Landowners challenge the bullying, harassment, and eminent domain condemnations of pipeline companies. Communities criticize the acceptance of industry funding and pipelines by local representatives. Additionally, grassroots groups and environmental non-profits challenge the minimal regulation, permitting process, and lack of public participation allowed by the DEP, and the FERC “rubber stamp” permitting process.

Awareness and opposition grow with each proposal, condemnation, rupture, and explosion. This rapid construction is compromising pipeline quality and public safety, according to a report conducted by the Pipeline Safety Trust. They found that pipelines built after 2010 had higher rates of failure than those in decades past. Whistleblowers who worked for Spectra Energy have attested to the neglect of proper inspection in the haste to construct pipelines. Spectra’s Texas Eastern pipeline, completed in 1981, was built in a decade when pipelines failed at one-sixth the rate they do today. However, their preliminary investigation indicates that the explosion in Salem Township was likely the result of corrosion due to a “possible flaw in the coating material applied to the weld joints.”

The FERC is a regular target of criticism. Funded through fees received by the companies and industries it oversees, FERC rarely denies permits for pipelines. The Delaware Riverkeeper Network has filed a lawsuit against the FERC challenging the constitutionality of its decision-making.

The DEP’s dedication to protecting Pennsylvania’s environment from the natural gas industry at large is continuously questioned due to its infrastructure permitting, negligent response to water contamination complaints, and unwillingness to hold companies accountable. The DEP’s poor record on drilling regulation continues with regard to the pipeline build-out.

Pipeline Infrastructure Task Force

The Task Force is criticized for its overwhelming industry influence and lack of public inclusion. Of the 48 Infrastructure Task Force members, 56% are tied to the oil and gas industry. Specifically, 92% of the non-governmental members have industry ties. In fact, potential opposition to the build-out was intentionally absent. PA resident and documentary filmmaker Scott Cannon of the Gas Drilling Awareness Coalition (GDAC) was invited to the PITF, only to receive a letter rescinding his invitation a few days later. Additionally, concerned residents were allowed 2 minutes to make a statement, a limit strictly enforced by Secretary Quigley. While affected landowners recounted their fight for their livelihoods, the roundtable of apathetic Task Force members stared blankly. These problems resulted in escalating activist presence increasing from comments and protests outside the DEP building, to meeting disruptions and arrests.

Residents and activists weren’t the only ones unhappy with the PIFT. Cindy Ivey, representative for Williams, and Sarah Battisti, with SouthWest Energy, spoke of their frustrations. The fact that interstate pipeline projects are regulated by federal agencies, and state level organizations have a minor role caused tension in the group. According to Ivey, these issues are “hard things to try to explain gracefully.” Additionally, Battisti added that the 184 recommendations in the report wouldn’t “impact any of us in the near future.”

Despite recommendations of the Task Force, the DEP continues to issue permits that neglect cumulative impacts and complete environmental review. Unlike New York, which denied the 401 Water Quality certificate and prevented the construction of Constitution pipeline, the PA DEP granted the 401 certificate to the Atlantic Sunrise pipeline. As a result, it is under appeal by environmental groups, who argue that it violates the Clean Water Act and the Pennsylvania Code.

PA’s Political Climate

Fracking and the Revolving Door in Pennsylvania Regulations

Unfortunately, meaningful updates to oil and gas regulations in Pennsylvania are consistently challenged. Although Act 13 passed in 2012, critical components were appealed repeatedly, specifically the issue of local zoning authority of oil and gas infrastructure. Lawmakers who oppose any restriction on the industry dominate the current legislature. Recently, the House panel voted a second time to block increased DEP oil and gas regulations, in the making since 2011.

Frustrations in the process peaked when John Quigley resigned as secretary of the DEP after sending a profane email chastising environmental groups for their lack of support. Weeks later, Governor Wolf signed a bill that eliminates current regulations, aiming to start new and in agreement with the legislature. As a result, many environmentalists feel that the Governor has consistently compromised on the environment, putting the lives of PA residents at risk.

Political Campaigns

The relationship between the state and the drilling industry is evident and problematic in Pennsylvania. The Marcellus Money project has tracked campaign contributions and lobbying expenses from the natural gas industry, revealing over $8 million in political contributions and $46 million for lobbying efforts. In 2013 the Public Accountability Initiative released a report revealing the “revolving door” between state government and the oil and gas industry. The report identifies individuals who have moved from the public sector to industry jobs or vice versa, and how often this occurs over the course of their careers.

NPR StateImpact Pennsylvania created an interactive webpage called, “Blurred Lines” that provides a visual exploration of the “revolving door.” As you scroll through the years, individuals slide back and forth between the private and public sector. Additionally, lawmakers have, for a third time, earmarked fiscal code legislation to fund an industry-supported non-profit Shale Alliance for Energy Research PA, (SAFER PA).

State Agencies

Financial gains from drilling support other aspect of the public sector as well. The DCNR’s annual budget became increasingly reliant upon revenues from gas leases within public lands. In 2013, oil and gas lease royalties and other payments provided one-third of the DCNR’s budget. Act 13 implemented a mandatory impact fee whereby the PUC collects money from companies based on the number of oil and gas wells in the state. This money is directed to local municipalities based on the number of wells within their boundaries. However, while 60% of the fee total goes directly to impacted counties, the remaining 40% can go anywhere in PA. While impact fees totaled over $233 billion dollars in 2014, 2016 is expected to be the lowest amount yet due to the decline in drilling activity. This statistic is one of many that highlights the risk of relying on a fluctuating resource.

Governmental and Industry Responses

US_Marshal_Holleran

2016: Armed U.S. Marshall escort the tree cutting crew for the Constitution pipeline on Megan Holleran’s property (Photo: Alex Lotorto)

Response to community opposition of pipeline projects is often militaristic in nature and exaggerated by the industry and the state. The oil and gas industry views community opposition to infrastructure as an “insurgency.” In 2011, it was revealed that the Army/Marine Corps Counterinsurgency manual is used as a tactical reference. The Gas Drilling Awareness Coalition was classified as a terrorist threat by the PA Office of Homeland security, who hired the Institute of Terrorism Research and Response to track activists provide weekly information on a bulletin sent to law enforcement and gas companies. In 2012, state law enforcement, the FBI, the PA Office of Homeland Security, and the oil and gas industry established the Marcellus Shale Operators’ Crime Committee (MSOCC). This committee actively targeted activists and environmentalists in their homes.

Landowners who refuse to sign easements face an uphill battle against companies, law enforcement, and the state as they advocate for their rights. Megan Holleran of Susquehanna County lost her family’s maple syrup trees to Williams’ proposed Constitution pipeline. After protesting and challenging in court, the judge upheld eminent domain and prohibited the family from being within 150 feet from the right-of-way. Further, armed U.S. Marshalls escorted and guarded the tree cutting crew against peaceful protest. Additionally, in Huntingdon County, Elise and Ellen Gerhart faced tree clearing of their woods for Sunoco’s Mariner East pipeline. Once again, armed police escorted tree cutting crews and made several arrests of protesters, who faced bails of up to $200,000.

Pipeline Build-Out Map

The map below shows the existing major pipeline infrastructure in Pennsylvania and proposed pipelines, with the option of also viewing the unconventional wells in the Marcellus and Utica shale. For more information on pipeline regulation and public information, please view our Intro to Pipelines resource page. It includes details about current and proposed pipeline projects in Pennsylvania and throughout the country. Additionally, the intro links to a map of all proposed pipeline projects in North America.


View map full screen | How FracTracker maps work

While it is clear that companies go to every length to construct pipelines, it is equally clear that state agencies, courts, and law enforcement support pipeline development. The direction of drilling, pipelines, and politics in the state of Pennsylvania serves the bottom line of the natural gas industry. This is evidenced by the proposed pipeline built-out, state support, and state suppression of public backlash. However, continued challenges to public health and environment will only serve to increase the resilience and strength of community opposition.

Drilling rig in Ohio, December 2015

Ohio Shale Country Listening Project Part 1

Listening Project Partners: CURE, OOC, & FracTracker

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

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

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

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

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

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

Listening Project Summary

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

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

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

Summary of Recommendations

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

Conclusion

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

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

Inception & Evolution of the Listening Project

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

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

ListeningProject_Volunteer

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

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

Listening project respondents by location

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

Land-Use Change, the Utica Shale, and the Loss of Ecosystem Services

By Ted Auch, PhD – Ohio Program Coordinator, FracTracker Alliance

In Ohio, Utica Well pads range in size from 5-15 acres. (Estimates for pipeline and retention ponds are unavailable.) That figure gives us the chance to estimate how hydraulic fracturing influenced changes to land-use, ecosystem services, plant productivity, and soil carbon loss.

Working with Caleb Gallemore and his Ohio State University GIS class, we created a data set that estimated the percent cover for each well pad prior to drilling using the USGS and Department of Interior’s 2006 National Land Cover Database (NLCD, 2006) [1].

Figure 1. Ohio’s original vegetation cover and Utica Well permits as of April 30th, 2013

Figure 1. Ohio’s original vegetation cover and Utica Well permits as of April 30, 2013

Accordingly, the state was and is dominated by:

  • mixed oak (from 12,038 mi2 pre-settlement to 7,911 mi2 today) to the east and
  • maple-beech-birch (from 13,917 mi2 pre-settlement to 2,521 mi2 today) to the west stretching into the southeast and northwest corner of Ohio.

During pre-settlement times additional dominant forest types included:

Since industrialization:

  • The faster growing elm-ash-cottonwood has arisen as a sub-dominant forest type currently comprising 1,237 mi2.
  • Additional sub-dominant forest types comprising 100-140 mi2 of Ohio’s land area include aspen-birch (134 mi2), white-red-jack pine (124 mi2), and loblolly-shortleaf pine (108 mi2).

Our results suggest the average amount of deciduous forest [2] disturbed – as a percent of total well pad area – by well pad establishment is 9.8 ± 5.5% per well pad with a range of 4.7% in Stark and Holmes Counties and a high of 24% in Monroe County (Figure 2). With respect to pasture and crop displacement the average is 11.7 and 10.7% per well pad, respectively, with significantly higher between-county variability for crop cover (±5.5% Vs ±3.6%).

Figure 2. Percent Cover across Ohio’s 269 Utica Well Pads assuming an average area of 7.75 acres and the National Land Cover Database 2006 (NLCD 2006) as a proxy for previous land-use.

Figure 2. Percent Cover across Ohio’s 269 Utica Well Pads assuming an average area of 7.75 acres and the National Land Cover Database 2006 (NLCD 2006) as a proxy for previous land-use. – Click to enlarge

Converting this data into ecosystem services requires certain assumptions about plant growth, soil organic matter content, and soil compaction utilizing Natural Resource Conservation Service (NRCS) soil data to model the latter two and established peer-reviewed estimates for plant pattern and process (Follett, Kimble, & Lal, 2000; Lobell et al., 2002; Valentine et al., 2012). The basics of this analysis – assuming subsurface soils are 25% more compact and contain 45% less organic matter than the surface 12-13 inches (Needelman et al., 1999) – demonstrated that well pad establishment has displaced approximately 28,205 tons of surface and 78,348 tons of subsurface soil carbon [3] for a total of 106,554 tons of carbon equivalent to 389,986 tons of CO2.

Additionally, the displacement and/or removal of vegetation – assuming the average Ohio forest is 40-80 years old [4] – has resulted in the annual loss of 1,050, 6,516, and 9,461 tons of crop, pasture, and forest carbon production, respectively. This is equal to 17,027 tons of carbon or 62,319 tons of CO2, which when added to the aforementioned soil loss is equivalent to the CO2 footprint of 25,198 Ohioans [5].

Over the life of these three ecosystem types, well pad establishment displaces 1,021,619 tons of carbon. This equates to 3.74 million tons of CO2 or 230,034 Ohioans, which is roughly 9,000 less people than reside in Akron and Warren combined. Another way way to frame this figure is that it would be equivalent to the eightieth largest US city between Henderson, NV and Scottsdale, AZ.

At CO2’s current valuation this Ohio Utica well pad “carbon displacement” is roughly $18.71 million. However, if we assume this is at the lower end of reasonable CO2 estimates and that a range of $10-75 dollars is more indicative of carbon’s price, then we estimate the value of well pad displaced carbon is more like $41.29-309.68 million.

The true value of Utica well pad carbon displacement is somewhere in this range and entirely dependent on your belief in the feasibility of valuing CO2 emissions. However, these estimates do point to some of the externalities associated with Utica Shale development currently ignored by industry lobbyists and political advocates. There is far more work to be done as it relates to understanding well pads’ influence on ecosystem services, crop productivity, and local hydrology; this is simply an attempt to begin quantifying such effects.


References

Follett, R F, Kimble, J M, & Lal, R. (2000). The Potential of U.S. Grazing Lands to Sequester Carbon and Mitigate the Greenhouse Effect. Boca Raton, FL: CRC Press LLC.

Fry, J, Xian, G, Jin, S, Dewitz, J, Homer, C, Yang, L, . . . Wickham, J. (2011). Completion of the 2006 National Land Cover Database for the Conterminous United States. PE&RS, 77(9), 858-864.

Lobell, D B, Hicke, J A, Asner, G P, Field, C B, Tucker, C J, & Los, S O. (2002). Satellite estimates of productivity and light use efficiency in United States agriculture, 1982-98. Global Change Biology, 8(8), 722-735.

Needelman, B A, Wander, M M, Bollero, G A, Boast, C W, Sims, G K, & Bullock, D G. (1999). Interaction of Tillage and Soil Texture Biologically Active Soil Organic Matter in Illinois. Soil Science Society of America Journal, 63(5), 1326-1334.

Valentine, J, Clifton-Brown, J, Hastings, A, Robson, P, Allison, G, & Smith, P. (2012). Food vs. Fuel: The use of land for lignocellulosic next generation energy crops to minimize competition with primary food production. Global Change Biology Bioenergy, 4(1), 1-19.


Footnotes

[1] The NLCD estimates land cover using sixteen classes at a 98 foot spatial resolution applied to 2006 Landsat satellite data or 4-5 years prior to the first Ohio Utica permit in September, 2010 (Fry et al., 2011)

[2] Primary tree species include red and sugar maple, red and white oak, white ash, black cherry, American beech, hickory, and tulip poplar according to the most recent USFS Forest Inventory Analysis “Ohio Forests 2006”.

[3] Along with roughly 6,536 tons of soil nitrogen assuming an Ohio soil Carbon-To-Nitrogen ratio of 14.6.

[4] Utilizing the USFS’s Forest Inventory and Analysis EVALIDator Version 1.5.1.04 tool we determined that 62% of Ohio’s oak-hickory, maple-beech-birch, elm-ash-cottonwood, and oak-pine forest types, which account for 94% of the state’s forest area, are 40-80 years old.

[5] Assuming 17.3-18.6 tons of CO2 per capita based on Oak Ridge National Laboratory’s Carbon Dioxide Information Analysis Center as cited by the World Bank.

The Marcellus Shale, the Newark Basin, and Household Income

When the US Geologic survey released their assessment of undiscovered oil and gas resources last month, it created some attention in Pennsylvania, as it raised the possibility that oil and gas companies might begin exploring areas in the southeastern portion of the state for the first time ever.  The report estimated $2.5 billion worth of gas in the southern portion of the Newark Basin at current prices.

When the legislature placed a moratorium on drilling in the formation until January 1, 2018 as impacts are studied, many observers saw this as fundamentally inconsistent with the spirit of Act 13, passed by the same legislature earlier in the year. While Act 13 established an impact fee for drilling operations and strengthened some environmental regulations, it was controversial due to all but eliminating local input on when and where gas wells and corresponding infrastructure could be built.

To many, the moratorium in southeastern Pennsylvania seems like a double standard, as many in the Commonwealth have advocated for a moratorium in the Marcellus for precisely the same reason–to assess impacts of drilling and related activity–to no avail. Why then did suburban Philadelphia get treated differently from the rest of the state?


The Marcellus Shale, the Newark Basin, and median household income by county in Pennsylvania. Please click the compass rose and double carat (^) to hide those menus. Click the blue “i” tool then any map feature for more information.

This map explores the possibility that this could be an environmental justice issue. The Newark Basin, where caution was employed, underlies the three wealthiest counties in Pennsylvania as measured by median household income according to the US Census. Obviously, correlation does not show causality, but the possibility that representatives of wealthier communities are more influential than others is an idea worth exploring.

The moratorium for the Newark Basin was inserted into the state budget at the request of Republican Senator Charles McIlhinney of Bucks County, who voted for Act 13 (known as HB 1950 until its passage). To see how other Pennsylvania senators voted on HB 1950, see the map below.


Pennsylvania senate votes on HB 1950 (subsequently known as Act 13). Click the blue “i” tool then any map feature for more information.

Jobs Impact of Cracker Facility Likely Exaggerated

This past January, when Ohio was still in the midst of the bidding war for the proposed cracker facility, Toledoans saw the following blurb in their paper, the Toledo Blade:

Gov. John Kasich is pursuing the multibillion-dollar ethane-cracker facility that Shell Chemicals LP plans to build in Ohio, West Virginia, or Pennsylvania to capitalize on the increasing harvest of natural gas from Marcellus shale. The American Chemistry Council estimates that the plant would generate 17,000 jobs in chemistry and other industries as well as $1 billion in wages and $169 million in tax revenue.

That’s some financial impact, right?  And now we are hearing the same figure coming out of Harrisburg via the Post-Gazette:

Estimates from the American Chemical Council have projected that a $3.2 billion ethane-processing facility, similar to the one that Shell is considering for Beaver County, would create more than 17,000 new jobs at the plant itself and among spinoff businesses along the supply chain.

Too bad it is isn’t very realistic.

Although the planned Monaca plant is one of several new cracker facilities planned in North America, currently, there are just a handful on the continent. In January, I posted about one of them, a Shell facility in Norco, Louisiana.  On their website, the multinational giant proudly proclaims the following, in bold type:

Shell Chemicals’ Norco facility is located in St. Charles Parish. The facility has over 600 full-time employees, more than 160 contractors, and generates an annual payroll of $50 million. The company pays more than $16 million in state and local taxes and $6M is property taxes that help fund public education as well as police and fire departments.

As I mentioned five months ago, those are significant contributions, to be sure. But it is a far cry from the projections of the American Chemistry Counsel (ACC) state above.  Shell also operates another cracker in Deer Park, Texas, which claims:

Shell Deer Park is a 1,500-acre complex located in Deer Park, Texas, approximately 20 miles east of downtown Houston along the Houston Ship Channel. Founded in 1929, Shell Deer Park is now home to 1,700 employees who operate a fully integrated refinery and petrochemical facility 24 hours a day.

That’s a lot of jobs, but as an integrated facility, it already accounts for some of the “spinoff businesses along the supply chain”.

Nova Chemicals operates another cracker in Sarnia, Onterio, which according to their website employs about 900 people who earn an estimated $86 million in wages and benefits each year.

So how silly is the claim of 17,000 jobs and $1 billion in wages? Consider that with all of its existing crackers and other facilities,

Shell chemicals companies staff total 8,500 worldwide. The majority of these support our manufacturing operations.  This does not include joint venture employees.”

Even with the JV employees not being counted, we are talking about major petrochemical plants in nine locations around the world, plus three technology centers.  So just who are these experts at the ACC who keep getting quoted for the 17,000 job figure? According to website:

The American Chemistry Council’s (ACC’s) mission is to deliver business value through exceptional advocacy using best-in-class member performance, political engagement, communications and scientific research.

Well played, ACC.  You have put on a best-in-class performance with your exceptional advocacy.  But for the rest of us, it is time to start considering more realistic jobs numbers when talking about the proposed ethylene producing facility.

By the Pittsburgh Post-Gazette

Marcellus Impact Graphic by Pittsburgh Post-Gazette

A captivating view of gas drilling’s impact from an economic standpoint. Click on the image for more information by the Pittsburgh Post-Gazette about how 7 counties in Southwest PA may use the funds they receive from PA’s impact fee.