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Early Construction (2016) of Shell Ethane Cracker in Monaca, Beaver County, Pennsylvania

House Bill 1100: What you need to know

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.

Some lawmakers have said that they will attempt to override the veto.

 

Fiscal Responsibility

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.

Attend an informative press conference

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.

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How State Regulations Hold Us back and What Other Countries are doing about Fracking

By Isabelle Weber, FracTracker Alliance Spring 2019 Intern 

Feature photo of oil and gas drilling in North Dakota, and is by by Nick Lund, NPCA, 2014

 

Although there are some federal regulations in place to protect the environment indirectly from fracking in the United States, the regulations that try to keep fracking in check are largely implemented at the state governing level. This has led to a patchwork of regulations that differ in strictness from state to state. This leads to the concern that there will be a race to the bottom where states lower the strictness of their regulations in order to draw in more fracking. While it might be tempting to welcome an industry that often creates a temporary economic spike, the costs of mitigating the environmental damage from fracking far out-weighs the profit gained. Germany, Scotland, and France are examples of countries that have taken more appropriate regulatory measures to protect their populations from the risks involved in unconventional oil and gas development.

The Shortfalls of State by State Regulations

For a detailed overview of how fracking regulation differs between states, check out the Resources for the Future report, The State of State Shale Gas Regulation, which analyzes 25 regulatory elements and how they differ between states. Two of their maps that attest to this vast difference in regulation are the “Fracturing Fluid Disclosure Requirements” map as well as the “Venting Regulations” map.

The “Fracturing Fluid Disclosure Requirements” map shows regulatory differences between states regarding whether or not the chemical mixture used to break up rock formations must be made known to the public. “Disclosure” means that the chemical mixture is made known to the public and “No Regulation” means that there is nothing that obligates companies to share this information, which usually implies this information is not available.

Fig 1. Map of fracking fluid disclosure requirements by state, from Resources for the Future’s report, “The State of State Shale Gas Regulation.” Original data from US Energy Information Administration.

 

Note from the editor: There are several exemptions that allow states to limit the scope of reporting chemicals used in underground fluid injection for fracking. For example, all states that require chemical disclosure are entitled to exemptions for chemicals that are considered trade secrets.  

Concealing the identity of chemicals increases the risk of harm from chemical exposure for people and the environment. Emergency first responders are especially at risk, as they may have to act quickly to put out a fracking-induced fire without knowing the safety measures necessary to avoid exposure to dangerous chemicals. The population at large is at risk of exposure though several pathways such as leaks, spills, and air emissions. Partnership for Policy Integrity, along with data analysis by FracTracker, investigated the implications of keeping the identity of certain fracking chemicals secret in two states, Ohio and Pennsylvania. These reports point to evidence that exposure to concealed fracking chemicals could have serious health effects including blood toxicity, developmental toxicity, liver toxicity and neurotoxicity.

 

The second map, “Venting Regulations,” shows which states have regulations that limit or ban venting and which do not. Venting is the direct release of methane from the well site into the atmosphere. Methane has 30 times the green-house gas effect as carbon dioxide. Given methane’s severe impact on the environment, no venting whatsoever should be allowed at well sites.

Fig 2. Map of fracking venting regulations by state, from Resources for the Future’s report, “The State of State Shale Gas Regulation.” Original data from US Energy Information Administration.

Having overarching federal regulatory infrastructure to regulate fracking would help to avoid risks such as toxic chemical exposure and accelerated climate change. Although leaving regulation development to states allows for more specialized laws, there are certain aspects of environmental protection that apply to every area in the United States and are necessary as standard protection against the effects of fracking.

How do other countries regulate fracking?

Stronger federal regulation of fracking has worked well in the past and can be seen in several other countries.

Germany

In 2017, Germany passed new legislation that largely banned unconventional hydraulic fracking. The ban on unconventional fracking excludes four experimental wells per state that will be commissioned by the German government to an independent expert commission to identify knowledge gaps and risks with regards to fracking. Conventional fracking also received tighter regulations including a ban on fracking near drinking water sources. In 2021, the ban will be reevaluated, taking into account research results, public perception, long term damage to residents and the environment, and technological advances. This is a perfect example of how a country can use overarching federal regulation to make informed decisions about industry action.

Scotland

In 2015, Scotland placed a moratorium into effect that halted all fracking in the country. Since 2017, the government has held that the moratorium will stand indefinitely as an effective ban on fracking in the country, but the country is still working on the legislature that will officially ban fracking. Meanwhile, the Scottish government conducted one of the most far-reaching investigations into unconventional oil and gas development, which included a four-month public consultation period. This public consultation garnered 65,000 responses, 65% of which were from former coal mining communities targeted by the fracking industry. Of those responses, 99% of responses opposed fracking.

The Scottish people should be applauded for holding their federal government accountable in fulfilling its responsibility to protect its people and its environment against the effects of fracking.

France

In December 2017, France passed a law that bans exploration and production of all oil and natural gas by the year 2040. This applies to mainland France as well as all French territories. Although France has limited natural gas resources, it is hoped that the ban will be contagious and spread to other countries. This is a prime example of a country making a decision to protect their environment through regulation.

Although France’s banning of fracking was largely symbolic and may not result in a considerable reduction of greenhouse gases related to natural gas exploration, the country is sending a message to the world that we need to facilitate the end of the fossil fuel era and a move toward renewables.

Back to the US, the world’s leading producer of natural gas

Federal regulation on fracking should be holding the oil and gas industry in check by requiring states to meet basic measures to protect people and the environment. States could then develop more stringent regulations as they see fit. It is important that we come to a national consensus on the environmental and health hazards of fracking, and consequently, to adopt appropriate federal regulations.


By Isabelle Weber, FracTracker Alliance Spring 2019 Intern

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Urban Drilling in Los Angeles

Impact of a 2,500′ Oil and Gas Well Setback in California

Why does California need setbacks?

A new bill proposed by California State Assembly Member Al Muratsuchi (D), AB345, seeks to establish a minimum setback distance of 2,500′ between oil and gas wells and sensitive sites including occupied dwellings, schools, healthcare facilities, and playgrounds. A setback distance for oil and gas development is necessary from a public health standpoint, as the literature unequivocally shows that oil and gas wells and the associated infrastructure pose a significant risk to the communities that live near them.

FracTracker Alliance conducted a spatial analysis to understand the impact a 2,500’ well setback would have on oil and gas expansion in California. In a previous report, The Sky’s Limit California (Oil Change Internal, 2018), Fractracker data showed that 8,493 active or newly permitted oil and gas wells were located within a 2,500’ buffer of sensitive sites. At the time it was estimated that 850,000 Californians lived within the setback distance of at least one of these oil and gas wells.

This does not bode well for Californians, as a recently published FracTracker literature review found that health impacts resulting from living near oil and gas development include cancer, infant mortality, depression, pneumonia, asthma, skin-related hospitalizations, and other general health symptoms. Studies also showed that health impacts increased with the density of oil and gas development, suggesting that health impacts are dose dependent. Living closer to more oil and gas sites means you are exposed to more health-threatening contamination.

An established setback is therefore necessary to alleviate some of these health burdens carried by the most vulnerable Environmental Justice (EJ) communities. Health assessments by the Los Angeles County Department of Health and studies on ambient air quality near oil fields by Occidental College Researchers support the assumption that 2,500′ is the necessary distance to help alleviate the harsh conditions of degraded air quality. Living at a distance beyond 2,500′ from an oil and gas site does not mean you are not impacted by air and water contamination. Rather the concentrations of contaminants will be less harmful. In fact studies showed that health impacts increased with proximity to oil and gas, with associated impacts potentially experienced by communities living at distances up to 9.3 miles (Currie et al. 2017) and 10 miles (Whitworth et al. 2017).

Assembly Bill 345

This analysis assesses the potential impact of State Assembly member Al Muratsuchi’s Assembly Bill 345 on California’s oil and gas extraction and production. Specifically, AB345 establishes a minimum 2,500’ setback requirement for future oil and gas development. It does not however directly address existing oil and gas permits.

The bill includes the following stipulations and definitions:

  • All new oil and gas development, that is not on federal land, are required to be located at least 2,500′ from residences, schools, childcare facilities, playgrounds, hospitals, or health clinics.
  • In this case the redrilling of a previously plugged and abandoned oil or gas well or other rework operation is to be considered new oil and gas development.
  • “Oil and gas development” means exploration for and drilling production and processing of oil, gas or other gaseous and liquid hydrocarbons; the flowlines; and the treatment of waste associated with that exploration, drilling, production, and processing.
  • “Oil and gas development” also includes hydraulic fracturing and other stimulation activities.
  • “Rework operations” means operations performed in the well bore of an oil or gas well after the well is completed and equipped for production, done for the purpose of securing, restoring, or improving hydrocarbon production in the subsurface interval that is the open to production in the well bore.
  • The bill does not include routine repairs or well maintenance work.

Map

Figure 1. Map of Wells within a 2,500′ Setback Distance from Sensitive Receptor Sites. The map below shows the oil and gas wells and permits that fall within the 2,500′ setback distance from sensitive receptor sites.  Summaries of these well counts and discussions of these well types are included below as well.

Map of Wells within a 2,500′ Setback Distance from Sensitive Receptor Sites

View map fullscreen | How FracTracker maps work

 

Environmental Justice

The California Environmental Justice Alliance (CEJA) has just released their 2018 Environmental Justice Agency Assessment, which used FracTracker’s data and mapping to assess environmental equity in the state regulation of oil permitting and drilling. The report issued the Division of Oil, Gas, and Geothermal Resources (DOGGR) a failing grade of ‘F’. According to the report, “DOGGR is aware that the proposed locations of many drilling activities are in or near EJ communities, but approves permits irrespective of known health and safety risks associated with neighborhood drilling.”

FracTracker’s analysis of low income communities in Kern County shows the following:

  • There are 16,690 active oil and gas production wells located in census blocks with median household incomes of less than 80% of Kern’s area median income (AMI).
  • Therefore about 25% (16,690 out of 67,327 total) of Kern’s oil and gas wells are located within low-income communities.
  • Of these 16,690 wells, 5,364 of them are located within the 2,500′ setback distance from sensitive receptor sites such as schools and hospitals (32%) vs 13.1% for the rest of the state.

For more information on the breakdown of Kern County wells, see our informational table, here.

DOGGR wells

Using freshly published Division of Oil, Gas, and Geothermal Resources (DOGGR) data (6/3/19), we find that there are 9,835 active wells that fall within the 2,500’ setback distance, representing 13.1% of the total 74,775 active wells in the state.

There are 6,558 idle wells that fall within the 2,500’ setback distance, of nearly 30,000 total idle wells in the state. Putting these idle wells back online would be blocked if the wells require reworks to restart or ramp up production. For the most part operators do not intend for most idle wells to come back online. Rather operators are just avoiding the costs of plugging and properly abandoning the wells. To learn more about this issue, see our recent coverage of idle wells here.

Of the 3,783 permitted wells not yet in production, or “new wells,” 298 (7.8%) are located within the 2,500’ buffer zone.

Getting a count of plugged wells within the setback distance is more difficult because there is not a complete dataset, but there are over 30,000 wells in areas with active production that would be blocked from being redrilled. In total there are 122,209 plugged wells listed in the DOGGR database.

Permits

We also looked at permit applications that were approved in 2018, including permits for drilling new wells, well reworks, deepening wells and well sidetracks. This may be the most insightful of all the analyses.

Within the 2018 permit data, we find that 4,369 permits were approved. Of those 518 permits (about 12%) were granted within the proposed 2,500’ setback. Of the permits 25% were for new drilling, 73% were for reworks, and 2% were for deepening existing wells. By county, 42% were in Kern, 24% were in Los Angeles, 14% in Ventura, 6% in Santa Barbara, 3% in Fresno, and 2% or less in Glenn, Monterey, Sutter, San Joaquin, Colusa, Solano, Orange and Tehama, in descending order.

SCAQMD Notices

In LA, Rule 1148.2 requires operators to notify the South Coast Air Quality Management District (SCAQMD) of activities at well sites, including stimulations and reworks. These data points are reiterative of the “permits” discussed above, but the dataset is specific to the SCAQMD and includes additional activities. Of the 1,361 reports made to the air district since the beginning of 2018 through April 1, 2019; 634 (47%) were for wells that would be impacted by the setback distance; 412 incidences were for something other than “well maintenance” of which 348 were for gravel packing, 4 for matrix acidizing, and 65 were for well drilling. We are not sure where gravel packing falls, in reference to AB345.

A major consideration is that this rule may force many active wells into an idle status. If the onus of plugging wells falls on the state, these additional idle wells could be a major liability for the public. Fortunately AB1328 recently defined new idle well rules. The rules entice operators to plug and abandon idle wells. If rule 1328 is effective at reducing the stock of idle wells, these two bills could complement each other. (For more information on idle wells, read FracTracker’s recent analysis, here: https://www.fractracker.org/2019/04/idle-wells-are-a-major-risk/)

State Bill 4 Well Stimulation Reporting

We also analyzed data reported to DOGGR under the well stimulation requirements of CA State Bill 4 (SB4), the 2013 bill that set a framework for regulating hydraulic fracturing in California. Part of the bill required an independent scientific study to be conducted on oil and gas well stimulation, including acid well stimulation and hydraulic fracturing. Since 2016 operators have been required to secure special permits to stimulate wells, which includes hydraulic fracturing and several other techniques. To learn more about this state regulation read FracTracker’s coverage of SB4. From January 1, 2016 to April 1, 2019, there have been 576 well stimulation treatment permits granted under the SB4 regulations. Only 1 hydraulic fracturing event, permitted in Goleta, would have been impacted by a 2,500’ setback in 2018.

Support for AB345

After being approved by the CA Assembly Natural Resources Committee in a 7-6 vote, the bill did not make it up for a vote in the Senate Appropriations Committee during the 2019 legislative session.  The bill was described by the committee as “promising policies that need more time for discussion.” AB345 is now a two-year bill in the state Senate and will be reconsidered by the committee in January of 2020. The Chairperson of the Appropriations Committee, Lorena Gonzalez, indicated her general support for the policy and committed to working with the author to find a way to move the bill forward at the end of the session.

By Kyle Ferrar, Western Program Coordinator, FracTracker Alliance 

Feature image by David McNew, Getty Images

https://www.kvpr.org/post/dormant-risky-new-state-law-aims-prevent-problems-idle-oil-and-gas-wells

Idle Wells are a Major Risk

Designating a well as “idle” is a temporary solution for operators, but comes at a great economic and environmental cost to Californians 

Idle wells are oil and gas wells which are not in use for production, injection, or other purposes, but also have not been permanently sealed. During a well’s productive phase, it is pumping and producing oil and/or natural gas which profit its operators, such as Exxon, Shell, or California Resources Corporation. When the formations of underground oil pools have been drained, production of oil and gas decreases. Certain techniques such as hydraulic fracturing may be used to stimulate additional production, but at some point operators decide a well is no longer economically sound to produce oil or gas. Operators are supposed to retire the wells by filling the well-bores with cement to permanently seal the well, a process called “plugging.”

A second, impermanent option is for operators to forego plugging the well to a later date and designate the well as idle. Instead of plugging a well, operators cap the well. Capping a well is much cheaper than plugging a well and wells can be capped and left “idle” for indefinite amounts of time.

Well plugging

Unplugged wells can leak explosive gases into neighborhoods and leach toxic fluids into drinking waters. Plugging a well helps protect groundwater and air quality, and prevents greenhouse gasses from escaping and expediting climate change. Therefore it’s important that idle wells are plugged.

While plugging a well does not entirely eliminate all risk of groundwater contamination or leaking greenhouse gases, (read more on FracTracker’s coverage of plugged wells) it does reduce these risks. The longer wells are left idle, the higher the risk of well casing failure. Over half of California’s idle wells have been idle for more than 10 years, and about 4,700 have been idle for over 25 years. A report by the U.S. EPA noted that California does not provide the necessary regulatory oversite of idle wells to protect California’s underground sources of drinking water.

Wells are left idle for two main reasons: either the cost of plugging is prohibitive, or there may be potential for future extraction when oil and gas prices will fetch a higher profit margin.  While idle wells are touted by industry as assets, they are in fact liabilities. Idle wells are often dumped to smaller or questionable operators.

Orphaned wells

Wells that have passed their production phase can also be “orphaned.” In some cases, it is possible that the owner and operator may be dead! Or, as often happens, the smaller operators go out of business with no money left over to plug their wells or resume pumping. When idle wells are orphaned from their operators, the state becomes responsible for the proper plugging and abandonment.

The cost to plug a well can be prohibitively high for small operators. If the operators (who profited from the well) don’t plug it, the costs are externalized to states, and therefore, the public. For example, the state of California plugged two wells in the Echo Park neighborhood of Los Angeles at a cost of over $1 million. The costs are much higher in urban areas than, say, the farmland and oilfields of the Central Valley.

Since 1977, California has permanently sealed about 1,400 orphan wells at a cost of $29.5 million, according to reports by the Division of Oil, Gas, and Geothermal Resources (DOGGR). That’s an average cost of about $21,000 per well, not accounting for inflation. From 2002-2018, DOGGR plugged about 600 wells at a cost of $18.6 million; an average cost of about $31,000.

Where are they?

Map of California’s Idle Wells


View map fullscreen | How FracTracker maps work

The map above shows the locations of idle wells in California.  There are 29,515 wells listed as idle and 122,467 plugged or buried wells as of the most recent DOGGR data, downloaded 3/20/19. There are a total of 245,116 oil and gas wells in the state, including active, idle, new (permitted) or plugged.

Of the over 29,000 wells are listed as idle, only 3,088 (10.4%) reported production in 2018. Operators recovered 338,201 barrels of oil and 178,871 cubic feet of gas from them in 2018. Operators injected 1,550,436,085 gallons of water/steam into idle injection wells in 2018, and 137,908,884 cubic feet of gas.

The tables below (Tables 1-3) provide the rankings for idle well counts by operator, oil field, and county (respectively).  Chevron, Aera, Shell, and California Resources Corporation have the most idle wells. The majority of the Chevron idle wells are located in the Midway Sunset Field. Well over half of all idle wells are located in Kern County.

Table 1. Idle Well Counts by Operator
Operator Name Idle Well Count
1 Chevron U.S.A. Inc. 6,292
2 Aera Energy LLC 5,811
3 California Resources Production Corporation 3,708
4 California Resources Elk Hills, LLC 2,016
5 Berry Petroleum Company, LLC 1,129
6 E & B Natural Resources Management Corporation 991
7 Sentinel Peak Resources California LLC 842
8 HVI Cat Canyon, Inc. 534
9 Seneca Resources Company, LLC 349
10 Crimson Resource Management Corp. 333

 

Table 2. Idle Well Counts by Oil Field
Oil Field Count by Field
1 Midway-Sunset 5,333
2 Unspecified 2,385
3 Kern River 2,217
4 Belridge, South 2,075
5 Coalinga 1,729
6 Elk Hills 958
7 Buena Vista 887
8 Lost Hills 731
9 Cymric 721
10 Cat Canyon 661

 

Table 3. Idle Well Counts by County
County Count by County
1 Kern 17,276
2 Los Angeles 3,217
3 Fresno 2,296
4 Ventura 2,022
5 Santa Barbara 1,336
6 Orange 752
7 Monterey 399
8 Kings 212
9 San Luis Obispo 202
10 Sutter 191

 

Risks

According to the Western States Petroleum Association (WSPA) the count of idle wells in California has increased from just over 20,000 idle wells in 2015 to nearly 30,000 wells in 2018! That’s an increase of nearly 50% in just 3 years!

Nobody knows how many orphaned wells are actually out there, beneath homes, in forests, or in the fields of farmers. The U.S. EPA estimates that there are more than 1 million of them across the country, most of them undocumented. In California, DOGGR officially reports that there are 885 orphaned wells in the state.

A U.S. EPA report on idle wells published in 2011 warned that existing monitoring requirements of idle wells in California was “not consistent with adequate protection” of underground sources of drinking water. Idle wells may have leaks and damage that go unnoticed for years, according to an assessment by the state Department of Conservation (DOC). The California Council on Science and Technology is actively researching this and many other issues associated with idle and orphaned wells. The published report will include policy recommendations considering the determined risks. The report will determine the following:

  • State liability for the plugging and abandoning of deserted and orphaned wells and decommissioning facilities attendant to such wells
  • Assessment of costs associated with plugging and abandoning deserted and orphaned wells and decommissioning facilities attendant to such wells
  • Exploration of mechanisms to ameliorate plugging, abandoning, and decommissioning burdens on the state, including examples from other regions and questions for policy makers to consider based on state policies

Current regulation

As of 2018, new CA legislation is in effect to incentivize operators to properly plug and abandon their stocks of idle wells. In California, idle wells are defined as wells that have not had a 6-month continuous period of production over a 2-year period (previously a 5-year period). The new regulations require operators to pay idle well fees.  The fees also contribute towards the plugging and proper abandonment of California’s existing stock of orphaned wells. The new fees are meant to act as bonds to cover the cost of plugging wells, but the fees are far too low:

  • $150 for each well that has been idle for 3 years or longer, but less than 8 years
  • $300 for each well that has been idle for 8 years or longer, but less than 15 years
  • $750 for each well that has been idle for 15 years or longer, but less than 20 years
  • $1,500 for each well that has been idle for 20 years or longer

Operators are also allowed to forego idle well fees if they institute long-term idle well management and elimination plans. These management plans require operators to plug a certain number of idle wells each year.

In February 2019, State Assembly member Chris Holden introduced an idle oil well emissions reporting bill. Assembly bill 1328 requires operators to monitor idle and abandoned wells for leaks. Operators are also required to report hydrocarbon emission leaks discovered during the well plugging process. The collected results will then be reported publicly by the CA Department of Conservation. According to Holden, “Assembly Bill 1328 will help solve a critical knowledge gap associated with aging oil and gas infrastructure in California.”

While the majority of idle wells are located in Kern County, many are also located in California’s South Coast region. Due to the long history and high density of wells in the Los Angeles, the city has additional regulations. City rules indicate that oil wells left idle for over one year must be shut down or reactivated within a month after the city fire chief tells them to do so.

Who is responsible?

All of California’s wells, from Kern County to three miles offshore, on private and public lands, are managed by DOGGR, a division of the state’s Department of Conservation. Responsibilities include establishing and enforcing the requirements and procedures for permitting wells, managing drilling and production, and at the end of a well’s lifecycle, plugging and “abandoning” it.

To help ensure operator liability for the entire lifetime of a well, bonds or well fees are required in most states. In 2018, California updated the bonding requirements for newly permitted oil and gas wells. These fees are in addition to the aforementioned idle well fees. Operators have the option of paying a blanket bond or a bond amount per well. In 2018, these fees raised $4.3 million.

Individual well fees:

  • Wells less than 10,000 feet deep: $10,000
  • Wells more than 10,000 feet deep: $25,000

Blanket fees:

  • Less than 50 wells: $200,000
  • 50 to 500 wells: $400,000
  • 500 to 10,000 wells: $2,000,000
  • Over 10,000 wells: $3,000,000

With an average cost of at least $31,000 to plug a well, California’s new bonding requirements are still insufficient. Neither the updated individual nor blanket fees provide even half the cost required to plug a typical well.

Conclusions

Strategies for the managed decline of the fossil fuel industry are necessary to make the proposal a reality. Requiring the industry operators to shut down, plug and properly abandon wells is a step in the right direction, but California’s new bonding and idle well fees are far too low to cover the cost of orphan wells or to encourage the plugging of idle wells. Additionally, it must be stated that even properly abandoned wells have a legacy of causing groundwater contamination and leaking greenhouse gases such as methane and other toxic VOCs into the atmosphere.

By Kyle Ferrar, Western Program Coordinator, FracTracker Alliance

Cover photo: Kerry Klein, Valley Public Radio

Photo by Liz Hafalia, The Chronicle

Governor Brown’s Climate Summit Heats up Political Climate

Overview

California has become a battleground for real climate action. The state Governor, Jerry Brown prides himself in his own climate leadership, and California has pushed EU nations and countries worldwide to take climate change seriously. As a final tribute to his own tenure as a term-limited governor, Brown has organized and hosted a Global Climate Action Summit, September 12-14th. The summit convenes an international invitation list of “climate leaders” to, in their words:

“Take Ambition to the Next Level.” It will be a moment to celebrate the extraordinary achievements of states, regions, cities, companies, investors and citizens with respect to climate action. It will also be a launchpad for deeper worldwide commitments and accelerated action from countries—supported by all sectors of society—that can put the globe on track to prevent dangerous climate change and realize the historic Paris Agreement.

Meanwhile, frontline communities, community organizers, and grassroots organizations contest the perspective that real change has been made. While investors and green capitalists celebrate, frontline communities fight daily for clean air and water. In solidarity with and led by frontline communities, activists have protested the summit, in an attempt to hold policy makers accountable to those most affected by the fossil fuel industry.

Rise for Climate, Jobs, and Justice

One quarter of a million people worldwide, and well over 30,000 in San Francisco hit the streets during the Rise for Climate last Saturday, September 8th. With over 900 actions taking place simultaneously people worldwide demanded real climate action from their local leaders. FracTracker Alliance staff helped coordinate and participated in events nationwide.

In San Francisco, the march was led by members of the Indigenous community, making up the Indigenous Bloc, on the frontlines of the action. The day officially started with prayers from Indigenous leaders and a moment of silence for Indigenous Peoples that have been most harmed by the effects of climate change. Dozens of various other movements followed the Indigenous Bloc in a parade of support. FracTracker took the opportunity to document this monumental event, and photos from the march are shown below.

March Photos

For California and international “climate leaders” in attendance, Rise kicked off a long week of climate action culminating with the Global Action Climate Summit. The week is full of activities geared towards movement building, including the Solidarity to Solutions Summit (#sol2sol) by It Takes Roots; Women’s Assembly for Climate Justice, hosted by Women’s Earth and Climate Action Network; and mass actions including a march and occupation of the Global Climate Action Summit!

SB100

To mark such a momentous movement, the Brown administration signed a new bill into law, SB100. The new law, authored by Kevin De León (D-Los Angeles), pledges that all of California’s electricity will come from clean power sources by 2045. Brown said, “California is committed to doing whatever is necessary to meet the existential threat of climate change.” This is the most ambitious state climate policy in the U.S. The legislation barely passed the state Legislature after nearly two years of debate, with opponents arguing that it would lead to higher electric bills for all Californians.

Opposition from Eco-Activists

In opposition to the feel-good, pat-yourself-on-the-back feelings from delegates at the summit, frontline communities and activists respond that the SB100 legislation does nothing to stop harms to frontline communities caused by extraction and the supply side of the fossil fuel economy. The Against Climate Capitalism campaign is a coalition of Diablo Rising Tide teamed up with Idle No More SF Bay, the Ruckus Society, It Takes Roots, Indigenous Environmental Network and the Brown’s Last Chance. Members of the coalition have been outspoken proponents organizing in support of real climate leadership. The coalition is pushing for Governor Jerry Brown and the California legislature to end the extraction of new fossil fuels in California. The green groups making up these larger coalition networks encompass a broad range research and advocacy groups, from international groups like Greenpeace to local grassroots movements from Los Angeles and California’s Central Valley. FracTracker Alliance is also a campaign member.

The goal of the campaign is to keep fossil fuels in the ground, and supports a just transition from a fossil fuel economy to clean energy sources. A petition to pressure California Governor Jerry Brown to end fossil fuel extraction can be found on their website. The California legislature and the Brown administration has consistently failed to address the impacts of extraction in its own backyard. While frontline communities are suffering, the Brown administration continues to take the easy way out with future legislation such as SB100, which does nothing to address the environmental justice spector of actual oil drilling and production. In response to SB100, the campaign has issued response:

  • Governor Brown has consistently failed to address the supply side of oil and the drilling in California, which is an indispensable step to avoid the worst effects of climate destruction.
  • Some 5.4 million Californians live within a mile of at least one oil or gas well, and this includes hundreds of thousands of children. Many suffer illnesses from toxic exposure and cannot wait for action.
  • Brown’s failure to act on this issue is a massive moral failure from which no bill signing can distract. Despite his signing of an important and historical bill he did nothing to draft or support, Governor Brown can expect to be greeted with energetic and committed protest at the Global Climate Action summit this week.

With these poignant criticisms, it begs the question; how can Governor Jerry Brown continue to ignore the actual cause of climate change? Brown has passed legislation ensuring that everyday Californians will bear the costs for clean energy utilities, but has done nothing to hold accountable the actual culprits responsible for climate change, the oil and gas corporations extracting the 5.7 million barrels of oil per year from California soil.


By Kyle Ferrar, Western Program Coordinator

Cover photo: Brown’s Las Change Billboard. Photo by Liz Hafalia, The Chronicle

Behind in the Game Feature Image: Wind and farm. Creative Commons license.

Missouri’s clean energy is behind in the game, but at least they’re trying

Talking about fracking all day, every day, can be a bit of a downer. Here at FracTracker, we find hope in the advances of clean energy across the country and around the world. This time around, let’s see how Missouri’s clean energy sector is fairing. Long story short – while it seems their clean energy is a bit behind in the game, at least they are trying.

Background

The role of clean energy in Missouri’s economy is on the rise: Clean energy already supports 55,251 jobs, and the sector grew by 5.3 % over 2015-2016. This rate is over three times faster than overall jobs in Missouri. And in 2017, St. Louis approved a measure to transition to 100% clean, renewable energy by 2035, making it one of the largest cities to do so. St. Louis’ decision also puts it squarely in line with efforts from other cities to take the lead on renewable energy, especially in the face of larger federal inaction.

Clean Energy Progress in Missouri

In collaboration with our partners at Environmental Entrepreneurs (E2), FracTracker Alliance produced a series of maps investigating current clean energy businesses and sites where renewable energy is and can be generated. They aim to describe Missouri’s clean energy economy – and how much room it has to grow. Here is a sneak peak at some of these maps, below:

Map 1. Clean Energy Electric Generation

View map fullscreen | How FracTracker maps work

Map 1, above, shows clean renewable energy generation in Missouri. Solar and wind are the most dominant forms of renewable energy in Missouri. Missouri’s clean energy generating capacity is highest in the northwest corner of the state, where several large wind-energy projects are located. The state has 6 wind farms in this region including the newly-announced 100 MW Hawthorne Wind Farm and 49 MW High Prairie Wind Farm. In total, Missouri produces 1,000 MW of wind energy from about 500 turbines. Solar power is more dominant across the rest of the state, especially with schools’ solar energy generation around Kansas City and St. Louis and solar farms throughout the rest of the state, including Pulaski, Macon, and Bates counties. All in all, about 702 megawatts of wind and solar capacity are installed currently, with another 458 megawatts currently proposed to be built.

Map 2. Clean Energy Generation Potential

View map fullscreen | How FracTracker maps work

However, much more potential remains to be tapped as shown in Map 2, above. This holds true across solar, wind, and other renewable energy sources – particularly in the southwest corner of the state, where solar energy potential is the highest.

Missouri has up to 275,000 MW of wind potential energy, and these maps of energy potential show that overall, approximately 75% of the state has above-average potential for solar power. This is an important statistic since coal fueled 81% of Missouri’s electricity in 2017; only two other states burned more in 2017. Also, the new addition of bidirectional natural gas flow to the Rockies Express Pipeline means stiffer competition for renewables from the natural gas market.

Map 3. Clean Energy Businesses

View map fullscreen | How FracTracker maps work

It looks like the transition to clean energy in Missouri is happening, but there is always work to be done (nerdy “energy” joke). According to the E2 Missouri Clean Jobs Report, there is a lot of room for the clean energy sector to develop.

The potential does exist for the sector to drive economic growth in the state by being a major contributor to job growth. According the Environmental Entrepreneur’s Midwest Advocate Micaela Preskill, the industry in Missouri is slated to grow another 4.5% through 2019. Recent hires in the sector show that the workforce is very ethnically diverse, with the percentage of minority new hires doubling the average state demographics. Also 14% of new hires are veterans. Map 3, above, displays over 400 businesses, including energy efficiency contractors and renewable energy installers, which cover all 34 state senate districts. Surveys indicate that 80 percent of businesses working in clean energy in Missouri employ fewer than 25 individuals, illustrating the importance of small businesses in the clean-energy sector.

With the new state policies that support the transition from fossil fuels and the growing clean energy economy, Missouri is on a path to becoming more sustainably focused. This is particularly important because of the state’s past and present reliance on coal, and the availability of natural gas. More investment of state and federal resources in the clean energy sector could provide the boost that benefits state’s health, environment and economy through new jobs and manufacturing.


By Kyle Ferrar, Western Program Coordinator

Behind in the Game Feature Image: Wind and farm. Creative Commons license.

A Fresh Look at Oil and Gas Drilling from Europe

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

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

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

London, England Meetings

The House of Commons meeting was held in Parliament, just below London's Big Ben

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

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

House of Commons meeting, London

House of Commons meeting, London. Photo by Sam Rubright

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

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

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

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

Brussels, Belgium Workshop and Meeting

After the European Commission meeting

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

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

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

Rotenburg (Wümme), Germany Workshop

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

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

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

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

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

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

View Gegen Gasbohren’s map fullscreen

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

Rotenburg Field Tour

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

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

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

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

IMG_0063

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

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

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

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

Badbergen, Lower Saxony, Germany Workshop

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

Schoonebeek Tour, Netherlands

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

OES-Europe-Home

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

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

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

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


About the Our Energy Solutions Project

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

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

Endnotes and References

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

O&G Politics & Campaign Financing

By Ted Auch, OH Program Coordinator, FracTracker Alliance

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

As such, this article covers two issues:

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

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

Politics and Campaign Financing

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

1. Letting the Numbers Speak

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

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

Data Analysis Process

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

Results

Annual Senate compensation relative to average US Income Per Capita

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

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

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

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

Figure 2a

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

Average funding received by oil and gas industry

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

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

2. Committee on Science, Space and Technology

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

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

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

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

Figure 5. Totals

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

Figure 6. Percentage of party averages

 “Don’t Confuse Me With The Facts”

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

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

Close to the Action

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

Know Your Vote

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


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

Average Total
Democratic Representatives

Average Oil & Gas Industry Contributions to Democratic Representatives

Fig. 4a

Total Oil & Gas Industry Contributions to Democratic Representatives

Fig. 4b

Democratic Senators

Average Oil & Gas Industry Contributions to Democratic Senators

Fig. 4c

Total Oil & Gas Industry Contributions to Democratic Senators

Fig. 4d

Republican Representatives

Average Oil & Gas Industry Contributions to Republican Representatives

Fig. 4e

Total Oil & Gas Industry Contributions to Republican Representatives

Fig. 4f

Republican Senators

Average Oil & Gas Industry Contributions to Republican Senators

Fig. 4g

Total Oil & Gas Industry Contributions to Republican Senators

Fig. 4h


References

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

NY State Hydraulic Fracturing Bans Relative to Population

By Karen Edelstein, NY Program Coordinator

According to industry projections, one of the next big frontiers for Marcellus shale-gas development may be in the New York State Counties bordering northern Pennsylvania. However, after more than four years of discussion, two versions of the Supplemental Generic Environmental Impact Statement (SGEIS), and hundreds of thousands of citizen and professional comments on the SGEIS and regulatory framework, the future for hydrofracturing for natural gas in New York  is still highly contested–both in statewide political and locally-based fora.

This map shows the municipalities, as of July 2013, that have enacted hydrofracking prohibitions, represented relative to the population size of those towns. New York State municipalities began invoking home rule laws as early as 2010 to prohibit high volume hydraulic fracturing for natural gas. Primarily implementing zoning tools, these towns found that while they could not regulate against drilling, outright, they could determine appropriate land uses within the town or village boundaries. In this map, bans are shown as red circles, moratoria are shown as lavender, and movements for bans or moratoria are shown in yellow.

As of June 2013, 61 municipalities have passed permanent bans against HVHF, and 111 municipalities have enacted temporary moratoria while they explore the issue more fully, or draft ban legislation.

Within the area of New York State that overlies the Utica Shale, the major population centers, including Buffalo, Rochester, Syracuse, Binghamton, Union, Utica, and Albany have all enacted bans or moratoria. This unprecedented movement is the reaction to concerns of residents who do not desire large-scale energy industrialization, and who have been frustrated with the pace at which the New York State government has been finalizing their generic environmental impact statement, health review, and gas extraction regulations. Large urban centers account for more than 13% of the population in the area over the shale-gas formation that have enacted local prohibitions. These municipalities, along with more than 150 more across the region, (accounting for more than 28% of the region’s total population) have taken precautions to protect the air, water, food, and landscape from the potential risks of hydraulic fracturing that other communities in Pennsylvania, Texas, North Dakota, Wyoming, and beyond, have experienced.  An additional 88 towns (representing over 8% of the population over the Utica Shale formation) have grassroots movements that are spearheading discussions on the need and desire for bans or moratoria. On a town-by-town basis, population-dense centers, as well as rural towns and villages, are exercising democracy to determine whether or not they will risk living with this form of industrial development.

Florida Gas Drilling Developments and Legislation

By Samir Lakhani, GIS Intern, FracTracker Alliance

Florida Aquifers - Source data and map based off of Alan Baker at Florida Department of Environmental Protection.  Acquired Data from: USGS, USDA, FDEP   Source Link: http://www.dep.state.fl.us/geology/programs/hydrogeology/geographic_info_sys.htm

The Floridian Aquifer: Connectivity, Permeability, and Vulnerability

There have been a significant number of enquiries regarding the status of hydraulic fracturing activity in Florida, enough of which garner a FracTracker post. The short answer is that there is minimal drilling activity occurring in Florida—but not for long. It was only a matter of time until gas companies set their gaze on Florida, and her abundance of energy resources. Preparations to drill are already underway. Permits have been filed, equipment is being shipped, and exploratory drilling will begin any minute now. What makes Florida drilling ominous is the real risk for chemical leakage and groundwater contamination.

Imagine this:

It is just another sunny day in sunny Florida, but on this quiet day, two men ring your doorbell. You answer, of course, and find out that these men are from Total Safety, Inc., a company contracted by the independent oil company Dan A. Hughes Company, from Beeville, Texas. They ask you to provide your contact information and any other emergency contact info, just in case disaster strikes at the drill site operating barely 1000 feet from your house. For most of the citizens of Naples, Florida, this is the first they have ever heard of drilling, in their neighborhood. The citizens of Naples, Florida received quite a scare that day. The outrage in the community was so abundant and uniform that these families decided to act out against this development to preserve their piece of paradise. Read More

What makes drilling in Florida so precarious is that porous limestone shelves make up the majority of rock underlying permitted well sites. If any accident were to happen, the leakage of waste and chemicals would be virtually impossible to contain. It then would seep directly into the Florida aquifer which lies beneath the entirety of the state and large sections of Alabama, Georgia, and South Carolina. Maintaining water quality for the Floridan Aquifer is non-negotiable, since it is the primary water source for Savannah, Jacksonville, Tallahassee, Orlando, Gainesville, Tampa, and others. An attempt to clean the aquifer thoroughly would be impossible, and not to mention, prohibitively expensive. Another troubling thought is possible contamination and degradation of the beloved Florida Everglades.

Florida is an interesting case right now; the gas game is still very young. Florida lawmakers have an opportunity to draft real preventative measures, rather than legislation after the fact. Hydraulic fracturing is no new phenomenon, and Florida politicians have the prospect of learning from other states, incorporating relevant ideas and taking their own stance on this issue. Currently, a couple of bills are slowly trudging through the state legislature. The idea is to require a list of chemical disclosures from all active gas drilling companies. Environmentalists claim this bill is a sham, for the companies need to list the chemicals used in drilling, but not the quantities of each. It may be just another half-hearted attempt to show real political action, while retaining a good business relationship with drilling companies. It is unlikely more stringent policies will be successful, however, given that some powers currently in office believe climate change to be a fairy tale.