Tag Archives: chesapeake energy

Oscar Night: Open Letter to President Obama


Dear Readers:  Please  celebrate having two of The Upper Delaware River Valley’s sons nominated for  Academy awards:   Josh Fox for “Gasland” and Mark Ruffalo for  “The Kids Are All Right.”

At this auspicious time in world history, send your own letter about Hydraulic Fracturing  to President Obama.   (Many thanks to Marcia Nehemiah for sending both  this link and one for today’s NY Times report on hydraulic fracturing to  The Upper Delaware Network.)

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Dear President Obama,

While you watch the Oscars tonight, you will see clips from “Gasland.”  Please watch them carefully.  The people in the movie are my brothers and sisters.

The waters of the Delaware River Valley   meet the thirsts of 17+ million people and they  are under threat.  (Lower Valley,  Upper Valley)

I thought the Gulf, Flower Mound,  Dimock, PA and scores of others  would be sufficient to show the careless disregard with which gas extractors ply their dangerous trade.  I was wrong.

Gas extracted from my valley does not represent energy independence:  much of it will ship to BP,  Norway, and others.

“Big Coal”  lied to us years ago and its  agenda was shoved down our throats with the connivance of our leaders and representatives.  Pennsylvania and  New York are no better off  — and are probably worse —  for that sad chapter in our histories.

“Big Energy?”  “Clean Gas?”  Just more “Big Coal.”

How many more people have to sicken?   How many more fields & forest lands  have to be destroyed?   (Please support a National Moratorium on Hydraulic Fracturing!)

How many more neighborhoods, livelihoods, properties have to be wasted by 600+ undisclosed  “proprietary” chemicals? (Please support the Frac Act!)

There comes a point when ambition and greed are just unseemly, Mr. President.  And as we saw and voted in 2008,  ignorance of the cost of something is not an excuse for supporting it.  (The Iraq War.)

Please!  Watch the movie.  No matter what control you believe your opponents wield,  it’s nothing to the power being generated by the  flora and fauna in my valley or the risk they face.

Sincerely,

Liz Bucar

Breathing Is Political

 

Hodgepodge: Sullivan County Leases, David Jones


IN SULLIVAN COUNTY, NY:    According to an article on the front page of the  March 9, 2010  Sullivan County Democrat, “On March 2, the Sullivan County Clerk’s Office filed four new gas leases in western Sullivan County…  Industry insiders have acknowledged that leasing slowed down while everyone awaits New York State’s finalization of new gas drilling rules.  Those rules are expected to go into effect later this year, and with Sullivan County sitting on what has been identified as a deep and potentially plentiful source of Marcellus Shale natural gas, industry interest has reappeared. ”

According to the article, of the four recently-signed leases,  two  are for mineral rights in the Town of Delaware,  one is in  the Town of Cochecton and one is in the Town of Fremont.

This  Thursday  (March 18, 2010)  the Sullivan County Legislature will meet in  full at  2:00 PM in the Government Center at 100 North Street in Monticello, NY.   In accord with  Breathing’s March 5, 2010 article about Sullivan County’s current efforts to update its  Hazards Mitigation Plan,   the  March 18th  meeting is open to the public and would be one venue in which to ask that the Legislature conduct public meetings  where  residents can hear from and ask questions of  Commissioners of  Public Health, Public Works, Planning and our  emergency responders.  The linked article  contains other suggestions that might be made to the Sullivan County Legislature.

The Delaware Town Board is meeting tomorrow night (Tuesday March 17th) at 7:00 PM  in Hortonville.

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On March 11, 2010,  The River Reporter published  a  letter to the editor from James Barth in which he alleged that David Jones, drilling and hydraulic fracturing proponent and  a member of  Northern Wayne Property Owners’ Association, “… either alone, or with partners, has purchased,  just since the natural gas boom talk started, the following acreage: In June of 2008, Jones Partners LP purchased 185 acres in Berlin Township for $1,000,000. In August of 2008, David C. Jones purchased 68.99 acres in Damascus Township for $438,500. In May of 2009, Ruth M. and David C. Jones purchased two plots of land in Preston Township that totaled 181.75 acres at a cost of $825,000.  Therefore, in the 12-month period between June of 2008 and June of 2009, Mr. Jones and partners seem to have paid $2,263,500 for 435.75 acres of land. During this period, Mr. Jones has been a vocal proponent of high volume, slick water hydraulic fracturing and horizontal drilling into the Marcellus Shale.”  (Mr. Barth cites to “tax assessment public records.”  By following the link and searching for “Jones” and “Jones Partners,”  you will find the records referenced by Mr. Barth.)

After reading Mr. Barth’s letter,  Breathing phoned  Mr. Jones and  asked  whether or not  he’d made  the 2008-2009 land purchases  and if so,  where he’d gotten  the necessary funding ($2,263,499).

Mr. Jones —  who has been unfailingly civil and generous with his time  in our conversations —  provided answers off-the-record but would not address his real estate purchases  publicly.

He did have opinions concerning news that the Wayne Highlands School District is considering leasing its gas rights to HessNewfield.  “It’s a great idea to lease school property.  The wells have to be far enough from  a school in case of an accident — because you never know — a minimum of 500 feet from any structure.  Our  local and school taxes are too high.”

At the  March 9, 2010  Wayne Highlands Board of Education  meeting, members of the public expressed concerns over siting gas wells on school property.  Some referenced a recent talk in Callicoon by Mayor Tillman in which he vehemently opposed drilling in school yards and also explained why children should not be exposed  to  air and water toxins which  might  result  from such drilling.

On the question of whether or not Pennsylvania should levy a severance  tax on gas extraction  (as has been done in all other extraction states  except New York and Pennsylvania)  Mr. Jones was unequivocal, “No.  We already tax royalties paid to lessors.  There are other ways to raise state revenues.  For one thing, we could lease public lands.”

A February 12, 2010  press release from  PA State Representative John Siptroth roundly criticized expanding gas leases on PA’s  State  lands.  In part,  Siptroth’s press release reads, “‘The local recreation industry would suffer great loss, as would hunting and fishing activities….  The few local jobs created by the gas industry are not worth losing hundreds more jobs that depend on Pike County’s pristine environment.’  Siptroth has co-sponsored House Bill 2235, which would put a five-year moratorium on leasing additional state forest land for natural gas drilling in the Marcellus Shale region.  The State Forest Natural Gas Lease Moratorium Act would give the state Department of Conservation and Natural Resources sole discretion after the moratorium ends Dec. 31, 2015 to determine if state forests can withstand additional natural gas exploration.”

In his January 28, 2010 letter  to Governor Rendell,  Representative Siptroth writes, “Today more than one-third of the entire State Forest — over 700,000 acres — is either already under lease or acreage on which the mineral rights are not owned by the state.  At least 100 wells are slated to be drilled in the State Forest in the coming year, and it’s expected that we could have as many as 1,500 well pads with 5,000-6,000 wells drilled over the next decade on the State Forest land that was leased in just the last 18 months.”

David Jones also believes  it would be appropriate for the Town of Damascus to  change its zoning regulations to permit gas extraction in its Rural Residential District.  “It will benefit residents.  It’s what  the majority of people want.”

As to the ability of  Pennsylvania’s Department of Environmental Protection (DEP) to regulate and oversee gas extraction,  Mr. Jones stated,  “We need more  DEP  inspectors  but I believe that’s being taken care of.  There’s a new field office in Scranton.”

Mr. Jones is referencing announcements made in January and February by Pennsylvania’s Governor Rendell and DEP Secretary John  Hanger which stated, in part,   “DEP will hire 68 permitting and inspection staff, including 10 for the new Scranton office, in response to expectations that the industry will apply for 5,200 new Marcellus Shale drilling permits in 2010—nearly three times the number of permits issued during 2009.”

According to DEP’s own records, there are significant discrepancies between the numbers of  wells permitted during 2009 (6,240 vs.  2,543)  and the number drilled since 2005  (19, 165 vs. 18,796).  Also according to DEP’s records,  there were 9,848 well inspections during 2009 which revealed  3,361 violations and  resulted in 678 enforcements.  (Numbers are culled from DEP’s 2009 Year End Report and its  2009  Year End Workload Report.  Other numbers are available at the 2010 Permit and Rig Activity Report.   The reports can be found at:  http://www.dep.state.pa.us/dep/deputate/minres/OILGAS/oilgas.htm

Mr. Jones was willing to be quoted also  about protecting  the Delaware River and its environs from  a proposed power line which would traverse three National Parks.  According to The National Park Service (NPS) : “We would like to inform you of a new planning effort at the Delaware Water Gap National Recreation Area, Middle Delaware National Scenic and Recreational River and the Appalachian National Scenic Trail.  PPL Electric Utilities Corporation and PSE&G, have proposed to upgrade and expand a power transmission line from Susquehanna (Berwick, Pennsylvania)  to Roseland, New Jersey (the S-R Line)…that currently crosses the three Parks….”   (The National Park Service’s Scoping Newsletter on  PPL-PSEG’s  proposed power line upgrade and expansion is  here.)

Although three plans —  Projects A, B and C — have been debated during the past few years,  the National Park Service gave the nod to Plan B in 2009. (All three of the planned routes are mapped here with brief descriptions of the areas proposed for transection.  Another good breakdown is offered by The Times Tribune with links to NPS  maps.)

However, NPS  has re-opened  discussions recently  on the  three possible routes and that  has Mr. Jones concerned.  “Plan A is the worst of the three,”  he said.  “The Park Service will have to buy land,  clear land and  put a tower on an island that floods.  It’s going to cost.  The environmental impacts will be greater than from Plan B.  We’ve got  an endangered cactus species where  Route A would go.  Not many people know that.   There’s a crystal-clear native trout stream. The line will go over one of my campgrounds.  Nobody will want to camp there.  The Delaware Water Gap is the gateway to  the Delaware River recreational area.  It’s  going to look great  with power lines draped across it,” he said sarcastically.  “New Jersey needs power but it doesn’t want the lines.  It’s a waste of energy to run them so far from where the population need is.”

Mr. Jones suggested  that,  “[The power lines] should go where the people are — where more people will be using the power.  But they’ll fight that.”

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*For more on Chesapeake, please read Breathing’s article,  “Chesapeake Energy and Penn State’s Robert Watson :  Who Are Those Guys?

Tillman, Janyszeski : Dimock and Callicoon


First,  who is   Mayor Calvin Tillman from DISH, Texas and why should any of  us  care that he spent  last week in a whirlwind tour of  New York and Pennsylvania communities?

Three years ago,  Calvin Tillman  was elected  Mayor of DISH,  Texas, which  is located in the heart of the  Barnett Shale about 25 miles north of Fort Worth.

DISH  occupies no more  than 2 square miles,  is home to about 180 residents and its  annual operating budget  is a mere $70,000.  (For reference,  The  Incorporated Village of  Liberty, NY  covers 2.39 square miles,  is home to 3,975  residents and has an annual GENERAL  budget of $3,798,804.00.)

According to  Mayor  Tillman’s  presentation (which Breathing heard in both  Dimock, PA and  Callicoon, NY)   DISH is also home to  “eleven natural gas compressors as well as  an associated treating facility, four natural gas metering stations, around eighteen natural gas wells within its corporate limits,  fifty plus wells just outside  its corporate limits”  and is where  “eleven high pressure natural gas pipelines converge.” (Please find aerial views  here.)

The Mayor  and his  residents became increasingly alarmed by   the noise  generated at the compressor site.  “One compressor creates noise at 85-90 decibels…and DISH has 11.”   (According to the American Speech Language Hearing Association,  “Sounds louder than 80 decibels are considered potentially dangerous.”)  Although Tillman was eventually able to  obtain noise abatement  around the compressors,  a foul stench —  apparently emanating from the same site —  continued to  permeate the town  and   “all the trees along the compressor site were dead or dying.”

After  complaining about  the odor for several years,  “The person who finally came to look said  he couldn’t determine the source of the odor.”

Eventually,  five corporate operators performed a joint air study  and  concluded,  “no natural gas leaks were found that would be detectable to the human nose.”

The stench worsened  and as a result,   DISH  spent approximately 15% of its annual budget to commission an independent air study  which  “assessed thirty-one  citizens and former citizens of the town….  The laboratory results confirmed the presence of multiple recognized and suspected human carcinogens in the fugitive air emissions present on several locations tested in the Town of DISH….  61% of  health effects reported [by study participants] are known health effects of the chemicals detected in the DISH air study.   These health affects include: difficulty in breathing, brain disorders, chronic eye irritation, dizziness, frequent nausea, increased fatigue, muscle aches, severe headaches, sinus problems, throat irritation, and allergies.”

In his presentations, Tillman added,  “All the commissioned tests were taken on private property within 100 feet of homes and children.”

According to the Occupational  Safety and Health Administration (OSHA),  “The maximum time-weighted average (TWA) exposure limit is 1 part of benzene vapor per million parts of air (1 ppm) for an 8-hour workday and the maximum short-term exposure limit (STEL) is 5 ppm for any 15-minute period.”

WFAA – TV lends credence to  Mayor Tillman’s concerns about air quality,  “So imagine the reaction of scientists looking at an air sample from a Targa Resources compressor station outside Decatur, west of DISH in Denton County. The sample revealed a level of 1,100 parts per billion of benzene.”  (Note:  1,100  ppb  =  1.1 ppm)

As  the Mayor pointed out,   recommended levels are based on a healthy 35 year old man’s exposure  over an eight hour period, five days a week.  Exposures are not based on the effects of exposure on pregnant women or children.   “Why  aren’t they based on pregnant women and children?” he asked rhetorically.  “Because they shouldn’t be exposed at all,”  he said.

(DISH  residents  are exposed  24/7.   Readers interested in learning more about the  DISH air study are encouraged to visit the Mayor’s site where the results have been published  and he  answers those  who have attempted, unsuccessfully, to debunk its results.  During his presentation, Mayor Tillman affirmed  that since the results of   the DISH air quality tests have been published,  “The Texas Commission on Environmental Quality (TCEQ) validated  the DISH air study in an internal memo.  They’re going to install a permanent  air monitoring unit in DISH.  If they’d  debunked our study,  they wouldn’t  have spent the money for that.”   The  TCEQ monitor will record air quality in DISH in real time and anyone  will be able to follow the results on the internet.  If you’re interested in hearing from DISH residents who have suffered debilitating health effects,    Split Estate,  presents  their stories. )

Although  concerns in DISH, Texas  are somewhat different from those raised  by drilling in  Dimock, PA or  the   Marcellus Shale in New York and the Delaware River Basin,  local residents   believed  those of us living in the Delaware River Basin would benefit from hearing about the “DISH experience.”   Mayor Tillman agreed  and  accepted invitations  to meet with some of our local communities.

Unlike most elected officials,  Tillman receives no compensation for his mayoral duties and he  refuses any compensation, reimbursement or sponsorship for his informational tours.

On Friday February 19, Mayor Tillman met in a closed-door session  in Narrowsburg, NY  with local policy makers and elected officials.  Neither the press nor the public attended and  beyond rumors that 20 or so attendees conferenced with the Mayor,  we have no information as to who attended or the scope of their conversations.

During  the afternoon of the 19th,  Tillman, accompanied by members of the press and private citizens, helped delivered 17 cases of fresh water to  Dimock, PA resident,  Pat Farnelli  for use by her and other familes  whose water has  been rendered useless by a toxic soup of  contaminants such as methane, dissolved solids, heavy metals, minerals, barium and strontium.  Approximately 18  Dimock families —  the number continues to grow — have filed suit against   Cabot Oil and Gas (Fiorentino et al. v. Cabot Oil & Gas Corp. et al., No. 09-2284, complaint filed M.D. Pa. Nov. 19, 2009)  for the degradation of their water supplies.  Although the drilling company has provided drinking water to some residents,  Farnelli says  her family doesn’t  qualify  for deliveries.  “There are  six or seven  gas wells  within about 700 feet of my house.  The  last time  we checked,  the methane saturation  of our water  was about 12%.  The DEP  [Department of Environmental Protection] said they won’t make Cabot  deliver water to us until our saturation is higher — maybe 30% or so — that’s what I’ve heard.  Between 30-50% is  when  the methane starts rumbling before the wells explode.  Four or more of my neighbors have had their wells explode.  Not just Norma’s.  But the  methane concentration  in our well  isn’t that high,  yet.”

When Breathing asked Ms. Farnelli if she had anything in writing from either  Cabot  or Pennsylvania’s  Department of Environmental Protection  (DEP)  explaining the 30% ceiling,  she said, “No.  It’s just what we’re told.”

In response to a question from Mayor Tillman,  Ms. Farnelli  explained  that when her children “drank water from the family well,  they’d get a terrible stomach ache and throw up.  They’d just double over.    Used to be, they’d drink water at the school, and they’d be fine but  whenever they drank our home  water,  they’d get sick.   And now,  the water at the school’s turned off, too.”   (A drill pad was erected on the Elk Lake School grounds after The Susquehanna River Basin granted  approval in July 2009.   See Docket #37.)

(Later  in the evening,    Breathing was in the Elk Lake School for a discussion of gas drilling sponsored by  The League of Women Voters.   The school’s water fountains were turned off.  Students  and staff are confined to drinking from bottled water dispensers  although water continued to flow to  lavatory sinks and toilets.    According to several attendees, students and parents were informed by  the Elk Lake School District that  installation of bottled water  was a precaution against the spread of  “the H1N1 virus.”  (Link to article written prior to the start of drilling.)  According to a December 9, 2009 article at  The Independent Weekender,  drinking fountains were shut down after the pump system “malfunctioned”  on October 15, 2009.  The  District Superintendent said the shutdown had nothing to do with drilling or hydraulic fracturing at the school site.   Further,  he stated  the water has been tested, found safe  and repairs would be completed over the Christmas break.  Instead, according to officials,  fountains were turned off  to prevent spread of  the H1N1 virus.)*

During Mayor Tillman’s presentations at both the Elk Lake School auditorium and The Delaware Community Center in Callicoon,  he was adamant that certain areas should be off limits to well drilling pads.  “You do not have to site them on school yards. You make this hazard a risk when you put it  in school yards and in peoples’ front yards.”

Locally,  the Wayne Highlands School District has been approached  by Hess about a potential leasing of school properties for drilling.

When  Farnelli was asked about her own health,  she admitted she’s undergone testing for lupus.   “The doctor ordered some blood tests for  metals,  but I haven’t had them done.  We don’t have health insurance.  Even though I’m on disability and my husband’s  cook job  barely pays the bills,  we don’t qualify for assistance and we sure can’t afford health care.”

“I feel like we were naive for signing the leases,” Farnelli continued.   “We sure aren’t prospering.  I wish we’d never signed.  The landman told us they probably  wouldn’t drill; that there’d  be little or no lasting damage or impact;  that there’d  be a commotion for two or three weeks, and then there’d be a little thing like a fireplug on a square of concrete in the hayfield left.  He said it was almost like winning the lottery and that’s how they were still talking Thrusday night at Elk Lake at the royalty owners’ meeting…about winning the gas well lottery.  They said the sign-on  bonus was the most anyone would pay  —  $25 per acre  —  and that it was like free money.  They made it sound  patriotic and  clean and green —  like getting America off of foreign oil dependency.   When   Norma’s  [Fiorentino] well blew up on New Year’s Day…we’ve been kicking ourselves.   The  Carter’s  well vent exploded  6 or 7 times.  Now,  I worry about my kids.”

“We were told everyone would get a  methane tester  for our basements but Cabot said the equipment wasn’t  necessary.  The  DEP showed up here with a Cabot representative and they were pretty jovial when they didn’t  find  methane in the basement.  Then they said they’d  found some  at our  well head and that they needed me to vent  it  because they’d found it in the water.   My husband wasn’t home and I didn’t know what I had to do.  They  didn’t explain anything and they said they couldn’t do it for me.  I asked for help a couple of times but they said I needed a big wrench.  Two days went by and  all they’d say was my house could  blow up.”

At this point in the story,  Mayor Tillman asked Ms. Farnelli for  the name of her DEP contact and said he planned to contact  him.

Throughout  Dimock, signs of poverty are  clearly visible and  the state of  dirt roads traveled by heavy drilling trucks was impossible to ignore.  Ruts were so deep and continuous that   humps as high as 8-9″ threatened  the under carriages of low-riding vehicles and, in part,  may have prompted  the Mayor’s question in Callicoon (below)  about the state of our  local roads.

On February 20th,  the Mayor was back in Sullivan County at the Delaware Community Center in Callicoon, NY where he was joined by Nancy Janyszeski,  Chair of the  Board of Supervisors of Nockamixon Township and Pennsylvania Chair of the Lower Wild and Scenic Delaware River.  They were  greeted by a standing-room only crowd that was a  mix of drilling advocates,  lessors and opponents of gas drilling.

After  explaining the results of air quality tests conducted by DISH (see above)  Tillman addressed  issues of hydraulic fracturing and  recommended several precautionary measures.   “I saw in Dimock that drill pads  are situated next to homes.   In Texas, local authorities are allowed to permit a well  which I was shocked to hear local ordinances can’t do here.   It needs to come back to the local level. In theory,  Chespaeake could buy and tear down this building and put in a well and there’s nothing your local governments  could do about that. They might buy a city block like in Fort Worth  and put a pad site. What’s good for Albany might not be good for here. Urge your local officials to get the local control back to the local level.”

Supervisor Janyszeski  echoed the Mayor’s concern about local control.  Nockamixon has used zoning  to  hold the drills at bay until  protections of its water and land are in place.  “We’ve  always  understood the benefits of drilling, but we need to make sure it’s safe.  We’re in  Special Protection Waters.  We have a Wild and Scenic Rivers designation.  The proposed drilling site in Nockamixon is on an Exceptional Value Stream.

“Hundreds  of leases were signed  before we even knew they were in town,”  Janyszeski said.  “The gas people say  they don’t need local permits.

“The  drilling will be for a short-term  and our communities will be left with the clean up   but the gas companies  come in and  say, ‘We  don’t need a permit  from local governments.  If you or I want to put an addition on our house, we need a permit.  Why don’t then need one?”

At which point, most of the audience broke into spontaneous applause.

Janyszeski then discussed an  amicus brief filed by,  among others,   Nockamixon Township, The Delaware Riverkeeper and Damascus Citizens in the Supreme Court of Pennsylvania concerning the ability of local governments to control  gas drilling within their borders.

According to the  Court’s ruling,  “Municipalities have a unique authority and responsibility in the regulatory framework which must be maintained; they ‘give consideration to the character of the municipality, the needs of the citizens and the suitabilities and special nature of particular parts of the municipality.’”   In the end,  the court’s  decision permits a local regulatory body to enact “traditonal zoning regulations that identify which uses are permitted in different areas of the locality,  even if such regulations preclude oil and gas drilling in certain zones….”    However,  the decision also restricted the scope of  local jurisdiction,  “We do not, for instance, suggest that the municipality could permit drilling in a particular district but then make that permission subject to conditions addressed to features of well operations regulated by the [Pennsylvania Oil and Gas] Act.”  (Bold added for emphasis.)  Essentially, when it comes to actual drilling practices and operations,  the  Court  upheld that Pennsylvania State law will carry more force than local regulations.

In response to the ruling,  Nockamixon Township has  amended old zoning ordinances in order to restrict  gas and drilling operations  to “light industrial and quarry zones.”   Also,  the Town has strictly enforced  weight limits on all its bridges.

“It means  companies  have  more hurdles to jump,”  said Janyszeski.

Tillman  reiterated  the importance of local involvement,  “Your local authorities  have to insist  drilling companies use  green completions.  Flaring isn’t necessary.  They don’t have to store  the drilling waste in pits. Make sure  there’s a system for vapor recovery on condensate tanks and other emission sources.  They can use  zero emission dehydrators and pneumatic valves.  The companies say it costs too much but green completions actually save product which makes the companies more money.”

In amplification  of Tillman’s  statement that,  “Companies will tell you the fracking fluid’s safe.  It  contains over 250 chemicals and over 90% of them have negative health effects,”  Ms. Janyszeski  suggested other localities conduct baseline water testing as was done in Nockamixon Township.  “We used  Wild and Scenic  River funding to perform our first round of testing.  Now  we know how our water is.  We tested streams near proposed sites  and ten wells and  discovered we have TCE in a couple wells.  As a  result of the successful testing, we got another $25,000  from The Wild and Scenic River funds for a second round.  I’d add, since hearing what  Mayor Tillman’s done with air testing in DISH,  that’s also something our local governments should be looking at.”

(Linda Babicz,  moderator of the program,  interjected that  our local  Multi-Municipal Taskforce is  working to ensure,  through permits,  that drilling companies will be responsible  for testing before any gas  wells are drilled or worked on.  In addition,  she offered,  “We don’t have Home Rule  in New York State.  That’s why our local governments  don’t have the right to demand permits.”**

As to assertions made by drilling proponents that  gas drilling will be  an economic boon for local municipalities,  Mayor Tillman addressed the issue of  declining tax revenues in DISH.  “During my tenure as Mayor,  I’ve doubled the size of the town to 2 square miles.  The [underground] minerals  are  just an extension of the  property for taxation purposes.  The average well loses about 50% of  its mineral value after the first year of production. The only way to maintain the value,  is  to drill more and more….   and the cost of natural gas goes down……  a lot of cities in Texas and in the Barnett shale  are in trouble. They’re having to raise taxes and lay off people. I liken this to heoin. It’s like an addictive drug  and a lot of  [Texas] cities got addicted to it.”

“There are other  ways to think about it,”  the Mayor continued.  “We used to get 60%  of our tax revenues from minerals.  We’ve probably spent that much to clean up. If you don’t  have minerals on your property  and you don’t  get ‘mailbox money,’   it probably isn’t worth  it.  And even those who get the mailbox money,  they’ll probably say it isn’t worth it.  The former mayor [of Dish]  sold mineral rights.  He’s  one of my supporters now.   [The companies]  have  kicked in money for parks, but if you weigh the costs and benefits,  I just don’t think there’s been  an overall benefit.”

When he was asked about the kinds of jobs  the gas industry’s created in Texas, Tillman  said,  “Most drilling rig crews are transient.  They’ll come  for two weeks and then they’ll go somewhere else.  They live on the  pad site — seven days on and seven days off.”

When asked about  the health impacts of drilling on drilling  workers,  Tillman responded,  “There’s probably  stuff that doesn’t get reported.  There have been  some accidents where  workers got asphyxiated and died. There’ve been  explosions on sites and people have  died.  There are signs,  ‘No Open Flames’  near wells because of  the methane.  I called OSHA   for the workers but they’re  only considered temporary employees so they don’t go through OSHA.”

One  audience member asked  Mayor Tillman  to address the impact  of  hydraulic fracturing on organic farms.  “The only other air study done besides ours [outside of litigation]  was at an organic goat farm in Fort Worth.  The company was flaring a well. [The study] detected the same toxins  as ours did.  She  has to constantly test her pastures.  I assume you’d have to do that at your own expense until you win a long court battle.”

(According to  The Northeast Organic Farming Association of New York (NOFA) and an article in The Post Standard,  “The number of organic farms in New York has tripled since 2006”  while the market for organic goods has  expanded 20%  over the last ten years.  According to The United States Department of Agriculture’s  2008  Survey of Organic Growth,  “Nationally,  New York ranks fourth in the number of organic farms behind California, Wisconsin, and Washington.  Total area devoted to organic production in New York totaled 168,428 acres. Value of sales of organically produced commodities in the state totaled $105.1 million, ranking seventh nationally and accounting for 3.3 percent of total U.S. organic sales.”)

At the end of his prepared remarks,  Mayor Tillman recommended several actions that should be taken by  local and state governments:

Develop ordinances related to oil and gas exploration prior to permitting any wells.
Local Ordinances should require road use agreements
Local ordinances should require green completions
Understand that there are places that should be off limits for drilling.
Wells should not be located in school playgrounds, and pipeline should not be run through front yards

Impose a severance tax

Require the latest emission lowering technology, including vapor recovery, and zero emissions dehydration, and pneumatic valves

Work together in groups when signing leases
Do not be the mole, working against your neighbors

Of the severance tax enacted by the State of Texas, he said,  “Here’s what I wish your legislators would consider.  We don’t have a state income tax in Texas.  We have the severance tax on the gas companies.  It’s good for a lot of reasons.   The tax is paid by volume on the gas so if you’re leasing,  you’ve got a measurement of how much your wells are producing.  It’ll tell you how much gas is coming out of the ground and how much money you should be getting.”   (In a previous Breathing article, I referenced a court judgment that found   Chesapeake had defrauded royalty owners in Texas out of $134 million in payments by under-reporting the amount of  gas Chesapeake extracted from its lessor’s wells.)

Tillman continued to tout the benefits of enacting a severance tax,  “Do you have enough inspectors in  New York?   A severance tax could pay for that, too.”
Then, looking out over the audience,  he asked,  “How are the roads holding out around here?”  When the audience groaned and laughed, he said,  “A severance tax can fix that.”

But the final recommendation which drew a standing ovation from the crowd was this,   “Do not issue another permit until these things are accomplished!”

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*The article does not specify what agency tested the water.  I am planning to make contact with the  school in order to obtain more clarity.  If I succeed,  I will certainly report back here.

**Actually,  there is a weak version of  Home Rule in New York State that permits localities to narrowly  regulate within their own borders so  long as the State of New York approves.  When Sullivan County attempted to use it relative to a  Room  Tax  on our hospitality industry, we discovered that  the process is arduous,  complicated and is ruled by “windows of opportunity.”

Chesapeake Energy & Penn State’s Robert Watson: Who Are Those Guys?


Pursued  by a well-financed posse,   Butch Cassidy  and The Sundance Kid wondered again and again,  “Who are those guys?”   Their  wild west world —  a place they understood and  felt safe in —  had become more memory than fact.    Even at the very end, when Butch and The Kid  faced certain death at the hands of  hundreds of  Federales Mexicanos,  they and the audience believed  the old ways would survive side-by-side with the  industrial revolution. Because we didn’t understand industry’s insatiable  hungers  in 1908, we still ask in 2009,  “Who are those guys?”

CHESAPEAKE ENERGY:  Its own words and omissions.

Most readers of this column know that Chesapeake Appalachia is a natural gas drilling company that wants to hydraulically fracture and drill the Marcellus Shale. The Marcellus encompasses nearly 44 million acres and  underlies a third of Ohio, bits of Maryland and Virginia, all but a thin wedge of West Virginia,  most of Pennsylvania and stretches under and beyond the Delaware River  into New York State.

Pro-water advocates point to reports that hydraulic fracturing and waste water disposal have resulted in contaminated ground water, ruined private wells, sick residents, explosions and poisoned livestock.  “The Delaware River [Watershed] supplies water to 15 million people, including New York City and Philadelphia,” so Damascus Citizens for Sustainability and other conservation groups are pressing the Delaware River Basin Commission (DRBC) to produce  Environmental Impact Statements and a comprehensive review of drilling’s cumulative impacts before any gas drilling applications are considered or approved.

But behind the scenes,  what does Chesapeake tell its investors (or omit from the telling)?

First,  Chairman and Chief Executive Officer (CEO), Aubrey McClendon,  began his 2008 Annual Report to Shareholders with one of  Charles Dickens’ most famous quotes,  “It was the best of times, it was the worst of times…”  One wonders that any CEO would willingly adopt a Dickensian mantle given the author’s depictions of hatchet-faced money-grubbers, but that’s Mr. McClendon’s look-out.

Chesapeake’s CEO tells his investors that, “As  of December 31, 2008, [Chesapeake] owned interests in approximately 41,200 producing natural gas and oil wells; and had 12.051 trillion cubic feet equivalent of proved reserves…[In 2008], Revenues rose 49% from $7.8 billion to $11.6 billion….”

(I’m  befuddled that he omitted mentioning his own annual compensation of $116.89 million which ranks him third amongst American CEOs even though his performance earned him a less stellar  rating of 66 out 175. Also omitted was the Ontario Teachers’ Pension Plan’s “six-party lawsuit” demanding that Chesapeake rescind the $75-million bonus it awarded McClendon.  I’m sure the omission was an oversight and so I’ve included it here.)

Also absent from his letter is the Class Action suit lodged against Chesapeake by investors for making “materially false and misleading statements” during a recent public stock offering.

And he skips any  reference to the Court’s judgment that found Chesapeake had defrauded royalty owners in Texas out of $134 million in payments by under-reporting the amount of  gas Chesapeake extracted from its lessor’s wells.

The  20 cows that dropped dead in Caddo Parish, Louisiana near a Chesapeake well also escaped Mr. McClendon’s notice.

Nor did I find any allusion to  the recent Texas Supreme Court case which saved the drilling industry’s collective butt by saying company wells could drain  gas from adjacent properties without fault because “subsurface trespass by frac”  can’t be proved and therefore is not a ’cause of action’ in Texas courts.  “Frac treatments may commence at the surface, but the real work occurs unseen in the depths of the well and rock formations, and only theory and hypothesis can be advanced in support of an alleged underground trespass.”   (How, then, does the industry prove  that frac treatments are safe when they’re carried out “unseen in the depths…?”)

In 2008, Chesapeake forecasted that their Marcellus Shale leasing campaign would be finished by 2010 with “approximately two million acres of leasehold in the play.”

Consistently, Chesapeake and other gas companies have said  that moving forward at all possible speed with natural gas exploitation (without levying “deterrent” taxes or conducting  scientific studies) is required by our national interest.  On the other hand, in his letter to investors,  Mr. McClendon states, “Because of lower natural gas prices in the fourth quarter of 2008 and first quarter of 2009, we have substantially reduced our drilling activities in the Barnett [Shale] from 43 rigs in August 2008 to around 20 today. We intend to maintain this lower pace of drilling until natural gas prices recover to more attractive levels.”

Apparently, the national interest is only provocative if it dovetails with Chesapeake’s ability to rake in maximum profits.

As long as we’re  singing paeans to the National Interest,  let’s see what Mr.  McClendon has to say about sharing our national wealth with other multi-national corporations:  “A key to Chesapeake’s Fayetteville success,” he attests,  “was entering into a joint venture with [British Petroleum] in September 2008. In this joint venture, we sold 25% of our assets in the Fayetteville to BP for $1.9 billion in cash and future drilling carries.…Earlier in 2008, we had also sold to BP all of our Woodford assets in the Arkoma Basin for $1.7 billion.”

As to the amount of our  National Interest and Wealth that Chesapeake’s sharing  with Norway’s StatoilHydro,** Mr. McClendon announced proudly,  “After acquiring 1.8 million net acres, Chesapeake began looking for its third shale joint venture partner. This search culminated in a $3.375 billion transaction with StatoilHydro, one of the most innovative, well-respected and largest of the European international energy companies. This transaction, in which we sold a 32.5% interest in our Marcellus assets, was completed in November 2008. StatoilHydro had been seeking an entry point into a big U.S. shale play and had independently arrived at the conclusion that the Marcellus was the best shale play in which to invest….Today, Chesapeake is drilling with 10 rigs in the Marcellus. We plan to end 2009 with at least 20 rigs drilling and project 30 rigs drilling by year-end 2010 and 40 rigs drilling by year-end 2011… In addition, we also are engaged with StatoilHydro in searching for additional shale gas plays around the world in a 50/50 partnership.”

In a more innocuous statement, Mr. McClendon offers this prognostication, “I also see our company continuing as an industry leader in innovation and technology, underpinned by a work force and asset base second to none.”  In part, he is alluding to Chesapeake’s “Energy in Training” intern program [which] maximizes [Chesapeake’s] college recruiting efforts and encourages students to enter the [drilling] industry while still learning.”

Which leads me to wonder about the validity of  Pennsylvania State University’s  (PSU)  July 2009 study, “An Emerging Giant: Prospects and Economic Impacts of Developing the Marcellus Shale Natural Gas Play,” co-authored, among others, by Timothy Considine (University of Wyoming, whose state is home to  the Mowry Shale in Wyoming’s Powder River Basin) and Robert Watson (Pennsylvania State University,  whose state is home to the Marcellus Shale.)

Those coincidences alone are enough to ask  “Who are those guys?” but what really piqued my interest was that the study cites no funding sources and  sings hosannas for a projected economic boom in Pennsylvania without addressing the costs of environmental degradation.  (Costs that are already emerging in Fort Worth, TX,  Dimock, PA,  Hickory, PA and the state of Wyoming.)

The copy of the study I’ve linked  to is located at PA Marcellus — a consortium of drilling companies.  The Study’s authors  (1)  oppose legislation that will force drilling companies to reveal the toxins used in drilling and frakking; and  (2)  suggest that levying a production tax on the industry will burden Pennsylvania with lost revenues because,  the authors predict,  such State actions will deter companies from drilling in Pennsylvania and lead to slowed exploitation of the Marcellus Shale.

At last count, more than sixty organizations have  already opposed the Study’s assertion that a tax would impede exploitation of the Marcellus Shale.  In fact, opponents say, drilling companies are salivating at the prospect of drilling into the Marcellus’ rich heart.

Anyone — including drilling company employees — who tracks down the entities who funded this propaganda in a prestigious American university will win a gift from  CottageWorks.

In the meantime, who is Robert Watson, one of the study’s two lead authors?  He is the Director of Penn State University’s Consortium for Petroleum and Natural Gas.  Penn State’s website describes The Consortium thusly,  “The Consortium is industry driven and focused on identifying, expanding, and creating new value-added markets for petroleum and natural gas-based products. Research is also being done to identify and develop new technologies to increase the efficiency and/or productivity of petroleum and natural gas exploration, production, and refining.”

Perhaps he knows who funded his study. The PSU website lists his email address as:  bob@pnge.psu.edu and his phone number as  814-865-0531.

So who are these guys?  They’re the people who pay Congress to enact drilling-friendly legislation with provisions like the Halliburton Loophole.  They’re the people who help establish drilling-friendly curricula in publicly-funded universities.  They’re the people who benefit to the tune of billions of dollars when publicly-funded universities write studies supportive of their private industry.

More important,  who are the People of Pennsylvania whose lives are, according to PSU, improved by Penn State’s cosy relationship with the natural gas drilling industry?

They’re the people whose children will pay at least $12,538  to attend and live on PSU’s  University Park Campus this next academic year. (It’s not clear that the University’s tuition calculator incorporates a proposed 3.7% tuition hike.)

They’re the people whose unemployment rate climbed to 8.3% in June 2009.  (The average income of the bottom 90% of Pennsylvania taxpayers actually declined by 4% from 2001 to 2005.)

They’re the people who “..lost nearly 202,000 manufacturing jobs since 2001, according to the Alliance for American Manufacturing…”

They’re the people who are being conned into a poker game where drilling companies hold all the chips (jobs) and make all the rules.

Disclaimer:  As a New York State resident who’s  lived three decades in or near  the Delaware River Basin, these observations about PSU have been spurred by this particular study.  I have no doubt that  similar instances of Corporate Cronyism exist at the State University of New York.

Coming soon: Discussion of gas drilling leases recently signed in Wayne County, Pennsylvania.

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*There is great debate about when and where the “real” Butch and Sundance died.

** Of their lucrative deal with Chesapeake,  Statoil Hydro says at their website, “The holding covers 1.8 million acres in the Appalachian region of the north-eastern USA. The acquisition is part of a strategic agreement between the two companies to jointly explore unconventional gas opportunities worldwide.  The agreement covers more than 32,000 leases in the states of Pennsylvania, West Virginia, New York and Ohio. Chesapeake plans to continue acquiring leases in the Marcellus shale play. StatoilHydro has the right to a 32.5% participation in any such additional leasehold. With this transaction StatoilHydro has acquired future, recoverable equity resources in the order of 2.5-3.0 billion barrels of oil equivalent (boe). StatoilHydro’s equity production from the Marcellus shale gas play is expected to increase to at least 50,000 boe per day in 2012 and at least 200,000 boe per day after 2020. Both companies believe that the development programme could support the drilling of 13,500 to 17,000 horizontal wells over the next 20 years.”

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