July 30, 2008, Ithaca Times: "East Coast Gas Rush?"

East Coast Gas Rush?
On Wednesday, July 23, Gov. David A. Paterson signed a bill that permits additional natural gas wells and drilling activity in New York State and allows for new and under-researched methods. The Environmental Conservation Law had previously established requirements for a spacing unit (the area of land from which a well recovers oil or gas) and set back measurements (the distance between the well and the boundaries of the spacing unit), but Paterson's pen changed that: the legislation passed Wednesday reduces required well spacing from 640 acres per well to 25.
This change is significant, and potentially devastating to the Finger Lakes region, as the Southern Tier of New York has been discovered as the Mother Lode of Marcellus Shale, a rock layer that some geologists predict could meet the nation's natural gas needs for more than two years. Three companies in the natural gas industry have submitted drilling applications for gas wells in Chenango, Tioga, and Chemung Counties in New York. On his Web site, the Governor claimed that "natural gas exploration has the potential to increase domestic supplies of natural gas, create jobs, expand the tax base and benefit the upstate economy." But because of New York's geological formation and the techniques required to reach the desired resources, Paterson's decision has created anger among locals who understand the potential consequences.
      What is Marcellus Shale, exactly? It is a Devonian-age black, low density, carbonaceous (organic-rich) shale that occurs beneath much of New York, Ohio, West Virginia, and Pennsylvania. Marcellus Shale is said to have "favorable mineralogy" in that it is a lower-density rock with more porosity, which means it may be filled with more free gas. In its 2002 Assessment of Undiscovered Oil and Gas Resources of the Appalachian Basin Province, the United States Geological Survey (USGS) calculated that the Marcellus Shale contained an estimated undiscovered resource of about 1.9 trillion cubic feet of gas.
      In early 2008, Terry Englander, a geo-science professor at Pennsylvania State University, and Gary Lash, a geology professor at the State University of New York (SUNY) at Fredonia, estimated that the Marcellus might contain more than 500 trillion cubic feet of natural gas, 10 percent of which is considered recoverable and hence a potential resource. The technology required to recover these 50 trillion cubic feet of gas - almost 70 percent more than the current annual US production of gas - is a horizontal drilling technique called hydraulic fracturing (also known as "fracking" or "hydrofracking").
Writer Abrahm Lustgarten has described the recoverable gas in the Marcellus Shale as being held like bubbles in a brick of Swiss cheese. However, the grains in shale fit together so tightly that there is little movement of water or gas, and in order to extract the gas, a mixture of water, sand and chemicals is shot into the earth with such force that it fractures the rock, releasing the bubbles to the surface. This is hydrofracking. According to Lustgarten, the gas then bubbles to the surface, as does the water, full of natural toxins from the shale, along with suspected cancer-causing compounds. Some of the injected fluids remain trapped underground, but a number of these fluids qualify as hazardous materials and carcinogens, and are toxic enough to contaminate groundwater resources. Englander said Marcellus is considered to be a highly radioactive shale, containing materials such as uranium and thorium. Roy Lackner, a Cornell graduate working in construction landscaping in Binghamton, has been investigating the issue and says these elements would seep right into local aquifers.

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Potential local impact

There was a caveat to Paterson's decision: Along with ordering a study of the effects of the drilling sites, he demanded that the State Department of Environmental Conservation (DEC) provide a more thorough and detailed environmental statement for each site. Currently, drilling applications will be reviewed on a case by case basis, without regard to the effects on the entire region. Still, New York State candidate for the 51st Senate District Don Barber (D & WFP-Caroline) said this directive to the DEC is a "de facto moratorium" on gas drilling, and has called numerous times for the DEC to put proper regulations in place before issuing drilling permits. "We should extract the natural gas under us because it burns cleaner than oil and coal, and can be a part of New York's energy independence strategy," Barber stated. "But it must be extracted in an environmentally responsible way." Barber mentioned the potential effects on local land, noting that the new law allows for more than one well every square mile. "Tompkins County isn't equipped to deal with the wastewater, and I want to know what measures will be taken to keep it out of the aquifers," he said. "And when that water is taken away in big, heavy trucks, it will destroy local roads and leave tax payers to fix the damage with no revenue."
Of this, Paterson seems sure. "This new law will ensure greater efficiency in the processing of requests to permit oil and gas wells, while maintaining environmental and public health safeguards," he said. "My administration is committed to working with the public and local governments to ensure that if the drilling goes forward, it takes place in the most environmentally responsible way possible."
DEC Commissioner Pete Grannis said the legislation appropriately addresses the issue of how oil and gas wells will be spaced without compromising the environmental oversight. "The DEC will be vigilant in ensuring environmental safeguards. Water protection will be a top priority. As the issue of potential natural gas drilling develops, Governor Paterson and DEC are committed to exercising its authority to protect New Yorkers and their environment," he said.
Others were less sure. On Friday, eight environmental groups, including the Sierra Club, the Natural Resources Defense Council, the Wilderness Society, the Catskill Mountainkeeper and the Riverkeeper, sent Paterson a letter seeking a moratorium on drilling activity until the environmental impact statement is adopted. "Natural gas development is progressing across the country at a scale and pace that no one ever envisioned," the letter said. "Let New York State be a model of how to do this right."
Judith Enck, the governor's environmental adviser said the goal is "not to have a bunch of permits scoot through before the environmental impact statement is done." Enck predicted that the review will not be completed until the spring. The DEC announced Friday that it has initiated a public process featuring a series of public meetings across the Southern Tier and Catskills to supplement the generic environmental review. The regulatory update will focus on the impact on groundwater, surface water, wetlands, air quality, aesthetics, noise, traffic and community character.
Still, gas companies have already paid hundreds of millions of dollars in leasing fees to landowners in the New York City watershed, pressing area residents to bombard OGAP with questions ranging from the difference between deep and shallow gas drilling to how to negotiate mineral leases, surface use and damage agreements, to how to organize to what kind of regulations and laws exist to protect water and air quality. As writer Peter Applebome put it, "they didn't pay the money without expecting to drill on the land. They can argue that gas is a far more palatable energy source than alternatives like oil from the Middle East, nuclear power or coal. And as the economy sputters, the economic lure has never been stronger for individuals, communities and the state."
In fact, drilling companies have been interested in leasing property as close as Caroline, New York, where Michael Ludgate manages a locally popular natural food store called Ludgate Farms. "Multiple different companies have come to try to get us to sign a lease for at least a year, and they finally stopped recently because I told them I don't want to be bothered," Ludgate said. But with financial restrictions that afflict the vast majority of Americans, Ludgate said the prospect of leasing his land is "becoming more tempting." Ludgate owns 40 acres that border Hammond Hill State Forest and says several of his neighbors have already signed agreements after being offered "huge amounts of money."
One such resident who owns 108 acres in Spencer, 90 of which are in a gas drilling unit, blogged in an online forum started by Ludgate about signing on his land for the drilling: "Gas started production about a month ago, and I start getting royalties in September. It's a Trenton-Black River well, which is much less nasty than Marcellus Shale. Once a driller has leases on 60% of the land in the unit, they can force everyone to participate," also known as compulsory integration. "You get 12.5% royalties by default, or you can put up your share of drilling costs and get 100% royalties. I signed a lease with a 3rd party who put up the $900K, and offered me $250 an acre up front and 18.75% royalty, and accepted a lease blocking all surface activities."
A source indicated that this resident didn't want to sign, but had to, because 60% of the land in his unit had been leased, meaning all his neighbors already had signed, and that gas was already being pulled from underneath his land. Meanwhile, Barber's Communications Director Micheal Blaine said these farmers were all being ripped off: they were being paid $250 an acre, while the actual worth of the land is closer to $2500 an acre.

Environmental assessment

The Oil and Gas Accountability Project (OGAP), which was founded in 1999 to work with communities to prevent and reduce the impacts caused by oil and gas development, published a June report on potential oil and gas development in the Marcellus Shale formation in southeastern New York and northeastern Pennsylvania. OGAP aims to expose the health, environmental, economic, social and cultural impacts of irresponsible mineral development, and their report indicated that the pollution from oil and gas exploration and production has involved known carcinogens, reproductive toxicants, and other toxic chemicals like arsenic, hydrogen sulfide, mercury and volatile organic compounds (VOCs) including benzene and xylene. According to the report, there is almost no information on the amount of water used by companies drilling the Marcellus Shale. A Chief Oil and Gas representative stated that the company expected to use about 800,000 gallons of water and 250,000 pounds of sand to fracture a vertical well in Barnett Shale, and that a horizontal well would require much more water and sand.
"The Susquehanna River Basin Commission (SRBC) and the Delaware River Basin Commission (DRBC) have a very rigorous system for issuing drilling permits," said William Kappel, a hydrologist with the US Geological Survey (USGS) in Ithaca. The Interstate Environmental Commission (IEC), which controls the Great Lakes area, however, is much more lenient. The drilling companies will get water anywhere they can, Kappel said. "Instead of midnight dumpers, we'll have midnight pumpers. There needs to be some coordination with the use and transport of water," he said, to avoid illegal inter-basin water transfer.
According to Lustgarten, the DEC says it does not track how drillers dispose of the produced water waste. The U.S. Department of Energy lists produced water from gas drilling as among the most toxic of any oil industry byproduct. Most drilling states inject the tainted water back into the ground in areas where solid rock layers keep it isolated from drinking water, but the geology in New York and Pennsylvania makes that impossible. DEC officials said the water would be shipped to Pennsylvania for treatment. But Paul Hart, an executive for three of five qualified Pennsylvania plants, said he had not been contacted about that plan, nor do plants there have capacity for the wastewater.

Drilling technology developed under Cheney

According to OGAP, the US Environmental Protection Agency (EPA) does not currently regulate the injection of fracturing fluids under the Safe Drinking Water Act. Additionally, the oil and gas industry is the only industry in America that is allowed by EPA to inject hazardous materials - unchecked - directly into or adjacent to underground drinking water supplies. In 2000, the EPA initiated a study to assess the potential for fracturing to contaminate underground drinking water supplies.
An October 2004 article in the L.A. Times cited that, in the first four years of the millennia, the Bush administration and Vice President Dick Cheney's office backed a series of measures favoring the lucrative technology, developed by Halliburton Co. Cheney himself was elected chief executive of Halliburton in 1995, and six years later the then-VP convened a task force to devise a national energy policy. The 2001 national energy policy report, written under the direction of the vice president's office, cited the value of hydraulic fracturing but did not mention concerns raised by staff members at the Environmental Protection Agency.
The June 2004 EPA study concluded that fracturing "poses little or no threat" to drinking water. The EPA also concluded that no further study of hydraulic fracturing was necessary. Some EPA employees, however, complained internally about the study before its completion, according to the L.A. Times. One of them, environmental engineer and 30-year EPA veteran Weston Wilson, blew the whistle with a letter to the agency's inspector general and members of Congress. The statement alleged that the study's findings were premature and were approved by an industry-dominated review panel that included a current Halliburton employee. "EPA produced a final report [...] that I believe is scientifically unsound and contrary to the purposes of the law," Wilson wrote.
A week after receipt of the letter, EPA spokeswoman Cynthia Bergman said the agency was reviewing Wilson's statement but did not "believe that any of the concerns raised by his analysis would lead us to a different conclusion." In March of 2005, EPA Inspector General Nikki Tinsley found enough evidence of potential mishandling of the EPA hydraulic fracturing study to justify a review of Wilson's complaints.
Lackner highlights the seeming favoritism diluting government policies. The Energy Policy Act of 2005, sponsored by V.P. Cheney, exempts the oil and gas industry from the "most basic environmental protections," Lackner said, such as The Clean Air Act, The Clean Water Act, The Safe Drinking Water Act, The Comprehensive Environmental Response Compensation and Liability Act (CERCLA), and The Planning and Community Right to Know Act.

Community Mobilization

The Citizen's Energy Alliance (CEA) of Spencer will hold its third meeting at 7 pm on Wednesday, July 30 at the Spencer Grange. Lisa Ann Wright, a resident of Cayuga Heights, plans to attend this meeting, but she is also wondering when public information sessions will be held in Ithaca to discuss the potential impact of natural gas drilling on the community. "In an agricultural area like upstate New York, how will our diverted water supplies impact our crops and farms?" she asked. "What kind of pollution are we going to realistically see? Are the horror stories from places like Washington, Pennsylvania true?"
Law A11606 is pending in the NYS Assembly to prohibit the use of toxic fracking solutions during hydraulic fracturing - a practice that is currently legal. Bill A11527 is also pending. It would require an immediate two-year moratorium on this type of gas exploration. Meanwhile, the Catskill Mountainkeeper, at catskillmountainkeeper.org, provides videos, first-hand accounts, and more information on getting organized and informed about the issues surrounding oil and gas development.

(Danielle Winterton contributed to the reporting in this article.)

©Ithaca Times 2008

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