Posts

The Ohio Utica Shale Play Turns 500… Almost!

Drilling Trends

Ohio’s first Utica well was permitted by ODNR on behalf of Hess Ohio Resources on 9-28-10. As shown in Figure 1 (right), the major uptick in well permitting began in the summer of 2011 with 23 wells permitted during that period, ramping up to 24 wells in November 2011. There was a brief reduction in permitting during the winter of 2011-12, followed by the boom-boom summer and fall of 2012, with an average of 37 wells per month and a total of 261 wells permitted between June and December 2012.

Production

As of the end of 2012, only 30.4% of the 487 permitted wells had been drilled or are currently being drilled. Forty-seven are currently producing gas, with the Ohio Department of Natural Resources (ODNR) reporting production data for only 9 of the 47 producing wells. All of these wells are owned by Chesapeake, 2/3 of which are in Carroll County. On average, these wells produced 61 barrels of oil, 1,875 million cubic feet of gas, and 8,905 gallons (i.e. 37 tons) of brine per day over an average production period of 88 days. Twenty of the permitted wells are classified as inactive (not drilled) or plugged, with the remaining permitted but yet to be drilled (Figure 2). The top five Utica counties based on number of well permits are Carroll, Harrison, Columbiana [1], Jefferson, and Guernsey [2]; while on the other end, Ashland, Geauga, Medina, and Wayne are each home to one Utica well at this point (Figure 3). According to Columbus, OH-based Huntington Bank’s first Midwest Economic Index, early returns in these parts are mixed in Ohio: “58 percent of respondents agreed that the industry would bring opportunity, with 15 percent of those saying it would be a significant opportunity, while 42 percent said they did not see it bringing economic opportunity to their communities.”

Bird’s Eye View

From an area perspective, Carroll County has 0.45 wells per square mile – 0.39 more wells per square mile than the next ten counties with the most wells (Figure 4) – while the bottom four counties currently contain 0.0023 wells per square mile. The relationship between population and wells is generally the opposite of the previous two relationships with the bottom four counties having an average of 108,345 citizens for every well drilled. Carroll County has 163 residents per well, while the remaining top ten counties have an average resident-to-well ratio of 7,057 (Figure 4, Inset). This means that any potential ad valorem-based tax structure would benefit – on a per capita basis – less populated counties rather than those with more wells such as Carroll.

Companies Involved

Chesapeake and its subsidiaries is the dominant player in the Ohio Utica play, with 320 of all wells permitted, followed by Gulfport Energy with 25, Enervest and HG Energy with 16, and Hess Ohio with 14 permitted wells. These five firms account for 80.3% of all permitted wells in Ohio, with an additional eighteen firms splitting the remaining 19.7% (Table 1, below). However, the firms that are publicly traded have been experiencing an average decline in share price of 3.41% since the time their first wells were permitted to the close of business on January 22nd, 2013. The biggest financial losers have been some of the Ohio Utica play’s biggest participants – including Chesapeake (CHK, -27%), Consol Energy (CNX, -29%), and Devon (DVN, -17%) [3]. Meanwhile, Anadarko (APC, +14%), Gulfport (GPOR, +19%)), and the upstart PDC Energy (PDCE, +55%) are the biggest beneficiaries of wading into Ohio’s Utica Shale play. However, the industry is displaying quite a few characteristics of an unsustainable boom; Wall Street analysts have been skeptical of big Utica Shale energy operations from soup to nuts as reported by Reuters last fall. but Wall Street voted in favor of the removal – either voluntary or forced – of CHK’s founder Aubrey McLendon to the tune of a 10% share spike the day of the announcement. Even the aforementioned winners have been outperformed by the S&P 500 and Dow Jones Industrial by 12.6% since permitting began in September 2010.

Will the boom continue to boom? It may be too soon to tell, but one thing is for sure, shale gas extraction to-date has made an indelible mark on many communities in eastern Ohio.

Figure 1. Ohio Utica Well Development per Month & Cumulatively as of January 1, 2013

Figure 1. Ohio Utica Well Development per Month & Cumulatively as of January 1, 2013. Click on the image to view full-screen.

Figure 2. Ohio Utica Well Status as of January 1, 2013.

Figure 2. Ohio Utica Well Status as of January 1, 2013. Click on the image to view full-screen.

Figure 3. Ohio Utica Wells by County as of January 1, 2013

Figure 3. Ohio Utica Wells by County as of January 1, 2013. Click on the image to view full-screen.

Figure 4. Ohio Utica Wells Per Square Mile by County and People Per Well by County as of January 1, 2013.

Figure 4. Ohio Utica Wells Per Square Mile by County and People Per Well by County as of January 1, 2013. Click on the image to view full-screen.


[1] Thanks to the surge in Columbiana County wells, the Texas-based Santrol will be opening a frac sand terminal with direct access to Ohio State Route 11 open 365 days a year and equipped to handle 500,000 tons annually.

[2] Guernsey and Noble are home to the Muskingum Watershed Conservancy District that is currently in negotiations with Antero to drill beneath Seneca Lake – even though there is a substantial and vocal opposition in the region in the form of the Southeast Ohio Alliance to Save Our Water.


Table 1. Distribution of Ohio Utica Shale wells across companies (#, %), Date of First Permit (DFP), and the valuation of the publicly funded companies at their DFP at the close of business 1/22/2013.

     

Company Valuation

Company

#

%

DFP

Share Price DFP

Share Price 1/22/2013

% Change

Anadarko

12

0.025

09/07/2011

69.88

79.49

1.138

Antero

11

0.023

03/23/2012

Atlas Noble

5

0.010

09/24/2012

31.14

30.315

0.974

Carrizo

2

0.004

07/26/2012

24.02

22.43

0.934

Chesapeake Energy

320

0.657

12/23/2010

25.61

18.73

0.731

Chevron Appalachia

2

0.004

07/31/2012

109.58

115.91

1.058

Consol Energy

19

0.039

06/17/2011

45.86

32.74

0.714

Devon Energy

13

0.027

11/02/2011

65.46

54.28

0.829

Eclipse Resources

1

0.002

12/21/2012

Enervest

16

0.033

06/30/2011

9.37

9.37

1.000

EQT

1

0.002

09/13/2012

57.76

60.43

1.046

Gulfport Energy

25

0.051

02/28/2012

35.49

42.3

1.192

Halcon

1

0.002

11/02/2012

5.003

5.815

1.162

Hall Drilling

1

0.002

09/17/2012

Hess Ohio

14

0.029

09/28/2010

53.63

58.87

1.098

HG Energy

16

0.033

09/14/2011

Hilcorp Energy

1

0.002

12/14/2012

Mountaineer Keystone

7

0.014

07/13/2012

PDC Energy

4

0.008

05/25/2012

25.67

39.8

1.550

R E Gas Development

8

0.016

03/19/2012

Sierra Resources

3

0.006

07/02/2012

SWEPI

1

0.002

06/20/2012

XTO Energy

4

0.008

04/09/2012

0.28

0.027

0.096

 Sum

487

       Average

0.966

DFP = Date of First Permit; “—“ not a publicly funded company.

 

A Rare Resource in WV Host Farms

Fire on McDowell B well site near Wetzel County, WV. Burned for 9 days. (Sept. 2010) Wetzel County Action Group photo, copyright of Ed Wade, Jr.

Fire on McDowell B well site near Wetzel County, WV. Burned for 9 days. (Sept. 2010) Wetzel County Action Group photo, copyright of Ed Wade, Jr.

By Samantha Malone, MPH, CPH – Manager of Science and Communications

While I am a full-time staff member of FracTracker Alliance, like many other people I wear several hats. One of these is as an academic researcher and doctorate student in environmental health at Pitt. My academic research focuses on unconventional natural gas extraction and its potential impacts on health. However, trying to conduct research in such a controversial arena can be frustrating – at best. Access to well pads, pipelines, or other industrial areas is limited for a variety of reasons in Pennsylvania. The opportunity to discuss concerns with workers and residents is stifled by fear, red tape, and/or the desire to protect precious assets. I don’t blame people for being cautious about with whom they speak, but I truly wish it were easier to get close to drilling activity in person, without putting anyone’s lives or jobs in danger. My lamenting on that very subject one day resulted in a colleague telling me about The West Virginia Host Farms Program, a grassroots project launched by volunteer home owners residing near drilling activity.

The purpose of the program is to provide environmental researchers and the media with the chance to conduct research or simply to photograph a well pad in person from the safety of an adjacent host farm. In short, the network of volunteers help to develop research partnerships to better understand the impacts of drilling. Diane Pitcock, the program’s administrator, recognized the need for this initiative a few years ago as a surface rights owner. In WV many people are in “split-estate” situations, meaning that most surface owners do not own the mineral rights beneath their land. This issue is compounded by the fact that most of the minerals in WV are owned by people that do not even live in state. As such, the people who own the surface rights feel that their homes and livelihoods in some cases are at risk – without the potential for financial reimbursement from the sale of the mineral rights below their land. The program aims to show people that unconventional drilling using hydraulic fracturing is not our grandfather’s gas extraction process, and it can’t be treated as such.

The project operates out of 14 West Virginia counties where drilling is most active. The network of volunteers has aided in academic research based out of several universities including Yale and Duke. The project has also hosted out of state reporters and even international photojournalists, people who possess platforms to advance the outreach and public education effort surrounding unconventional drilling. For example, Jolynn Minaar, who produced the documentary,  Un*earthed, visited from South Africa in 2012 as part of her field work. Journalists from alternet.org  and polidoc.com have been among the area’s many inquirers, as well.  Even if you don’t plan on taking a tour of WV drilling sites, you can still benefit from the project’s extensive, online photo gallery (see image above).

Despite the controversial nature of shale gas drilling, the growing utilization of the program is surely a success story. Based on the WV Host Farms model, additional host farm networks are being coordinated in PA and OH as we speak. Engaging people who can volunteer 30-40 hours per week is no easy task, however. As more federal research like the US EPA’s hydraulic fracturing study begins to get off of the ground and into the well, perhaps even more people will support and recognize the value of such an integral, on-the-ground resource in the WV Host Farms Program. I know this researcher does!

For more information:

Diane L. Pitcock, Program Administrator
The WV Host Farms Program
P.O. Box 214, West Union, WV, 26456
304-873-3764
(e) wvhostfarms@yahoo.com
(w) www.wvhostfarms.org

A Tale of Two “Gas Rush Stories”

Kirsi Jansa in her element

Many people may have seen or are familiar with Gas Rush Stories, a series of short documentaries about natural gas drilling in Pennsylvania. According to the website, these stories are important to tell because “whether we live near a drilling site or downstream, whether we receive royalties or paychecks from a gas company, we are all impacted by this gas drilling in ways good and bad.” But how many of you know how Gas Rush Stories came to be? How many actually know the woman behind the curtain, Kirsi Jansa? If you have ever coordinated an event or been a speaker at one like I have, you have most certainly run into a wonderfully impassioned Finn standing behind her video equipment. Here is her Gas Rush Story…

A few weeks ago I sat down with Kirsi to get a better understanding of her work. Originally, I thought she was an extreme advocate against natural gas drilling, but like many other people with that perception, I was way off. Looking back, I don’t even know where I developed that idea about this energetic and passionate journalist.  Kirsi has been covering environmental and public health issues for some time. A couple of years ago, she saw the need to develop a forum for people to share their experiences of this new industrial development in the northeastern United States. She sold the pilot idea as a project to the Finnish Broadcasting Company. The project eventually evolved into a series of documentaries on shale gas that presented various facets of the issue. She continues the project to this day and is looking for additional funding to develop an extension of the series called Rethinking Energy Stories.

It’s all who you know – and who you can access

Unfortunately, as those of us who work in this field know, the climate that surrounds unconventional natural gas drilling is tense at best. Kirsi has found it very difficult to access people with the true know-how. She says that the culture in the U.S. does not support bridging the gaps between industry, regulators, academia, and the public. (If you follow U.S. politics you will see this behavior mirrored in the inability or unwillingness of many politicians to work across party lines.) As a result of this barrier, many of her initial short videos showcase the negative aspects of drilling – partly because that is who agreed to speak publicly about it at the time and partly because that is where she saw the gaps in information being presented. Trouble accessing industry and regulatory experts only intensified when her stories were slammed as “advocacy-ridden.” Kirsi believes that her personal opinion on whether drilling should continue is irrelevant to the experiences being presented. “Even though I have concerns and critical questions, I want to you tell your story,” she relayed to me during our frank conversation. Through sheer persistence and fortitude, Kirsi later was able to cover other perspectives and issues such as frac fluid recycling with Reserved Environmental Services (RES), water management with engineering professor, Dr. Radisav Vidic, and even a short documentary in Germany.

In Need of a Transparent Dialogue

Kirsi feels that the lack of transparency inhibits true participation in the public dialogue regarding the nature of unconventional natural gas drilling. People need unbiased sources of information that allow them to develop their own opinions organically. The problem is that there seems to be no neutral party in this game, since all of us involved live and work in this economy. Unconventional natural gas extraction may offer many benefits (economic boosts, domestic energy production) but also many drawbacks (environmental spills and pollution, health risks). Through her stories, Kirsi hopes to highlight the need for us to listen to each other in order to develop a broader, more comprehensive picture of such a complicated issue.

Check out the Gas Rush Stories series here: www.gasrushstories.com, with additional videos on Kirsi’s vimeo page.

Request for Papers:  Special Issue of the ASCE Journal of Environmental Engineering

Topic: Environmental Aspects of Shale Gas Development

Submission Deadline:  September 30, 2012

Guest Editors:
Jeanne VanBriesen, Carnegie Mellon University
Michel Boufadel, Temple University

Unconventional gas in tight shales like the Barnett, the Marcellus, and the Eagle Ford formations is changing the view of domestic natural gas supply. Directional drilling and hydraulic fracturing has opened up new resources, but also opens new debates on the impacts of extraction technologies on water and air resources. Environmental engineers are leading technology developments in green completions, as well as investigating the effects of drilling on water and air quality.

ASCE is pleased to announce a special issue of the Journal of Environmental Engineering broadly encompassing the following aspects: Water resources and allocation, migration of fluids (liquids and gases) in aquifers and waterways, produced water treatment, and air quality.

Prospective authors are requested to prepare manuscripts according to the guidelines published at Journal of Environmental Engineering. Submission of a manuscript for the special issue does not guarantee publication. Manuscripts will be subject to the same peer-review process for all manuscripts published in the Journal of Environmental Engineering. Submit articles to editorial manager.

A detailed timeline for publication of the special issue is given below:

Schedule

Submission deadline: September 30, 2012
First round of reviews: December 30, 2012
Final decision: February 28, 2013
Accepted manuscripts due: March 30, 2013
Publication: Late 2013/Early 2014

Prospective authors for the special issue should address cover letters to Special Issues Editor Dionysios (Dion) D. Dionysiou. If you have questions regarding this special issue, please contact Jeanne VanBriesen or Michel Boufadel.

Drilling Health Concerns and Research Covered at IOM Event

By Samantha L. Malone, MPH, CPH – Communications Specialist, FracTracker & DrPH Student, University of Pittsburgh Graduate School of Public Health, Environmental and Occupational Health department

Last week I attended the Institute of Medicine’s Workshop on The Health Impact Assessment of New Energy Sources: Shale Gas Extraction in Washington, DC. This was part of a larger research initiative to understand the potential health impacts of shale gas extraction as a whole. The meeting involved very balanced discussions among presenters and attendees, not on whether gas drilling should occur, but how it will impact health and how the effects can best be studied. For those of you who could not attend in person, here are some key points that were raised:

  • Dr. Aaron Wernham of Pew Charitable Trusts discussed the advantages of incorporating a Health Impact Assessment into the decision making process for drilling, highlighting an HIA’s ability to address local concerns and data gaps. For example, he mentioned that data has indicated there was a jump in syphilis rates in Ft. McMurray, Canada where drilling is heavy. Learn more about where HIA’s have been used in the U.S. here.
  • Traffic problems associated with drilling activity have been documented in many parts of the country, including Sublette County, WY. Learn more»
  • Dr. Charles Groat from the University of Texas at Austin discussed his research that suggests that most of the problems (violations/incidents) related to shale gas drilling are not those unique to unconventional natural gas extraction such as hydraulic fracturing, but to the more conventional processes and shale gas drilling’s surrounding infrastructure. He felt that many if not all of these are preventable if the entire industry implemented best practices. He posits that it is the intensity of drilling that has actually been the biggest contributor to the incidents and public concern about the safety of this process.
  • Dr. Allen Robinson from Carnegie Mellon University found that if the air emissions from active well sites were aggregated, they would be a significant contributor to regional air pollution. Emission are dependent on the composition of the gas (wet vs. dry).
  • Three quarters of the sand used for shale gas operations comes from Minnesota and Wisconsin (which could mean long transportation distances depending on the shale play where it is used). There is a significant amount of water used to clean the sand prior to transport, as well.
  • Research by Eric J. Esswein, M.S.P.H. of the National Institute of Occupational Safety and Health (NIOSH) indicates that respirable silica, found in the sand used for hydraulic fracturing, is the greatest exposure hazard to workers on shale gas drilling sites. Silica is often released into the air when the sand is mixed into the frac fluid. Part of this risk is due to the lack of awareness about how long term exposure to it could result in irreversible lung damage and because half face respirators do not fully protect the workers from silica. This exposure can be significantly reduced by installing special technological controls on the mixing equipment. While hydrogen sulfide (H2S) can be present on sites, Mr. Esswein reports that workers are well informed and prepared for this hazard. The second most concerning exposure on the work site is diesel particulate matter.  Mr. Esswein emphasized that presently the most worker incidents are still related to mechanical problems/falls/traffic, not chemical exposures.
  • Dr. Timothy Kelsey discussed economic and community impacts in PA, noting that a significant challenge to the local economy presents when the drilling trend begins to slope downward. He also briefly mentioned that he has not seen significant community impacts being felt in northeastern PA that are normally associated with boom and bust cycles of resource extraction. However, there was some contention about that statement from attendees. For example, according to PennFuture, National Public Radio (NPR) recently reported that a group of churches in northern Tioga County opened the area’s first-ever homeless shelter to feed persons displaced by the influx of natural gas industry employees. Individuals working at a nearby drilling site reportedly made donations to help the work of the Jemison Brethren in Valley Christ Church. The establishment of this shelter was necessitated by the unintended impact of the shale gas industry on those in need of affordable housing — the poor and under-employed. In Williamsport, for example, the influx of industry workers caused moderately priced $400-per-month apartments to skyrocket to $1200. This set off a cascade of effects that ended with the lowest income persons being forced out of available housing.
  • Dr. Michael Honeycutt from the Texas Commission on Environmental Quality suggested that regulatory agencies in states where drilling is heavy should be actively monitoring ambient air (see map below) and periodically conducting fly overs of gas facilities with infrared cameras to detect fugitive emissions into the air.

This map displays the sites where TCEQ collects air sampling data and areas of non-attainment or near non-attainment for air quality standards. Click on it to be taken to TCEQ’s dynamic version.

Select slides from all of the presentations from this meeting are available for download here. Under the Other Meeting Resources tab on the right, click Presentations.

A World Without Research

When times are economically demanding, the first tendency of regulators is to suggest cutting non-essential programs. Unfortunately, many of those ‘non-essentials’ include public services and research, which are pivotal to the progress of our nation. Mostly as a mental exercise, I’d like everyone to ask themselves where we would we be if we did not fund such research:

  • You would not be reading this article on the internet, as it was pioneered by those that developed the Large Hadron Collider.
  • The paths of hurricanes and tornadoes would be terribly difficult to predict.
  • One out of every ~nine babies worldwide would be claimed by smallpox.
  • Medical MRI technology would not exist – pioneered by a chemist and a physicist.

DCNR Changes

DCNR Lands & Active Permits

Located more close to home are Pennsylvania’s recent funding cuts on ecological projects. Those in power have claimed that their regulatory decisions regarding unconventional natural gas extraction from the Marcellus Shale layer are based on science. However, the funding for the Commonwealth’s Department of Conservation of Natural Resources (DCNR) to provide data on the health of PA’s ecosystem is aggressively being cut by those same individuals. On January 18, 2012, NPR reported that documents obtained by StateImpact Pennsylvania (among others) suggest that the funding for scientific endeavors within DCNR currently focusing on drilling-related issues is actively being slashed by the state. The agency’s wildlife research program has been cut by almost 70%, specifically impacting the projects dealing with understanding the impacts of drilling. The rationale for why some projects were cut and not others has not been provided, nor was the reason for failing to involve the conservation team in such funding decisions. Also recently, the director of DCNR’s citizens advisory committee was fired by the Corbett administration. The committee has oversight of the state’s parks and forests. These significant changes could significantly affect the accountability of Marcellus Shale gas drilling in PA’s forests.

The Commonwealth of Pennsylvania has a major budget deficit to deal with, no doubt. However, in the face of financial crises compounded by overlapping priorities on a policy level, it is even more crucial that we use real evidence – science – to create policies and make decisions. How can we do that when we are cutting the very channels that provide us with the data? Without access to reliable data and information about how PA’s ecosystem is dealing with drilling, our policy-makers will find it more difficult to make well-informed decisions. Without programs that provide up-to-date and reliable impact data, we are doomed to repeat the mistakes that lead to today’s legacy pollution sites – for which tax-payers are now encumbered to remediate!

Read more about the DCNR cuts in NPR’s full article.

Cuts as Pace of Drilling Intensifies

Inadequate access to quality data is an issue that is only going to become more concerning as the pace of the shale gas industry intensifies. (There were 785 Marcellus wells drilled in 2009; 1,461 in 2010; and 1,920 in 2011.) Forty percent of PA’s state forests are already leased out for shale gas drilling, and there has also been some discussion about the likelihood of lifting the moratorium (ban) on further drilling. Learn more here.

As another point of reference regarding the scale of shale gas drilling in PA, below is a map of all of the Marcellus Shale wells drilled in the state as of 1-12-12 created with data from the PA DEP using Data.FracTracker.org


Samantha Malone, MPH, CPH is a doctorate student in the Environmental and Occupational Health department of the University of Pittsburgh’s Graduate School of Public Health and the Communications Specialist for FracTracker.org. She can be reached at: malone@fractracker.org  |  412-648-8641

Community Foundation for the Alleghenies Announces Director for its New FracTracker Fund

Community Foundation for the Alleghenies logo

The Community Foundation for the Alleghenies has named a former state Department of Conservation and Natural Resources official to manage its newest fund, FracTracker.org, effective this week.

Brook Lenker, who served as manager of education and outreach in the department for nearly eight years, will manage FracTracker.org staffing and operations; expand the website capabilities; coordinate and develop content; publicize and expand use of the website by journalists and other users; broaden community and academic outreach; and undertake additional strategic initiatives.

“We are pleased to be able to engage a talented and committed environmental leader such as Brook and to work with donors such as The Heinz Endowments, whose generosity can be put to use through important community tools like the FracTracker.org Fund,” Angie Berzonski, program & communications officer for the Community Foundation for the Alleghenies, said in making the announcement today (Friday, December 9, 2011).

“FracTracker is an invaluable resource to all who care about our future and the complex challenges associated with the shale gas industry,” said Lenker. “I’m honored to lead it and hope to expand its utilization, grow its capabilities, and build powerful partnerships that enhance its effectiveness.”

In his previous work, Lenker had extensive experience collaborating with groups as diverse as conservationists, businesses and hunting-fishing interests. “It was my responsibility to help lead a program to engage all Pennsylvanians in better environmental stewardship practices,” he said, “and I look at my work with the diverse stakeholders connected to FracTracker in the same way.”

The FracTracker website is hosted by the Foundation for Pennsylvania Watersheds. The web portal is a combination data and blog tool that allows users to interact with, upload, analyze and visualize data that have been located geographically in relation to gas extraction activities in the Marcellus Shale region and oil and gas extraction nationally. The portal is also a hypothesis generating tool for academics; a storytelling device for journalists; and a resource for industry and government agencies. The hub serves as a center of data aggregation so that impact can be viewed and understood at scale and, through analysis and exposure, informs all levels of society and social discourse.

“We are looking forward to Brook’s leadership in the future development and use of FracTracker.org.,” said Caren Glotfelty, director of  The Heinz Endowments’  Environment Program, which has provided nearly $1.5 million for the project since it began two years ago. “The website has become an important, independent, fact-based source of information on the effects of Marcellus Shale natural gas production, and we expect it will become even more useful under Brook’s management.”

Additional support for various aspects of the FracTracker project comes from the Philadelphia-based William Penn Foundation, which has awarded a $300,000 grant.

The Community Foundation for the Alleghenies is a nonprofit public foundation. Through the charitable giving of its donors, it builds professionally managed assets to support the communities it serves. Grants typically are advised by donors or are entrusted to the Foundation to use its community knowledge and engagement to place their giving toward greatest needs, emerging issues or to best leverage additional support. The Foundation is overseen by an active volunteer board and committees. The Foundation is also among those community foundations achieving compliance with national standards as established by the Council on Foundations.

For information about grantmaking or to inquire how to establish your own charitable fund at the Foundation, please contact the Foundation at 814-536-7741 or visit its website, www.cfalleghenies.org.

###

Samantha Malone and Matthew Kelso welcome Brook Lenker into the FracTracker.org team. They are excited about the experience and passion he brings to the table and look forward to working with him in making FracTracker.org a key player into the shale gas world.

Study Offers 7 Safeguards For Hydraulic Fracturing

Duke University Press Release

A new report by Duke University researchers offers several health and environmental measures for North Carolina lawmakers to consider as they debate legalizing horizontal drilling and hydraulic fracturing for natural gas.

The study, which has been accepted for publication in the journal Duke Environmental Law and Policy Forum, looks at potential environmental hazards and how lawmakers in other states are factoring health and environmental risks into regulatory approaches targeting the natural gas extraction method.

”If North Carolina legalizes shale gas extraction, we need to consider what’s worked best in other states and avoid what hasn’t,” said Rob Jackson, Nicholas professor of global environmental change at the Nicholas School of the Environment. “That’s the only way to get it right.”

Legislation passed earlier this year has moved North Carolina closer to producing shale gas, and is directing the Department of Environment and Natural Resources to complete a study on the effects of hydraulic fracturing, often called “fracking,” by May, 2012.

Authors of Duke’s own study say if North Carolina legislators allow natural gas production through hydraulic fracturing, they should consider seven measures to help avoid and mitigate any possible negative effects. These include:

  1. Securing baseline data on groundwater prior to shale gas production and at each stage of the drilling process;
  2. Funding for regulatory programs and an agency to carry them out;
  3. Planning for withdrawals from area water supplies related to the production;
  4. Minimizing the risks of spills and contamination caused by equipment failure and human error by implementing safety requirements;
  5. Thinking through options for the disposal and treatment of wastewater resulting from the hydraulic fracturing process;
  6. Assessing the impacts on air quality and assure attainment of federal ground-level ozone standards; and
  7. Requiring some degree of disclosure regarding the chemicals used in fracturing fluid.

“Lawmakers have the unique opportunity to decide whether or not hydraulic fracturing is appropriate for the state,” said Jonas Monast, director of the climate and energy program for the Nicholas Institute for Environmental Policy Solutions. “Before making a decision, we need to understand the full range of potential economic, environmental, and health impacts.”

The paper “Considering Shale Gas Extraction in North Carolina: Lessons Learned in Other States,” is written by Sarah Plikunas, Brooks Rainey Pearson and Jonas Monast of Duke’s Nicholas Institute for Environmental Policy Solutions and Rob Jackson and Avner Vengosh of the Nicholas School of the Environment. To read it, click here.

DEP = Department of…Economic Promotion?

In today’s Post-Gazette, Laura Olson quotes the DEP Deputy Secretary of Oil and Gas Management Scott Perry refuting the notion that hydraulic fracturing is an unregulated process, saying:

“It’s important to point this out, because I think if the public loses confidence in the department’s ability to manage this industry, it’s going to have some consequences and perhaps some unfortunate policy decisions will be made. It ultimately will result in less opportunities for everyone.”

In times like these, isn’t it nice to know that even the Department of Environmental Protection has the economy foremost on their minds?

“I feel like I’m trying to convince the public that Sasquatch doesn’t exist.”

Hasn’t anyone told him? There have been 951 confirmed Sasquatch sightings in the Marcellus Shale portion of the Commonwealth so far this year.

Even if I’m taking this quote of Perry slightly out of context, the point remains valid: The DEP stands for the Department of Environmental Protection. That’s what they should talk about, and denying that there are problems doesn’t make it seem like they are paying any attention to their own data.

Comparing & Contrasting Extractive Industry Sectors in Ghana & the US

By Deanna Bitetti (Common Cause) and Samantha Malone, MPH, CPH (CHEC)

In the quiet of the morning the group we have travelled to Ghana with using a grant from the US Department of State to study extractive industries find ourselves swapping stories – wistfully thinking of American life back home. We find ourselves constantly comparing and contrasting the political environment in which public policy around extractive industries are crafted in both nations. Scratch beneath the surface and you will find that Ghana and the US are not that different after all.

The pernicious influence of special interest money permeates throughout American political culture just as it does in Ghana; compulsory Integration models in the states have allowed for mineral rights to be taken from American citizens, and confusion over the leasing of mineral rights for natural gas extraction has led to uprooted communities. Environmental degradation and costs to local communities have been paramount in both the US and Ghana. These two nations separated by the Atlantic are struggling to balance new extractive industries as an engine for economic growth and protecting communities from the pitfalls associated with the “resource curse.” As both nations forge ahead in developing their oil and gas sectors, how they manage the risk associated with natural gas development will ultimately define how the citizenry thinks about the role of government and government institutions.

Below is a short comparison of some key aspects affecting constituencies in the US and Ghana.

Special Interest Influence

During a recent discussion with a local royal chief in a small village I am reminded that corporate influence is not localized to any specific nation. Here, a gold mining company publicly presents the tribal leaders of a village with keys to two Land Rovers. In America, special interest money floods campaign coffers, exceedingly so in the wake of Citizen United. According to Open Secrets individuals and political action committees affiliated with oil and gas companies have donated $238.7 million to candidates since 1990. From 2010-2011 Exxon Mobil and The Koch Brothers, one of the largest oil and gas conglomerates in the US, spent $384,030 and $318,800 respectively on campaign donations on both sides of the partisan divide to influence environmental legislation aimed at regulating the oil and gas sector. In Pennsylvania, Common Cause’s www.marcellusmoney.org has tracked the significant campaign cash contributions that have flooded campaign coffers, and in New York our recent report “Deep Drilling, Deep Pockets,” highlighted the large amounts industry has spent to lobby our elected officials.

Public Benefits for Public Good

In Ghana only 5% of royalties paid by the extractive industry sector is paid to the State. Out of that 80% of the money goes into the government’s general fund, with only 9% trickling down to effected communities. In the US, Congress has historically rewarded energy companies and those involved in the extractive industry sector with tax breaks, without tangible realization of positive benefits to communities. Nearly two-thirds of US corporations don’t pay any income taxes. According to a study from the non-partisan Government Accountability Office, 83 of the top 100 publicly traded corporations that operate in the US exploit corporate tax havens. Since 2009, America’s most profitable companies, such as ExxonMobil, General Electric, Bank of America and Citigroup, all paid a grand total of $0 in federal income taxes. Even as we write this, Congress is considering offering major subsidies to promote natural gas extraction methods and providing major tax incentives to the industry, speeding up the timeline for extraction and feeding the natural gas boom (and possibly bust) cycle.

Mineral Rights and Extraction

At the heart of the debate over natural gas extraction in the US is the right of landowners to either retain their land or sign leases with companies with the hope of negotiating lucrative contracts for their mineral rights. In Ghana, Article 257 of the Constitution states that public lands and public property are “vested in the President on the behalf of, and in trust for, the people of Ghana.” In essence, the state has claims to mineral rights, not the individual. On the surface the situation in Ghana appears anathema to American values. Forced resettlement programs of thousands of fisherman, farmers and landowners offends our notion of private property and ownership as inviolate. Yet areas in New York and Pennsylvania have allowed for Compulsory Integration where companies were granted the right to drill on lands for which they did not hold leases. Some residents that may own the surface rights but not the mineral rights experience the effects of a “split estate.” Additionally, population displacement often occurs near areas of heavy drilling either because of fear of health effects, noise or pollution, or due to harassment by companies. The important benefits and drawbacks that result from personal ownership of mineral rights must be considered seriously. Further, neither the United States or Ghana require companies to disclose the exact composition of the chemical mixtures used in the process, shrouding it in a cloud of secrecy from the public.

Externalities of Natural Gas Development

In Ghana, as farmland is turned over to industry to pave the way for rapid development, food productivity has begun decreasing – causing food and commodity prices to rise. Housing prices have been steadily increasing as foreigners flock to the areas surrounding the Jubilee oil field, causing a surge in demand for those residences. Prostitution and crime has been on the rise, as well. Even smoking has increased as foreigners bring with them new social norms. In the US we have seen similar externalities imposed on host communities by the extractive industry sector. In Pennsylvania we have already seen the rise in housing shortages due to workers being brought in from out of state, traffic incidences, and roadway degradation. Air quality concerns, drinking water contamination, and stress-related health effects are being documented. Both nations lack clear and updated standards for hazardous waste removal of drilling fluid or drill cuttings. Each country will have to address new pressures placed on transportation infrastructure, including increasing maintenance costs as new roads are created and old roads need constant repair to handle the increase in heavy truck traffic.

Public Health Issues

Residential and operational waste – regardless of its country of origin – is a common postcard to receive from the presence of extractive industries. Improperly handled waste contributes to a multitude of public health issues, such as tainted drinking water, disease transmission, air pollution, and threats to the food supply. One of the differences between Ghana and the U.S. lies in the awareness of where our waste goes. Americans are physically separated from the sources and end products of our distracted commercial lives. Trash is collected by a contractor and taken to dump sites, incinerators, or overseas. Ghanaians face their (and others’) waste on the country’s busy sidewalks, in open sewers, and floating in their magnificent waterways. They witness the neocolonial exploitation of their local resources for the imbalanced consumption and financial gain of other countries. While our processes for extraction and waste disposal differ somewhat, we share a common problem – how to reduce our demand on the entire cycle. Many of the earth’s resources are finite and severely threatened, and so sustainability must be the prescription for healthy development.

Conclusion

This list is not exhaustive, nor it is it meant to be. To move toward a best-practices model for developing extractive industry sectors and managing the high risks associated with doing so means paying close attention to the pace and scope of development, as well as attempting to ameliorate negative externalities imposed on communities. This must include mechanisms for proper oversight and regulation, sustainable planning and development, enhanced civic societal input at the decision- making table, and realistic expectations about the financial promises of oil and gas. In nations such as Ghana, managing these revenues will require more transparency and better management to ensure that revenues do not create large wealth distribution imbalances. In the US, ensuring that industry and government do not form cozy relationships that undermine independent oversight regimes is a major concern.


Deanna Bitetti is the Associate Director of Common Cause/NY. Samantha Malone is the Communications Specialist at the Center for Environmental Healthy Environments and Communities and a doctorate student in the University of Pittsburgh Graduate School of Public Health. They are currently in Ghana as part of a State Department funded research trip on resource extraction hosted by Duquesne University (Pittsburgh, Pennsylvania) and the University of Ghana (Legon, Ghana).