“Arkansas has historically promoted short-term economic gain over economic and environmental sustainability. We live under the boom and bust mentality, and consequently we have seen some profit while others suffer. Residents across the state are increasingly battling against the negative impacts of misguided ‘opportunity.’ We can do better.”A release on the film follows.
Mother Jones reports on new evidence of linkage of practices in fracking for gas and oil with earthquakes, here along the Wilzetta fault in Oklahoma. It was long thought "dead," until a 5.7 quake in 2011.
When the Wilzetta mysteriously and violently awakened, [Oklahoma geophysics professor Katie] Keranen wanted to know why. So she partnered with scientists from the USGS and Columbia University's Lamont-Doherty Earth Observatory. The morning after the initial foreshock, Keranen's team scrambled to install three seismometers around Prague. They did so in time to capture the quake system in unprecedented detail. She says, "We got this beautiful image of the fault plane." Within a week, her team and other scientists had placed a total of 25 devices around the fault zone. One is buried in the Reneaus' backyard. Now, having completed a yearlong study (just published in the journal Geology), Keranen's research indicates the Oklahoma earthquakes were likely attributable to underground injection of wastewater derived from "dewatering," separating crude oil from the soupy brine reaped through a drilling technique that allows previously inaccessible oil to be pumped up. "Pretty much everybody who looks at our data accepts that these events were likely caused by injection," Keranen concludes.
...Such seismic activity isn't normal here. Between 1972 and 2008, the USGS recorded just a few earthquakes a year in Oklahoma. In 2008, there were more than a dozen; nearly 50 occurred in 2009. In 2010, the number exploded to more than 1,000. These so-called "earthquake swarms" are occurring in other places where the ground is not supposed to move. There have been abrupt upticks in both the size and frequency of quakes in Arkansas, Colorado, Ohio, and Texas. Scientists investigating these anomalies are coming to the same conclusion: The quakes are linked to injection wells. Into most of them goes wastewater from hydraulic fracking, while some, as those in Prague, are filled with leftover fluid from dewatering operations.
Jason Rapert surely can explain how this is alarmist nonsense that will kill the goose laying golden eggs, or something, all over the Fayetteville shale.
A study by Duke University and U.S. Geological Survey participants has found no contamination of Arkansas groundwater by gas exploration using hydraulic fracturing.
The scientists sampled 127 shallow drinking water wells in the Fayetteville shale exploration region
Duke scientists had earlier found some contamination in the shale zone in Pennsylvania.
"The hydrogeology of Arkansas's Fayetteville Shale basin is very different from Pennsylvania's Marcellus Shale," [Avner] Vengosh noted. Far from contradicting the earlier studies, the Arkansas study "suggests that variations in local and regional geology play major roles in determining the possible risk of groundwater impacts from shale gas development. As such, they must be taken into consideration before drilling begins."
Faulty drilling techniques also still hold the potential to cause problems, the scientists said.
"The take-home message is that regardless of the location, systematic monitoring of geochemical and isotopic tracers is necessary for assessing possible groundwater contamination," he said. "Our findings in Arkansas are important, but we are still only beginning to evaluate and understand the environmental risks of shale gas development. Much more research is needed."
Good news for the shale gas industry in a report released today by the U.S. Geological Survey:
A study that examined the water quality of 127 shallow domestic wells in the Fayetteville Shale natural gas production area of Arkansas found no groundwater contamination associated with gas production, according to a report released today by the U.S. Geological Survey.
Scientists analyzed water-quality data from samples taken in Van Buren and Faulkner counties in 2011, focusing on chloride concentrations from 127 wells and methane concentrations and carbon isotope ratios from a subsample of 51 wells.
"For more than one hundred years, the USGS has been a source of freely available, unbiased information on our natural resources such as oil, gas, and water, helping government and local leaders make wise decisions for the public good," said USGS Director Marcia McNutt. "This new study is important in terms of finding no significant effects on groundwater quality from shale gas development within the area of sampling."
Chloride is a naturally occurring ion that is found at elevated levels in waters associated with gas production. Chloride moves easily through groundwater without reacting with other ions or compounds in solution, making it is a good indicator of whether chemicals used during hydraulic fracturing are reaching groundwater. In this case, the chloride concentrations from this study were not higher than samples taken from nearby areas from 1951 through 1983.
Methane is the primary component of natural gas, but also can be found naturally in shallow shale formations in the Fayetteville Shale area that are used as sources of water for domestic supplies. What methane was found in the water, taken from domestic wells, was either naturally occurring, or could not be attributed to natural gas production activities.
"None of the data that we have looked at as part of this study suggests that any groundwater contamination is resulting from natural gas production activities," said USGS hydrologist Tim Kresse. "However, this study does not speak to other wells that were not sampled, every chemical used during the hydraulic fracturing process, or water quality changes that might take longer to occur. It does provide a baseline to use to evaluate any possible changes in the future."
Arkansas isn't specifically mentioned in this major New York Times article, but it might as well be. The crazy speculation, over-exploration and resulting bust that is now besetting the gas industry included a heavy Chesapeake Energy play in Arkansas, to name just one fast-and-loose production company whose go-go times have gone-gone. Fortunes have been made and lost. And the plunge in gas prices from exuberant, money-losing production has been a boon in many ways. (Some electric companies are converting to cheaper gas from dirty coal for example; though not the power companies that do business in poor ol' Arkansas.) But ...
The drillers punched so many holes and extracted so much gas through hydraulic fracturing that they have driven the price of natural gas to near-record lows. And because of the intricate financial deals and leasing arrangements that many of them struck during the boom, they were unable to pull their foot off the accelerator fast enough to avoid a crash in the price of natural gas, which is down more than 60 percent since the summer of 2008.
Although the bankers made a lot of money from the deal making and a handful of energy companies made fortunes by exiting at the market’s peak, most of the industry has been bloodied — forced to sell assets, take huge write-offs and shift as many drill rigs as possible from gas exploration to oil, whose price has held up much better.
Rex W. Tillerson, the chief executive of Exxon Mobil, which spent $41 billion to buy XTO Energy, a giant natural gas company, in 2010, when gas prices were almost double what they are today, minced no words about the industry’s plight during an appearance in New York this summer.
“We are all losing our shirts today,” Mr. Tillerson said. “We’re making no money. It’s all in the red.”
In other words, those thinking the exploration bubble in Arkansas won't ever end might want to read this article closely. If nothing else, read it for more background on Aubrey McClendon, the Chesapeake dealmaker who was treated like a deity in Arkansas by those prone to sanctify businessmen, no matter how shady or rapacious.
The suit is brought on behalf of anyone living within three miles of the injection wells. The named plaintiffs live a miles or less from injection wells in Faulkner, Conway and Independence County.
The waste is a byproduct of "fracking," the injecting of large amounts of fluid underground at high pressure to release gas trapped in what is known as the Fayetteville Shale. The water contains a number of toxic chemicals, the lawsuit asserts. It's mostly recaptured after drilling and trucked to waste disposal sites, where it's eventually injected underground for permanent disposal in underground rock formations.
The lawsuit contends the waste spreads — as much as several miles — in an underground "reservoir" that lies under land of people who have not been paid any consideration for waste that has migrated under their property. Since it can never be removed, the lawsuit calls this a "permanent trespass." Some of the plaintiffs have been paid to lease mineral rights on their property and the income has been reduced by waste disposal costs. But, the lawsuit said, the leases didn't permit waste disposal on their property and the defendants never told the plaintiffs that was a possibility. The suit says the defendants have injected far more waste into permitted injection wells than the reservoirs below them can hold, thus insuring spread of the waste over a wider territory.
The suit alleges that gas drillers paid landowners in other states for waste disposal, but took advantage of the "naivete" of Arkansas residents to avoid payments here. In newspaper and journal articles, a Southwestern Energy official bragged about leasing land before rural Arkansans could figure out what was happening, the suit said.
...the idea was to use out of state 'land men' with no connections in the state of Arkansas to secure mineral leases from unsophisticated land owners for a fraction of what was being paid in other states. By using 'foreign' land men, there was little risk that they might be inclined to be forthright about the mineral leases and its attendant consequences for the land owners.
The suit said the land men made sure to avoid telling land owners that injection wells would take waste from all over Arkansas, not just from wells on their land. The suit alleges fraudulent conduct, along with damage to property rights, in what they allege was a "civil conspiracy."
The defendants have injected billions of gallons of oilfield waste underneath the lands of the named plaintiffs and all others similarly situated in the state of Arkansas, in an concerted and orchestrated effort to maximize the defendants profits at the expense of the landowners upon whose property this waste matter is being dumped.
Potential damages are enormous ($17 million in actual and punitive damages for each of the plaintiffs named so far) and the lawsuit seeks treble damages under the federal anti-conspiracy statute.
Lawyers from Tennessee and Texas, Timothy Holton of Memphis and Michael McGartland of Fort Worth, filed the amended lawsuit. It's distinct from claims Holton made in earlier suits, which alleged water contamination.
The gas companies undoubtedly will issue general denials and file motions to dismiss. Shale cheerleaders such as Sen. Jason Rapert and the gas company toadies in county judge offices and elsewhere in the shale probably will bemoan the slaying of the goose laying the golden eggs — and billions of gallons of permanent toxic waste — on Arkansas people.
Duh. New reports says many of the scientists who issue rosy reports about fracking for natural gas are on the gas industry payroll. (Economists, too, they could have added.) Not that the paychecks have any influence on their reports, of course.
Those reports feature prominently in the high-dollar ad campaign underway in Arkansas and elsewhere to promote fracking as the country's ecomomic panacea. Road damage, environmental damage, earthquakes, inflated economic claims, meager extraction taxes? Let's get the gas first. We'll worry about the rest later.
Wired reports. And provides a snippet that spans more than gas drilling research (think education "reform" and other fields):
Of course, industry funding of research has been commonplace since at least the heyday of Big Tobacco, and is still de rigueur for pharmaceuticals, among others. But Thomas McGarity, a UT-Austin law professor whose research on industry money in university research led him to write the book Bending Science: How Special Interests Corrupt Public Health Research, said it’s almost impossible to imagine a bias-free study with industry cash behind it.
“They’re trying to buy the prestige of the university,” he said. “And the universities are happy to sell their prestige, I suppose.”
Sheffield Nelson, who's been leading a campaign to increase the severance tax on natural gas, said it will be Tuesday before he announces the committee's plans on continuing the petition drive for the initiative.
Nelson learned Thursday that the committee had a 70 percent failure rate on trying to get registered voters to sign petitions to put the increase on the ballot. That leaves the committee needing more than 41,000 signatures, with 30 days from last Thursday to get them. The committee had gathered 69,774, needing 62,507 from registered voters. With even a 60 percent success rate, the committee would need another 70,000 signatures to qualify. Signature gathering was to continue after Thursday, but I'd call this a prohibitive longshot.
UPDATE: Word is that the 21,000 registered voters Nelson was able to gather may be further reduced by some duplicate signatures. Or so say the whispers from those close to the gas company-financed campaign to beat the initiative.
Josh Fox, who made "Gasland," the influential documentary about gas fracking, is back with a new film, "The Sky is Pink."
It's another must-watch, particularly in Arkansas, where fracking continues unabated in the Fayetteville shale. No way fracking is going to stop here. Just like there's no way the Arkansas legislature is likely toformally acknowledge the potential harm of greenhouse gases. Those deadly gases smell like money to the Chamber of Commerce ruling clique.
But it's at least brain food as the state considers whether our low severance tax, producing maybe $50 million or so a year, is nearly enough against a half-billion in road damage alone, never mind inadequate environmental regulators and the risks waste dumping, big trucks and other aspects of the industry carry for the state.
Simple lessons from the new video: Cement casing in wells can fail. Chemicals can leak. Industry documents prove it. Wells also can cause migration of naturally occurring gas while drilling deeper for different gas.
Says Fox: "There's no safe drilling. And they know it."
Sheffield Nelson thinks XTO Energy (a subsidiary of Exxon) and Southwestern Energy, two publicly traded companies that are drilling for natural gas in Arkansas, have violated Securities and Exchange Commission rules by talking about the negative impact of a severance tax increase on their work in Arkansas.
Nelson, who is leading an initiative campaign for a gas severance tax increase, today sent a letter to Mary Shapiro, chair of the SEC, outlining his argument: Through their donations to an anti-severance tax group (Southwestern, XTO and the private Stephens Production have contributed together more than $1.5 million), these companies have knowingly disseminated false information – that they will pull out of Arkansas and jobs will be lost, should the severance tax pass. Nelson contends it violates securities rules to disseminate such relevant business information only in Arkansas, rather than to the public generally.
XTO and Southwestern have donated $950,000 of the $1.6 million total contributions received by the anti-severance group, Arkansans for Jobs and Affordable Energy. This group, spearheaded by Randy Zook, president of the Arkansas State Chamber of Commerce, is behind the Stop the Gas Tax campaign.
In Feb. 2012, in a public letter seeking contributions, Zook writes, “This industry plays a vital role in our state’s future economic development, and a tax increase would no doubt jeopardize jobs we’ve come to count on, as well as the potential for continued growth.” Other materials say, “this gas increase is a job killer, let’s keep those high paying jobs here, keep Arkansas competitive.” A study commissioned by the Conway Chamber of Commerce found that Arkansas would lose 8,300 jobs if the severance tax passes.
According to Nelson, these statements, made indirectly in behalf of XTO and Southwestern by a campaign they are financing, are scare-mongering, the equivalent of telling the public that these companies will leave the state if they have to pay more taxes. And, he maintains, that is simply not the case. In February, Southwestern released its 2011 financials, which indicated that the company invested over three times as much capital in Arkansas than in any other state – a commitment it is unlikely to walk away from, Nelson contends.
Neither Southwestern or XTO have ever mentioned Arkansas’s potential severance tax in public SEC filings, said Nelson. If this tax was a material financial issue, Nelson said, they would have to file notice with financial regulators.
Arkansas Times asked XTO for it's reaction to Nelson's S.E.C. complaint, and we received this statement via email: "We don't believe this current debate over a proposal to increase the severance tax merits an SEC filing. If enacted, a significant severance tax increase would impact our costs to drill in Arkansas, and such costs will be taken into account when making future investment decisions."
We've sought a comment from the group opposing the tax increase. In an earlier exchange with a related group opposing the tax, a spokesman told Max Brantley that predictions of a negative impact on drilling activity were not the same thing as a decision to withdraw from the state.
UPDATE FOLLOWS FROM LUCAS HARGRAVES OF THE ANTI-TAX GROUP:
The campaign to raise the natural gas severance tax has come up with its own analysis to counter recent studies funded by the Arkansas State Chamber of Commerce and Conway Chamber of Commerce on the positive impact of gas drilling in Arknasas.
Sheffield Nelson, who's leading the tax campaign, commissioned Dr. Charles Venus, who's been a member of the Governor’s Council of Economic Advisors and a tax advisor to Govs. Rockefeller and Bumpers, to do an analysis on the impact of the gas severance tax. Nelson is leading the a petition drive for a ballot measure to increase the severance tax to 7 percent. It's now capped at 5 percent, but can be much lower depending on the type of well that produces the gas.
Venus agreed to do the study for expenses only, about $3,000, which he primarily passed along to researchers. The University of Arkansas was paid $47,900 by the State Chamber for a report it did on the impact of gas exploration in Arkansas. The Conway Chamber of Commerce hasn't said what it paid for a Texas researcher's report on the impact of a tax increase.
Venus found that the economic impact of a 7 percent severance tax (either a 2 or 5.5 percent increase, depending on if you go with the limit on the books or what the average gas company actually pays), will raise Arkansas’s gas revenue from 2011’s $55.5 million to $209 million annually, about as much as major explorer Exxon Mobil makes worldwide in a day. Venus said the impact would be positive because the money would go to highway construction. It would create 6,200 direct highway jobs and 9,300 indirect and induced jobs. Nor should Arkansans’s gas bills increase, since our residential gas comes largely from Oklahoma and Louisiana.
The boom has been met by a burst of state regulation.
This year, Ohio rewrote state regulations for wastewater disposal from oil and gas fields after earthquakes occurred around a deep wastewater injection well in Youngstown. The state legislature also approved a bill, which the governor is expected to sign this week, that strengthens standards for building oil and gas wells to prevent leaks into underground water supplies, requires companies to disclose the chemicals they use in every stage of production, and mandates that companies test water supplies close to new drilling sites.
The boom also was met by a savvy former Democratic legislator and lawyer who organized landowners in one region of the state.
Working with a lawyer in nearby Marietta, the residents were able to band together to negotiate an unusually lucrative deal with the company that paid $4,000 an acre and 19 percent royalties on oil and gas production, and included safeguards to protect water and land. (The standard has been $20 to $30 an acre, one-sixth royalty rates, and no protections for water and land.)
Note that phrase about protection of water and land, an alien concept to many fracking cheerleaders in Arkansas. (Hell, Arkie cheerleaders don't even want to make the gas companies pay enough to cover road damage.) The ex-legislator's lease deals, says the Times,
... also contain provisions for testing before and after drilling occurs to make sure that none of the chemicals used in the production process have contaminated drinking water. The leases bar energy companies from drawing water for hydrofracking from any water source on the leaseholder’s land — provisions that go beyond existing Ohio regulations.
Republican Gov. John Kasich wants to raise the severance tax and has a business group's study that says it won't deter shale development. A business group likes a tax increase. Yes, because Kasich would use the gas revenue to cut income taxes.
For your reading pleasure: A policy maker's guide to the pluses and minuses of shale gas production from the National Conference of State Legislatures, a non-partisan, non-industry-funded organization.
The Energy Wire summarizes:
But the report warns that fracturing companies may provide inflated estimates of the economic benefits of energy development while not mentioning the negative local impacts that some regions are experiencing.
"Rural areas tend to experience short-term booms as extraction industries move in, then experience long-term busts," the report says. "Reduced economic diversity, higher unemployment and wider income disparities often ensue once industry leaves."
Quick fact noted is the exaggeration of job benefits. One industry supported study claimed the shale supported 600,000 jobs in 2010. But note that the Bureau of Labor Statistics reports only 186,000 jobs in the entire U.S. oil and gas extraction industry in 2011.
The careful point from NCSL is that it should be a balancing act — weighing obvious economic benefits against obvious environmental and other concerns. Some states push harder to insure a return for their people. Six states — Alaska, New Mexico, Wyoming, Montana, Oklahoma and North Dakota — get more than 10 percent of total state revenue from extraction taxes. Doesn't seem to have stopped the industry in those states. Things can be done: Water quality enforcement, impact fees on wells, tougher disclosure rules, wastewater rules, better rules on well construction and spacing.
In Arkansas, the Shale Caucus says it's all good. Other states are not so much captive to industry boosterism.
The chamber of commerce's full frontal attack on the severance tax increase — not yet qualified for the ballot — continues. The Conway Chamber of Commerce today trotted out U.S. Reps. Mike Ross and Tim Griffin to announce their thoroughly unsurprising opposition. When the corporate lobby says jump, the toads leap.
The stealth campaign continues, with some good effect according to recent polling. The cry that the gas tax will deter job creation is a lie, judging by experience in states with higher severance taxes where production continues unabated (except to the extent depressed prices have had an impact). The congressmen probably would even cheer old Aubrey McClendon, the Chesapeake Energy boss who dreamed up a scheme to make himself unfathomably rich by cutting himself into a profit into every hole punched in the ground of Arkansas and other states. He doesn't want to make gas producers pay for the damage they cause to roads or environment either. Mike Ross and Tim Griffin respect millionaires, if not the roads of Arkansas.
I referred to a stealth campaign. I mean, for example, the guys handing out flyers at my house, the flyers themselves, the people running the social media accounts, the people orchestrating propaganda events like today's in Conway and all the other ways the Arkansas State Chamber of Commerce is laundering money through campaign consultants to beat the severance tax without being accountable for how the money provided by gas companies is being spent. It's the same secrecy template used by the Little Rock Regional Chamber of Commerce when it passed corporate money through the Markham Group to avoid disclosure of specific spending on a city sales tax campaign. I don't know why they haven't thought of laundering the contributions themselves through the consultants too. It would make reporting very simple. Hypothetically:
ARKANSANS FOR LOW TAXES FOR RICH, SALES TAXES FOR POOR
Receipts: Markham Group, $1 million.
Expenditures: Markham Group, $1 million.
What else, really, does the public need to know?
Oddly, this was an issue I was thinking about on the way into work: What has the oil industry, so hell bent on exploiting the Arctic and oil shales here, done to despoil the environment in oil-producing countries? Then, a reader sends Michael T. Klare's article in tomdispatch.com that answers my question and suggests that the oil industry would do to the U.S. what it does in the unregulated, undemocratic Third World: Frack us, and rake in the money.
Five coaches over five seasons. Not sure that's occurred many other places. It's both a…
The first thing Hitler did when taking office was restrict mass murders. All such proposals…
Pretty shitty deal. . .
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