Fracking is the Future!

Categories:  Features    News & Politics
Tuesday, February 19th, 2013 at 4:05 PM
Fracking is the Future! by Jay Stevens
Mark Kosobucki

Dan Doyle is a fracker. He sits in the corner booth at the back of Avanti’s, where it’s dark. He’s not wearing a pin-striped suit and lighting cigars with hundred-dollar bills the way you might expect him to be. There’s no black hat on his head or sudden cascade of diminished chords that usually accompany the appearance of movie villains. Instead, he’s an ordinary looking Erie resident – not the image of the evil capitalist his profession sometimes conjures – whose roundish face and generous laugh makes you feel instantly at ease.

Doyle owns Reliance Well Services in Erie, a small company with eight full-time employees that “fracks” – or uses hydraulic fracturing – to extract natural gas from the ground. That’s the process by which water mixed with sand and chemicals is forced at high pressure into a drilled hole to split or fracture gas-bearing rock, releasing the gas for extraction.

That process has come under a lot of scrutiny and criticism. People are concerned that the process injects toxic chemicals too close to our freshwater aquifers, that drilling can result in spills and releases of methane into water supplies, and that the byproducts of fracking – millions of gallons of water contaminated by chemicals and heavy metals and salt – stand to endanger the health and safety of future generations. Those concerns have fed the popular imagination. There’s the documentary, “Gasland,” which shows a homeowner lighting his water on fire. And there’s the recent Matt Damon film, “Promised Land,” featuring an oil and gas company strong-arming a community into leasing its land to natural gas exploration.

The concerns, of course, are real. But just like Doyle – a regular in the diner, who chats with the waitress like an old friend whenever she refills our coffee, who greets what seems like every other customer by name, “Hey, how’ya doing?” – it’s hard to characterize fracking as something absolute. Evil. Monstrous. Poisonous. And just like every issue that’s hard or complex or difficult, fracking is not monochromatic, black and white. Instead, it’s full of gray.

“I’m an avid reader,” says Doyle. “I catch all the articles and news on fracking. I can’t tell you how often it’s poorly researched. They’re getting it wrong.”

Doyle tells me the industry is very good at self-policing. He says the state environmental protection agency thinks fracking is safe. He explains how in his shallow wells – he’s a shallow-well fracker, fracking wells at maybe 1,000 feet or so, whereas deep wells go down 5,000 feet or more – the frack plane radiates horizontally, which means it’s not a threat to groundwater. He explains how dilute the chemicals are – maybe one gallon to every 1,000 gallons of water. He tells me about abandoned wells from decades ago, and how they might pose environmental risks. He talks about how he recycles water, he talks geology, bedding planes, clay – he says one of the common chemicals found in fracking fluid is “guar” – a bean derivative found in gelatin and ice cream.

Doyle’s words all come out in a gush, not unlike oil spurting out of the ground like you’d see in the old movies. I came to talk to him about his business, how it works, the equipment, the different jobs, but he keeps steering the conversation to fracking’s critics, the claims about his business, its reputation.

“It’s just like politics,” he says, “there’s the rhetoric, and there’s the reality.”

Doyle is full of surprises and complexity, maybe not unlike the business he’s in. He went to NYU film school. He was a writer – screenplays – and tells a good story about waiting in his apartment for two weeks for a phone call from a California agent. This was after his days in West Texas working the oilfields. Later he was an assistant producer, then started a lighting company for work on commercials, in Pittsburgh. Lightspeed Grip & Lighting.

But the film business got too frustrating for Doyle. He spent all his time waiting on other people. And it was stressful. So, he went back to digging up the earth.

“We have other industries that deserve so much more media attention,” he says. “Who’s going after Monsanto?” At home, he says, his family eats organic. They used to drink goat’s milk. He shows me the screensaver on his computer – twin daughters, 4 years old, in their Halloween costumes. A witch. A princess.

He’s a self-made man, worked his way up from a couple of Texas trucks to an owner of his own fracking company. The outlay is enormous – trucks running nearly a million dollars apiece – and there are times, like last winter when the dirt roads he needed to travel were wet, when his operation was idle, not bringing in any money. Oil and gas is a boom-and-bust-cycle business, of course. Back in the Texas days, when oil prices were high, money flowed like the oil they drilled. But then – boom! – just like that, the price drops, there’s a depression, and you’re stuck making the payments on your equipment, and your profits are razor-thin.

By fracking – extracting the natural gas we use to heat homes, thereby creating electricity, Doyle feels like he’s actually doing something important – unlike his time in the film business. Gas burns cleaner than other fuels – “40 percent cleaner than diesel,” he says, “60 percent cleaner than coal” – and it’s locally produced. That means we’re not giving money to the dictators and mullahs sitting on oil reserves halfway around the globe.

“With energy, it’s a great service,” says Doyle. “We keep people warm.”

Doyle points out that much of fracking occurs in depressed rural communities. He’s providing jobs, injecting money into communities where there really isn’t much else going on. “My top guy will make 85 to a hundred thousand dollars this year,” he says. “Where the hell are you going to make that kind of money in Bradford [County]? Who’s showing up with that kind of job?”

He lays out his vision for the future. Natural gas replacing diesel, especially for the big trucks that work the highways. People converting their cars to natural gas, the air in cities clearing up. Natural gas replacing coal. The end to mountain-top removal mining, coal-fired power plants.

It’s an intoxicating vision, and I’m caught up in it. Doyle believes in his business. He believes it’s safe. He believes it’s clean. He believes natural gas reduces pollution, gets us away from coal, provides jobs. He believes these things with every fiber of his body. And this belief is built on a foundation of experience. He is, after all, the fracker.

But. There are the concerns, and the concerns are real. Still, the least I can do is try to get it right.

“You’re welcome to come down to a frack job,” says Doyle. “Come fracking with me.”

Hell, yeah.

There are no “unconventional,” or fracked, gas wells in Erie County. And that’s not likely to change soon. According to David Yoxheimer, a Penn State hydrogeologist, the Marcellus shale is simply not deep or thick enough to provide the yields that gas companies need to cover the expenses of fracking.

The Marcellus shale is an enormous rock formation brimming with natural gas – as much as 500 trillion cubic feet, according to Penn State researchers. The formation resembles a giant trout leaping across several Appalachian states, with its tail stretching down as far as eastern Kentucky and central Tennessee, its body arched over West Virginia, Ohio, and Pennsylvania, and its nose thrusting over the New York border. Drilling natural gas from the shale wasn’t profitable until horizontal bore drilling – a process that allows drilling crews to push out their drill on a horizontal plane far below the surface – was developed about a decade ago. That process allows gas companies to drill lengthwise down the plane of rock and extract more than enough gas to make the drilling profitable.

And now the gas tap is wide open. But not in Erie.

“Two to three thousand feet is pretty marginal,” said Yoxheimer, speaking of the depth of the Marcellus shale under Erie County. “There’s not enough pressure to force the gas out of the shale.” Shale also has to be deep enough to be subjected to enough heat and pressure to form the hydrocarbons that make up natural gas.

“The shale there is pretty thin,” added Yoxheimer. “It’s less than 50 feet thick. The thinner the shale, the less oil and gas.”

But fracking might have a future for Erie, even if it’s not immediate. Under the Marcellus shale in Erie County, roughly two to three thousand feet deeper, is another formation brimming with potential: the Utica shale. It’s also much thicker than the Marcellus, some 200 to 250 feet thick.

“Some oil and gas companies are testing [the Utica shale’s] viability,” said Yoxheimer. “Once they prove it out in those areas, they would expand their drilling.”

But that won’t happen until the price of gas rises. Peaking around $15 per thousand cubic feet in the mid-2000s, the price of natural gas has fallen to about $3.35 today, thanks to expanded drilling and a glut of the product on the market. That price isn’t enough to fund the expensive exploratory drilling that invariably proceeds active, productive wells.

When prices rise, Erie County will likely become a target for gas exploration and drilling.

While those concerned with Erie County’s water quality can breathe a sigh of relief over the immediate prospects of fracking here, it’s true that this lack of fracking also deals a blow to the county’s finances. Besides missing out on the benefits that a drilling boom brings to a community – the jobs, investment in infrastructure, the growth in tax base – the fee structure that Pennsylvania designed around its natural gas drilling leaves the county largely dry.

“Normally states have what’s called a severance tax [on natural gas drilling],” said Mike Wood, Research Director at the Pennsylvania Budget and Policy Center, “based on an amount of production and based on the sales price of the commodity.” State revenue rises and falls with production. “It’s kind of like a sales tax.” States that use a severance tax include Oklahoma, Texas, and Wyoming – hardly liberal states with tax-imposing tendencies.

In Pennsylvania, the Assembly designed what’s known as an “impact fee,” a fee for each well in the state charged over a 15-year lifecycle of a well. The fee is flat, and isn’t based on production, but any yield after 15 years is fee-free. Estimates place Pennsylvania state revenue as low as 30 percent of what would be expected if the state used a severance tax. In short, the impact fee ended up being a big boon to the oil and gas industry.

The impact fee was a direct result of the election of Pennsylvania Gov. Tom Corbett and his pledge not to impose any new taxes in the state after election. “They were jumping through a lot of hoops to avoid a tax,” said Wood. “It’s a very unusual, and I’m not sure, a very forward way of looking at this,” added Wood. “Especially after the drilling is over. The state’s going to be on the hook for the cleanup.”

“The remaining 40 percent goes to the Marcellus Legacy Fund,” wrote Wood in an email, “which gets divided up between funding projects across the state and some minor revenue for counties across the state based on population.”

This is where Erie receives its share of the drilling impact fee. And that share is not much. According to a Pennsylvania Public Utility Commission report provided by Wood, Erie County received $238,032.39 through December 2012 from the Marcellus Legacy Fund. While that amount doesn’t include Marcellus-funded state projects, like road repair that might impact Erie, says Wood, it “should still be in the same ballpark.”

That 238,000 and change – or its approximation – comprises a mere 0.2 percent of all revenue from Marcellus shale hydrofracking distributed to counties and municipalities across the state.

“Unless there is drilling in Erie County, this is the type of revenue that the county should expect in future years,” said Wood, “whether or not a lot of workers in the industry live in Erie, trucks pass through Erie going between natural gas sites, or pipelines taking gas to markets are laid all over the county.”

In this way, the drilling-impact fee works in the opposite way of the state’s sales tax. Most of the state’s sales tax revenue is raised in metropolitan areas of the state – Philadelphia, Pittsburgh, and Erie – but is distributed equally across the state.

In fact, if you look at a political map of the state, you’ll notice that those counties hurt most by the distribution of sales tax and drilling impact fee revenue are Democratic strongholds, and those areas reaping in the most revenue from hydrofracking – in the northeast and southwest corners of the state – are far from liberal.

In that way, the political interests of the state’s Republican governor, Tom Corbett, are also well served by the drilling impact fee structure. By distributing the bulk of the Marcellus shale monies to conservative counties and areas with a lot of “Reagan Democrats” – blue-collar swing voting blocs that sometimes vote Republican – the state’s drilling policies benefit those whose votes Corbett needs for re-election in 2014. And that the impact fee greatly benefited the oil and gas industry’s finances – a lobbying sector that contributed $1.49 million to Corbett’s 2010 campaign – bodes well for Corbett’s re-election campaign funding.

Wood admitted that the drilling impact fee “does have a very specific pattern the way the map is drawn out” but wisely refused to speculate further, other than to say that “very little of that fee goes to protecting the environment.

“That was deliberate.”

I’m at my son’s soccer practice when Doyle calls. The fracking job is a no-go. The operator isn’t comfortable with me being on site. He feels like the industry has been burned so many times by the media, Doyle explains, he’s nervous I’ll see something at the site I won’t understand, and I’ll misrepresent or misstate what’s actually going on.

Doyle is embarrassed. He thinks the operator is making a mistake. How can you tell the story right if you won’t let reporters see what’s going on? “The oil business has done a poor job, a really poor job of getting its story out,” he says. “They just let the media beat the shit out of it.”

He says he’s going to another job for a different operator the next day, and maybe I’ll be able to come along then.

When he hangs up, I’m left wondering. Are all the concerns about fracking the byproduct of poor media coverage? Like all things to do with fracking, I find out, the answer to that question isn’t easy.

For starters, there’s no evidence that the actual process of fracking – the use of pressurized water, sand, and chemicals to extract gas – has affected any aquifer. As of yet, no state regulation agency has found that fracking chemicals have migrated from fracked rock to an aquifer. The one exception – fracking chemicals found in an aquifer in western Wyoming – was, according to Yoxheimer, likely the result of a vertical well in sandstone. That is, from an old well drilled in different rock and by different methods than what currently occurs in Pennsylvania.

Of course, that fracking companies often hide behind laws protecting trade secrets to not divulge the full list of chemicals they use in the fracking process inhibits investigators’ ability to accurately determine the presence of fracking compounds. Still, it seems fracking itself is reasonably safe.

The same can’t be said for the process of drilling.

“At one point, we thought that natural gas would be a bridge fuel from a dirty past to a clean, renewable future,” says Jeff Schmidt, director of the Pennsylvania chapter of the Sierra Club. “We now realize that there are a lot of problems with the production of natural gas that make it as dirty as coal.”

For one, he cites the byproducts of well development, one of the more news-worthy of which are methane leaks into local groundwater – it’s that methane contamination that allows people to light their taps on fire in such spectacular fashion. In Dimock, Pa., for example, gas wells contaminated as many as 68 drinking wells with as much as four-times the acceptable state level of methane. Closer to home, several homes in Millcreek in 2007 had to be evacuated because of methane contamination of their water as a result of leaks from nearby gas wells.

“There’s plenty of evidence that fracking has ruined people’s water supplies,” said Schmidt.

Methane leaks are the byproduct of drilling, not fracking. Drillers create a kind of concrete sleeve – called a “casing” – for the part of the well that passes through an aquifer. If the case isn’t constructed properly or is degraded, contaminants from different levels of the well – including methane – can leak into the aquifer. If the leaks are repaired or the wells plugged, the contamination usually ceases.

Another concern centers on the sheer volume of water used for fracking. “When you withdraw 3, 4, 5 million gallons of water for use at a frack site,” says Schmidt, “that’s going to reduce water flow at surface streams and rivers, and in some cases, it can have a real harm on fish and aquatic populations.” Burning natural gas does produce water vapor – more than enough to replace the water used to frack – but that doesn’t help the local ecosystem when the gas, say, is burned overseas.

The most serious concern Schmidt identified, however, is with fracking wastewater. After a well is fracked, water contaminated not only by fracking chemicals, but by natural contaminants found underground – heavy metals, salt, radioactive material – returns to the surface. This wastewater poses a threat to human health and the environment.

Schmidt pointed out that a lot of this wastewater had been dumped illegally, and certainly that’s the truth. There’s known cases of hauling and fracking companies that dumped wastewater in storm drains, rivers, and abandoned mine shafts. But even past proper disposal of wastewater posed problems. Earlier, wastewater had been hauled to wastewater treatment plants – but those plants were unable to properly treat the radioactive materials in fracking’s waste, and contaminated water was released into the Monongahela and Susquehanna Rivers. Pittsburgh’s water supply.

In 2011, the Pennsylvania Department of Environmental Protection asked the oil and gas industry to stop using treatment plants for wastewater disposal, and for the most part, frackers began either recycling fracking wastewater or hauling it to Ohio to underground storage sites – disposal wells. But even those methods of treatment aren’t wholly safe. Disposal wells “can cause earthquakes by raising the subsurface pressure,” according to Scientific American, and recycling wastewater, some claim, only serves to concentrate its contaminants.

Schmidt also complained about the regulation of the drilling. “The [state] Department of Environmental Protection does not have sufficient staff to monitor all the wells at the different stages they occur – they can’t get to all the wells,” he said.

“They’re not able to meet their own requirements.”

An Erie environmental lawyer, Mark Wohlford, thinks this characterization of the state regulators isn’t fair. “The DEP was not prepared when the Marcellus shale drilling first hit,” he said. Existing regulations didn’t cover unconventional wells. “You can’t change statutes and regulations overnight.” A lot of abuses occurred during the first rush to drill horizontal wells, but since then new regulations put into place do a pretty good job of monitoring wells, establishing better water management, and responding to issues.

Wohlford also noted that old, abandoned wells might pose bigger risks than new wells. Often the location of wells aren’t known, and the quality of their casing – some of the earlier ones were made of wood – are poor, making them more likely to leak hazardous material into water.

But then there’s the larger issue behind natural gas: climate change.

“If we’re working to wean ourselves off of fossil fuels, like coal,” said Schmidt, “moving from coal to natural gas isn’t going to be beneficial to the climate.” In fact, said Schmidt, that natural gas is so cheap and pollutes much less than coal, there’s a danger we’ll get locked into natural gas for decades as we begin to replace coal-fired plants with natural-gas plants.

All of this adds up to an energy source that has some serious problems, and isn’t the shiny, new, safe fuel its most vociferous advocates claim. On the other hand, some of fracking’s worst environmental dangers – illegal dumping of wastewater, improper drilling – seem to stem, not from the technology itself, but from that first Wild-West rush to exploit a massive new source of fuel. That is, most of the worst of fracking is avoidable and preventable.

Fracking has warts. But so does any energy source. Burning coal spews toxins into the air, and there’s little worse environmental devastation than mountain-top removal mining. Oil is another fossil fuel, burns dirtier than natural gas, and too much American taxpayer money is used to secure it militarily. Wind and solar are intermittent and costly and come with their own environmental concerns.

We simply consume too much energy. Maybe the only solution, such as it is, is to change our consumer-mad ways. We’re wasteful and thoughtless and obsessed with our gadgets and toys and material possessions. And that’s the root of the problem, isn’t it? That’s an easy sentence to write, but somewhere coal is ignited to turn the turbine that generates the electricity my computer uses as I type these words.

I get Dolye’s text at about nine at night. “Stuck in hole,” it reads. “No good tomorrow.” The fracking is off.

I’m disappointed. I had no malicious design about seeing a frack job. I just wanted to see the equipment and the work. I wanted to hear it, smell it. I’d been looking at the pictures on Reliance Well Services’ website, of the trucks with massive equipment on their backs, of convoys snaking through winter woods, and I had this childish desire to sit in a truck cab and pull levers.

Perhaps it was for the best that I couldn’t go.

To console myself, I instead drove to North East, up to the grape farms along East Main Street by I-90. It’s some of the most picturesque landscape in Erie County: rows of cultivated grape vines on gently undulating land, rolling downward toward the lake. Snow still covered a significant part of the ground, especially on the wooded ridge southwards beyond the highway, but the lake was that bright-colored blue it gets when the midday sun is out, and the land had the look of the Mediterranean.

This landscape was ground zero for the county’s most recent brush with fracking. A little over a year ago, Lake Erie Energy Partners, LLC leased land for about a dozen drilling sites, an action that was met with much local resistance and led the township to consider a fracking ban. Citing concern for the ban, the company last May halted operations.

On a slight rise close to the I-90 on-ramp sit the Mobilia Produce Market and Arrowhead Wineries. A hand-written note on the market door lets me know it’s closed for the season and points me to the winery, whose doors are bedecked with

Penn State flags. Inside is a gift shop with shirts and knick-knacks, even a stand for Penn State-and Wine-opoly. I’m greeted warmly by the clerk; she takes my dollar for tasting and pours me small glasses of red wine. I try the Chamourcin and the Cabernet Sauvignon, but they’re acidic – common for wines in the region. The clerk and I chat about wine-tasting and local varieties, and then she suggests the Cabernet Franc. I taste it, and it’s good. It’s dry and elegant, with a hint of cinnamon, so I buy a bottle.

I’m here because the market and winery and land is owned by Nick Mobilia, one of North East’s citizens that got caught up in the brouhaha over fracking. Earlier in the week, I had called him and talked about his involvement opposing Lake Erie Energy Partners’ drilling. And to my surprise, I found out that Mobilia was not at all an opponent of fracking.

“Ninety-nine percent of these wells are perfect,” he said. “The landowner makes money, the wells provide jobs. We’re sitting on a world of gas, and I’m just excited about the gas industry.”

Like Doyle, Mobilia glowed over the rosy future of gas. “There’s going to be a natural gas revolution,” he said. He envisioned a day when people, with cars fueled on natural gas, would fill their cars right at home. “It’s clean when it’s burned,” he said, and thought the big semis would probably start running on gas soon.

When asked about the controversy, Mobilia declined to comment directly about his reasons for his involvement. He didn’t want to rehash the fight that ended last summer. But he did say about fracking, “If it’s done right, it’s safe. But it’s got to be right.”

Mobilia talked about how some “bad players” plagued the industry as a whole, citing incidents of spillage of hazardous materials and noted that the industry itself had to take care of those that operated poorly.

“We need transparency,” he said. And companies that come into communities to drill for gas need to communicate, find out the best and proper way to operate, to respect citizens’ concerns, and to remember to act like a good neighbor. “We need to sit down and talk before they set up,” said Mobilia. “If anyone wants to come here and drill for natural gas, let’s just sit down over pizza and beer, and talk.”

And there it is.

If there’s any one thing that disturbs me about the fracking industry, it’s not the actual process or even the water discharge and potential for harm to the water supply – it’s this. It’s that the state and federal governments have created legislation specially crafted for the oil and gas industry to obscure their work and its after-effects, its potential damage to the environment and human health and safety.

Maybe it is a safe industry. Maybe our worst fears are overblown. But how will we know when fracking operates behind a government-created veil of secrecy?

If fracking really is as clean and safe as its advocates claim, why the need for, say, the industry’s exemption from the Clean Water Act? In 2005, the Bush administration inserted a provision into the federal Energy Policy Act that exempted gas drilling from federal regulations governing injection wells. Likewise, the oil and gas industry and gas drilling received exemptions or special treatment under a number of other federal regulations, including CERCLA, RCRA, SDWA – letters that denote laws regulating drinking water, hazardous waste, and liability for the cleanup of toxic sites.

Also, many frackers are allowed to keep the chemicals they use a secret. Citing that the composition of the fracking fluid is a trade secret, extraction companies are allowed by OSHA, the federal agency that polices work conditions, to not disclose a number of chemicals used in the fracking process.

Things in Pennsylvania aren’t much better.

Last spring, the Pennsylvania legislature passed a bill that contained new regulations to govern gas drilling in the state. Known as “Act 13,” the bill makes a host of wide-ranging concessions to oil and gas drillers. Besides creating the drilling impact fees, the bill empowers oil and gas companies over private property rights and local zoning ordinances.

The most well-known provision of the bill is probably the “gag order” for state doctors. Under the new law, physicians can request and receive information about what chemicals are used in fracking in order to diagnose or treat a patient, but they’re not allowed to share that information with anyone else – including their patients.

One of the worst sections of the bill empowers the Public Utilities Commission to overturn local zoning ordinances if they conflict with gas drilling.

“In Pennsylvania, prior to the passage of Act 13,” says Schmidt, “local government had the authority to zone their communities, define where certain actions can take place. They couldn’t ban fracking, but they could say you can’t put a drill in a residential area, for example.

“Act 13 took that right away.”

Shortly before the provisions of Act 13 were to kick in, Commonwealth Court ruled the changes to zoning regulations were unconstitutional. The case has gone on to the state Supreme Court and is currently pending a decision.

Schmidt perhaps sums up my fears the best: “The gas industry tells us gas is safe, that we have nothing to worry about. Why then are they refusing to disclose what’s in the chemicals they’re using to frack?

“They’re hiding something.”

The oil and gas industry is not having an open discussion with the communities they’re working with. Instead, a battery of laws and regulations has sprung up that cut ordinary citizens and communities out of the loop.

Maybe we’re all wrong about fracking. Maybe we don’t know shit. On the other hand, maybe we do. Maybe we do have concerns about how our towns look, how our water tastes that need to be addressed. And I damn well think we have the right to decide what’s best for our communities.

And then just the other day, I run into Doyle again. Again he’s in a back booth in Avanti’s, only this time his girls are with him. They’ve propped up their Valentine’s Day presents -- matching pink elephants -- against the wall, and they alternate between watching a Wonder Woman video on dad’s phone and mixing salt, sugar, vinegar, oil, and Tabasco sauce in a bread plate. “Making fracking fluid,” I joke.

While the girls mix their brew, their father and I talk fracking. He apologizes for not being able to get me on site for a frack. I tell him what I’ve found, express my concerns and objections, and he pokes holes into my argument, and I into his. It’s a good time.

And isn’t this the way it should be?

 

Jay Stevens can be contacted at Jay@ErieReader.com, and you can follow him on Twitter @snevetsyaj.

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