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03.August.2011

FLASHBACK: Fmr. Dem. Pa. Gov. Ed Rendell on the NYT claims: If the goal of your report about natural gas drilling was to gratuitously frighten Pennsylvanians, then congratulations on a job well done. If it was to deliver an evenhanded examination of the critical balance that must be achieved between job creation, energy independence and environmental protection in regions with large natural gas deposits, then it was a mighty swing and a miss. … [Fmr. PADEP sec. John Hanger and I] strongly disagree that there is lax regulation and oversight of gas drilling there. (New York Times, 3/5/11)

  • Hickenlooper said news reports on fracking — including recent articles in The New York Times — were full of misinformation and distortions of facts, causing a public mistrust and paranoia about the industry. “This is all hyperbole and anxiety being expressed … and no science here,” he said. (Platts, 8/2/11)
  • “Everybody in this room understands that hydraulic fracturing doesn’t connect to the groundwater,” said the Democrat and former petroleum geologist. “It’s almost inconceivable that we would ever contaminate, through the fracking process, the groundwater.” He blamed inaccuracies and misinformation in the media – he named The New York Times three times – for public anxiety about fracking. (Durango Herald, 8/2/11)
  • Colorado Gov. John Hickenlooper, a Democrat, told an audience at the Colorado Oil and Gas Association Energy Epicenter in Denver that groundwater sampling before and after hydraulic fracturing, or fracking, of shale gas deposits was needed to allay public “paranoia.” … He dismissed a recent damning report on fracking in The New York Times as a baseless article meant to excite the public with “hyperbole.” Some state environmental agencies and energy companies say that, if done correctly, fracking poses little threat to the environment. (UPI, 8/3/11)
  • Hickenlooper said the concerns over fracking were overblown and not based on science. (Denver Post, 8/3/11)
  • “It’s almost inconceivable” that so-called fracking fluids affect groundwater because they are released far below the level of the water, Hickenlooper told a Colorado Oil and Gas Association conference in Denver. (Associated Press, 8/2/11)
  • Colorado governor says fracking doesn’t contaminate ground water: Gov. John Hickenlooper today dismissed the fears of activists and community members concerned that the natural gas drilling process of hydraulic fracturing can contaminate groundwater supplies. (Washington Independent, 8/3/11)
  • “Everyone in this room understands that hydraulic fracturing doesn’t connect to groundwater, that it’s almost inconceivable that groundwater will be contaminated,” said Hickenlooper, who worked as a petroleum geologist in Colorado in the 1980s. (Denver Business Journal, 8/2/11)
  • Hickenlooper says it’s “almost inconceivable” that the fluids are contaminating water wells. (Northern Colorado 5, 8/2/11)

Chris Tucker • 202-346-8825This email address is being protected from spambots. You need JavaScript enabled to view it.

WASHINGTON -- Coming on the heels of another rebuke this past weekend from the public editor of The New York Times -- the second such admonishment issued by the paper’s ombudsman in just the past two weeks -- Times reporter Ian Urbina today filed the latest installment in his ongoing and increasingly controversial series attacking natural gas, this time borrowing research from the anti-shale Environmental Working Group (EWG) and a well-known opponent of oil and natural gas in an attempt to blame hydraulic fracturing for contributing to the contamination of a single water well nearly 30 years ago in West Virginia.

Notably, the EWG press release today announcing the results of its year-long, Park Foundation-funded “investigation” of the same exact well was sent two hours before the Times posted its story online – suggesting either that a mistake was made in coordinating the release with the Times, or that EWG wanted to ensure the role it played in influencing the story was properly acknowledged. Either way, the piece itself relies on poor, and at times conflicting, records and accounts to arrive at what appears to be the Times’ firm conclusion that fracturing technology “in fact” caused contamination. The reporter also draws heavily on an after-action report of the “WV-17” well from the mid-1980s written by EPA contractor Carla Greathouse, a long-time opponent of the oil and natural gas industry and a source Urbina has used previously in this series without ever mentioning her prior work and reports targeting the industry.

Lee Fuller, executive director of Energy In Depth (EID) and an engineer with more than 30 years’ experience in the industry, issued the following statement:

“We’re talking about a technology that’s been deployed more than 1.2 million times in more than 25 states over the course of more than 60 years. I think it says an awful lot about fracturing’s record of safety that the best these guys could come up with after studying the issue for an entire year is a single, disputed case from 30 years ago that state regulators at the time believe had nothing to do with fracturing. Three decades later, the technology today is better than it’s ever been, the regulations are broader and more stringent, and the imperative of getting this right, so that we can take full advantage of the historic opportunities made possible by shale, has never been more apparent. Despite the Times’ best efforts, this story does not prove that hydraulic fracturing had anything to do with the contamination of a water well 30 years ago.”

Both the EWG paper and the Times story focus on a well drilled in Jackson Co., W.V. in 1982, using old reproductions of completion reports accessed from microfiche to argue that fracturing must have contaminated the well since records indicate it was properly cased and drilled to depths below the water table. But according to a letter sent in 1987 by West Virginia’s Department of Energy specifically referencing the WV-17 well, the actual cause of any alleged issue may have been related to something entirely different.

According to Ted Streit, then the state’s deputy director of inspection and enforcement, neither regulators nor industry had known back then that a shallower formation commonly fractured for its oil and natural gas resources – the Pittsburg sandstone – actually contained potable water resources in some parts of Jackson County. From Mr. Streit’s letter:

I would like to point out that WV Code 22B-1-20 requires an operator to cement a string of casing 20 feet below all fresh water zones. At the time the permit was issued concerning this well, the Division [of Oil and Gas] had no knowledge that the Pittsburg sand was a fresh water source. This is because in certain areas oil and gas is produced from the Pittsburg. With this case however, the division discovered the problem and took the following steps to remedy the situation: 1) We had a geologist map the Pittsburg sand in the Roane and Jackson country area so that our permits group and enforcement group knew where that sand could be found. 2) We required every well drilled in the area to have casing cemented up over the Pittsburg sand.

According to Greg Wrightstone, a geologist with decades of experience completing wells in West Virginia: “My hunch is that the operator had an idea about trying a completion in the Pittsburgh sand. We saw small shows out of it from time to time back then. They may have drilled through it, fractured it, got nothing back, and then just gave up on it and drilled down to do a standard Berea/shale completion. If that was the case and a neighbor was using the Pittsburg sandstone as a water zone, then of course there could be elements of the fracturing fluid in it because that was the zone being fractured.”

EID is currently working with producers in the state to acquire and analyze whatever records might still be available and relevant to this issue nearly 30 years after the WV-17 well was drilled.

Although characterizing the WV-17 well as a “clear case of drinking water contamination from fracking” in a quote provided to the Times, EWG lawyer Dusty Horwitt adopts a more measured tone in his actual paper, admitting in one section (page 8) that “it is unclear” how fluids could have accessed the well. In another section (page 13), EWG concedes that the West Virginia-based laboratory commissioned to investigate WV-17 “did not conclude that hydraulic fracturing caused the contamination …” And in its press release, EWG admits that “it is possible that another stage of the drilling process [and not hydraulic fracturing] caused the problem.”

Finally, the Times story pulls extensively from a 1987 report written by well-known oil and gas opponent Carla Greathouse, whom Urbina actually credits with giving this story its start. But according to comments published by the American Petroleum Institute (API) contemporaneous with that report, Ms. Greathouse’s work suffered from a “lack of thoroughness” owing to the contractor’s failure “to find or disclose a substantial number of the administrative and enforcement actions by the state agencies.” API also said at the time that it wasn’t able “to find a single case where EPA’s contractor contacted the operator involved to determine their side of the story.”

According to Ms. Greathouse, one of the goals of her 1987 report was to convince EPA to start regulating things such as drill cuttings, pipe scale and produced water as “hazardous wastes,” with an eye on preventing them from being disposed of in a manner consistent with industrial waste rules under the Resource Conservation and Recovery Act (RCRA). After reviewing the Greathouse report, EPA arrived at precisely the opposite conclusion, issuing a report to Congress in 1988 stating that “regulation as hazardous wastes under Subtitle C was not warranted and that these wastes could be controlled under other federal and state regulatory programs.” Ms. Greathouse later told CBS News that the decision was “a very difficult pill to swallow.”


By Tiffany Kary - Aug 2, 2011 6:13 PM ET        Bloomberg News

The U.S. government said it will ask a judge to dismiss a New York lawsuit that seeks to force a fuller environmental review of how natural-gas extraction could affect 9 million water drinkers in the state.

The U.S. plans to ask U.S. District Judge Nicholas Garaufis in Brooklyn, New York, to dismiss the case on the grounds that the state can’t prove injury and doesn’t have the right to sue federal agencies, according to a letter filed with the court yesterday.

The New York state complaint is “barred by well-settled principles of sovereign immunity,” Assistant U.S. Attorney Sandra Levy wrote in the letter to the judge. Sovereign immunity protects the U.S. from lawsuits unless it waives the right.

New York Attorney General Eric Schneiderman sued on May 31, saying a commission that oversees the Delaware River Basin has proposed regulations that will allow hydraulic fracturing, or fracking, at 15,000 to 18,000 gas wells without a full environmental review. Fracking is the process in which water, sand and chemicals are pumped underground to break apart rock formations and release natural gas.

“As our complaint makes clear, the federal government has an obligation to undertake the necessary environmental impact study,” Schneiderman spokeswoman Lauren Passalacqua said in a statement.

Marcellus Shale

Schneiderman’s suit seeks to halt the regulations until the commission complies with the National Environmental Policy Act’s requirement for a full review of all health and safety risks.

The Delaware River Basin Commission, which oversees activities in the gas-rich area known as the Marcellus Shale, has a pending application from XTO Energy Inc., a unit of Exxon Mobil Corp. (XOM), to explore in the area, and has refused to produce a full environmental impact assessment, according to Schneiderman’s complaint.

New York’s claim that it will be harmed is “conjectural and hypothetical, and not actual or imminent,” Levy wrote in the letter. The case also isn’t “ripe” because the agency hasn’t completed its review, she wrote.

The Delaware River Basin covers 58 percent of the land area of New York City’s watershed west of the Hudson River, according to Schneiderman. The region targeted for exploration is protected by a 50-year-old agreement among the U.S. government, New York, New Jersey and Delaware.

Drinking Water

New York City has spent almost $1.5 billion to protect the drinking water that flows from the watershed west of the Hudson, Schneiderman said in his complaint. The money has gone to buying land to serve as a buffer for pollutants, upgrading sewage plants and regulating human activity.

More than 2,000 natural gas wells have been drilled in Pennsylvania, resulting in “hundreds of violations of water pollution laws,” Schneiderman said in the complaint, citing an April 19 blowout of a natural-gas well owned by Chesapeake Energy Corp.

The case is New York v. U.S. Army Corps of Engineers, 11- cv-2599, U.S. District Court, Eastern District of New York (Brooklyn).

To contact the reporter on this story: Tiffany Kary in New York at This email address is being protected from spambots. You need JavaScript enabled to view it.

To contact the editors responsible for this story: Michael Hytha at This email address is being protected from spambots. You need JavaScript enabled to view it.; John Pickering at This email address is being protected from spambots. You need JavaScript enabled to view it.

This is additional information and insight on an article previously posted on this site.
Written by Jon Campbell, Press Connects, A Gannett Company, August 3, 2011

Feds seek to dismiss N.Y. fracking lawsuit

ALBANY -- The U.S. government will ask a federal judge to throw out state Attorney General Eric Schneiderman's attempt to force a study of natural gas drilling's impact in the Delaware River basin, according to a letter filed in court this week.

In the letter, Assistant U.S. Attorney Sandra Levy cites "well-settled principles of sovereign immunity" in making the government's case to have the suit dismissed. The federal government can't be sued in the case, she argued.

Aside from that, Levy contends Schneiderman's suit is without merit because the state can't "demonstrate a cognizable injury" from the Delaware River Basin Commission's decision not to take up a study, calling the potential for harm "hypothetical" and "not actual or imminent."

The letter was filed in U.S. District Court in Brooklyn earlier this week.

Schneiderman's office filed suit against the U.S. Army Corps of Engineers and a host of other agencies in May after issuing an ultimatum the month before.

The lawsuit contends that the federal government, as a member of the multi-state basin commission, is required under the National Environmental Policy Act to study the impacts of high-volume hydraulic fracturing in the river's watershed before the commission issues regulations for the technique.

The commission, which also includes representatives from New York, Delaware, Pennsylvania and New Jersey, is in the process of finalizing its hydrofracking regulations for the watershed, which includes parts of Delaware and Ulster counties. A comment period and a round of public hearings on the proposed rules wrapped up earlier this year.

"As our complaint makes clear, the federal government has an obligation to undertake the necessary environmental impact study," Schneiderman spokeswoman Lauren Passalacqua said in a statement.

In her letter, Levy disputes the lawsuit's claim, saying that that case law shows the Delaware River Basin Commission is not a federal agency and isn't required to take up a study under the environmental policy law.

Both the U.S. attorney's office and Schneiderman's office will discuss Levy's request for dismissal at a conference with U.S. District Court Judge Nicholas Garaufis in Brooklyn on August 10, according to court documents.

It remains unclear how the commission regulations will coincide with the state Department of Environmental Conservation's ongoing review of high-volume hydrofracking, which involves the injection of a mix of water, sand and chemicals deep underground to break up gas-rich shale formations. The technique remains on hold in New York's Marcellus and Utica shale formations until the state's review is finalized, which is expected at some point next year.

Meanwhile, Schneiderman said in a radio appearance Wednesday on WCNY's The Capitol Pressroom that his office is continuing to look at complaints it has received about natural gas companies trying to extend existing gas-rights leases with private landowners.

Several companies, including Chesapeake Energy and Inflection Energy, have sent letters to landowners saying their expiring leases have been extended because the state hasn't permitted high-volume hydrofracking to this point. The companies have cited "force majeure" clauses in those leases, which allow a contract to be extended if unforeseen circumstances prevent one of the sides from holding their end of the bargain.

In 2009, then-Attorney General Andrew Cuomo entered into a $192,500 settlement with Fortuna Energy, which has since been renamed Talisman. Cuomo's office found the clauses in the Fortuna leases weren't sufficient for a force majeure claim, and dozens of Southern Tier landowners were freed from those leases.

Schneiderman said his office is continuing to look into complaints stemming from other companies, but declined to discuss specifics. Two current lawsuits have been filed by private landowners in federal court against Chesapeake for force majeure claims in the Southern Tier.

"We're looking closely at that," Schneiderman said. "We've received some complaints in the past month or two about that -- some earlier, but more lately -- and we're looking into the matter very closely."

-- Jon Campbell is a staff writer for Gannett's Albany Bureau

What follows is a clear communication of issues confronting some New York communities. We suspect that many of our site users and readers will be confronted with issues similar if not the same as Dryden, NY. We feel that rational, well thought out strategies to protect our interests and investments as land owners, tax payers and common travelers down the rocky path of life , are the most fair and prudent paths to travel. Emotionally striking out at those with whom we do not agree may be acceptable at times, but only if the one being hurt, is the striker. We must consider all parties when dealing with issues as acrimonious as has been demonstrated and equally as important financially to the greater community as gas drilling. The position of few very vocal and well funded groups should not be taken as the best or only position available at all costs.  What follows is a communication from the Dryden Safe Energy Coalition (DSEC) to the Town of Dryden NY, Town Supervisor and currently seated Town Board Members. This letter clearly communicates the risks that they may be placing on the taxpayers of their community as well as the injustice that they would be perpetrating on a large group of land owners, whose only faults in this situation are their hopes and dreams for a better future for their family and community, by using the land that they rightfully possess. JLCpulse

Dryden Safe Energy Coalition (DSEC)
c/o Henry S. Kramer

This email address is being protected from spambots. You need JavaScript enabled to view it.

August 1, 2011

Dryden Town Supervisor
Members, Town Board
By E-Mail and hand delivery to Town Clerk

As it appears that the Dryden Town Board will be voting on a complete energy development ban on August 2, 2011, this to present DSEC’s position, to amplify Henry Kramer’s prior statement, and to put the Board on formal notice that if it passes a total energy development ban it will be engaging in knowing prospective violations of constitutional rights, federal, and state law.

If the Board enacts the proposed ordinance it may subject the Town not only to litigation costs but also to potentially hundreds of millions of dollars of taking liability, which would ultimately have to be borne by the taxpayers.  The Board should not take lightly the risk of such potential liability.

Whether or not the Board believes it may somehow legally prevail, the Board should weigh the cost to benefit ratio of adopting this ban.  Even assuming, for argument only, that the possibility of success were 50-50, can the Board risk the chance of a nine figure liability?  Not reasonably.

First, the ban would violate the Fifth and Fourteenth Amendments of the United States Constitution and constitute a taking requiring just compensation.  The ban entirely confiscates mineral rights to an estimated value of $175 million (valuations may vary, but the significance of the sum involved remains), not including the additional value of royalty rights also likely in the many millions and the costs of litigation.  Alternatively, the Board’s action may be viewed as a 100% confiscatory tax on wealth in mineral rights, a tax outside the Board’s powers, not authorized by and preempted by state law.  Board members have fiduciary responsibilities.  Given the magnitude of potential damages and the outsized legal risks, it is simply not fiscally prudent behavior to adopt this ban.

Second, the ban would be in violation of the state’s preemption of the regulation of drilling.  In the May Dryden newsletter, the Town Supervisor so acknowledged.  Legal authorities give ban ordinances little chance of surviving court challenge.  The wiser course, when faced with legal doubt, is not to act.

Third, the ban as a zoning ordinance is in violation of many of the holdings of the New York Court of Appeals in the Udell zoning case, a copy of which was previously supplied the Board.  Read the case and it should guide the Board.

Fourth, the ban is ultra vires, that is outside the authority of a town board.  There is no authorization in state law for the Town to enact a complete ban, on the contrary Town action is preempted.  An Article 78 proceeding may follow.

Fifth, a Town may not, by local ordinance, nullify, or make entirely nugatory, state created and recognized mineral rights and general laws.  To do so would, in effect, nullify state law and state created rights within Dryden.  If towns could do this, they could pick and choose which state laws would apply.

Sixth, section 5 of the proposed ban which would have the Dryden ban trump state and federal permits and actions, as a matter of black letter law, is invalid.  It is reasonable to conclude that the Town Board will be knowingly attempting to override and destroy constitutional, federal, and state rights.

Seventh, the ban is discriminatory.  It shifts the entire alleged environmental protection costs onto land and mineral rights holders instead of the general population.  This is not an incidental shift but an overwhelming burden, extinguishing millions of dollars of thousands of individuals’ property rights.  If such an action is taken, it must be a general charge on the population of the Town.  The survey on which our comprehensive plan is built calls for compensation for takings.  Further, such compensation was provided when the Town bought development rights, recognition of the injustice of unpaid taking.

Eighth, adoption of this ban would cloud the land titles of thousands of Dryden residents who have signed leases on 41% of Dryden land.  A ban is a classic force event and may prevent these leases from ever expiring.  A ban could thus condemn many Dryden residents to land sale and mortgage difficulties for years to come, a harsh and selective punishment.

Ninth, the Town may not be insured for any act it takes which it knows, or reasonably should know, is illegal.  The Town is notified it will be in violation of constitutional and legal rights if it enacts the ban.

Tenth, if Town Board members, having notice, violate constitutional and legal rights, they may lose their qualified immunity and be subject to suit in their personal (possibly uninsured) capacities.

In conclusion, the Town should affirmatively anticipate that federal and/or state court action against it is highly probably, if not virtually certain, on one or more of the above cited or other claims.  You cannot extinguish hundreds of millions of dollars of property values held by thousands of residents and separate mineral rights held by both in and out of state people without anticipating legal actions.  The energy industry has its own causes of action and may also sue.

It is highly probable that this overly broad ban, as written, will have unforeseen or unintended consequences.  For similar reason, the County Legislature deferred action on a road law.

The more sensible alternative and responsible fiduciary response is to defer any action on a ban until ban challenges elsewhere are litigated.  Certainly, the State is far from ready to begin permitting wells, so there is no need for haste.  You have at a minimum into 2012, if not longer.

The Town should take notice that a ban is inconsistent with environmental advocates’ position favoring the development of natural gas under the Kyoto protocols.  It is also inconsistent for the Town and individuals to use energy from elsewhere while refusing to allow its regulated development locally.  And, failure to develop domestic energy means foreign energy dependence, foreign wars to protect vital energy interests, and the sapping of revenues the government could use to pay debt and provide programs.

DSEC’s mission is to offer balanced, data driven information on safe energy development, to logically and numerically evaluate benefit-to-risk ratios, free of emotional bias or ideology, and to bring together people interested in an analytical approach to energy issues.  A ban does not serve to meet this mission.  It does not allow for a “middle way” in which there is lawful, safe, regulated energy development.  Legally, we believe a total ban is an unnecessary high risk strategy for the Town and which in its uncompensated takings is unjust.

The Board is now on notice.  It is DSEC’s hope the Board will do the prudent thing and recognize there is both division of opinion in Dryden and significant large scale dollar risk.  Both drilling without regulation and refusal to drill are equally extreme solutions.  We oppose both.  Please opt for deliberate moderation and do not adopt in haste this radical total ban.

Sincerely yours,

Dryden Safe Energy Coalition
By Henry S. Kramer, Tracy Marisa

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