In the Black: How Federal Regulations of Shale Gas Can Save the Economy and the Enviroment

 

In the Black

How Federal Regulation of Shale Gas Can Save the Economy and the Environment

James Campbell, Nina Orellana, Mary Emma Searles

UMass Amherst

 

This April marks the sesquicentennial anniversary of the signing of the treaty that ended the American Civil War.  Fast forward 150 years and it appears there are still some towns in upstate New York that are looking toward the south with hopes of secession…well, Pennsylvania that is.  First reported by WBNG-TV Binghamton, fifteen towns that share a border with Pennsylvania are researching the plausibility and legality of actually removing themselves from the state of New York and incorporating with their neighbor to the south.  Among the list of reasons why these long time New Yorkers yearn to join the Keystone State are complaints of high property taxes, low sales tax revenue, and a recent decision to deny the region a casino licence.  However, these qualms pale in comparison to the real issue at hand, a potential game changer that could turn this otherwise economically destitute area around overnight.

An economic boom has come to Pennsylvania.  Between 2007 and 2011, income rose by 19% in some counties, over 44,000 jobs were created, and $3.87 billion was added to the state economy (Furchtgott-Roth & Gray, 2013).  What do these numbers have in common?  They represent the money brought in by a relatively new industry – hydraulic fracturing, known as “fracking”.  According to the Manhattan Institute, a conservative think-tank, this new method of drilling revitalized the Pennsylvania economy and is capable of doing the same for other states within the large Marcellus shale deposit on the East Coast (Furchtgott-Roth & Gray, 2013).  It is numbers like these that have spurred the 15 towns just north of the border to seek a motion of secession as a direct result of a December 17, 2014 all out ban on hydraulic fracturing by New York governor Andrew Cuomo.

For a small town in Northern Pennsylvania, however, the price for economic growth may be too high.  In 2009, Norma Fiorentino, a resident of Dimock, PA, came home to find that her drinking water well had exploded with enough force to shatter several thousand pounds of concrete (Lustgarten, 2009).  The culprit seemed to be natural gas that crept into her well and built up over a matter of weeks – natural gas that had been pushed in by a nearby fracking well (Lustgarten, 2009).  The explosion in Dimock was accompanied by methane contaminated water in nearby homes and the explosion of other wells, all blamed on leaky well cases at the profitable fracking sites in the area (Lustgarten, 2009).  The town of Dimock remains split – although the EPA officially declared the water safe, some residents are still doubtful while others resent the uproar that interferes with the economic gain of drilling (Banerjee, 2012).

Leaks like this are occurring all around the United States at rapidly increasing rates.  Fracking has become a scare word in the media and environmentalists have managed to ban it outright in New York and other states.  This only brings tension to communities that depend on this new technology for an income and causes unnecessary political strife.  People feel that their way of life is endangered while others see it as gambling with the environment.  A way to appease both sides would be to introduce strict regulations on the federal level.  By standardizing and tightening regulations, we can slow the negative effects of fracking while continuing to work towards energy independence.

The Rise of Fracking

Since the turn of the century, this relatively obscure natural gas extraction process has exploded onto the energy scene and now poses a powerful alternative to traditional fossil fuels.  “In 2001, shale gas provided less than 2 percent of the total U.S. natural gas production; now the figure is approaching 30 percent” (Schachter, 2012, p.25).  What provoked this adaptation?  Geologists have known for years that there are valuable hydrocarbons trapped in porous shale deposits scattered across the country, but they did not know how to extract it.  The credit goes to George P. Mitchell, a Texas wildcatter who was determined to get it to the surface.  Mitchell and his team discovered that by combining a traditional vertical well with horizontal fracturing of the rock, engineers could extract gas trapped in the Barnett Shale in North Texas.  After 10 years of trial and error, Mitchell sold his Barnett “play” for $3.5 billion in 2002, by which time his gas field had become one of the most productive in the country (Schachter, 2012).  From those early days, not much has changed in the way of regulation, and this has precipitated various harmful consequences from those players who take advantage of the loose oversight.

Potential Health Impacts

Since fracking is such a new technology, there have not been many studies to determine the effect they may have on human health in populations surrounding fracking areas.  Due to the nature of environmental testing, our knowledge is often limited to toxicants present at a single time point, failing to take into account potential cumulative effects of exposure to chemicals used in fracking (Bamberger & Oswald, 2014).  However, preliminary studies have shown that proximity to fracking wells can be correlated with human health problems.  A study by Hill and Currie et. al has shown correlations between low birth weight and infant respiratory problems, and proximity to gas wells in Pennsylvania (as cited in Bamberger & Oswald, 2014, p.1862).  Another study by McKenzie et. al showed correlations between birth defects and proximity to gas wells in Colorado (as cited in Bamberger & Oswald, 2014, p.1862).  While these studies are certainly only correlative and do not necessarily show a causal relationship, the link between health issues and fracking is clearly present and is worth consideration.

In addition to direct impacts on human health, there may be  problems that arise through the food we consume.  There is a lot of fracking activity on farmland, bringing livestock populations close to accidental toxin release.  Cows that were kept on pasture close to gas wells came into contact with chemical exposure due to either wastewater leaks or illegal dumping.  The cows that were exposed in this way had higher instances of reproductive problems, respiratory illnesses, and sudden death (Bamberger & Oswald, 2014, p.1861).  This chemical exposure will certainly affect the safety of the meat we consume.  In 2009, a herd of cows in Louisiana died after direct exposure to fracking fluid, and were not sent to slaughter due to health concerns (Bamberger & Oswald, 2014, p. 1862).  However, a herd in Pennsylvania that was exposed to fracking wastewater was merely quarantined – and although they did show high rates of reproductive failure, they were sent to slaughter anyway (Bamberger & Oswald, 2014, p. 1862).  In a case like this, the impact of the exposed cows on the food chain is unknown.  The chemicals they were exposed to are likely to be present in their meat, potentially spreading the negative effects of exposure even to consumers not in proximity to gas wells.  Through the vector of livestock, fracking accidents can have impacts across the country.

Environmental Issues

Water contamination can also be a serious concern. What is key to remember is that it is an entirely preventable occurrence.  Most of the cases of water contamination come from wells that were drilled improperly years ago and have since degraded after being abandoned in a derelict state due to poor regulation.  The lack of strong legislation restricting the method of drilling and well creation have resulted in poorly constructed shafts with dire consequences.  On average 20 million litres of water is shot down into each well, combined with large amounts of sand and other materials to help keep the fissures open (Howarth, Ingraffea, & Engelder, 2011, p.272).  The injection process also involves a slew of other materials, which are often toxic and many are kept secret. When done without the oversight of certified geologic evaluators, this can create larger than expected faults within the rock structure that can result in unexpected tectonic activity and contaminated groundwater can result from poorly treated flowback water (Figure 1: Howarth etc. 2011, pg 272).  Howarth et al. (2011) explain that a peer reviewed study found that 75% of wells sampled within one kilometer of gas drilling of the Marcellus shale in Pennsylvania were contaminated with methane (Howarth etc., 2011, p.273).  The fact is, besides global warming, there is no huge environmental reason to outright ban fracking.  Yes, there are environmental risks like contaminated groundwater or blowouts, but these risks can be managed through rapidly improving technologies and regulations (Howarth etc., 2011, p. 274).

Costs and Benefits

Even if regulations are imposed that standardize construction methods and waste water measures in order to minimize pollution, the overall consensus amongst environmentalists is that fracking should be banned outright because any burning of fossil fuels increases the greenhouse effect on our planet.  While proliferation of fossil fuels has been proven to increase the impact of global climate change due to human activity, the reality is that this relatively new process has become such an integral part of the US economy that the projection is only for it to expand in the foreseeable future.

A reversal of the current economic trend could spell disaster for everyday Americans.  For example, the cost of home heating natural gas has plummeted from $15 per thousand cubic feet to just $2 (Schachter, 2012, p.25).  North Dakota now holds the nation’s lowest unemployment rate below 3%, almost certainly exclusively due to recent exploitation of the vast Baaken shale oil fields (Schachter, 2012, p.25).  Since 2006, in the Marcellus region of Pennsylvania, drilling has contributed $1.3 billion to the state economy and tens of thousands of jobs have been created in the fracking industry itself and all the surrounding businesses that pop up in such newly fortuitous locales, (Schachter, 2012, p.25).  Until alternative energy sources are available and profitable at levels currently exploited by the natural gas industry, the use of fracking will continue to grow.  Only in about the last decade has fracking ushered in a new era of energy independence that this county has not experienced for a century.  With strict but reasonable regulations, this resource can be responsibly exploited to the point where it is celebrated for the energy revolution it has started.

At this moment the natural gas industry in the United States accounts for $385 billion in economic activity and nearly 3 million jobs (Howarth et al. 2011, p.274).  According to Howarth et al. (2011) fracking alone produces 50% of locally produced natural gas and 33% of petroleum (p.274).  Furthermore, Howarth et al. (2011) states that, “[a] moratorium on new wells [will] have immediate and harsh effect,” (p. 274) on the US economy that in turn would affect the global economy.  This is a monumental change from the recent past when our economy has been so tightly bound to the interests of foreign governments who have traditionally controlled the oil agenda.  However, the proliferation of fracking could signal a new leader amongst the world economy. The potential impact of fracking is illustrated by the sheer volume of gas obtainable in the US:

According to government experts, the United States possesses more than 2,500 trillion cubic feet of technically recoverable natural gas. That is the equivalent of 412.5 billion barrels of oil, and it means that America right now produces more natural gas per day than Saudi Arabia produces oil (Schachter, 2012, p. 25).

Energy independence will not only rid us of these inconvenient entanglements but will significantly boost an already recovering domestic economy and cement our position as the world’s leading energy producer.

Regulation to the Rescue

Making fracking safer is certainly possible.  In many states already, there are rules and regulations in place in order to minimize potential damage due to fracking.  Prior to the ban in New York, for example, fracking permits were only issued provided that the proposed well site was not near natural resources like streams and wetlands in case an accident did occur (Wiseman, 2010).  All states in the Marcellus shale region require frackers to have some level of erosion and stormwater controls in place (Wiseman, 2010).  However, some steps of the drilling process are regulated to different extents in different states, allowing contradiction of safety levels.  In New York, spill regulation was spelled out and each large tank needed to have a special secondary containment unit to catch potential spills before they happened.  In contrast, the state of Ohio simply requires a pit beneath surface activities to control spills that may occur rather than prevent them (Wiseman, 2010).  By creating proactive regulations, New York was able to stop accidents rather than react to them; Ohio’s lack of regulation creates situations where seepage and groundwater contamination are much more likely.  In West Virginia and Pennsylvania, operators must prove that their treatment plan can handle the large volume of waste and contaminants before being allowed to proceed; there are no such regulations in other Marcellus states (Wiseman 2010).  Multiple states have enacted laws regarding how closely a well can be built to a water source, intended to prevent flooding of pits and wells and also contamination of water sources, in the wake of the Pennsylvania fracking accidents that contaminated nearby wells (Wiseman 2010).

In order for fracking to become a possible economic boost for the entire nation, the whole country needs the ability to frack safely and reliably. To do this, some federal control will be necessary.  Environmental pollution does not respect state lines – if groundwater is contaminated in a state with lax regulations, it may seep into a neighboring state regardless of the safety measures of this state. In order to protect all our land, the country must work together towards the same overall goal of safety.  There are several steps that can be taken to minimize environmental damage while still providing the economic benefits of using local natural gas.

The first step is to properly track where companies are allowed to frack.  Adequate distance from water sources should be a priority, preventing spillage from affecting wells, rivers, and streams.  Additionally, fracking on farmland should be discouraged due to the impacts on livestock living nearby.  If farmers choose to lease their land to fracking companies, their crops and livestock should be kept at a safe distance from potential exposure.  Animals that may have been exposed should not be allowed to be sent to slaughter, keeping their potential health problems from spreading through human consumption.

Even if fracking is removed from high risk areas, steps must be taken to prevent accidents.  All equipment should be inspected regularly to catch weak points where leaks may occur.  Additionally, containment units should be used in order to control leaks that do occur, rather than allowing leaks to seep into the ground and cause damage like the explosions in Dimock.  By focusing on preventing accidents, money will actually be saved in the long run by avoiding catastrophic consequences and potential insurance payouts.

An excellent example of fracking regulation is coming from the state of California.  Working with pre-existing boards and agencies to monitor these new problems that stem from this technology, they have managed to produce a comprehensive plan that covers all the bases. It is a completely “do-able” model; the division of work makes regulation not a complete burden on one agency.  The work is also divided to agencies

that know the most about that particular topic.  For example, the California Water Resources Control Board will work to develop criteria to monitor groundwater, a task that their agency will have the correct resources to perform (CAFrackFacts, 2013).

What we are suggesting is a comprehensive overhaul of the regulations currently in place.  Although this would be a major change, the consequences of accidents in this area are too high to be allowed to continue.  In order to balance America’s need for domestic energy with the potential environmental impacts, we must be strict about where fracking occurs, how it occurs, and increase levels of responsibility in the industry.  Fossil fuels in their finite amounts cannot be a permanent solution to our energy crisis, but by improving on the safety of our drilling we can frack as efficiently as possible while we develop new solutions.

 

 

References

Bamberger, M., & Oswald, R. E. (2014). Unconventional oil and gas extraction and animal health. Environmental Science: Processes & Impacts, 16(8), 1860-1865. doi:10.1039/C4EM00150H

Banerjee, N. (2012, March 18, 2012). EPA finds Pennsylvania well water safe after drilling.

Furchtgott-Roth, D., & Gray, A. (2013). The economic effects of hydrofracturing on local economies: A comparison of New York and Pennsylvania. New York, NY: The Manhattan Institute.

Goggin, C. (2015, Feb 23). Southern Tier towns looking to cut NY ties. WBNG Binghamton. Retrieved from http://www.wbng.com/news/local/Southern-Tier-towns-looking-to-cut-NY-ties–292486411.html

Howarth, R. W., Ingraffea, A., & Engelder, T. (2011). Natural gas: Should fracking stop?

Nature, 477(7364), 271-275.

LA Times “California Fracking Regulations.” 2013. CAFrackFacts, n.d. Web.

Lustgarten, A. (2009, April 27, 2009). Does natural gas drilling make water burn?. Scientific American.

Schachter, A. W. (2012). Energy independence and its enemies. Commentary, 133(6), 24-29.

Wiseman, H. J. (2010). Regulatory adaptation in fractured Appalachia. Villanova Environmental Law Journal, 21(2), 101–160.