FRACKING: Corruption a Part of Pennsylvania’s Heritage

(part 3 of 3)

The history of energy exploration, mining, and delivery is best understood in a range from benevolent exploitation to worker and public oppression. A company comes into an area, leases land in rural and agricultural areas for mineral rights, increases employment, usually in a depressed economy, strips the land of its resources, creates health problems for its workers and those in the immediate area, and then leaves.

It makes no difference if it’s timber, oil, or coal. In the 1970s and 1980s, the nuclear energy industry promised well-paying jobs, clean energy, and a safe health and work environment. Chernobyl, Three Mile Island, Fukushima Daiichi, and thousands of violations issued by the Nuclear Regulatory Agency, have shown that even with strict operating guidelines, nuclear energy isn’t as clean and safe as claimed. Like all other energy industries, nuclear power isn’t infinite. Most plants have a 40–50 year life cycle. After that, the plant becomes so radioactive hot that it must be sealed.

In the early 21st century, the natural gas industry follows the model of the other energy corporations, and uses the same rhetoric. James M. Taylor, senior fellow at the Heartland Institute, claims on the Institute’s website, “The newfound abundance of domestic gas reserves promises unprecedented energy prosperity and security.”

The energy policy during the eight years of the George W. Bush–Dick Cheney administration was to give favored status to the industry, often at the expense of the environment. In addition to negating Bill Clinton’s strong support for the Kyoto Protocol, signed by 191 countries, to reduce greenhouse-gas emissions, former oil company executives Bush and Cheney pushed to open significant federal land, including the 19 million acre Arctic National Wildlife Refuge (ANWR), to drilling that would disrupt the ecological balance in one of the nation’s most pristine areas.

A study by the Environmental Protection Agency (EPA), published in 2004 concluded that fracking was of little or no risk to human health. However, Wes Wilson, a 30-year EPA environmental engineer, in a letter to members of Congress and the EPA inspector general, called that study “scientifically unsound,” and questioned the bias of the panel, noting that five of the seven members had significant ties to the industry. “EPA’s failure to regulate [fracking] appears to be improper under the Safe Water Drinking Act and may result in danger to public health and safety.”

The following year, the Energy Policy Act of 2005—on a 249–183 vote in the House and an 85–12 vote in the Senate—exempted the oil and natural gas industry from the Safe Water Drinking Act. That exemption applied to the “construction of new well pads and the accompanying new roads and pipelines.” The National Defense Resource Council noted that the EPA interpreted the exemption “as allowing unlimited discharges of sediment into the nation’s streams, even where those discharges contribute to a violation of state water quality standards.” The exemption became known derisively as the Halliburton Loophole, named for one of the nation’s major energy companies, of which Cheney, whose promotion of Big Business and opposition to environmental policies is well-documented, had once been the CEO.

Bills introduced in the U.S. House (H.R. 2766) and U.S. Senate (S. 1215) in June 2009 to give federal regulatory oversight under the Safe Water Drinking Act to hydraulic fracturing languished. New bills (H.R. 1084 and S. 587), introduced in March 2011 in the 112th Congress, are also expected to die without a vote.

The natural gas industry has a long history of effective lobbying at the state and national level. America’s Natural Gas Alliance has four former Congressmen as lobbyists, according to research by the Center for Responsive Politics (CRP). Through various political action committees (PACs), the industry has contributed about $238.7 million in campaign contributions, about three-fourths of it to Republican candidates, since 1990, according to the CRP. For the 2008 election, the gas and oil industry contributed $27.4 million, including contributions from individuals, PACs, and soft money, according to CRP data. Total contributions for the current election cycle, as of mid-March, are $20.6 million, with almost 90 percent of it going to Republicans.
At the federal level, the top recipients of oil and gas contributions during the current election cycle, according to the CRP, are former presidential hopeful Gov. Rick Perry of Texas ($833,674), Lt. Gov. David Dewhurst of Texas ($650,850), presidential hopeful Mitt Romney ($597,950), Senate Majority Leader Mitch McConnell ($264,700), and Sen. John Barasso of Wyoming ($225,400), a member of the Energy and Natural Resources Committee. Every one of the top 20 recipients is a Republican.

Barack Obama, although significantly more environmental friendly than his predecessor, had opened up off-shore drilling just prior to the BP oil spill in the Gulf Coast in April 2010. He has repeatedly spoken against the heavy use and dependence upon fossil fuels, and sees the expanded use of natural gas as a transition fuel to expanded use of wind and solar energy. Nevertheless, he has still received funding from the natural gas industry. During the 2008 presidential campaign, he received $920,922 from the oil and gas industry, according to data compiled by the CRP. His opponent, Sen. John McCain, according to CRP, accepted $2,543,154.

In contrast, the 1.4 million member Sierra Club, since August 2010, has refused to accept any donations from the natural gas industry. The Sierra Club, which has actively opposed the development of coal as an energy source, had received $27 million since 2007 from Chesapeake Energy. By 2010, “our view of natural gas [and fracking] had changed [and we] stopped the funding relationship between the Club and the gas industry, and all fossil fuel companies or executives,” says Michael Brune, Sierra’s executive director.

Mixed into Pennsylvania’s energy production is not only a symbiotic relationship of business and government, but a history of corruption and influence-peddling. Between 1859, when an economical method to drill for oil was developed near Titusville, Pa., and 1933, the beginning of Franklin D. Roosevelt’s “New Deal,” Pennsylvania, under almost continual Republican administration, was among the nation’s most corrupt states. The robber barons of the timber, oil, coal, steel, and transportation industries essentially bought their right to be unregulated. In addition to widespread bribery, the energy industries, especially coal, assured the election of preferred candidates by giving pre-marked ballots to workers, many of whom didn’t read English.

In a letter to the editor of The New York Times in March 2011, John Wilmer, a former attorney for the Pennsylvania Department of Environmental Protection (DEP), explained that “Pennsylvania’s shameful legacy of corruption and mismanagement caused 2,500 miles of streams to be totally dead from acid mine drainage; left many miles of scarred landscape; enriched the coal barons; and impoverished the local citizens.” His words serve as a warning about what is happening in the natural gas fields.

Pennsylvania’s new law that regulates and gives favorable treatment to the natural gas industry was initiated and passed by the Republican-controlled General Assembly and signed by Republican Gov. Tom Corbett. The House voted 101–90 for passage; the Senate voted, 31–19. Both votes were mostly along party lines.

In addition to forbidding physicians and health care professionals from disclosing what the industry believes are “trade secrets” in what it uses in fracking that may cause air and water pollution, there are other industry-favorable provisions. The new law guts local governments’ rights of zoning and long-term planning, doesn’t allow for local health and environmental regulation, forbids municipalities to appeal state decisions about well permits, and provides subsidies to the natural gas industry and payments for out-of-state workers to get housing but provides for no incentives or tax credits to companies to hire Pennsylvania workers. It also requires companies to provide fresh water, which can be bottled water, to areas in which they contaminate the water supply, but doesn’t require the companies to clean up the pollution or even to track transportation and deposit of contaminated wastewater. The law allows companies to place wells 300 feet from houses, streams and wetlands. The law also allows compressor stations to be placed 750 feet from houses, and gives natural gas companies authority to operate these stations continuously at up to 60 decibels, the equivalent of continuous conversation in restaurants. The noise level and constant artificial lighting has adverse effects upon wildlife. As a result of all the concessions, the natural gas industry is given special considerations not given any other business or industry in Pennsylvania.
Each well is expected to generate about $16 million during its lifetime, which can be as few as ten years, according to the Pennsylvania Budget and Policy Center (PBPC). The effective tax and impact fee is about 2 percent. Corbett had originally wanted no tax or impact fees placed upon natural gas drilling; as public discontent increased, he suggested a 1 percent tax, which was in the original House bill. In contrast, other states that allow natural gas fracking have tax rates as high as 7.5 percent of market value (Texas) and 25–50 percent of net income (Alaska). The Pennsylvania rate can vary, based upon the price of natural gas and inflation, but will still be among the five lowest of the 32 states that allow natural gas drilling. Over the lifetime of a well, Pennsylvania will collect about $190,000–$350,000, while West Virginia will collect about $993,700, Texas will collect about $878,500, and Arkansas will collect about $555,700, according to PBPC data and analyses.

State Sen. Daylin Leach, a Democrat from suburban Philadelphia, says he opposed the bill because, “At a time when we are closing our schools and eliminating vital human services, to leave billions on the table as a gift to industry that is already going to be making billions is obscene.” State Rep. Mark Cohen, a Democrat from Philadelphia, like most of the Democrats in the General Assembly, agrees. The legislation, he says, “produces far too little revenue for local communities, gives the local communities local taxing power which most of them do not want, because it pits one community against the other, and gives no revenue at all to other areas of the state.”

The new law is generally believed to be “payback” by Corbett and the Republican legislators for campaign contributions. The industry contributed about $7.2 million to Pennsylvania candidates and their PACs between 2000 and the end of 2010, including $860,825 to the Republican party and $129,100 to the Democratic party, according to data compiled by Common Cause. In addition, the natural gas industry contributed about $1.6 million to Corbett’s political campaigns during the past 10 years, about $1.1 million of that for his campaign for governor, according to Common Cause. Rep. Brian L. Ellis (R-Butler County), sponsor of the House bill, received $23,300. Sen. Joseph B. Scarnati (R- Warren, Pa.), the senate president pro-tempore who sponsored the companion Senate bill (SB 1100), received $293,334. Of the 20 Pennsylvania legislators who received the most money from the industry since 2001, 16 are Republicans, according to Common Cause.

Rep. H. William DeWeese (D-Waynesburg, Pa.), received $58,750, the most of the four Democrats. DeWeese, first elected in 1976, had been Speaker of the House and Democratic leader.

It’s possible that the significant campaign contributions didn’t influence Pennsylvania’s politicians to rush to embrace the natural gas industry and its controversial use of hydraulic fracking. It’s possible that these politicians had always believed in fracking, and the natural gas industry was merely contributing to the campaigns of those who believed as they do. However, with the heavy amount of money spent by the natural gas lobby and, apparently, willingly accepted by certain politicians, there is no way to know how they might have voted had no money or lobbying occurred.

Tom Corbett’s first major political appointment after his election in November 2010 was to name C. Alan Walker, an energy company executive, to head the Department of Community and Economic Development. The Pennsylvania Progressive identified Walker as “an ardent anti-environmentalist and someone who hates regulation of his industry.” A ProPublica investigation revealed that Walker had given $184,000 to Corbett’s political campaign.

Shortly after taking office, Corbett repealed environmental assessments of gas wells in state parks. The result could be as many as 2,200 well pads on almost 90 percent of all public lands, according to Nature Conservancy of Pennsylvania.

Corbett’s public announcements in March 2011, two months after his inauguration, established the direction for gas drilling in Pennsylvania.

In his first budget address, Corbett boldly declared he wanted to “make Penn¬syl¬va¬nia the hub of this [drilling] boom. Just as the oil com¬pa¬nies decided to head¬quar¬ter in one of a dozen states with oil, let’s make Penn¬syl¬va¬nia the Texas of the nat¬ural gas boom. I’m deter-mined that Penn¬syl¬va¬nia not lose this moment.” Lt. Gov. Jim Cawley would later boast, “The Marcellus [Shale] is revitalizing our main streets in downtowns.”

Within the budget bill, Corbett authorized Walker to “expedite any permit or action pending in any agency where the creation of jobs may be impacted.” This unprecedented reach apparently applied to all energy industries. That same month, Corbett created an Advisory Commission, loaded with persons from business and industry. Not one member was from the health professions; of the seven state agencies represented, not one member was from the Department of Health.

Between 2007 and the end of 2010, the Pennsylvania Department of Environmental Protection (DEP) issued 1,435 violations to natural gas companies; 952 of those violations related to potential harm to the environment. In March, Michael Krancer, the new DEP secretary, also a political appointee, took personal control over his department’s issuance of any violations. By Krancer’s decree, every inspector could no longer cite any well owner in the Marcellus Shale development without first getting the approval of Krancer and his executive deputy secretary.

“It’s an extraordinary directive [that] represents a break from how business has been done” and politicizes the process, John Hanger told ProPublica. Hanger, DEP secretary under the Ed Rendell administration, said the new rules “will cause the public to lose confidence entirely in the inspection process.” He told the Scranton Times-Tribune the new policy was the equivalent of every trooper having to get permission from the state police commissioner before issuing a traffic citation. Because the new policy is so unusual and broad “it’s impossible for something like this to be issued without the direction and knowledge of the governor’s office,” said Hanger. Corbett denied he was responsible for the decision. Five weeks after the Krancer decision was leaked to the media, and following a strong negative response from the public, environmental groups, and the state’s media, the DEP rescinded the policy—which Krancer claimed was only a three-month “pilot program.”

“When state agencies say they will ‘regulate’ or ‘monitor’ hydraulic fracturing to reduce known threats, we should not accept this as a guarantee of any kind,” says Eileen Fay, an animal rights/environmental writer. Fay argues that because of legislative corruption, it is a responsibility of citizens to protect their own health and environment by “putting pressure on our legislators.”

In February 2012, Corbett proudly signed Act 13, a merger of the House and Senate bills.

HB 1950 had initially included a provision to provide up to $2 million a year in funding to the Department of Health for “collecting and disseminating information, preparing and conducting health care provider outreach and education and investigating health related complaints and other uses associated with unconventional natural gas production activity.” That provision, strongly supported by numerous public health and environmental groups, was deleted in the final bill.

The Pennsylvania Constitution (Article I, section 27) declares: “The people have a right to clean air, pure water, and to the preservation of the natural, scenic, historic and esthetic values of the environment. Pennsylvania’s public natural resources are the common property of all the people, including generations yet to come. As trustee of these resources, the Commonwealth shall conserve and maintain them for the benefit of all the people.”

However, unlike New York state, which placed a moratorium on well permits while it is evaluating the health and environmental risks, Pennsylvania has rushed to embrace the natural gas industry and its use of fracking, apparently disregarding its own Constitution. The Susquehanna River Basin Commission has routinely approved requests from drillers to remove millions of gallons of water each day from the river, although the commissioners have not requested any health impact statements or undertaken a complete cumulative impact study, according to Iris Marie Bloom, an environmental writer and activist. Because of the nature of the Marcellus Shale deposit in Pennsylvania, as opposed to neighboring states, natural gas companies have to transport the wastewater to other states for re-use or disposal or take it to sewage treatment plants. The plants then discharge the treated wastewater into the state’s rivers. However, present methods can’t remove the salt and some other chemicals and radioactive elements. Currently, about 11 million gallons of wastewater a day are taken from the Susquehanna for fracking operations; about three times that amount is anticipated when fracking reaches its peak in the state, according to Paul Swartz, Commission executive director. In contrast, the Delaware River Basic Commission has put a moratorium on taking water from that river until studies have been completed.

Pennsylvania is “handing out permits almost like popcorn in a theater,” says Diane Siegmund, a psychologist from Towanda. Between Jan. 1, 2005 and March 2, 2012, the Pennsylvania Department of Environmental Protection issued 10,232 permits, and denied only 36 requests.

Siegmund is frustrated by what she sees not only as state government’s acceptance of fracking but of numerous local governments in the Marcellus Shale region from speaking out on behalf of the preservation of health and the environment. When she went to the Bradford County commissioners with stacks of research about problems with fracking, “all they did was to thank me and claim it’s not their problem.” She says residents are beginning to believe that local governments are operating in collusion with the energy companies.

But it isn’t just governments. The issue of fracking has divided towns like Dimock, Pa. In November 2009, 15 residents sued Cabot Oil and Gas, charging that the company contaminated their drinking water. Tests conducted by the DEP during the last years of the Ed Rendell administration had revealed there was higher than expected methane gas in 18 water wells that provided drinking water to 13 homes near the drills. The build-up of methane gas had also led to well explosions and DEP warnings to citizens to keep their windows open. Among the provisions of a consent order, the state required Cabot to provide fresh water to families whose water had been affected by the excess methane gas. Cabot denied its fracking operation was responsible for the elevated levels. On Nov. 30, 2011, after the DEP, now under the Tom Corbett administration, declared the water to be safe to drink, Cabot stopped delivering water.

And then something strange happened. The town of Binghamton, N.Y., about 35 miles north, said it would provide a tanker of fresh water. However, the supervisors of Dimock Twp., supported by most of the 140 residents who attended the meeting, most of them with some economic ties to the natural gas industry, refused the offer. According to reporting in the Scranton Times-Tribune, when Binghamton mayor Matthew T. Ryan asked “Why not let people help?” he was rebuffed by one of the township’s three supervisors who snapped, “Why should we haul them water? They got themselves into this. You keep your nose in Binghamton.”

In January 2012, after declaring that the water “contains levels of contaminants that pose a health concern,” the EPA decided it would bring water to residents in Dimock. The response by Cabot was that the EPA was wasting taxpayer money in its investigation of Cabot environmental and health practices. The response by Pennsylvania’s DEP was almost as inflammatory as the water in the taps. Michael Krancer, DEP’s head, not only disagreed with the EPA findings, he called the agency’s knowledge of fracking to be “rudimentary.”

In mid-March, following preliminary tests on several of the wells serving Dimock residents, the EPA found that the water “did not show levels of contamination that could present a health concern.” However, it acknowledged arsenic, some metals, and potentially explosive methane gas remained in the water. A ProPublica investigation revealed that four of the five water samples it obtained showed methane levels exceeding Pennsylvania standards.
“
We are deeply troubled by Region 3’s rush to judge the science before testing is even complete, and by their apparent disregard for established standards of drinking water safety,” said Claire Sandberg, executive director of Water Defense. She questioned why EPA Region 3’s handling of the Dimock case differed from how other EPA regional offices handled similar cases in Texas and Wyoming when it didn’t release the information until all testing was completed. Dr. Ron Bishop, professor of biochemistry at SUNY/Oneonta, told ProPublica, “Any suggestion that water from these wells is safe for domestic use would be preliminary or inappropriate.”

The extraction of natural gas has also led to the development of other industries—and the exploitation of the people. In Jersey Shore, Pa., about 20 miles west of Williamsport, Aqua PVR bought a 37-unit mobile home village, with plans to build a water withdrawal plant to provide up to three million gallons a day to the natural gas industry. The day the purchase was completed on Feb. 23, 2012, Aqua told the residents their leases were terminated “immediately,” according to reporting in the Sun-Gazette. The company gave residents until May 1 to leave. To sweeten what may be seen as a callous corporate action, Aqua said it would give $2,500 to each resident that moved by April 1, and $1,500 if they moved by May 1. However, as the Sun-Gazette reported, the cost to move each mobile home ranged from $5,000 to $12,000. Many of the residents lived in the village more than a decade; one was there 38 years. The newspaper reported that most trailer parks in the area were already at maximum occupancy, and others would not accept the older trailers.

“Residents are afraid to speak up,” says Diane Siegmund, who points out there is “a lot of fear” among the residents, those whose lives are being uprooted, those whose health is being compromised, and those whose economic benefits may be compromised if fracking operations are reduced.

“As long as the powers can keep the people isolated and fragmented,” says Siegmund, “the momentum for change can never be gained.” The experience in Dimock is seen
throughout the Marcellus Shale region.

It’s not unreasonable to expect people who are unemployed or underemployed to grasp for anything to help themselves and their families, nor is it unreasonable to expect that persons—roustabouts, clerks, truck drivers, helicopter pilots, among several hundred thousand in dozens of job classifications—will take better paid jobs, even if it often means 60 hour work weeks under hazardous conditions. It’s also not unreasonable to expect that families living in agricultural and rural areas, who are struggling to survive, will snap at the lure of several thousand dollars to lease mineral rights and some of their land to an energy company, which will also pay royalties. But what is unreasonable is that government allows corporations to flourish at the expense of the people and their environment.

The Sierra Club urges that the country needs “to leapfrog over gas whenever possible in favor of truly clean energy. Instead of rushing to see how quickly we can extract natural gas, we should be focusing on how to be sure we are using less—and safeguarding our health and environment in the meantime.”

Christopher Portier, director of the National Center for Environmental Health, calls for more research studies that “include all the ways people can be exposed [to health hazards], such as through air, water, soil, plants and animals.”

In November 2011, the Advisory Board of the U.S. Department of Energy concluded: “The public deserves assurance that the full economic, environmental and energy security benefits of shale gas development will be realized without sacrificing public health, environmental protection and safety.”

When the history of natural gas exploration in Pennsylvania is finally written, the story will be that it was a cheaper, cleaner energy source, and that it temporarily helped some people in rural areas, and brought some well-paying jobs into the state. But history will probably also record that the lure of immediate gratification led Pennsylvania’s politicians to willingly accept political donations that led them to sacrifice their citizens’ health and the state’s environment.

[Assisting on this series, in addition to those quoted within the articles, were Rosemary R. Brasch, Eileen Fay, and Dr. Wendy Lynne Lee. Dr. Walter Brasch is an award-winning social issues journalist. His current book is Before the First Snow, a critically-acclaimed novel that looks at what happens when government and energy companies form a symbiotic relationship, using ‘cheaper, cleaner’ fuel and the lure of jobs in a depressed economy but at the expense of significant health and environmental impact. The book is available at amazon.com and from the publisher, Greeley & Stone.]

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Walter M. Brasch, Ph.D.
Latest Book: Before the First Snow: Stories from the Revolution
(www.greeleyandstone.com)

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