New York’s attorney general has taken the first step in turning back Exxon Mobil’s plan to use “fracking” on up to 18,000 gas wells in New York City’s watershed – an application of the highly controversial extraction process that would affect 9 million water-drinkers in New York and cost the state billions in beefed up water-filtering measures.
For those of you who’ve been living under a rock, hydraulic fracturing, or fracking, is an extraction process that involves injecting fluid – water, sand and a mixture of toxic chemicals – under extremely high pressure into rock formations to break them apart and release the oil and natural gas contained in them. Growing numbers of landowners, environmental groups, public officials and concerned citizens say fracking contaminates drinking-water supplies – and scientific studies back those claims. Concerns have reached fever pitch with France last month banning the fracking process nationwide.
According to a May 31 Bloomberg News article, New York AG Eric Schneiderman filed a complaint yesterday in federal court in Brooklyn to stop regulations that would allow hydraulic fracturing in thousands of gas wells in the Marcellus Shale region of the Delaware River Basin. The basin covers nearly 60 percent of the land comprising New York City’s watershed west of the Hudson River. Schneiderman’s suit alleges that the Delaware River Basin Commission, the group that oversees industrial activities in the Marcellus Shale area, is permitting Exxon Mobil’s XTO Energy to explore in the region without first conducting “a full environmental review of the health and safety risks.”
The National Environmental Policy Act requires by law (when common sense isn’t enough) that such a study be completed before any development activity can begin. So it appears the state’s case has merit.
The Commission’s flimsy defense is that it stopped doing impact assessments in 1980 – because it lacked the necessary funds. Great, that’s reassuring. The fact that the group freely admits to not conducting an environmental assessment for more than 30 years reveals how loosely regulated the oil and gas industry really is. Furthermore, the Commission, without providing much in the way of reasoning, says it isn’t subject to federal law calling for environmental impact assessments. And up to this point, the feds have done nothing to compel the Commission to provide one for Exxon’s application.
The suit, New York v. U.S. Army Corps of Engineers, cites as defendants both government agencies and specific leaders of the agencies who are responsible for protecting our citizens and our natural resources, including Lisa P. Jackson, administrator of the EPA, and Kenneth Salazar, secretary of the Interior Department. Other agency defendants are the U.S. Army Corps of Engineers, the National Park Service and the U.S. Fish & Wildlife Service.
With a distinct lack of leadership at the federal level, AG Schneiderman is fulfilling his professional responsibility by moving to protect the people of New York. “The welfare of those living near the Delaware River Basin, as well as the millions of New Yorkers who rely on its pure drinking water each day, will not be ignored,” Schneiderman said. He went on to recommend the feds consider not authorizing development in the part of the river basin that includes New York City’s watershed. XTO Energy, a unit of Exxon Mobil, applied to conduct “gas exploration” in a drainage area, or watershed, of the Upper Delaware River in May 2010. Public comments are scheduled for later this month.
The attorney general’s complaint cites well-documented public health risks tied to fracking, including water contamination from radioactive materials, heavy metals, methane and other toxins. In addition to health concerns, Schneiderman focuses on costs the already cash-strapped state would have to shoulder if Exxon’s fracking plan moves forward. From Bloomberg:
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 the complaint. The money has gone to buying land to serve as a buffer for pollutants, upgrading sewage plants and regulating human activities. If the city has to filter, as it already does with water coming from east of the Hudson, it would cost more than $10 billion initially, with annual maintenance costs exceeding $100 million, according to the complaint.
So Exxon Mobil, one of the richest companies on the planet, will add to its gargantuan annual profits while burdening the state of New York with billions of dollars in water-filtering costs and endangering the health and well being of its residents. Even with tax revenues factored in, the state loses money on the deal. To lend some perspective to just how much is at stake for Exxon and other oil and gas giants, in 2009, the production of Marcellus Shale in Pennsylvania alone had an economic output of nearly $4 billion. The New York watershed represents a similar revenue bonanza.
But according to Schneiderman, the corporate profits and the accompanying job creation come at much too high a price. From Bloomberg:
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.
The stakes in New York are so high that Exxon announced last week that it’s planning a full-blown advertising campaign to defend and promote fracking. The move harkens back to the days of BP’s “Make It Right” ad blitz, when the company shelled out nearly $100 million in advertising dollars to local and national media outlets between April and July 2010. We’ll be keeping an eye on where Exxon’s fracking ads run and how media outlets cover the fracking issue after they’ve accepted advertising dollars. We noticed clear editorial biases from some of the outlets that received BP ad dollars, and a tendency on the part of the national media to avoid running stories that reflected poorly on BP.
But no amount of advertising dollars will change the fact that New York and other states present a compelling anti-fracking case when they couple public health concerns and enormous budgetary outlays to protect water supplies. As state budgets across the country continue to shrink, government costs associated with fracking are sure to factor into the politics of the approval process.
As for the organizations and companies that support unfettered natural gas drilling in the Marcellus Shale, Andarko Petroleum Corporation is one of them. If that name sounds familiar, it should: Andarko owned 25 percent of the crippled Macondo well that spewed 200 million gallons of crude into the Gulf of Mexico last year. BP has billed Anadarko, an independent oil and gas producer, nearly $5 billion for what BP considers to be Anadarko’s proportionate share of the cleanup costs through the end of March.
Check back with us soon as we’ll be covering this story as it makes its way through both federal court and the court of public opinion.
See the full Bloomberg report here: http://www.bloomberg.com/news/2011-05-31/new-york-to-sue-u-s-over-delaware-river-basin-gas-fracking-water-impact.html
Catch up on Andarko’s ongoing legal woes here: http://online.wsj.com/article/BT-CO-20110517-708346.html
Read about France’s ban on fracking here: http://thetyee.ca/Blogs/TheHook/BC-Politics/2011/05/13/FranceFracking/
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