Wall Street, government double down on fracking as evidence mounts it causes serious illness


Some days it seems like the national debate over hydraulic fracturing — better known as fracking — is taking place in parallel and opposing universes. There’s the world that everyday American citizens live in, where evidence continues to heighten concerns that unregulated natural gas drilling is making folks sick by polluting the water they drink and the air that they breathe. But as usual, government regulators and Wall Street are doing everything they can to make sure that more wells are fracked — with little regard to the costs, social or otherwise. One of these days, the collision of these two worlds is going to blow up.

A lot of the recent action centers on Pennsylvania, a state where scientists believe that a massive amount of natural gas is buried under the geologic formation known as the Marcellus Shale. Before landowners knew much of anything about what the fracking process entails — and especially not the environmental risks — they were rushed into leasing their land to companies and individuals who were fronting for Big Oil and Gas. Often, these properties in the vast rural expanses of Pennsylvania were farms that had been in a family for generations, or beautiful vistas in the scenic hillsides in the north and west of the Keystone State.

There was something else that Pennsylvanians didn’t know. These leases — which were indeed lucrative for some — were financed by the same reckless and speculative Wall Street practices that created the dot-com stock bubble in the 1990s, the housing bubble of the 2000s, and the student loan debt bomb of the 2010s. In the cases of these natural gas leases — not just in Pennsylvania but all across the country, including extensive drilling in my home state of Louisiana — the borrowing imposed tremendous pressure on the leaseholding companies to drill before these short-term contracts expired. This is driving the environmental nightmare.

Here is what is really driving the fracking boom:

After the financial crisis, the natural gas rush was one of the few major profit centers for Wall Street deal makers, who found willing takers among energy companies and foreign financial investors.

Big companies like Chesapeake and lesser-known outfits like Quicksilver Resources and Exco Resources were able to supercharge their growth with the global financing, transforming the face of energy in this country. In all, the top 50 oil and gas companies raised and spent an annual average of $126 billion over the last six years on drilling, land acquisition and other capital costs within the United States, double their capital spending as of 2005, according to an analysis by Ernst & Young.

Now the gas companies are committed to spending far more to produce gas than they can earn selling it. Their stock prices and debt ratings have been hammered.

But the out-of-control drilling has had tremendous consequences in Pennsylvania. Last week, the Oil and Gas Accountability Project at Earthworks, an environmental and public health advocacy group based in Washington, released its findings of a health survey of more than 100 people in that state who live in close proximity to fracking rigs. Although the study is not a comprehensive one, it is a valuable snapshot of health problems and fears above the Marcellus Shale:

The McIntyres of Butler County, Pa., no longer drink the water piped into their home. They no longer brush their teeth with it, shower or do laundry with it.

“We use water for nothing other than flushing the commode,” said Janet McIntyre, after describing her family’s wide-ranging health problems — from projectile vomiting to skin rashes — that she attributed to the water.

McIntyre and her husband, Fred, were among more than 100 people recently surveyed by the Oil and Gas Accountability Project at Earthworks, an environmental and public health advocacy group based in Washington, for a report published on Thursday, which suggests that widespread contamination of air and water by natural gas drillers in Pennsylvania has triggered an array of health problems, including sinus, respiratory and mood problems.

“We have a serious timing problem,” Nadia Steinzor, of Earthworks, said during a press call on Thursday. “Natural gas development is accelerating rapidly, but knowledge about its impacts on the environment and people is coming much slower.”

The Oil and Gas Accountability Project looked at air and water pollution near fracking sites, and its research confirmed that the closer one lives to a problem area, the more likely the individual suffers headaches, dizziness, shortness of breath, or more serious health issues. The findings scream out for a much more comprehensive health study of Marcellus Shale area residents. In the meantime, you would expect that Pennsylvania officials are doing everything they can to make sure that local residents know about fracking activities and pollution in their community. But state officials there are in the back pocket of Big Oil and Gas — so they’re moving in the opposite direction

PITTSBURGH (AP) — Fourteen environmental groups have asked Republican Gov. Tom Corbett to reverse a recent change in how official notifications of possible water pollution related to Marcellus Shale natural gas drilling are handled. But state officials say the public still gets the information it needs.

The 14 groups claim the new policy would delay warning the public about pollution related to oil and gas drilling from a procedure known as hydraulic fracturing, or fracking, which involves blasting chemical-laden water deep into the ground.

Under the new policy, which went into effect Sept. 14, top Department of Environmental Protection administrators in Harrisburg now decide whether residential water users should receive official determination letters, formal notices telling property owners that the agency has found that drilling either did or didn’t affect water. In the past, experts in field offices made that decision.

Although it seems clear in Pennsylvania that the state government is in the tank for Big Oil and Gas, what I mind dismaying about the situation is there’s little evidence that the federal government is going to step in and assert control over the situation. To the contrary, there are suggestions that at least some federal agencies are biased in favor of the industry and against homeowners. I recently received a report from a group called the Radioactive Waste Management Associates, which is researching the risk of increased radon pollution in the Marcellus Shale belt. They found the U.S. Geological Survey appeared to be underreporting radon levels, and there’s evidence that the industry is controlling the location and other details of the test wells. You can read the disturbing report here.

Indeed, the whole situation is upsetting. That’s why we need a do-over on fracking. New York State has taken the lead recently on putting the brakes on gas drilling, but other governments need to follow their lead. Rather than Wall Street controlling the breakneck pace of drilling, our political leaders and regulators need to make sure we get it done correctly. The right of people to live a healthy life is at risk.

To read the New York Times report on Wall Street and the speculative bubble of fracking investment, please check out: http://www.nytimes.com/2012/10/21/business/energy-environment/in-a-natural-gas-glut-big-winners-and-losers.html?pagewanted=all&_r=2

To find out more about the Earthworks’ Oil and Gas Accountability study of fracking-related health problems in Pennsylvania, please check out: http://www.huffingtonpost.com/2012/10/18/fracking-pollution-pennsylvania_n_1982320.html

To learn about Pennsylvania environmental groups challenging the state’s notification proceedures, please read: http://www.seattlepi.com/news/science/article/14-eco-groups-ask-Pa-to-change-drill-water-policy-3974835.php

To read the Radioactive Waste Managemengt Associates report on the U.S. Geological Survey and radon, go to: http://rwma.com/newsletter_fracking_special_edition_2012.htm

© Smith Stag, LLC 2012 – All Rights Reserved


  • Great article- Really appreciate you getting the truth about this horrifyingly toxic industry bullying it’s way through our country as much the mainstream media (gas and oil industry backed) virtually ignore it. As someone living in the Southern Tier in New York, right above the eye of the storm in the Marcellus ‘play’ (what an absolutely disgusting, deceptive term for what is actuality going on), we are fighting this scourge every day, on a state and local level as many of our town boards are in the pockets of this low-life industry.

    To read someone reporting the truth about this atrocity and the others on your blog is very encouraging.

    So thank you.

    PS: How’s your sinkhole?

Stuart H. Smith is an attorney based in New Orleans fighting major oil companies and other polluters.
Cooper Law Firm

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