‘Stop, or the nig#$er gets it,’ aka the ‘fiscal cliff’

There’s a classic scene from the film “Blazing Saddles” in which the new sheriff of a Western town, finding the townspeople’s guns trained on him after they’ve found out, to their horror, that he’s black, puts a gun to his own head and says, “Stop, or the nigger gets it!” This being a Mel Brooks film, the townspeople immediately fall for the gag. People draw back in consternation, guns are lowered, and one woman cries out, “won’t anybody help that poor man!”

It’s no surprise to see such a con pulled off in a Mel Brooks film. It’s astounding to see it succeed in real life, with high stakes. But that’s exactly what seems to be happening in this country, with the so-called fiscal cliff.

Last year, in the Budget Control Act of 2011, deficit hawks in Congress demanded drastic, automatic government spending cuts to begin on January 1, 2013 in exchange for an increase in the debt ceiling at that time that kept the government from being shut down. In doing so, it picked up a gun and held it to its own head, along with those of all of the rest of us. Congress is now supposedly going to be forced to come up with a “Grand Bargain” consisting, if the people holding the gun get their way, of huge spending cuts largely aimed at the poor and middle class, or else a bunch of automatic cuts (aimed largely at the poor and middle class) will be enacted. It’s a self-manufactured crisis. It’s a gun Congress has elected to hold to its own head as an excuse to make draconian spending cuts of a dimension that economic experts tell us will send us right back down into recession. And all they have to do is put down the danged gun.

And if the electorate were in full possession of its wits, you’d think they’d be clamoring to their representatives to tell them to do so, given the potentially devastating impact not only of the automatic spending cuts and tax increases, but of any deals that might be struck to evade them, on the vast majority of the population during a precarious recovery.

Instead, the corporate media has done its bit to dull our senses by embracing the picturesque term “fiscal cliff” to describe the situation, as though the problem were an intractable and permanent feature of  the landscape toward which external forces are driving us. Whether through negligence or deliberation, the use of the term itself therefore has a propagandistic impact, while satisfying the media’s need to stimulate fear and excitement, sell papers and draw eyeballs to web pages and TV screens. "Fiscal cliff" in a headline is almost as good as "Lindsay Lohan."

After backing his “hostage” into the sheriff’s office and closing the door, Brooks’ sheriff relaxes, leans against it, folds his arms and says, “Oh baby. You are so talented, and they are so dumb.”

Indeed we are, if we continue to fall for it.

For more details on the fiscal cliff and the myth that austerity is the cure for what ails us, see:

http://www.alternet.org/economy/6-reasons-fiscal-cliff-scam
 http://www.nytimes.com/2012/11/12/opinion/krugman-hawks-and-hypocrites.html

http://www.nytimes.com/2012/09/28/opinion/krugman-europes-austerity-madness.html?partner=rss&emc=rss

Perhaps more comfort needed on the road use law

HORTONVILLE, NY — Comments on the Multi-Municipal Task Force (MMTF) road preservation law at the Town of Delaware’s public meeting last night agreed almost universally that in principle, the law is a great idea and should be passed. But speakers also voiced serious concerns about the way the law handles certain specific issues, and noted that it has not been well explained to the public. The preference therefore was to have a vote on the law be delayed, and it was also suggested that a workshop or workshops be arranged during which the points of contention could be discussed.

 I’ve written strongly in support of this law here and elsewhere, and obviously agree with the first point. But I also understand some of the concerns voiced about the law, which, to the extent that it interacts with complex and lengthy program and technical manuals that appear not to have been posted online, is not all that easily understood. I therefore agree that some delay might be in order, along with some effort at public education on points of concern.

The three main areas of concern raised last night were the difficulty and possible expense of administering the law; the potential difficulties of enforcing the law; and a query as to whether the law may wind up affecting small businesses like home builders instead of just the larger firms like Millenium Pipeline that it is intended to capture.

With regard to the administration issue, at last night’s meeting, town superintendent Ed Sykes said they had filled out some sample paperwork at a workshop that had been held for MMTF members and it didn’t seem that bad to him. I simply don’t have the knowledge base to evaluate what the potential problems might be here, but a further discussion of how much additional work is involved, the degree to which it might prove necessary to increase payroll expenses, and the extent to which the money put up by road use applicants will be adequate to cover any additional personnel might be appropriate if workshops were indeed to be held.

 I believe the concerns about enforcement were greatly overblown, partly because there seemed to be a misunderstanding of what it is that actually needs to be enforced. People were talking as though the issue was identifying individual trucks as either adhering or not adhering to weight and size restrictions, as one has to do when roads are posted with weight limits. But in fact the whole genius of this law, as opposed to posting, is that it makes no effort to restrict individual trucks by size. It measures the overall road damage created by an industrial project, and charges to repair all that damage, regardless of how many trucks caused it or what size they are. As much damage as is done, that’s how much the company will have to pay. The company has to put up a bond ahead of time to cover repairs, and if it turns out after the job that more damage has been done than the size of the bond, it will also have to pay that.

Enforcement to this extent only requires measurements at two points in time: once before the job begins, and once afterwards. It’s not as though you have to have a lot of people out on the roads spotting individual trucks and making sure they are not too big. To be sure, some enforcement would be required in a couple of areas. First, the law calls for companies to stick to only certain routes. There is a possibility they will use routes that have not been approved, and some kind of oversight system would be needed for that. Second, there is presumably the possibility that someone will commence a project without filing an application in the first place. I think these are fairly limited and probably manageable problems. But again, there would be no harm at all in holding some workshops to explain this kind of thing to the public.

With regard to the question whether small construction firms could be caught in the law’s net, I can understand why somebody in the construction business might find the language of the law itself vague, with phrases like “unusually heavy traffic” and “above-normal wear and tear” to describe the activity for which businesses will need to pay for road repairs. However, I believe that the specificity of the law lies not in its internal definitions, but in its interaction with the program and technical manuals, as contained in Section 5 B: " The Town Highway Superintendent shall review such application and worksheet in accordance with the Program Manual and the Technical Manual. Within no more than thirty (30) days after receipt of a complete haul route application and project traffic worksheet, the Town Highway Superintendent shall notify the applicant whether the use of Town Highways will result in Concentrated Traffic."

Obviously, the key thing here is whether the methodology of those manuals succeeds in screening out small businesses. But that’s not possible to tell for sure without access to those manuals, and an explanation of the methodology. Here again, it seems to me that it is quite legitimate for concerned businessmen to want to sit down and be shown exactly how the methodology works, perhaps filling out sample applications with numbers that would be typical for the jobs they do, and seeing what results would emerge using the manuals' procedures.

Like last night’s speakers, I think that the MMTF road use law is important to have in place regardless of whether fracking activity—the prospect of which provided the incentive for developing this law—ever comes to the county. But also like them, I think it is reasonable to ask for a small delay while the law is better explained to those members of the public who are concerned, and amend it as necessary to iron out any snarls that are discovered, and would recommend a workshop or workshops during which this could be done.

Reflections

This photograph, titled "Sunrise at Lily Pond," was taken, and sent to me, by Scott Rando of Shohola, PA.

What they'd be doing if they really thought it was a bridge

I have a concession to make. I think we need natural gas as a bridge fuel. But what I find infuriating is that the people in government and industry who say that we need natural gas as a bridge fuel don’t behave remotely as though they really believe it. They behave as though it’s a resource that we should use as exhaustively as possible for as long as possible.

I think we need natural gas as a bridge fuel in the sense that right today, if we completely stopped using fossil fuels in general and natural gas in particular, we would not be able to supply the planet’s human population with even its most minimal needs. But if you think it’s a bridge, then you should be formulating a plan, with a specific timeline and quantitative goals, according to which fossil fuels, including natural gas, will be phased out, and conservation measures and alternative energy sources phased in.

Instead, we hear people talk about how many hundreds of years of natural gas they think we have. We hear them talk about how, after they’ve finished draining the Marcellus dry, they can access the Utica shale. We hear them planning long-term retooling of various industries to use natural gas.

That’s not bridge thinking. That’s a “we can keep on doing this forever” fantasy.

Here’s what bridge thinking would look like:

1. Project the nation’s energy needs out to some date, no later than, say, 2050, on the basis of current trajectories of demographics and usage patterns.
2. Look at conservation measures that we know to be currently available, and set out a series of deadlines and goals for implementing these as broadly and completely as possible, out until 2050.  If there’s a quantitatively respectable way to estimate additional conservation savings that might be incurred due to the impact of innovations not yet known, add that in too.
3. Recalculate the nation’s energy needs, assuming that the conservation goals are met.
4. Set your ultimate phase-out targets: e.g., by 2050, no more than 5% of our energy needs should be met by natural gas (that doesn’t have to be the number – but if you really think it’s a bridge, that number had better be pretty small). Develop an annual schedule of how much the percentage of usage satisfied by natural gas would have to decline between now and 2050 to meet that goal.
5. Applying the percentages from step 4 to the nation’s total energy needs established in step 3, figure out how many mcf of gas will have to be produced each year to meet your phase-out goals.
6. Calculate how many wells should be operating, year by year, in order to produce the natural gas set in step 5 – which obviously at some point in the not-too-distant future would have to start diminishing.
7. Take a look at the environmental sensitivity, productivity of wells and costs of drilling in various areas, determine where it makes sense to drill between now and 2050, and where it does not, and develop an optimum schedule and map of such drilling activity.

Obviously, a similar series of steps should also be taken not only for other fossil fuels, in terms of phasing them out, but for various alternative energy sources, in terms of phasing them in.

When and if President Obama, other politicians like Governors Corbett and Cuomo, or the various industry cheerleaders present a plan like this, and make an effort to actually implement it, I will also listen respectfully to talk about needing natural gas as a bridge fuel.

But as it is, the people who throw around the phrase “bridge fuel” are mostly just talking out of both sides of their mouths.

Long, wonky post on the legality of road use laws OR Why I disagree with Bethel

An article in the Sullivan County Democrat a couple of weeks ago reported that the Town of Bethel has decided not to go ahead with the road use preservation law proposed by the Multi-Municipal Task Force (MMTF), of which it is a member, on the grounds that the law stands on shaky legal ground.

I am not a lawyer, but the town’s position on the legality of the proposed law puzzles me, in light of the New York State Department of Environmental Conservation’s (DEC) SGEIS on horizontal hydrofracking issued in September of 2011. That document concludes that damage to local roads is a major adverse impact to be expected from the heavy traffic associated with fracking, and proposes as mitigation laws and road use agreements that sound almost exactly like the model law produced by the MMTF (See the DEC SGEIS at http://www.dec.ny.gov/data/dmn/rdsgeisfull0911.pdf, starting on hard-copy page 7-137, digital pdf page 987.)

Nor can one argue that the DEC simply ignored legal issues; indeed, it cites chapter and verse of New York State transportation law in order to provide the basis for its suggestions. For one example, on page 7-137, it says:

“NYS Vehicle and Traffic Law § 1640(a)(5) provides that, 'The legislative body of any city or village, with respect to highways … in such city or village … may by local law, ordinance, order, rule or regulation … exclude trucks, commercial vehicles, tractors, tractor-trailer combinations, [and] tractor-semitrailer combinations from highways specified by such legislative body.” Part 10 of this same section allows legislative bodies of a city or village to 'establish a system of truck routes upon which all trucks, tractors and tractor-trailer combinations, having a gross weight in excess of ten thousand pounds are permitted to travel and operate and excluding such vehicles and combinations from all highways except those which constitute such truck route system.' Part 20 of this same section allows for the establishment of weight, height, length, and width criteria, for which vehicles in excess of such standards may be excluded from highways or the setting of limits on hours of operation of such vehicles on particular city or village highways or segments of such highways.”

Nor is the DEC alone in believing that road use laws and agreements of the type proposed by the MMTF are legitimate. New York Municipal Insurance Reciprocal (NYMIR) also has a supportive document online at http://www.nymir.org/pdf/NYMIR%20Marcellus%20Roads%20FINAL.pdf.

Among the many municipalities insured by NYMIR are a number of towns in Sullivan County, and one of the things it insures them against is lawsuits. In other words: if people do sue towns that adopt the road use preservation laws, NYMIR will have to pay up. So it is highly motivated to squelch any laws that it thinks may be challenged.

Instead, the NYMIR document devotes an entire section to providing the authority in law for local road use laws and agreements such as those described in the SGEIS (and the MMTF), starting on page 3. In defense of provisions that require road users to pay for repairs of any roads they damage, the NYMIR document cites Highway Law Section 320 in saying, “From a legal standpoint, the Highway Law has long held those responsible for injuring the highways liable for the damage that they have caused.” Like the DEC, it also enumerates a variety of relevant local powers derived from the NYS Vehicle and Traffic Law, supporting for instance the right to establish certain haul routes, implied in municipalities' right to “Exclude Certain Vehicles based upon weight, length, height or limit hours of operation (N.Y. Veh. & Traf. §§ 1660(a)(28), 1650(a)(4-a), 1640 (a) (20).”

According to the Democrat article, it was sections of this precise same law that were cited by the Town of Bethel as being of concern, specifically 1600 and 1604. Do those sections somehow offset or override the other sections I have quoted? Let’s look.

Section 1600 says “The provisions of this chapter shall be applicable and uniform throughout this state and in all political subdivisions and municipalities therein.” But note,  it is not municipal road use laws that have to be uniform; rather, it is the provisions of the state law, of which this is a section, that have to be applied uniformly. And those provisions, as we have seen from the quotes above, specifically permit any municipality to construct its own road use laws. They also contain some strictures to which all such laws must conform: for instance, though any town may exclude certain vehicles from designated roads, all towns must make exceptions for deliveries and pickups of property along the designated highways. But the uniformity described here has nothing to do with disallowing towns to come up with a variety of different local road use laws.

What about section 1604? Admittedly, it contains the assertion that local authorities have no power to restrict vehicle operators’ free use of the road. But that assertion is preceded by the opening clause: “Except as otherwise provided in this chapter." And we've already seen some of what is “otherwise provided in this chapter," namely section after section supporting the rights of local municipalities to create road use laws and agreements restricting traffic of certain designated types.

The one issue for which I have not been able to track down any legal basis is the idea that municipalities have the power to require companies to pay to upgrade roads before using them. However, the proposed road use law, at least in the versions posted on the Tusten and Highland websites, actually offers two options: requiring a company to pay to upgrade roads on its haul routes before it starts operations—in which case it would not have to pay for repairs afterwards—or requiring it to pay for repairs after damage has occurred. It is not clear to me what determines which option is chosen, but it looks as though, if a company refuses to pay for an initial upgrade, it can still be held accountable for any damage incurred after the fact -- for which, according to NYMIR, there is strong basis in law.

I don’t know all the legal points the Town of Bethel is concerned with, and I may well have failed to cover some of them here. But on the basis of the information I've found, it's hard to agree that there is a serious legal problem with the proposed road laws.

The New York State Vehicle and Traffic law can be read in its entirety at http://ypdcrime.com/vt/index.htm.

DCS pioneers methane baseline study

Utilizing technology that has only recently become available, a study commissioned by Damascus Citizens for Sustainability (DCS) to obtain baseline ambient methane levels in Damascus Township, PA has just been completed (<http://www.damascuscitizensforsustainability.org/2012/11/damascus-baseline/).

The study shows that methane concentrations are currently fairly low and consistent throughout the township. It also includes a graphic illustration of methane concentrations in Damascus compared to a similar venue in Dimock, PA, where of course natural gas drilling has been going on for some time. Concentrations in Dimock look to be at least four times as high.

Of course, since no baseline study was done in Dimock, we have no way of knowing whether the difference in ground-level methane concentrations is due to drilling, or was there to begin with. But that lack of evidence just goes to emphasize how important it is to have studies like this done before drilling commences in any given area. And one of the exciting features of the Damascus study is that it is apparently fairly economical to conduct, meaning that other local towns should probably consider doing so.

That point was further underlined by the conversation last night at the second meeting of the Town of Delaware, NY's natural gas drilling commission. There, it was pointed out that a number of local water well drillers have commented that, in digging wells, they frequently encounter methane. Hence, it might be concluded that the people in PA who are claiming that drilling activity is responsible for high levels of methane in their water might just be looking for a way to make a quick buck.

It was also briefly conceded that, even if there is methane to begin with, drilling activity could make it a lot worse. But the point is that, without having baseline measurements, whether in water or air, of various contaminants related to drilling, there is simply no conclusive and universally persuasive way to prove the impact drilling may or may not have had. It might be interesting if, in addition to trying to come to a conclusion as to whether hydrofracking would be good or bad for the Town of Delaware, the commission would make some recommendations as to precautionary steps, like baseline studies, that the town could take with regard to drilling if indeed it does continue to adopt a welcoming stance. At least that way, residents who do wind up being damaged would have a strong basis for litigation.

And from the climate change point of view, the methane problem is not just local, but global. A study by Cornell's Robert Howarth concluded that shale gas is responsible for 20% more greenhouse gases than coal on a life-cycle basis, despite the fact that burning natural gas emits less carbon dioxide, because of the methane -- a far more potent greenhouse gas than carbon dioxide -- released during extraction. The study found that up to 7.9% of the methane escapes directly from the wells, leaks from pipelines, or is released in venting and flaring.

I would hope that a number more local municipalities follow the example of Damascus in taking the initiative, where economically feasible, to start taking measurements of the quality of our common resources -- air and aquifers. That quality is perhaps our most valuable asset. Our current economic system unfortunately has not found a way to put a proper monetary value on possessing it -- but that does not mean there will not be a huge monetary cost if we lose it.

A primer on the ad valorem tax: look before you leap

A few weeks ago, Jack Danchak wrote a letter to the Sullivan County Democrat touting the advantages he sees in natural gas drilling, including, among other things, income from the ad valorem tax on natural gas production facilities permitted in New York State.

The ad valorem tax is a property tax that can be imposed by New York municipalities on natural gas production facilities, to be paid by the drilling companies. There are all kinds of questions that can (and should) be asked as to whether any income from such a tax would be sufficient to offset other costs to the municipality, from damage to residential property values, to health costs, to demands placed on law enforcement and infrastructure. However, before considering those questions about the bottom-line net, it is important to take a look at the top line, and see how much the tax is likely to bring in, and how quickly it might do so.

I’ve done some preliminary research on this issue, starting with the online manual by New York’s Office of Real Property Tax Services (ORPTS, http://www.tax.ny.gov/pdf/publications/orpts/oilgasoverviewmanual.pdf). My provisional conclusion is that, given the way the tax is calculated, the current price environment, and the rapidity with which natural gas production declines, the ad valorem tax would not only take a while to click in, but could do so in such a way that drilling companies could avoid paying the tax on the majority of their production.

The ad valorem tax calculation starts with profiles created by ORPTS for each region or type of well. ORPTS bases these profiles on information provided by all the gas drilling companies in the region in question over the previous five years. From this data, it derives a Unit of Production Value (UPV), which is the net cash flow per mcf divided by a discount rate. This unit is then multiplied by the production of any given well in the year to be taxed to produce the assessed value.

The important point to note here is that to obtain the net cash flow, ORPTS subtracts various expenses including operating costs, depreciation, royalties and the like from gross income. Those who have been following natural gas prices and analysts’ commentaries on unconventional shale production costs know that this could create just a little bit of a problem.

For instance, Arthur Berman of Labryth Consulting, a Houston-based geological consulting firm, says that the breakeven point for unconventional shale drilling is around $8 or $9 per mcf. Now look at a graph of natural gas prices since 1975 (http://www.eia.gov/dnav/ng/hist/n9190us3m.htm). During that entire period, prices only broke the $7.50 level twice, once in 2005 and again in 2008, and for less than a year both times.

If Berman is right, there has never been a five-year period during which there would have been positive cash flow on unconventional shale wells. Of course, we do not know whether ORPTS would take into account all the factors Berman is looking at, and probably won’t until and unless they actually start having to do a profile. But it certainly raises a red flag.*

So what would happen if the DEC started permitting gas wells in 2013? First, the process involves a delay. It wouldn’t be until 2014 that ORPTS would collect the production data from 2013 to construct the appropriate profile; in January of 2015 ORPTS would set tentative UPV values and set hearing dates, and it wouldn’t be until May of 2015 that assessors could put the natural gas properties on their tax rolls.

Second, of course, with horizontal hydrofracking, ORPTS would have to construct a brand new profile, whether for the new formation (Marcellus) or for hydrofracking wells as a class. But of course, they won’t have a five-year history. Most likely, they will just start out with one year, go on to a two-year average in the second, and so on until they cumulate to five years. That’s how they did it with the last class they added, Trenton Black River.

But it is highly unlikely that gas prices will rise fast enough in one year that Marcellus wells will break even in 2013. And that means, the UPV for that year, should production commence in 2013, could very well be 0. In that case, it will not be possible to tax the wells in that year. Indeed, on the basis of the natural gas price chart referred to above, there is a real possibility that the UPV will remain at zero for several years

Meanwhile, wells will be producing gas. And because production drops sharply in the initial years, that means the bulk of the gas may well be extracted from the ground without the municipality being able to collect a dime.

It’s difficult to get a hard number on how severe this effect could be here because, although drilling in the Marcellus has been occurring in Pennsylvania since 2005, the state did not require companies to report production until 2010. We do know that it declines over 60% in the first year in another unconventional shale formation, the Barnett Shale, and another 50%-plus in the second year.

For the Marcellus, I found one preliminary analysis of production declines (http://www.sooga.org/studies/Marcellus%20Shale%20Decline%20Analysis%20-%202010%20-%20Brandon%20Baylor.pdf) that projects that out of 2.3 billion cubic feet produced in the first 10 years in a typical well, about a third will be produced in the first year and more than half in the first three years. If gas prices remain low for the first three years, the municipality could, in effect, forfeit its opportunity to tax the majority of that well’s value over 10 years.

Meanwhile, the town will still have to pay all the expenses incurred by hosting natural gas drilling activity. Unless prices suddenly soar through the $8-$9 per mcf level, that will leave a lot of costs that town taxpayers will be hit with. And though cash flow may rise to a taxable level at some point in the life history of the well, the majority of the well's production value may avoid taxation altogether.

Certainly, there are a number of unknowns here. We need to get more reliable estimates of actual production declines in the Marcellus Shale, for instance. And it would be nice to get some idea of whether ORPTS net cash flow calculations include the various factors Berman is including when he comes up with his $8 or $9 per mcf break-even point. But we think the above considerations, at the very least, should alert municipal officials to the fact that the ad valorem tax may not necessarily be a panacea for a town’s financial woes. Local towns should not let themselves be lured by the tax into hosting an activity that will impose expenses for which they find out too late they cannot be reimbursed.

*Those who are not familiar with the work of Berman, Deborah Rogers et al might be wondering why gas drilling companies should continue to drill if they have a negative cash flow. The answer is that they don’t make their money from selling gas; they make it from flipping leases, expanding and overvaluing their reserves to raise their book value and selling equity. It’s a shell game.

On the vacuity of “as long as it’s safe”

As noted in the post “DEP turns a blind eye to drilling contamination?” below, the Pennsylvania Department of Environmental Protection’s (DEP) Oil & Gas Division, when requesting lab results for water samples submitted in connection with drilling contamination complaints, has been using a system of codes that effectively screens out a huge portion of the results that are actually available and relevant

I have read quickly through the deposition taken by the law firm, Smith and Butz, that disclosed this information, and I have to say that at this stage, there is no way to conclude whether or not the practice in question is a matter of deliberate fraud. It might just be good old-fashioned bureaucratic bone-headedness. But the question as to whether it is deliberate or merely negligent should not distract us from the bottom-line conclusion that, for whatever reason, this is one more case in which the state protector is failing to do its job of protecting.

Proponents of drilling repeatedly claim that there no evidence of contamination by hydro-fracking. Well, any purported lack of evidence* is obviously meaningless if nobody is making any meaningful effort to collect it. And the practice disclosed in this case is just one more example of a systematic, institutional inadequacy in the collection of evidence about the environmental impacts of drilling.

There is also, for instance, the nondisclosure agreement problem: in case after case in which contamination and health impacts have been claimed, out-of-court settlements have been made that prevent the public from ever finding out the true substance of the claims or the evidence for them. And then there’s the lack of pre-testing problem: in case after case, contamination is alleged, and because homeowners have lacked either the foreknowledge or the financial means, or both, to test their wells before drilling has commenced, the drilling companies can get away with saying the toxins were there before they started.

The DEP case reveals another problem: issues as to the safety of drilling involve expertise in biochemistry and health issues that the general public simply does not have. If you make a complaint to your state regulators, and they test your water, and they issue a report with 8, or 10, or 12 results, how are you to know that there may be a total of 24 or more substances that should have been tested for? Surely your state environmental regulator ought to be an entity you can trust in this regard. At least in the state of Pennsylvania, that is clearly not the case.

The idea that drilling can be done safely rests, among other things, upon an entirely bogus reliance on a legal and regulatory system that, when it comes to calling big corporations to account, is almost entirely broken in this country. And it is particularly amusing and ironic that the very individuals who are willing to put their wide-eyed faith in the government when it comes to assuring us of the safety of natural gas drilling, are frequently just those who think it should be starved until it’s small enough to drown in a bathtub.

I imagine Smith and Butz, the law firm representing the homeowners alleging contamination in this latest PA case, will go on to depose the individuals who actually used the codes in question to request water testing, and hopefully provide us with more information about what has been falling between the cracks and why. And maybe these particular cracks can be sealed (though not, most likely, as long as Tom Corbett is governor).

But whatever happens with this problem, the broader institutional weakness will remain. Whether drilling can be done safely depends not only on technological matters—which present their own set of issues—but regulatory issues. And there are no foreseeable circumstances under which regulation should be trusted to ensure against an eventuality as catastrophic as the contamination of our aquifers. One more reason why we should move as rapidly as possible to energy alternatives that do not carry that kind of risk.

*Claims that there is no evidence of water contamination due to horizontal hydrofracking also ignore, among other things, the USGS’s recent confirmation of earlier EPA findings that hydrofracking has caused water contamination in Pavilion, Wyoming (http://www.businessweek.com/news/2012-09-26/diesel-compounds-found-in-water-near-wyoming-fracking-site), and the fact that there is an abundance of evidence that there has been contamination related to the entire fracking-related drilling lifecycle, even if not specifically related to the fracturing itself.

PA DEP turning a blind eye to drilling contaminants?

The Cannonsburg, PA law firm of Smith Butz, in connection with litigation it is conducting with regard to alleged water contamination caused by natural gas drilling activities in Washington County, is claiming that the Pennsylvania Department of Environmental Protection (DEP) is systematically and deliberately ignoring test results that could provide valuable information with regard to such contamination.

In a letter to DEP Secretary Michael Krancer, the firm bases its charge on a deposition taken in September from DEP Bureau of Laboratories Technical Director Taru Upadhyay. In the course of the deposition, it was revealed that the lab typically tests for a long list of metals in keeping with EPA standard methods, but only a fraction of the results are delivered to the client—in the context of the deposition, the Marcellus Shale Drilling, Oil & Gas Management department of the DEP.

The limitation is due to the use of certain standard codes in making testing requests to the lab, including 942, 943 and 946, that specify only a restricted list of substances. Code 942, for instance, limits the reporting to only 8 out of 24 metals for which test results are available on a standard basis. In effect, the DEP Marcellus Shale drilling office is apparently asking not to be shown certain test results. In turn, any individual filing a complaint regarding water contamination is barred from seeing those results, and indeed has no way of knowing that such data is even available.

It is not clear from the documents whether it was Marcellus Shale Drilling, Oil & Gas Management that developed the codes in question, or whether the same codes are used by other DEP departments.

In its letter to Krancer, Smith Butz maintains that the results screened out pertain to substances known to be hazardous and associated with Marcellus Shale drilling. Included in code 942 results are barium, calcium, iron, potassium, magnesium, manganese, sodium and strontium. Excluded are results for silver, aluminum, beryllium, cadium, cobalt, chromium, copper, nickel, silicon, lithium, molybdenum, tin, titanium, vandium, zinc and boron.

The law firm also wrote a letter to State Rep. Jesse White (D-Allegheny/Beaver/Washington). White is calling on the U.S. Attorney’s Office and any other appropriate law enforcement agency to pursue an investigation of the DEP to investigate the matter, as well as to the National Environmental Laboratory Accreditation Program (NJ-NELAP), to investigate whether the DEP’s conduct and practices violated the accreditation standards for the DEP laboratories.

A press release from the office of Rep. White can be viewed here: http://www.pahouse.com/PR/046110112.asp

The letter from Smith Butz to Krancer can be viewed here: http://www.scribd.com/doc/111821139/Krancer-Letter

A copy of the actual deposition can be viewed here:

http://www.scribd.com/doc/111821978/Taru-Upadhyay-Depo