Sharon Kelly's blog

Sun, 2014-04-06 11:18Sharon Kelly
Sharon Kelly's picture

Responding to Investor Pressure, ExxonMobil Agrees to Disclose Fracking Risks

ExxonMobil, the nation's largest oil and gas company, will begin disclosing risks associated with shale drilling and fracking to investors, in response to a long-running campaign by a coalition of shareholders.

In February, the groups of investors in a handful of major oil and gas companies including Exxon, Chevron and EOG Resources, demanded for the fifth year in a row more information from companies about the risks associated with fracking. The motion won the support of over 30 percent of Exxon shareholders — an unusually strong showing for a shareholder resolution.

On Thursday, the investors’ coalition announced that Exxon was the first company to agree to disclose risks. The company will publish a report by September that will describe fracking’s potential harm to air quality, water and roads, as well as risks associated with the chemicals used. Exxon agreed to follow criteria identified in a 2013 report, cited by the coalition and called Disclosing the Facts: Transparency and Risk in Hydraulic Fracturing Operations, in which Exxon received a failing grade for its transparency.

We have seen the significant risks that come from hydraulic fracturing activities,” said New York City Comptroller Scott M. Stringer, custodian and investment advisor for the New York City Pension Funds’ $144 billion in assets, including $1.02 billion in ExxonMobil stock. “Corporate transparency in this arena is truly necessary for assessing risk and ensuring that all stakeholders have the information they need to make informed decisions.”

However, Exxon’s first report will not disclose data on methane leaks – information that shareholders argued strongly should be made public. Natural gas is primarily made of methane, a potent greenhouse gas that has climate changing effects over 80 times more powerful than carbon dioxide during the first two decades after it escapes to the Earth’s atmosphere.

Mon, 2014-03-24 05:00Sharon Kelly
Sharon Kelly's picture

Research Shows Some Test Methods Miss 99 Percent of Radium in Fracking Waste

Every year, fracking generates hundreds of billions of gallons of wastewater laced with corrosive salts, radioactive materials and many other chemicals. Because some of that wastewater winds up in rivers after it’s treated to remove dangerous contaminants, regulators across the U.S. have begun to develop testing regimens to gauge how badly fracking wastewater is polluted and how effective treatment plants are at removing contamination.

A newly published scientific study, however, shows that testing methods sometimes used and recommended by state regulators in the Marcellus region can dramatically underestimate the amount of radioactive radium in fracking wastewater.

These test methods can understate radium levels by as much as 99 percent, according to a scientific paper published earlier this month in Environmental Science and Technology Letters. The tests, both recommended by the Environmental Protection Agency for testing radium levels in drinking water, can be thrown off by the mix of other contaminants in salty, chemical-laden fracking brine, researchers found.

Not all the radium tests from the Marcellus region dramatically understate radioactivity. Many researchers, both public and private, have used a method, called gamma spectroscopy, that has proved far more reliable than the EPA drinking water method. But the results of the research serve as a warning to regulators in states across the U.S., as they make decisions about how to monitor radioactivity in fracking waste.

People have to know that this EPA method is not updated” for use with fracking wastewater or other highly saline solutions, said Avner Vengosh, a geochemist at Duke University.

The team of scientists from the University of Iowa tested “flowback water,” the water that flows out from a shale well after fracking, using several different test methods. The EPA drinking water method detected less than one percent of radium-226, the most common radioactive isotope in Marcellus wastewater.

Tue, 2014-03-18 06:00Sharon Kelly
Sharon Kelly's picture

A Record Year of Oil Train Accidents Leaves Insurers Wary

Spurred by the shale drilling rush that has progressed at breakneck speed, the railroad industry has moved fast to help drillers transport petroleum and its byproducts to consumers. Last year, trains hauled over 400,000 carloads of crude oil, up from just 9,500 carloads in 2008, according to railroad industry estimates.  Each carload represents roughly 30,000 gallons of flammable liquids, and some trains haul over 100 oil cars at a time.

But with this fast expansion has come some astounding risks — risks that have insurance companies and underwriters increasingly concerned.

A string of oil train explosions have highlighted the potential for harm. A train hauling 2.9 million gallons of Bakken oil derailed and exploded on November 8 in Aliceville, Alabama, and the oil that leaked but did not burn continues to foul the wetlands in the area.

On December 30th, a train collision in Casselton, North Dakota 20 miles outside of Fargo, prompted a mass evacuation of over half the town’s residents after 18 cars exploded into fireballs visible for miles. 400,000 gallons of oil spilled after that accident, which involved two trains traveling well below local speed limits.

Those crashes are all on the radar of the insurance industry,” attorney Dean Hansell recently told Law360.

All told, railcar accidents spilled more than 1.15 million gallons of crude oil in 2013, federal data shows, compared with an average of just 22,000 gallons a year from 1975 through 2012 — a fifty-fold spike.

Tue, 2014-03-11 05:00Sharon Kelly
Sharon Kelly's picture

Fracking in Public Forests Leaves Long Trail of Damages, Struggling State Regulators

Last Wednesday, the Washington D.C. city council passed a resolution opposing fracking in the George Washington National Forest, making the nation’s capitol the third major U.S. city, after Los Angeles and Dallas, to decry the hazards of shale drilling in recent days.

The D.C. council’s resolution called on the U.S. Forest Service to prohibit horizontal hydraulic fracturing in the forest’s headwaters of the Potomac River, the sole source of water for the nation’s capital, citing the risks of pollution and the costs of monitoring for contamination.

It is unclear whether the DC City Council vote will hold any sway in determining the actual fate of the forest. The decision whether to permit fracking there primarily rests with the U.S. Forest Service, which is currently updating its long-term management plan for the George Washington National Forest.

As the debate over shale drilling intensifies in the nation’s capitol and across the country, Pennsylvania offers useful lessons for how states have mishandled their forests. Pennsylvania has been ground zero for Marcellus shale development and roughly two thirds of Pennsylvania’s state forest land lies above the Marcellus shale, one of the largest shale plays in the U.S.

Cornell University Professor Anthony Ingraffea recently reviewed state data on environmental violations in Pennsylvania state forests, including the 100,000-acre Loyalsock forest in the north central part of the state, a popular tourist destination and the focus of a local controversy over fracking.

What Mr. Ingraffea found highlights the hazards of drilling and demonstrates how a powerful industry can overwhelm regulators’ capacity to protect against environmental harms.

State regulators, the data revealed, have been unable to adequately keep tabs on drilling on state lands.

Over 59 percent of the Marcellus wells already drilled in the Loyalsock had never been inspected, Prof. Ingraffea found, and over a quarter of wells on state lands had no inspection reports available to the public.

Tue, 2014-03-04 05:00Sharon Kelly
Sharon Kelly's picture

The View from Europe: America’s Shale Boom Looks More Like a Blip

The fracking boom has progressed at breakneck speed across the U.S., with roughly one in 20 Americans now living within a mile of a well drilled since 2000.

So, how much has the economy benefitted from this drilling surge?

Not much, according to a report presented to the European Union Parliament last month, which found “no evidence that shale gas is driving an overall manufacturing renaissance in the US.”

The shale boom’s economic contributions are very narrow, inflating local economies in places where drilling is intense but generating little impact on the country’s overall economic growth, the Institute for Sustainable Development and International Relations, a French think tank, concluded.

Although natural gas prices have fallen from their highs in 2008, benefitting consumers, those low levels are unlikely to be sustained and the U.S. is still expected to remain heavily reliant on importing crude oil, the researchers found.

Even using very optimistic assumptions, the report said, the industry’s cumulative long term effect on America’s Gross Domestic Product (GDP) will be less than one percent. “Despite very low and ultimately unsustainable short-term prices of natural gas, the unconventional oil and gas revolution has had a minimal impact on the US macro-economy,”

That’s not the amount that shale gas will add to the economy each year, the researchers said. Instead, the industry will make up no more than 0.84 percent of total GDP between 2012 and 2035 – the years when the shale boom is projected to be at its height. To put that in context, the personal care products industry – hair styling, cosmetics and the like – contributed 1.4 percent of GDP in 2010 – nearly double the impact that the EU report found the shale gas rush could have.

Mon, 2014-02-24 05:00Sharon Kelly
Sharon Kelly's picture

Cold Weather Brings Wild Swings in Natural Gas Prices Despite Shale Gas Rush

Last year, natural gas prices hit record lows and shale gas promoters confidently predicted a bright future of stable low prices, making the fuel the best choice for home heating and electrical generation alike.

But last year was also marked by an unusually mild winter amid a still-sluggish economy. This year, cold winter weather returned across much of the U.S. – and consumers and utilities have begun to confront a strikingly different reality. Natural gas prices immediately spiked as high as $8.15/mmBTU Henry Hub this month – the most expensive prices seen since the 2008 economic collapse – as demand for power and heat surged.

And that $8.15 represents the daily price at a Louisiana pipeline hub often referenced by traders and federal energy analysts; regional prices have spiked far more dramatically. In the frigid Northeast, local prices have skyrocketed this year, with some operators paying up to $120 per mmBTU. “I’ve never seen anything like this,” one New Jersey power company executive told Bloomberg Businessweek in January. The spike’s effects have even reached as far south as East Texas, where spot prices topped $40/mmBTU, nearly reaching the highs seen in 2004 when the current onshore drilling rush began in the Barnett shale.

Keep in mind that the same amount of natural gas cost only $1.92 in April 2012.

That’s a little like suddenly finding out that a McDonalds burger that used to be 2 bucks will now cost you as much as full dinner at a five star restaurant.

These massive fluctuations in natural gas prices over the past year drive home a vital point: natural gas has always been prone to sudden booms and busts. The idea that shale gas – less than ten percent of the nation’s natural gas production and some of the most expensive to produce – could fundamentally transform the natural gas market, keeping prices consistently low, now seems more like a pipe dream than ever before.

Already, utilities and their customers are paying the price.

Pages

Subscribe to RSS - Sharon Kelly's blog