accidents

Tue, 2014-11-04 04:00Sharon Kelly
Sharon Kelly's picture

Marcellus Shale Fracking Rush Brings Worries of Boom-Bust Cycle

Across the U.S., the shale gas industry's arrival has been marked by wariness, not only of the environmental impacts associated with fracking, but also due to the oil and gas industry's long history of flashy booms followed by devestating busts.

In towns across the state, the lingering effects of past economic downturns – the flight of manufacturing, the 2008 financial collapse, the slow erosion of the auto and steel industries – have left communities eager for jobs, but also experienced with job loss.

Nowhere better illustrates the potential for a shale rush to heal old economic wounds, or communities' vulnerability to new ones, than Cameron County, Pennsylvania. At the eastern edges of the rust belt, Cameron County has been hit hard by the decline of the American auto industry.

Hopes for a shale renassiance are running up against some difficult realities. A report released Monday by the Post-Carbon Institute, titled “Drilling Deeper: A Reality Check on US Government Forecasts for a Lasting Tight Oil & Shale Gas Boom,” concludes that the Marcellus shale is unlikely to fully live up to government forecasts, and that natural gas prices will have to rise to keep drilling going across the state. The vast majority of the Marcellus shale is not the same high quality as the areas where drillers are currently focusing most of their efforts, referred to in the industry as “sweet spots,” making the gas there more expensive to produce.

The report also finds that shale gas production in the Marcellus is expected to reach it's peak in 2018 or 2019 – meaning that within five years, production will begin dropping. “These projections are optimistic in that they assume the capital will be available for the drilling treadmill that must be maintained to keep production up,” the report says. “This is not a sure thing as drilling in the poorer quality parts of the play will require higher gas prices to make it economic.”

Sun, 2014-07-06 14:14Carol Linnitt
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One Year After Lac-Mégantic Disaster: Delay in Safety Regs, Groups Bring Oil Train Data to Communities

Lac-Mégantic oil train derailment, explosion

On July 6th, 2013, one year ago today, a train carrying oil derailed in the sleepy Quebec town of Lac-Mégantic, resulting in an explosion so wild and so hot it leveled several city blocks and incinerated the bodies of many of its 47 victims. The accident put the tiny town on the international media circuit and dragged a new social concern with it: oil trains.

Whether you call them oil trains, tanker trains or bomb trains, chances are you didn’t call them anything at all before this day last year.

Before the tragedy of Lac-Mégantic, several smaller tanker train accidents across North America had already raised alarm over the danger of transporting oil and other fuels by rail in small communities with tracks often running through city centres and residential areas.

In the wake of Lac-Mégantic, however, critics, environmental organizations, journalists and concerned communities began tracking the growing movement of volatile oil shipments across the continent.

Mon, 2013-11-25 05:00Sharon Kelly
Sharon Kelly's picture

Banks Reluctant to Lend in Shale Plays as Evidence Mounts on Harm to Property Values Near Fracking

Over the past several years, the fossil-fuel industry has been highly adept at publicizing the economic upshots of fracking: royalty checks, decreased prices for oil and gas, profits for investors. 

But the industry is far less eager to discuss the hidden costs of the current drilling boom – the longterm price of air and water pollution, the consequences of undermining a nascent renewable energy industry, the harms from accidents when moving and storing all the hazardous waste fracking produces. 

Add to that list of hidden costs one that is starting to grab more attention from bankers and the real estate industry: property values and mortgage problems. New research, for example, demonstrates that the vast majority of prospective buyers say they would decline to buy a home near oil and gas drilling.

As millions of Americans sign oil and gas leases granting the right to companies to extract fossil fuels from their land, they are realizing that these documents often conflict with their mortgages, which is leading to all manner of legal and financial headaches, and make it harder to sell homes on land whose oil and gas rights are leased.

Concern about these impacts is spreading in southern states like Texas, Alabama and Florida, according to a survey due for release in the next several weeks from the University of Dever. In northeastern states like Pennsylvania, fracking worries have prompted lenders to begin rejecting mortgage applications due to gas drilling – on neighboring property. In Colorado, real estate brokers describe keeping a long list of sellers in heavily fracked areas, but a paucity of buyers. 

Under the terms mortgage buyers like Fannie Mae and Freddie Mac require, “you cannot cause or permit any hazardous materials to be on your property and it specifically references oil and gas,” Greg May, vice president of residential mortgage lending at Tompkins Bank, told American Banker in an interview published Nov. 12. “That alone would make it a problem.”

The repercussions for the American real estate market could be enormous. More than 15.3 million Americans – roughly one out of every 20 people living in the U.S. – now live within a mile of an oil or gas well that was drilled since 2000, the Wall St. Journal recently reported

And that may be just the tip of the iceberg since shale gas and oil wells require ongoing drilling for them to stay productive. In 2010, for example, Pennsylvania regulators predicted a more than 10-fold increase in shale wells in their state over the next couple decades.

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