Hard Times in a Boom Town: Pennsylvanians Describe Costs of Fracking

If you're looking for the shale gas boom, northeastern Pennsylvania is the place to start.

The Marcellus is the largest and fastest growing shale gas play in the U.S. and more than half of its 50 most productive wells were drilled in Susquehanna County in the northeast. Susquehanna and neighboring Bradford County produced 41 percent of all Marcellus gas this June.

While drilling is down in other shale gas plays across the US, with major oil companies selling off their stakes and CEO's expressing regret for buying in, the Marcellus has bucked some of the downward trends so far.

A recent report from the Post Carbon Institute, “Drilling Deeper: A Reality Check on U.S. Government Forecasts for a Lasting Tight Oil and Shale Gas Boom,” has grave warnings about the Energy Information Administration's figures nationwide, concluding that two-fifths of the shale gas the agency expects to be produced between now and 2040 will likely never materialize. While many high-profile shale gas plays have already peaked in terms of gas production per well, the Marcellus appears to be an outlier in terms of productivity, researcher David Hughes concludes.

Enormous amounts of shale gas are being produced in Pennsylvania. In the first six months of this year, drillers here pumped 2 trillion cubic feet of gas. And much of this gas came from the Marcellus shale's twin sweet spots, in the Northeast and Southwest corners of the state.

In the whirlwind of activity, some locals in here struck it rich – those who owned large tracts of land and negotiated their deals at exactly the right moment. Driving through the county, it seems like every back road has a red-and-white permit sign marking a shale gas well, a water impoundment, or other Marcellus-related infrastructure.

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.

Sand Land: Frac Sand Mining in Western Wisconsin - Video Report by DeSmogBlog

The rush to drill for unconventional gas, enabled by a process popularly known as “fracking,” or hydraulic fracturing, has brought with it much collateral damage. Close observers know about contaminated water, earthquakes, and climate change impacts of the shale gas boom, but few look at the entire life cycle of fracking from cradle to grave.

Until recently, one of the most underlooked facets of the industry was the “cradle” portion of the shale gas lifecycle: frac sand mining in the hills of northwestern Wisconsin and bordering eastern Minnesota, areas now serving as the epicenter of the frac sand mining world.

The silence on the issue ended after several good investigative stories were produced by outlets in the past year or so, such as Wisconsin WatchPR WatchThe Wisconsin State Journal, the Associated PressThe Wall Street JournalOrionEcoWatch, and most recently, Tom Dispatch. These various articles, all well worth reading, explain the land grab currently unfolding in the Midwest and the ecological damage that has accompanied it

To put it bluntly, there could be no shale gas extraction without the sand. As Tom Dispatch's Ellen Cantarow recently explained,

That sand, which props open fractures in the shale, has to come from somewhere. Without it, the fracking industry would grind to a halt. So big multinational corporations are descending on this bucolic region to cart off its prehistoric sand, which will later be forcefully injected into the earth elsewhere across the country to produce more natural gas. Geology that has taken millions of years to form is now being transformed into part of a system, a machine, helping to drive global climate change.

Frac sand, which consists of fine-grained sillica, can cause the respiratory illness, silicosis. Washing the frac sand in preparation for the fracking process is also a water intensive process, particularly threatening in the age of increasing water scarcity in the United States and around the world.

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