Sharon Kelly

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Sharon Kelly is an attorney and freelance writer based in Philadelphia. She has reported for The New York Times, The Nation, National Wildlife, Earth Island Journal, and a variety of other publications. Prior to beginning freelance writing, she worked as a law clerk for the ACLU of Delaware.

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.

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.

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.

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.

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.

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.

New Study Shows Total North American Methane Leaks Far Worse than EPA Estimates

Just how bad is natural gas for the climate?

A lot worse than previously thought, new research on methane leaks concludes.

Far more natural gas is leaking into the atmosphere nationwide than the Environmental Protection Agency currently estimates, researchers concluded after reviewing more than 200 different studies of natural gas leaks across North America.

The ground-breaking study, published today in the prestigious journal Science, reports that the Environmental Protection Agency has understated how much methane leaks into the atmosphere nationwide by between 25 and 75 percent — meaning that the fuel is far more dangerous for the climate than the Obama administration asserts.

The study, titled “Methane Leakage from North American Natural Gas Systems,” was conducted by a team of 16 researchers from institutions including Stanford University, the Massachusetts Institute of Technology and the Department of Energy’s National Renewable Energy Laboratory, and is making headlines because it finally and definitively shows that natural gas production and development can make natural gas worse than other fossil fuels for the climate.

The research, which was reported in The Washington Post, Bloomberg and The New York Times, was funded by a foundation created by the late George P. Mitchell, the wildcatter who first successfully drilled shale gas, so it would be hard to dismiss it as the work of environmentalists hell-bent on discrediting the oil and gas industry.

In Pavillion, Wyoming Water Contamination Case, Questions Continue To Swirl About Oil and Gas Industry's Role

A funny thing happened when Idaho Dept. of Lands Oil and Gas Program Manager Robert Johnson stepped to the microphone at a public hearing this past fall. He said something that many have long suspected, but few officials have actually been willing to say bluntly and publicly.

He said that the oil and gas industry was responsible for the contaminated groundwater in Pavillion, Wyoming — referring to a high-profile case where environmentalists have alleged oil and gas drilling and fracking caused a town’s water supplies to go bad.  

Everybody's heard of Pavillion, Wyoming,” Mr. Johnson said. “OK. Pavillion was a leaking above ground pit that was not lined.”

Did the industry cause it?” Mr. Johnson said. “Yes they did.”

Later in his talk, Mr. Johnson also pointed to a faulty cement casing in a natural gas well as another factor in the case, describing EPA data showing pollution was caused “by a bad cement job on an Encana well that was drilled in 1985.”

His statement is noteworthy because, before coming to Idaho, Mr. Johnson was directly involved with the Pavillion investigation. He worked for the groundwater division of the Wyoming State Engineer’s Office, which has taken the lead role in the contamination investigation.

The comments, which were recorded by county officials and distributed by anti-drilling advocates, were also significant because they were so candid and because the state of Wyoming maintains that more study is needed before blame can be assigned. The state is currently investigating the Pavillion incident and expects to publish a report in September of this year.

Asked about the comments, Idaho state officials said that the remarks about wastewater pits were intended “to illustrate that the State of Idaho requires lined pits to avoid surface contamination,” adding that Mr. Johnson, an Idaho official, was not speaking on behalf of the State of Wyoming. Mr. Johnson worked for the oil and gas industry before joining the Wyoming State Engineer’s Office.

At State and Federal Level, Regulators Continue to Struggle With Fracking Wastewater

The oil and gas industry often complains about the patchwork of rules that exist from state to state and county to county. They say that the rules are so variable that it’s like having to get a new driver’s license every time you drive across a state line. Public safety advocates suggest a simple fix: federal oversight of drilling. Standardize the rules. But the drilling industry recoils at the very notion.

Several recent developments illustrate exactly why. Witness the two diametrically opposed directions federal and state regulators are heading. Officials at the U.S. Environmental Protection Agency, on the one hand, are considering strengthening rules on how oil and gas wastewater is handled by classifying some of it as hazardous waste. Meanwhile, state regulators in Pennsylvania, where the most active Marcellus shale drilling is currently underway, are considering a move to loosen wastewater rules.

Pennsylvania is currently poised to enact rules that would encourage oil and gas companies to use the heavily polluted wastewater from abandoned coal mines, called acid mine drainage, instead of fresh water. While supporters of this rule change say it’s a win-win situation for the environment and for drillers, opponents of the bill say that a key incentive in the bill goes overboard and could wind up creating worse problems down the road.

Risks of Fracking Boom Draw Renewed Attention from Investors

A coalition of investors called out five oil and gas companies for failing to measure or reduce risks associated with fracking on Tuesday, singling out companies both large and small for how they’ve handled the myriad risks associated with shale oil and gas extraction.

Shareholders in five companies — ExxonMobil, Chevron, EOG Resources, Occidental Petroleum and Pioneer Resources — filed resolutions objecting to the ways that the companies describe the risks of hydraulic fracturing and their failures to reduce the environmental and social impacts of fracking.

“The damaging impacts of hydraulic fracturing on air, water, and local communities have made the public understandably nervous and resistant to permitting this controversial industrial activity,” said Leslie Samuelrich, President of Green Century Capital Management, which together with the New York State Comptroller Thomas DiNapoli, filed the resolution at EOG Resources.

“Companies that fail to demonstrate a public commitment to identifying and mitigating their impacts will fail to earn the public trust,” she added, “and may put shareholder value at risk.”

Four of the five companies – ExxonMobil, Chevron, EOG Resources, and Occidental Petroleum –  received failing scores in a recent report that examined how companies disclosed the impact of fossil fuel extraction and graded their efforts to mitigate risks. Disclosing the Facts: Transparency and Risk in Hydraulic Fracturing Operations focused on 24 companies that use fracking, assessing the ways each handled toxic chemicals, water and waste, air emissions, community impacts, and governance. EOG Resources received a score of 6 out of 32, Chevron a score of 3, ExxonMobil and Occidental Petroleum each got a score of just 2.

That has some investors, including those overseeing New York City’s pension fund, worried.

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