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Will NY natural gas future break from problems of its past? DEC lacks funds to plug tens of thousands of leaky wells
Discharge from this abandoned well killed an acre of vegetation in Oneida County
The debate over natural gas development in New York has mostly been about the future. But residents living over New York’s abundant gas reserves must also figure out what to do about the past.
Regulators estimate there are 57,000 abandoned and orphan oil and gas wells statewide – many of them leaking. Of these, the state has listed 4,722 as a priority due to health and safety risks, but lacks funding to plug them. Wells tend to leak over time as casings deteriorate, raising risks of explosions and providing conduits for water contamination from methane, brine, arsenic and other pollution. The problem is summed up in this 2002 report from the New York Department of Environmental Conservation: “Abandoned wells can leak oil, gas and brine. They can contaminate groundwater and surface water, kill vegetation and cause safety and health problems. Underground leaks may go undetected for years before their damage is discovered.”
It’s a warning supported by facts in New York and neighboring shale gas states, where problems have ranged from drinking water pollution to fatal explosions. (More on that in a bit.) Unlike many industrial hazards, abandoned wells lurk in unexpected places. (Map here.) They have been found at playgrounds and parking lots, inside buildings, in wetlands, underwater in creeks and ponds, in wooded and brushy areas and in residential yards, according to DEC records. DEC staff discovers more of them every year during scheduled inspections or while investigating complaints. The most threatening cases go on the state’s priority list to be plugged “whenever funds become available.”
So far, funds have not become available, even as the state considers plans to begin permitting new drilling on an unprecedented scale for operators targeting the Marcellus and Utica shales, extending under most of upstate New York.
The abandonment problem is rooted in the economics and regulation of gas production. As wells age and production declines, they become maintenance liabilities, which encourages their sale to whomever will buy them -- typically smaller, less established firms or even homeowners. In the end, the parties left holding them often drop them from their books or go bankrupt.
Theodore Loukides, head of the Oil & Gas Compliance and Enforcement Section for the DEC, issued a bulletin earlier this year notifying operators that “given the state of awareness surrounding energy development, the plugging of legacy wells will likely remain a high-profile issue of years to come.” In the bulletin, published in a newsletter for the Independent Oil & Gas Association of New York, he asked operators for input on plugging, and new initiatives focusing on waste, bulk storage, spills, and proper submittal of annual reports.
DEC spokesman Peter Constantakes didn’t return calls or emails about the subject this week. Yet the “state of awareness” that Loukides delicately mentions is due to the contentious issue of whether Governor Andrew Cuomo will finalize permitting guidelines for high volume hydraulic fracturing necessary to explore and produce the Marcellus and Utica shales, which collectively run under a good part of upstate New York. Since shale gas became a major political issue in 2008, the legacy of “old oil fields” is something you rarely, if ever, hear DEC officials talk about publically, even though the problem has been neatly summarized in prior studies and annual reports.
The 1995 annual report for the Minerals Resources Division was explicit in this warning ,which was repeated verbatim almost a decade later in a 2003 report commissioned by the state Energy and Research Development Authority:
One of the biggest challenges facing the oil and gas regulatory program is the growing liability of idle and abandoned wells. In most cases financial security, even for operators in compliance with current regulations, does not provide sufficient funding to plug the covered wells. When operators default on their tax bills and counties foreclose on properties that contain unplugged wells, those wells become a liability for local taxpayers. This is not a hypothetical worst-case scenario, but reflect current events already happening in the counties. We need a creative approach to develop new solutions to this problem, and hope to productively work together with all stakeholders in this effort.
Fixing the problem will require significant regulatory reform, according to Ron Bishop, a professor of chemistry and bio chemistry at SUNY Oneonta who has been studying the orphan well issue in New York. In a white paper for a land preservation group called Sustainable Otsego, Bishop explains:
Unless the state of New York does something to dramatically alter the long-standing culture of neglect, we can reasonably expect oil and gas industry operators to ignore any new standards just as they systematically ignore existing standards today.
The problem extends from the pre-regulatory era to current times. It’s common practice for larger operators to sell off wells near the end of their life cycle to smaller firms with less capitol. The sale provides the seller with a better financial outcome than holding onto the dwindling returns and provides a buyer – typically one with limited capital -- a well that it doesn’t have to drill. Bishop cites this explanation from Lou Allstadt, a former senior executive with Mobile Oil:
The original company uses the cash to finance new investments. The buying company operates with lower costs because they spend less on maintenance and safety items and they have fewer well-qualified people to pay. The chain may end there or continue through smaller and ever lower cost operators who do no preventive maintenance at all, do the bare minimum of repairs to keep the well going and eventually walk away, maybe after plugging the hole as cheaply as possible and maybe not plugging at all. The smaller companies often operate each well or group of wells under a separate corporate entity that is always stripped of cash, so if something goes wrong there are no assets to pay off claims. Not all small operators will do this, but it happens.
Shale gas wells are more prone to this outcome than yesterday’s conventional wells because production from shale, known as tight gas, tends to taper more quickly than conventional wells, according to Bishop.
Now for more on the legacy of problems in New York and Pennsylvania: A starting point is in 2008. The first wave of aggressive shale gas prospecting in New York raised many questions with residents, and DEC staffers staged informational meetings at town halls throughout the Southern Tier to address them. Officials from the Minerals Resources Division pitched shale gas as a clean, problem free and well-regulated industry. They avoided mention of the tens of thousands of orphan wells that in fact represented a serious, chronic, and concrete problem.
Around this time Walter Hang, an environmental researcher, began uncovering a history of neglect that undermined the DEC’s message and sowed early seeds of public doubt about the transparency of both the industry and those who oversee it. Hang is president of Toxics Targeting, a firm that identifies and tracks pollution liabilities for developers and municipalities.
Hang and others who tried to quantify and characterize the problem had tough going, due to a records system that was decentralized, archaic, and often incomplete with files scattered among disparate government offices, private companies, and court rooms. Still, Hang culled 270 records documenting mishaps —some from newspaper clippings, dossiers at health departments, complaints filed with elected officials, and some showing up on the DEC’s database for spills. Many of the problems -- including fires, blow-outs, methane migration, and spills relating to wells or infrastructure –- remained unresolved and partially documented.
Hang’s analysis, which I wrote about in a series of reports for the Press & Sun-Bulletin and later in Under the Surface, drew sharp criticism from industry and regulators who dismissed it as overblown. A few hundred cases, they said, represents a negligible proportion of the tens of thousands of wells drilled through New York’s history. Still, the cases were troubling then and they are troubling now, mostly because they represent a subset of a greater number of problems that will remain unknown without a reliable and comprehensive system to document them.
In matters of transparency, the oil and gas industry operates mostly on its own terms. It works on private land under contract with landowners. Chemicals pumped into wells are exempt from the Safe Drinking Water Act, and waste that comes out is exempt from federal hazardous waste laws. The absence of a federal regulatory baseline in these two critical areas leaves a lot of grey area.
And it gets greyer. The DEC, like other states, adopts a laissez-faire approach to much of its oversight. Agency’s are understaffed and rely primarily on paperwork submitted by operators. Complaints involving water contamination are often settled privately between leaseholder and drillers, and they often end with non-disclosure agreements that eliminate any public paper trail.
William T. Boria, a water resources specialist at the Chautauqua County Health Department, was frustrated by this very approach. He reported his agency had received more than 140 complaints related to water pollution or gas migration associated with nearby drilling operations. “Those complaints that were recorded are probably just a fraction of the actual problems that occurred,” he stated in a 2004 memo summarizing the issue. For fifty-three of those cases filed from 1983 to 2008, county health officials tabulated an informational spreadsheet that cited methane migration, brine pollution, and at least one home evacuation resulting from a water well explosion. “A representative I spoke with from the Division of Minerals [of the DEC] insists that the potential for drinking water contamination by oil and gas drilling is almost nonexistent,” Boria wrote in his memo to a party whose name was redacted. “However, this department has investigated numerous complaints of potential contamination problems resulting from oil and gas drilling.”
The problem is worse in Pennsylvania, where 200,000 or more abandoned wells are more or less hidden under the landscape. In September, 2009, the DEP compiled a draft of known cases where methane leaked from abandoned or working wells. According to the briefing, methane migration from gas drilling, had “caused or contributed to” at least six explosions that killed four people and injured three others over the course of the decade preceding full-scale Marcellus development. The threat of explosions had forced 20 families from their homes, sometimes for months. At least 25 other families have had to deal with the shut-off of utility service or the installation of venting systems in their homes. At least 60 water wells (including three municipal supplies) had been contaminated.
What does this mean for the future? It’s hard to know where to start, but focusing on the cost of the problem is a good place. Plugging a single well can cost between $5,000 and $50,000, according to estimates from the DEC. That means the bill for dealing wells on New York’s priority list alone would cost between $24 million and $236 million. In economic terms, this cost is “externalized,” which means that it is not borne by businesses or their consumer. Rather, it’s falls to taxpayers, or comes at the expense of public health and safety.
In many ways the orphan well legacy is similar to the abandoned mine legacy that continues to foul water and create public hazards in Pennsylvania and other states, and it’s a manifestation of an important aspect of the extraction industry overall. Coal, natural gas, and oil provide modern-day comforts beyond historical comparison. As energy consumers, we should embrace a moral obligation to understand where our energy comes from and at what cost as we evaluate tradeoffs.
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Obama’s upstate tour motivates anti-fracking activists President: ‘Fossil fuels finite. Climate change is real’
Anti-fracking protestors line the motorcade route at Binghamton University
It was tough going for the 400 protesters preparing for Obama’s visit to Binghamton University Friday. They faced traffic from a rush of returning students and a maze of construction barriers, detours, and police blockades. Parking on campus, limited under ideal circumstances, got predictably worse when police closed campus roads at 10 a.m., two and a half hours prior to the arrival of the presidential motorcade.
After getting an early morning start that began with a walk of a mile or more from remote parking spots, with NO FRACKING WAY placards and provisions in hand, the protesters – skewed heavily toward the baby boom generation but also including students -- gathered at a designated spot on the motorcade route in front of the university library. They rallied for hours while waiting for the president’s arrival. They chanted “Yes We Can,” echoing both the president’s campaign slogan, and their intention to stop fracking. The cheers reverberated across quads and walkways at the center of campus that were mostly empty due to security measures, and the animation of the protesters offered stark contrast to the poised vigilance of police and secret service personnel stationed at every turn.
Behind the scene at the Town Hall meeting
I passed the protesters as I negotiated the series of barriers and yellow tape, hurrying to get to the press check-in at the university union before the cut-off. After getting cleared, I was directed through the press entrance to the venue, where I set up my laptop at a bank of workstations that accommodated about 40 other reporters on the periphery of the action. My view was partially obscured by the risers in front of me, which held cameras for photographers and broadcast outlets. The press pool, easily numbering more than 100, flanked one side of the small hall. The president’s podium was in the middle. Two other sets of risers – opposite and at a right angle to the risers for the press pool -- held students and faculty picked from a lottery. In the remaining space a row of folded chairs directly in front of the president was reserved for local officials and dignitaries.
A few hours later, with everybody in their assigned places, a helicopter churned overhead and the presidential motorcade turned onto campus. As the line of motorcycles with flashing lights, SUVs and a large black bus with the presidential seal made their way up the road, the activists by the library seized their brief moment and shouted and waved banners. Some glimpsed the president standing near the front of the bus, but it was difficult to discern a reaction behind the tinted class. It was over in an instant, and several minutes later, the president made his way into the Union from an unseen entrance.
Video of Obama's town hall meeting at Binghamton
Obama opened the meeting with a short talk about education as the essence of the American Dream. Predictably, he offered no passing mention of the subject that stirred the protest that greeted his arrival, or other protests that had been staged across various points of his two-day tour through upstate New York and Pennsylvania. The questions and answers of the two-hour town hall meeting were themed around equality and access and affordability of the American higher education system. (With due respect to the significance of the educational issues that were the focus of the president’s tour, I will not go into these much here, and leave that worthwhile work to other bloggers and educational beat writers.)
In keeping with the heart of the theme of his second term – working for the middle class -- Obama projected an approachable and informal manner throughout his upstate tour, which included spontaneous stops to greet surprised onlookers at soccer-fields, diners, and cafes. And he kept up that manner at Binghamton University. “I’m interested in hearing your stories, getting your questions,” he said. “And this will be a pretty informal affair -- well, as informal as it gets when the President comes -- (to laughter) -- and there are a bunch of cameras everywhere.” After calling on a student in an Obama T-shirt, he advised “here’s a general rule in the presidential town hall: If you want to get called on, wear the president's face on your shirt.” (The student’s question: How does your administration plan to address the major budget cuts that are happening with Head Start schools around the U.S.? Obama’s answer: As the deficit continues to fall with the economic recovery, he sees more resources for federal funding. But it remains a political fight, and he will fight for worthwhile programs like Head Start.)
Near the end of the meeting, Obama called on a man with something other than education on his mind. His name was Adam Flint, coordinator of a Cooperative Extension program called Broome Energy Leadership Program. Flint began with a bit of context: Fossil fuels might last another generation. And then what? He was worried about his children’s futures, and he was guessing that the president, with adolescent daughters of his own, shared his concern. “Is there any good news for green economy of future?” Flint asked.
Behind that simple question lies a convoluted political dilemma, and the president’s answer reflected this, if little else. On the one hand, Obama said, with record production of domestic fossil fuel “we’ve actually achieved, or are on the verge of achieving about as close as you can get to energy independence as America is going to see.” He notably chose to avoid the word “fracking” – the controversial method of splitting rock with pressurized chemical solutions. This technology, exempt from federal regulations that govern chemicals that go into the ground and waste that comes out of the ground, is largely responsible for prolonging and enabling our fossil fuel-based energy system.
Without mentioning these exemptions, Obama pushed on to the crux of the question: The future. “The bottom line is those (fossil fuels) are still finite resources. Climate change is real. The planet is getting warmer. And you’ve got several billion Chinese, Indians, Africans and others who also want cars, refrigerators, electricity. And as they go through their development cycle, the planet cannot sustain the same kinds of energy use as we have right now. So we’re going to have to make a shift.”
The shift will require new technology, he said. But immediate improvements can come through conservation measures now within reach that could reduce the country’s energy consumption by 20 percent to 30 percent. Retrofitting buildings for energy efficiency, as well as building new energy-efficient buildings and communities, can create jobs as well as decrease energy dependence. But even a relatively simple approach like this – what Obama called the “low hanging fruit” of the energy question – involves a problem. The problem is rooted deeply in prevailing influence of Big Energy on Capitol Hill, and ideological factors that “tend not to be particularly sympathetic to alternative energy strategies,” Obama said.
“In some cases, we’ve actually been criticized that it’s a socialist plot that’s restricting your freedom for us to encourage energy-efficient light bulbs, for example. I never understood that. But you hear those arguments. I mean, you can go on the Web, and people will be decrying how simple stuff that we’re doing, like trying to set up regulations to make appliances more energy-efficient -- which saves consumers money and is good for our environment -- is somehow restricting America’s liberty and violates the Constitution.
“A lot of our job is to educate the public as to why this can be good for them -- in a very narrow self-interested way. This is not pie in the sky. This is not tree-hugging, sprout-eating university professors. This is a practical, hardheaded, smart, business-savvy approach to how we deal with energy.”
Obama is dealing with energy in a somewhat different way than his fellow Democratic leader, New York Governor Andrew Cuomo. Obama has embraced an “all of the above” approach to encourage sources of domestic energy production, including fossil fuels and renewables, and in previous speeches he has identified fracking for natural gas and oil as “a priority.” Obama’s words have been supported by his actions: His EPA has dropped two critical investigations into groundwater pollution near drilling sites in Pavillion, Wyoming and Dimock, Pennsylvania. Both investigations found chemicals associated with drilling in residential water wells, and this finding, if pursued, could have provided ammunition for policy reform and a threat to the industry’s exemption to the Safe Drinking Water Act. Also, Obama’s Department of Energy has begun permitting facilities to export gas, a move that will encourage more exploration and production at home.
Cuomo, on the other hand, leads a state that sits over a lucrative part of the Marcellus and Utica shales – world class gas reserves. Yet Cuomo has not allowed shale gas development. A defacto-moratorium on permitting is now entering its sixth year, while the Cuomo administration continues to evaluate health and environmental impacts of fracking and the broader consequences of shale gas development.
In the meantime, political action groups both for and against fracking have used the delay to pressure Cuomo. Fracking supporters also appeared with signs – Drill a Well, bring a soldier home -- within view of the presidential motorcade yesterday. That protest, at Otsiningo Park boarding Route 81 several miles north of Binghamton, was much smaller and less visible than the one on campus, and the difference between the two protests illustrates the way things are going in New York state.
Walter Hang, an anti-fracking activist and an organizer of the Binghamton University protest, said the logistically difficult demonstration on campus was a reflection of the organizational ability and commitment of the anti-fracking push from the grass roots that has stalled the development of shale gas at the Pennsylvania border.
“When Obama’s office announced he would be taking a bus tour through upstate, we knew this was a chance to get our message out nationally,” said Hang, a career activist who worked as a community organizer for New York Public Interest Research Group for decades. Hang emphasizes the importance of tactics and execution in political action campaigns. “We’re out-organizing the industry in New York state,” he said.
In addition to well-organized grass roots campaigns in upstate New York, the movement is also getting help from Cuomo’s broader progressive base, which includes a host of institutions and influence from the Hudson Valley and New York City areas strongly opposed to fracking.
Cuomo, seen by many as a rising star in the Democratic party and a possible successor to Obama, neatly sidestepped this chapter of the shale gas controversy. After greeting the president at the Buffalo airport Thursday, he took his daughters back to college while the president made his rounds upstate.
On a related note: While most drilling takes place on private land, the federal government is considering a set of rules to regulate fracking on federal and Indian lands. This recent article by Keith Johnson of the Wall Street Journal explains the fight between the industry and environmentalists over the scope of proposed rules by the Bureau of Land Management.
Antifrackers unhappy w/Obama’s gas stance
Pete Bianco may an extreme example, but many of the fractivists here at Binghamton University are unhappy with President Barack Obama’s support of natural gas development, which would include hydrofracking.
Bianco, a BU grad and Utica-area community share vegetable farmer, was toting a poster with photos of Obama and the bete noire of many environmentalists, former VP Dick Cheney.
“The poster says it all,” Bianco said, adding “I see what Obama is doing as an extension (of the Bush Cheney energy policies).
Not all of the fractivists, who tend more to be Democrats and on the left side of many issues, took such a harsh view but they were clear that they disagreed with Obama’s gas stance.
Douglas Vitarius, a retired teacher from nearby Sanford said he has a “mixed” view of the president. “I feel he really cares about people,” said Vitarius. “But then he has come out on the side of pro-gas development.”
Added fellow fractivist Joan McKiernan, a retired Bronx teacher who has a home in Windsor: “Obama has never gone against bankers or corporations.”
Perhaps ironically, the pro-frackers that I spoke with earlier this morning, say they are encouraged by Obama’s support for gas development suggesting it could serve as a Part II of the Obama stimulus package.
“There was no stimulus package there,” Bryant Latourette St., of Oxford, said of earlier stimulus plans in his Central New York community.
Obama is about an hour away at this point and anti-frackers are chanting some of the same slogans they’ve used at Capitol rallies, such as “Hey Hey Hey Ho, Hydrofracking has Got to Go.” Alternately group leaders like Walter Hang are talking about what they say are the perils of fracking.
Pro and Anti-Fracking Groups Will Greet President in Binghamton
Another big element of the President's visit will of course be both the pro and anti fracking groups that are expected to be on hand as he arrives in Binghamton:
And the fireworks have already begun.
State Republican Chairman Ed Cox is noting the absence of Democratic Governor Andrew Cuomo during Obama's visit to Upstate New York - saying it's an act of Cuomo's, quote: "...political cowardice that the governor does not seem willing to join his president in facing the rabid mob of anti-frackers."
Some of those anti-fracking protesters, including Binghamton Mayor Matt Ryan, feel Cox should apologize for his choice of words. But a prominent anti-fracker feels it's obvious that Cuomo is hesitant to come to Binghamton.
"...so I think that the governor is afraid to face the music. He doesn't want to face hundreds, if not thousands of shale activists who are pounding him every day to halt the Department of Health review conducted in secret without any public participation," said Walter Hang of Toxics Targeting.
Anti-fracking protesters are planning to gather near the Bartle Library on campus Friday morning.
Fracking supporters will meet at Otsiningo Park. Cuomo did accompany Obama in Buffalo Friday morning but said he is missing the rest of the trip to help his twin daughters get ready for their first year of college.
