September 2009

an editorial by Ann Kozak

Among the arguments in favor of drilling in the Marcellus Shale is that it’s somehow patriotic; that landowners who sign leases are just doing their part to put the U.S. on the road to energy independence.

The battle cry at last month’s pro-drilling rally in Bainbridge, N.Y. was “Our Land, Our Rights, Our Future.” Regardless of what drilling might do to the land, the rights or the future for the rest of us, the pro-drillers stand ready to help the energy companies make sure our lights and our TVs stay on and our refrigerators keep running. If things get as bad as some predict, they can always take their royalty checks and move to where the water is still clean and the air breathable.

But in fact the gas extracted from the Marcellus Shale won’t make it any easier or cheaper to heat our homes or run the A/C in Hancock, or anywhere else in New York, or even in the country.  Right now most of the gas going into the pipeline from around here is being stored until prices go up. Gas supplies are so abundant that Chesapeake Energy has been reportedly looking at shipping it overseas where gas sells for twice the price it’s commanding in the U.S. (And you thought jobs were the only thing we exported.)  So much for patriotism.

The profitability of exporting natural gas explains in part why the industry might pay upwards of $5,000 per acre for drilling rights. The other part is taxes. Between 2002 and 2006, Chesapeake Energy, for one, had an average tax rate of 0.3 percent. I could qualify for food stamps and still owe 20 percent of my income to Uncle Sam. Landowners with producing wells will be paying about 42% on the royalties.  But not the gas companies.

And that’s not all. The oil and gas industry gets around a whole slew of rules and regulations that apply to every other industry. But because they are oil and gas, with friends in very high places, the laws no longer apply to them.

For instance, almost everyone knows that the drillers are currently exempt from the Safe Drinking Water Act, which sets standards and requires permits for the underground injection (e.g. hydrofracking) of hazardous substances that can endanger drinking water.

They are also exempt from the Resource Conservation and Recovery Act, which means they don’t have to disclose or safely manage their hazardous waste like every other industry does. Congress is now working to end those particular exemptions, but it will take more than the FRAC Act to end them all.

There’s the Emergency Planning and Community Right-to-Know Act, which requires industries to file their toxic release inventories with the EPA. But not the oil and gas industry.  Release away!

Drillers are also exempt from the Clean Water Act (not to be confused with the Clean Drinking Water Act), so they don’t need to meet the standards that everyone else does when it comes to storm water discharges, despite the potential for significant runoff from thousands of well pads, pipelines and other infrastructure.

They’re even exempt from the Clean Air Act.  This means drillers can emit any of 190 toxic air pollutants without so much as a slap on the wrist. They’ll ticket you for burning trash in your backyard in Hancock, but apparently it’s okay to asphyxiate us if you’re a driller.

And remember the Superfund? The Comprehensive Environmental Response, Compensation, and Liability Act? It’s been around since 1980 and decides who’s going to pay for the release or potential release of hazardous substances. If we live to see the day the Great American lot in downtown Hancock is given a clean bill of health, we can thank CERCLA. In 2008, CERCLA was revised to specifically exclude oil and natural gas drillers.

Then there’s the National Environmental Policy Act (NEPA) enacted in 1969, which introduced U.S. industry to environmental impact statements. In 2005 Congress exempted certain drilling activities from NEPA, so now it’s up to the public to prove that such activities are unsafe. Good luck with that.

I don’t know about you, but if I were one of the industries staying in compliance with these federal environmental statues, I’d be hopping mad over all the breaks they’re giving the oil and gas drillers. Who wants to go 65 in a 65 while the cop waves on the guy going 110?

But wait, there’s more.

Gas and oil drillers are also exempt from our local zoning and land-use laws. So here in Hancock, while you can’t operate a business in your garage without going through the zoning board, if you’re a Cabot or a Hess or a Chesapeake you could theoretically secure drilling rights next to the high school football field, set up a rig, go at it 24/7 and there’d be nothing the mayor or the school board or the Hancock Partners could do about it. Does that sound fair?

Well, there is one thing they could do about it:  A municipality can make sure they’re paid for repairing any roads damaged by the drillers. Last year the Town of Cochecton tried to do just that. They required a $250,000 bond from the Millennium Pipeline Company to cover damages that might occur while laying the pipeline. And there was damage—to the tune of $1 million—but to collect, the town had to prove the pipeline caused it.

According to one official quoted in the River Reporter, “These roads have to stay open for the ambulance service, the fire service, school buses, and no town here can afford to have a $1 million worth of damage to one of the roads, be expected to fix it, and get into a legal battle with any of these companies.”

No wonder the U.S. development of renewable energy lags behind the rest of the world. While we’ve allowed the oil and gas industry to side-step the rules and drill with impunity, we’ve had no real economic incentive to even try to recover from our collective dependence on fossil fuel. And yes, whether it comes from Iraq or the backyard, natural gas is still a fossil fuel. It’s neither clean nor renewable and there’s nothing at all patriotic about burning it.