By Stephen Young
By Stephen Young
By Stephen Young
By Jim Schutze
By Rachel Watts
By Lauren Drewes Daniels
Instead of signing away her property to one of the many landmen knocking on her door, she decided to attend a Chamber of Commerce luncheon where Chesapeake CEO McClendon boasted of the economic benefits of fracking. "So, I went home and looked into it and discovered that some of these companies had enormous amounts of debt," Rogers says. "It was more likely that they were drilling to meet debt service rather than for profitability."
Rogers describes fracking as a "drilling treadmill" based solely on hype. As soon as a geologist like Engelder reports a massive reserve, the industry immediately hypes what they call "a play," with each advertised as bigger and better than the last, from the Barnett Shale in Texas to the Marcellus Shale in Pennsylvania.
Gas companies quickly lease land and begin drilling at incredible rates of production. In the first year, everything looks great. But production soon drops as thousands of wells dry up, sometimes within 12 months.
"Only 20 percent of wells drilled will actually make money," Rogers says. "Eighty percent can easily be uneconomic. That is a whole lot of land used up in a search for 20 percent of the wells that will make money. Eighty-five percent of wells are abandoned in the first five years. And seven years is the average life of a well, rather than the 30 promised by industry."
But while the money quickly stops, Bush, Cheney and Congress made sure that the industry has no responsibility for cleaning up the pollution they leave behind, which will plague residents for years to come. The insurance industry understands the threat. Some of the biggest carriers, like Nationwide, won't even offer fracking coverage to homeowners.
Still, the industry uses its initial figures to sell drilling as a long-term gold rush. Not only do they overestimate earnings to landowners, but they are also able to borrow huge sums of money against these exaggerated estimates.
"After a decade of fracking, we're beginning to be able to show that, without a doubt, this was simply a very well-orchestrated public relations campaign," Rogers says. "There is gas there, but is there as much as they said? No. Are we gonna see the economic stability they promised? The answer is no."
Furthermore, the frenzy has flooded the natural gas market, where gas prices are at an all-time low thanks to over-production.
In the end, Rogers says that the money these wells actually produce isn't enough to offset the cost of land rendered worthless thanks to contamination. In essence, the industry is creating thousands of mini Super Fund sites, leaving someone else to deal with the ruin.
"Fracking is exempt under the Energy Act," Rogers says. "Now, people have no recourse if they contaminate your aquifer or if they contaminate your air. They don't have to pay for it and they don't have to use pollution control devices that other industries have to use. They've basically been given a free ride by the federal government."
Rogers isn't the only person arguing that fracking isn't the economic savior promised by the industry. Recent studies by Penn State and Ohio State researchers show that the industry's boasts of prosperity have been grossly exaggerated.
Penn State found that half the land being drilled is owned by people from outside the state. Moreover, half the employees of fracking companies are also imported from elsewhere. "This would imply that a large portion of the economic benefits immediately leaves the communities being impacted by drilling," says Professor Timothy Kelsey.
Worse, Pennsylvania has opted not to tax fracking ventures, buying the industry's claim that the state is the most expensive area to drill and a tax could make fracking economically unfeasible. As a result, the state has lost more than $300 million in potential revenue — while simultaneously slashing funding for everything from education to hospital trauma centers.
Critics note that Governor Tom Corbett has received more than $1.6 million in campaign contributions from the gas industry. Rogers says the same has been true in Texas and every other state where fracking has appeared.
"We've been experiencing the shale gas boom since 2005 and we are in horrible shape economically," she says. "Shale gas was supposed to be this economic powerhouse for the next 40 years, they said. It didn't even work out in the past seven. And it's the same story in every other state. Unfortunately, that's just how the game is played."
If you don't live in Dimock, Pennsylvania or Wise County, Texas, it's easy to ignore the fallout. But few parts of America remain untouched.
They aren't drilling in Wisconsin or Minnesota, yet the industry's effects are certainly being felt. Both offer rich supplies of fine sand called silica, used in fracking. In the last four years, sand mining in both states has doubled, along with the rates of respiratory problems associated with it. At least nine Minnesota cities have enacted moratoriums on mining, since treatment plants use toxic chemicals, presenting a threat to water supplies.
The U.S. Geological Survey further believes that an uncharacteristic surge of earthquakes throughout the Midwest is "almost certainly" related to gas companies disposing wastewater into deep-injection wells.