By Jeff Balke
By Aaron Reiss
By Angelica Leicht
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Ingraffea sees it as part of a pattern in which the industry buys off the country's most prestigious universities "like MIT to do pseudoscience."
Meanwhile, the Natural Gas Alliance, an industry lobbying group, shelled out $80 million to Hill & Knowlton Strategies, the same PR firm used by Big Tobacco to argue there was no link between smoking and cancer.
Dan Whitten, vice president of strategic communications for America's Natural Gas Alliance, issued a statement in response to our questions, saying, "Our member companies are committed to the safe and responsible development of natural gas. That commitment extends from protecting the air, land and water in the communities in which we operate to voluntarily disclosing the chemicals we use in hydraulic fracturing. And it means we need not trade protection of our environment for the many energy security, economic and air quality benefits natural gas offers."
"The whole goal is to put a little seed of doubt in people's minds," Ingraffea says. "And for those who believe that they can get rich from leasing their land, there is a willing suspension of disbelief. But the real question is: How many bad things can go wrong right in front of your eyes before you finally accept the truth that this stuff is nasty and extremely dangerous?"
While the gas industry is busy paying scientists and politicians to minimize the risks of fracking, it's also greatly exaggerating its economic potential.
Like most opponents, Deborah Rogers didn't pay much attention to the boom until Chesapeake was about to drill a well just 100 feet from her property. After working in finance for years, she quit her job in 2003 to open an artisanal cheese-making operation on land she'd inherited in Fort Worth.
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 a year.
"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, the industry has no responsibility for cleaning up the pollution it leaves behind. 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 does it overestimate earnings to landowners, but it also is 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 overproduction.
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 Superfund 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.