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Shale Gas Uncertainty: How an Industry Talking Point Misses the Mark

When oil and gas executives gathered in Pittsburgh, Pennsylvania to discuss the state of the industry shortly after Obama won re-election, they raised a recurring complaint.

“We now face four more years of regulatory uncertainty,” said Randy Alpert, an official with Consol energy told gathered shale gas executives.

Penny Seipel, Vice President of the Ohio Oil and Gas Association hit a similar note the very next day.

“Unfortunately, we have had quite a bit of uncertainty regarding our fiscal situation,” she said as she described proposed regulation and taxation of drilling companies in her state.

This uncertainty mantra has been trotted out by many industries facing potential oversight and is now being picked up by oil and gas: “We are not against regulation, we are against regulatory uncertainty,” the line goes. “We don’t care what the rules are,” companies say, “just tell us ahead of time and then we will follow them gladly.”

This well-worn trope gives the impression that drillers do not view regulators as adversaries. All they’re asking for is common-sense fairness. Who could be against someone asking to know what the rules are? Predictability is a reasonable request.

It's a shrewd position for the shale industry. But it’s also deeply misleading and worth flagging now since it is likely to get amplified in coming months as more attention turns to whether federal officials should step up their oversight of oil and gas drilling.

Oil and Gas Industry Set to Attack Matt Damon's "Promised Land"

Next month Focus Features releases Matt Damon’s new movie and the oil and gas industry is worried sick about it.

The movie, Promised Land, is about a Pennsylvania farm town deciding whether to go forward with shale gas drilling after a team of landmen arrives in the area.

Damon plays one of these landman, who rolls into town presenting himself as a humble flannel-wearing farmboy from Iowa. Damon’s character is an ace salesman, famously good at convincing homeowners to sign away the rights to their land. But halfway through the story, he starts having ethical pangs about his profession. Damon’s internal conflicts grow deeper as he grows closer to locals.

By Hollywood standards, it’s a small film, with a budget of $15 million. The script was written by Damon and co-star John Krasinski (best known for his role as Jim in “The Office”) and is based on a story by Dave Eggers.

The drilling industry is none too pleased about the movie’s at-times unflattering portrayal of landmen and it has already geared up its attack machine to aggressively respond.

The irony here, of course, is that the industry’s plan for taking on the movie runs parallel at times to the movie itself.  It a case where art imitates life imitates art.

I will come back to this.  But first, meet Mike Knapp.

Pennsylvania's Top Environmental Regulator Champions Drilling Industry at Shale Conference

When Pennsylvania Department of Environmental Protection Secretary Michael Krancer stepped to the mic at a shale oil and gas conference earlier this month, he offered one of his most candid descriptions to date of how he sees his mission as a regulator. His job, he said, is to protect the state not from the potential misdeeds of drillers but from those of the EPA.

EPA has completely lost its concept of the rule of law,” Mr. Krancer charged, adding that he would remain watchful against any effort by the federal government to usurp state authority over hydraulic fracturing.

It was a small window into the mind of the top environmental regulator in a state now famous as ground zero of the current drilling boom, where the shale industry has enjoyed a virtually unprecedented bonanza.

Mr. Krancer described how foolhardy he thought it was to assume that the industry needed policing.

We’ve been doing this safely in the United States for years and years and years,” he said with regards to hydraulic fracturing (fracking).

Along these lines, he dared his listeners to walk up to any American rigworker and to look that worker in the eye and tell say to his or her face that they shouldn’t be trusted to do their job safely.

Actually, I don’t recommend that you do take that challenge,” he added, to knowing chuckles from the audience of shale gas industry representatives.

So Wrong, So Often: Karl Rove Grasps For Audience Approval at Oil & Gas Summit

When the shale gas industry met last week in Pittsburgh, none other than Karl Rove gave the keynote speech, regaling the audience with a lengthy patriotic anecdote comparing the fossil fuel dillers to the US Navy Seals who killed Osama Bin Laden.

Having recently attended a quail hunt fundraiser with some of those Navy Seals, Rove described the tenacity of one Seal who had been wounded sixteen times on a mission in Iraq but courageously improvised his own medical evacuation despite his severe injuries. Rove then told the assembled drillers that their industry was serving the nation and overcoming adversity in much the same way as that soldier.

You overcome the physical difficulties of drilling thousands of feet under the surface for hydrocarbons,” he told over a thousand oil and gas executives as they dined on artichoke-crusted chicken. Invoking the wounded American soldier, Rove added: “He’s overcoming it by finding a way, after serving in this ghastly way like that, to serve something bigger than himself.”

It was quintessential Karl Rove. It was also the crowning moment of a rousing speech from a man who, over the past month has been pilloried for being so wrong, so often.

In Hurricane Sandy's Aftermath, Fracking Adds to Headaches

As Hurricane Sandy battered the East Coast last month, tens of thousands of landowners with oil and gas leases faced an especially acute concern: would they get help from FEMA if their properties were damaged or destroyed by the storm?

The question arises across the Marcellus region –- and the rest of the U.S. – because one of the agency's disaster response programs will not buyout land that’s been leased to drillers, according to FEMA emails and internal documents.

The US shale boom is drawing increasing attention from federal agencies worried about the potential hazards posed by drilling. A growing awareness of financial risks to landowners and lending institutions associated with oil and gas drilling is slowly emerging. The USDA, Fannie Mae and Freddie Mac have already considered moves to protect themselves from potential legal and financial reverberations.

With FEMA Hazard Mitigation Grant Program funding now at stake, Congress is also getting involved.

Oil and Gas Leases Create Conflicts for FEMA

As the shale gas boom has brought oil and gas drilling closer and closer to home for many Americans, banking and real estate experts have found that drilling may pose significant risks involving property values, homeowners, and mortgage lenders.

New documents obtained by DeSmogBlog show that the Federal Emergency Management Agency (FEMA) is the latest in a string of federal agencies and other major institutions that are now contending with the drilling boom’s impacts. And some landowners in Pennsylvania are now finding out that oil and gas development in their communities can cause unexpected difficulties – leading to new headaches for families who are already dealing with catastrophe.

Since the 1980’s, FEMA’s Hazard Mitigation Grant Program has worked to minimize the harms caused by disasters like floods. The program also provides help to those in areas that see frequent earthquakes or wildfires, taking measures to cut down on the harm done to people and to property.

Americans often turn to this program when their homes have been flooded again and again. It is a program of last resort, helping to pull back development from areas that are prone to disasters.

Experts Air Serious Concerns Before New York Fracking Decision

James Thilman/Gothamist

Two recent court decisions  in New York state upheld the right of towns to use zoning laws to limit or even ban fracking within their borders. Other states and cities such as DallasMaryland, and North Carolina, are still trying to figure out whether, and if so how, to proceed with new drilling.

But the big decision that concerned citizens are watching is the one to be made by New York Gov. Andrew Cuomo about his state’s moratorium. New York received more than 40,000 public comments on fracking and is plowing through them now.

The state has yet to publish those documents on the web, but DeSmogBlog has obtained many of them. Here is our initial shortlist of comments that offer the most important warnings and useful insights.

A Hidden Threat?

One of the most overlooked but potentially dangerous public health issues relating to unconventional gas drilling is radon. This odorless and radioactive gas comes up from the wells mixed with the gas that gets piped to consumers. Highly carcinogenic, radon is the second leading cause of lung cancer, just behind cigarette smoking, according to the EPA.

In his comments, Dr. Marvin Resnikoff, director of Radioactive Waste Management Associates, concludes that radon levels in the gas that will come from Marcellus and likely be delivered to nearly 12 million New York residents will be far higher than current levels. As a result, “the potential number of fatal lung cancer deaths due to radon in natural gas from the Marcellus shale range from 1,182 to 30,448” he writes.

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