A report released today suggests Ohio taxpayers could be on the hook for costs if something goes wrong at an oil and gas drilling operation.
The report from advocacy group Environment Ohio looks at the costs related to “fracking,” an extraction technique that involves pumping millions of gallons of water underground to unlock oil and gas reserves.
Recent technological advancements have spurred a boom in fracking, leading to hundreds of new wells in Ohio and thousands more around the nation.
When oil and gas companies obtain a permit to build a fracking well, they typically have to provide some financial assurance to the state in case something goes wrong. In Ohio, that assurance comes through bonds and specific insurance requirements.
If a well operation is completed without a problem, the cost of the bonds is returned to the operator. If something goes wrong, the company has to fix the mess before it gets its money back.
But Environment Ohio finds companies in Ohio only have to secure $5,000 in upfront bonds per well. That’s not enough for a company to fear the financial consequences of a disaster, which means it could act recklessly with little disincentive, according to the report.
The report says that could pose a huge cost to taxpayers: Simply reclaiming a well and its property can cost hundreds of thousands of dollars. Actually paying for damages, such as contaminated groundwater and ruined roads, can cost millions.
Under normal circumstances, private and public entities could sue for the damages, but that’s unrealistic if a well operator goes bankrupt or is otherwise unwilling or incapable of paying.
Another potential problem: The bond payments are only held by the state until a well is plugged and the site is reclaimed to the satisfaction of state operators. That doesn’t account for health and environmental damages that can surface after a drilling operation ends, according to the report.
The issues are further compounded by loopholes, which allow companies to avoid bonding requirements altogether if they prove they hold a certain amount of in-state assets. Environment Ohio calls it “an exceedingly easy test to meet.”
In what it calls “common sense” reforms, Environment Ohio says the state should impose more assurances for longer periods of time. The organization favorably cites other states that require $250,000 in upfront bonds — much higher than Ohio’s $5,000. For companies, that would mean a much higher financial hurdle when taking on a fracking project, but the high cost could provide a powerful incentive to avoid dangerous risks.
The report also finds that insurance requirements in the state are weak, with operators required to fulfill a $5 million liability cap regardless of whether they’re running one well or 100.
The organization recommends Ohio work to build stricter financial and regulatory safeguards.
“At a minimum, Ohio needs an adequate severance tax to fund impacts on communities and provide a cushion for long-term risk management,” said Wendy Patton, director at left-leaning think tank Policy Matters Ohio, in a statement released by Environment Ohio.
An oil and gas severance tax was suggested by Republican
Gov. John Kasich to pay for income tax cuts, but Republican legislators
rejected the proposal.
The report’s findings were not exclusive to Ohio. It also found issues and suggested solutions for other states and the federal government, including a similar call for stronger bonding requirements on federal lands.
CityBeat covered the fracking boom and its effects on Ohio in further detail here.
Remember when car manufacturers balked at the idea of making cars that would get – gasp – 30 miles to the gallon? Innovation was forced on the automobile industry because they were content to remain with the status quo, regardless of consequences. Reliance on coal and other fossil fuels is the current equivalent to status-quo complacency and Ohio ranks at the top, or bottom, of the list of a dangerous status quo – coal ash.
New coal plants proposed for Ohio will rank the Buckeye state the eighth highest polluter because of the plants would add 3, 711,616 tons of new coal ash waste.
“According to a new analysis by the Natural Resources Defense Council, the 15 states that would be the biggest polluters — the “Filthy 15”— have proposals for 54 coal plants and would create nearly 14 million tons of dangerous waste,” says a press release from the council. “Proposed coal plants across the United States would produce nearly 18 million tons of dangerous waste, including toxic metals, each year. Nearly 130 million tons of coal waste from existing plants is being produced annually, most of which is disposed of in largely unregulated landfills, ponds and other locations, posing serious public health and environmental risks.”
In conjunction with the new analysis, NRDC has released a new Web site that includes a state-by-state breakdown of the total amount annually of waste, including toxic metals, from existing and proposed plants. Go to: http://www.nrdc.org/energy/coalwaste.
Others with the distinction of being included in the Filty 15 are, in order, Texas, South Dakota, Florida, Nevada, Montana, Illinois, South Carolina, Ohio, Wyoming, Michigan, Kentucky, Missouri, Wisconsin, Georgia and West Virginia.
“Coal waste poses a large and unnecessary risk to people’s health and the environment, and we need to act before another Kingston disaster strikes,” says Peter Lehner, executive director of NRDC, “The EPA took a big step forward this week by announcing it will regulate coal ash, but they need to quickly examine how coal waste is handled and ensure proper management and disposal are in place at all new plants.”
The EPA recently announced it will finally begin to regulate coal ash. The action is too late for Kingston, Tennessee where 1 billion gallons of coal ash contained in a storage pond flowed through a breach in the walls into local waterways in December 2008. However, many states currently allow coal waste to be dumped, without oversight, into poorly constructed ponds, landfills and even abandoned mines.
“There are cleaner, safer and more sustainable energy choices available,” said Lehner. “America should be moving toward energy efficiency and renewable energy sources that will drive our economic recovery and meet the challenges of the 21st Century.”
The EPA identified 24 sites in 13 states that are known or suspected to be contaminated by coal ash. Toxic metals—like arsenic, mercury, lead, and other toxic substances – are frequently found in coal waste. Serious public health risks to people, especially children, include cancer, birth defects, reproductive problems, damage to the nervous system and kidneys, and learning disabilities.
Take a few moments to visit the Web site and learn about the impact these proposed coal power plants will have. Then write to your state representatives and demand that alternative and safer forms of energy be found – force innovation with your voice!
The final ratification of the Great Lakes-St. Lawrence River Basin Water Resources Compact came Oct. 3 when President Bush signed the joint resolution of Congress. The law is now on the books, even though some in Ohio who support Issue 3 – the constitutional amendment to guarantee property owners the right to reasonable use of their land (see my news article "No One Owns Water") – claim passage is needed to enact the law.
“The compact provides a comprehensive management framework for achieving sustainable water use and resource protection,” according to a pres release from the Council of Great Lakes Governors. “The eight Great Lakes states reached a similar good faith, agreement with Ontario and Québec in 2005, which the provinces are using to amend their existing water programs for greater regional consistency.”
The compact includes the following points:
Economic development will be fostered through
sustainable use and responsible management of basin waters.
In general, there will be a ban on new diversions of water from the basin but limited exceptions could be allowed in communities near the basin when rigorous standards are met.
Communities that apply for an exception will have a
clear, predictable decision making process, standards to be met and,
opportunities to appeal decisions. These processes and standards do not
exist under current law.
states will use a consistent standard to review proposed uses of basin
water. The states will have flexibility regarding their water management
programs and how to apply this standard.
Regional goals and objectives for water conservation and efficiency will be developed, and they will be reviewed every five years. Each state will develop and implement a water conservation and efficiency program that may be voluntary or mandatory.
There is a strong commitment to continued public involvement in the implementation of the compact.
For more information, visit www.cglg.org.
— Margo Pierce
Steve Chabot’s self-righteous attempt to block federal
streetcar funding found new criticism yesterday, as The Enquirer spoke to
several credible sources who say his amendment is broad enough to affect
federal funding for transportation projects beyond the streetcar,
including bus lanes or ferries.
Mayor Mark Mallory and 3CDC representatives were scheduled to kick off a grand opening celebration of Washington Park at 10 a.m. this morning. The $48 million renovation includes an underground parking garage, concession building, dog park and concert space. A rally against the renovation and displacement of residents was scheduled for 10:30 a.m. CityBeat’s Mike Breen blogged away yesterday about the park’s scheduled weekly music series.
It’s going to be another sucky hot weekend in Cincinnati.
U.S. hiring is being weak again.
Walgreens is buying mass drug store chains, preparing to cash in on that ObamaCare money.
Brad Pitt’s mom wrote a pro-Mitt Romney, anti-abortion and anti-same-sex marriage letter to the editor of a Missouri newspaper. Brad, for the record, is pro-gay marriage and donated to the 2008 anti-Proposition 8 campaign in California.
I have given much thought to Richard Stoecker’s letter (“Vote for Mormon against beliefs,” June 15). I am also a Christian and differ with the Mormon religion.
But I think any Christian should spend much time in prayer before refusing to vote for a family man with high morals, business experience, who is against abortion, and shares Christian conviction concerning homosexuality just because he is a Mormon.
Any Christian who does not vote or writes in a name is casting a vote for Romney’s opponent, Barack Hussein Obama — a man who sat in Jeremiah Wright’s church for years, did not hold a public ceremony to mark the National Day of Prayer, and is a liberal who supports the killing of unborn babies and same-sex marriage.
I hope all Christians give their vote prayerful consideration because voting is a sacred privilege and a serious responsibility.
First they were telling us that the Higgs boson is the building block of the universe. How Professor Peter Higgs says he has no idea what the discovery will mean in practical terms. Come on, Higgs!
Apparently 250,000 people are going to wake up without the Internet on Monday.
Scientists believe they’ve created the most realistic robot legs ever.
The Pleasant Ridge Community Council wil get words of advice and inspiration tonight from environmental activist Lois Gibbs, who was instrumental in the fight to clean up Love Canal in New York during the 1970s.
Gibbs will speak to the group at 7 p.m. at the Pleasant Ridge Presbyterian Church.
Earth Day is coming – April 22 – and the new Metro hybrid bus will bring models to the Earth Day “Eco Go-Go Fashion Show” on Fountain Square. At 12 p.m. “environmentally-conscious and bike-beautiful fashions” will demonstrate a new “green” style.
The study, released by the American Petroleum Institute (API) and America’s Natural Gas Alliance (ANGA), claims methane emissions given off during natural gas production are as low as half of what the EPA is estimating. The study arrived just in time for a June 19 congressional hearing in which industry officials are testifying in defense of natural gas production and fracking, a relatively new drilling process that involves pumping thousands of gallons of water underground to break up shale formations in order to release natural gas and oil.
The nonprofit environmental group Physicians, Scientists, and Engineers for Healthy Energy (PSE) has questioned the methodology behind the study. One criticism is that the study only covers 20 out of hundreds of oil and gas operators. This makes the study “statistically invalid,” according to Anthony Ingraffea, a professor of engineering at Cornell University and a member of PSE.
Ingraffea also says questions for the study were framed poorly. In one example, he pointed out that the study gave survey-takers, which work within the oil and gas industry, EPA estimates of methane emissions. Given the industry’s interest in making sure methane emissions are low, this could have “coached” survey-takers into giving lower estimates, according to Ingraffea.
Ingraffea says he would have preferred a study that randomly samples a larger number of operators from all over the country with more objective questions. That, he says, would have produced much more credible results.
Ingraffea also emphasizes that the data from this study is made up of estimates derived by mathematical equations, not any actual measurements taken from the field.
“No one, with one exception, has actually gone out into the field and made measurements,” he says.
The one exception is a study by the National Oceanic and Atmospheric Administration (NOAA) that was published February in the Journal of Geophysical Research. The NOAA study measured Colorado gas wells in an attempt to get more accurate data than what the EPA and the industry have been providing. The measurements showed methane emissions were at least twice as large as what the EPA was previously estimating, leading NOAA researchers to conclude the EPA is greatly underestimating emissions, a stark contrast to the API/ANGA study.
The National Resources Defense Council (NRDC) and 10 other individuals and organizations filed a letter today asking the Ohio Department of Natural Resources (ODNR) to strengthen its rules for wastewater injection wells, which are used to dispose of wastewater produced during fracking.
NRDC says the tougher regulations could prevent more incidents like the earthquakes experienced in Youngstown, Ohio around New Year’s Eve. The earthquakes were linked to wastewater injection wells in the Youngstown area.
Tougher regulations could also prevent water contamination,
according to the letter. Recent investigations have found that
wastewater disposed in injection wells might be seeping through the ground
and leaking into the surface or contaminating nearby water sources. But Heidi Hetzel-Evans, spokesperson for ODNR, says regulators have not recorded any groundwater contamination from Class II injection wells in Ohio since ODNR took over the program in 1983.
The structure of injection wells is also a concern. In the letter, the organization calls for tougher injection well standards that ensure the wells can withstand corrosive effects from fluids deposited in injection wells and any hydraulic pressure experienced during the dumping and storing process. With these standards, it would be much more difficult for wastewater to leak through the wells.
The letter includes additional recommendations that ask for clearer minimum standards, more water tests, checkups on wells, more protections for landowners near injection wells, and more. The full recommendations can be read in the letter here.
The call for more regulation is largely in response to new rules that Gov. John
Kasich signed in with an executive order on July 12. Hetzel-Evans defended the current rules by pointing out they are flexible yet often stronger than minimum requirements from the Environmental
Hetzel-Evans has not been able to see the full suggestions in the letter yet, but she says one of the strengths of the current rules is that they don’t burden operators with unnecessary tests. She cited the example of some wells being way too shallow for earthquake activity to be an issue. Seismic testings in those wells would serve no purpose, she says.
Cincinnati City Council recently banned wastewater
injection wells within city limits. But ODNR has received no permit
requests for wastewater injection wells in southwestern Ohio.
Hetzel-Evans says southwestern Ohio’s geology makes any shale drilling
and wastewater injection wells unfeasible.
The big news breaking the Internets is that Susan G. Komen for the Cure, the nation’s leading breast cancer charity, is pulling its grants from Planned Parenthood affiliates. The charity gave about $680,000 last year and $580,000 in 2010, which is mostly used to provide free breast exams for low-income women.