Will fracking bring riches or ruin to Western New York?
Somewhere on the back forty acres behind a small ranch house in Allegany County, there’s an abandoned natural gas well, a forgotten marker of the countryside’s history and perhaps a harbinger of its future. Finding it requires a hike—between the wires of electric fences, through the hoof-pocked pastures inhabited by a few beef cows, into a wooded lot on the slope below, along trails cluttered with deadfall and interrupted by drainages that eventually broaden into small ravines as they bisect a streambed at the base of the hill. After some searching, with luck, you will find on the bank a cylindrical piece of rusted steel casing poking incongruously from a lush setting of hemlocks and ferns.
Gill Barber, a fourth generation farmer, recently went searching for that pipe on land owned by her uncle, David Barber. Her curiosity was whetted by a farmer’s sense of the land’s worth—not only for the richness of the topsoil, but for the value of any mineral resources below. This well represents her great-grandparents’ bygone attempt to capture gas from shallow depths, but it’s also the starting point of a present-day story with seismic repercussions. Because Barber, who is forty-three and has raised corn and cows since her youth, is among those farmers in upstate New York, Pennsylvania, and Ohio who embrace the prospect of a new era of on-shore drilling.
Far below the shallow reaches of the ancient well on Uncle David’s property, the Marcellus and Utica Shales extend under northeastern and mid-Atlantic states. These plates of bedrock, covering 90,000 square miles, are thought to hold some of the largest natural gas reserves in the world. The recent ability to exploit them through a process called high volume hydraulic fracturing has encouraged visions of a family farm renaissance built on the mass production of gas. The process—familiarly known as “fracking”—injects chemical solution and sand into well bores drilled vertically to depth and then horizontally through the mantle of bedrock. The force, up to 10,000 pounds per square inch, shatters the rock and releases gas.
The Barbers’ land holdings—280 acres owned by David in Cuba, 430 acres owned by Gill’s father, Jim, in Rushford, and 280 acres owned by Gill in Black Creek—are very small pieces of a sprawling Western New York countryside sitting between two major shale gas rushes spawned by fracking technology. To the southwest, in Ohio, multinational energy companies have made some farmers “shalionaires” by paying $3,000 to $5,000 per acre, plus royalties, to drill for wet gas in the Utica Shale. To the southeast, in northern Pennsylvania, and to the east, in the Southern Tier of New York, companies have offered landowners similar terms to develop dry gas from the Marcellus Shale. Much of the targeted area sits over what is known in the industry as “stacked horizons”—multiple gas formations or “pay zones” sitting one on top of the other. In Western New York, that would include formations tapped by conventional drilling methods for more than a century, producing a number of wells too vast to count. As of now, there is no shale rush in Rushford, but Gill expects it is only a matter of time before Western New York is swept into the land play developing around it.
With per capita income of just over $20,000, and a poverty rate of close to seventy percent, Allegany County has a demographic profile similar to counties immediately to the west and east along the Pennsylvania border, and to the north along the Great Lakes. Due to a mix of demographic influences having to do with income levels, employment, education, and access to health care, Chemung, Steuben, Allegany, Cattaraugus, Chautauqua, Erie, and Niagara counties all rank in the lower third of the state Department of Health’s assessment of community health, which measures mortality and morbidity rates for the general population. Income is considered a primary factor, and Barber is among those who believe that the income from gas extraction will extend and improve the lives of farmers who lack health care and other necessities.
“People around here really need this,” she says. “We’re not talking about going out and getting a new truck. We’re talking about things like healthcare, basic needs to stay alive.”
At what cost?
But the prospects of large shale development driven by fracking are not all good. In fact, some believe them to be very bad. If Barber gets all that she hopes for, the landscape in the small town she grew up farming would indeed change. In terms of scale, intensity, and impact, shale gas development is unlike any kind of extraction activity that the region has seen. The hit and miss speculation that produced conventional wells—including the one sitting serenely behind Uncle David’s farm— throughout Western New York over centuries would give way to systematic and widespread unconventional development over mere decades. Unlike wells drilled in Western New York for geographically limited pockets of gas, shale gas unfolds on a grid of infrastructure covering towns, counties, and states. To critics, shale gas prospecting in the vast rural tracts in New York, Pennsylvania, and Ohio lends new meaning to the term “factory farm.” Full-scale shale gas will, they believe, industrialize the landscape, load rural countryside with tankers and heavy equipment, scar the land with swaths cut for pipelines and well pads, pollute water, and produce unmanageable volumes of waste including brine and radioactive debris.
In February 2011, Buffalo City Council member Joseph Golombek was part of a unanimous vote to ban fracking, as well as storing, transferring, treating, or disposing of fracking waste within the city. While the prospect of developing shale gas as far north as Buffalo is unlikely, Golombek sees the 2011 vote, as well as a vote this year urging Governor Andrew Cuomo to impose a statewide ban, as clearly defining the city’s stance on shale gas issues. Where Gill Barber sees wealth and economic renewal, Golombek is among critics who see predatory corporate exploitation and regulatory gaps reminiscent of Love Canal, the Niagara Falls suburb developed over a toxic waste dump that spawned a new era of environmental awareness in the late 1970s. Golombek, a history teacher, is fond of saying, “We must consider actions for seven generations into the future,” an adage he attributes to the Iroquois. “I don’t trust the industry to say ‘yes, we will treat this and everything will be fine,’” he says. “They cannot be left to police themselves. If they put this stuff into the ground, it will affect everybody’s water.”
The city of Buffalo, seventy miles north of Barber’s farm, is one of many upstate New York localities to ban shale gas development and is emblematic of an antifracking movement that has gained traction within urban centers, including New York City, Ithaca, Binghamton, and Syracuse. And even though parts of the Utica and Marcellus Shales extending under Buffalo are not economically viable targets at today’s shale gas prices, residents of Buffalo and nearby Niagara Falls feel they have a special stake in the matter given the region’s legacy as a disposal point for industrial and hazardous waste. Opposition is so strong in Niagara Falls that the city council received standing ovations in March after it passed measures to ban the treatment of waste from shale gas wells at industrial treatment facilities within city limits. As Buffalo did, Niagara Falls also passed a resolution to send a letter urging Governor Cuomo to impose a New York state moratorium on shale gas drilling.
The vastly different expectations for shale gas development between residents of Buffalo and Niagara Falls and rural landowners like Barber have everything to do with the perceived windfalls tied to leases and royalties, and outfall related to waste disposal and traffic. At the heart of the matter is the impact on water resources. Not only does fracking threaten water quality, but the industry’s consumptive needs are a whopping three to four million gallons per well. And, of course, it’s necessary to dispose of like amounts of waste.
Photos by James Pitaressi
The story of energy extraction is inextricably woven into the story of farming and, more broadly, land use issues in rural America. It’s no accident that energy reserves are most often discovered and proven under hayfields and pastures than in cities and suburbs. Gas companies find it easier to target the large contiguous tracts needed for exploration and development if they are encumbered by fewer restrictions and stakeholders. The promise of easy negotiations leads landmen and speculators to the open country, where they are likely to gain an audience with farmers—many of them land rich, cash poor, and facing health issues with no insurance, retirement, or pension.
Gill Barber lives this story. At seventy-seven, her father, Jim, still farmed his 430 acres with Gill’s help, but the operation had been losing money and creditors were at the door earlier this year. Her Uncle David, with 280 acres of his own, is suffering from fibrosis and needs a lung transplant. The family had sold off much of the dairy herd and, in March, was facing prospects of selling off most of Jim Barber’s land in bankruptcy proceedings. Gill, heir apparent to her father’s farm, was harboring hope that a deal to lease mineral rights would save it. But there were other factors at work.
The antifracking movement, fueled by reports of contaminated water supplies in Pennsylvania, was gaining momentum. In New York State, fracking was on hold pending an environmental review—a Supplemental Generic Environmental Impact Statement (SGEIS)—by the Department of Environmental Conservation. Additionally, the market for natural gas had softened as prices fell due to a glut from thousands of Marcellus Shale gas wells coming online just across the state border in Pennsylvania.
While the market conditions were no help to Barber, they favored those seeking to lease rights to the land or buy it outright. Well-capitalized speculators could buy cheap and wait for the economic dynamics to change; this is nothing new. Marv Covert’s family has been farming Western New York since the Civil War era, and his family expanded its farm as land prices fell during the Great Depression. Covert, sixty-seven, now owns close to 1,000 acres in Centerville, the town just north of Rushford. He recently leased the mineral rights to a land holding company for $30 an acre and twelve-and-a-half percent royalties. He feels good about the deal, given the soft market for gas and the drilling moratorium in New York. “It gets our foot in the door [of prospecting] and it gets us a little money, some of the easiest money I ever made in my life,” says Covert who, money aside, says he is sold on the principal of producing energy from the land. “All those people who are against it might be glad to have it when it’s fifteen below zero.”
Barber’s family has also been approached by speculators over the years. Growing desperate, but unwilling to sell her mineral rights cheap, Barber began organizing a coalition with her neighbors to leverage bargaining power. The idea that landowners command better terms if they collectively negotiate large tracts as a single unit has worked for farmers in Broome and Delaware counties to the east who, after holding out from dealing with landmen individually, leased land as a coalition for between $3,000 and $5,000 an acre at royalties of fifteen percent or higher. These properties to the east are in the center of what’s known in the industry as a “drilling fairway” extending north from Pennsylvania, where the thickness, depth, and organic content of the Marcellus make it an optimal target. To the west are conventional formations and the Utica, which is largely unexplored.
“If there’s all this gas in the ground,” Barber asserts, “why should we be signing away our rights to it for $30 an acre to somebody who can hold on to it for a while and flip it when the market goes back up?”
Just how close are the Western New York farming communities to the major shale gas pay zones? It’s a tricky question because neither the Marcellus nor the Utica Shale have been explored in Western New York. Based on available surveys, there is some consensus that the Marcellus is a secondary target west and north of Tioga County, where it gets thinner and shallower. But there is evidence that the Utica, deeper and thicker in Western New York than the Marcellus, holds the same sort of promise that is being realized in Ohio; there, Chesapeake Energy has begun tapping vast reserves of “wet gas” that is now commanding higher prices then the dry gas produced in the Marcellus. Wet gas includes propane, ethane, and butane, with uses ranging from fuel to petrochemical feedstock to making plastics. The Utica is also thought to be a source for oil.
“There is no geological reason to expect that wet gas could not be recovered from the Utica in western New York,” suggests Gary Lash, a geologist at State University of New York at Fredonia who specializes in shale in upstate New York and Pennsylvania. He cites limited test wells in Chautauqua and Cattaraugus counties that show the Utica to be more than 800 feet thick, with a base between 5,400 and 5,800 feet deep.
Given the many unknowns, it’s safe to say that the economic prospects of shale gas development throughout upstate New York will fall between two scenarios. Scenario one: The 2012 election year produces a Congress that passes a bill providing incentives to fuel vehicles with natural gas, and the availability of cheap gas drives this and other markets, including the conversion of coal-fired power plants to natural gas. With rising prices, the Department of Environmental Conservation (DEC) begins issuing permits for high volume hydraulic fracturing in New York. Operators begin building out shale well infrastructure from the center of the fairway in south Central New York and are attracted by the prospects of both the Utica and traditional formations stacked above it in Western New York. Farmers organize to get higher prices for their leases as the value of the resources below them is proven.
Scenario two: More gas coming online in Pennsylvania and Ohio contributes to a market glut that makes it increasingly difficult for operators to attract investment necessary for additional natural gas exploration. The plan to subsidize natural gas vehicles fails among resistance from other corporate interests staked to oil. The antifracking movement continues to gain traction nationally, contributing to interest in and political pressure to develop renewable fuel sources. Natural gas loses its luster as a clean alternative to coal. Regulations, environmental resistance, and falling prices make long-term investment needed to expand pipelines, wells, and infrastructure unsustainable.
It’s hard to predict the future, but it’s safe to say the impact will be proportional to the scale of development, and that history tells us regulators have little experience or wherewithal to control the industry.
Areas in Western New York have long been known for petroleum seeping from shallow formations. William Hart, a gunsmith and inventor, is credited with drilling the first commercially viable natural gas well in Fredonia in 1825. About sixty miles to the southwest and a short drive from Barber’s farm, a bituminous film can be found on the surface of bogs in Oil Springs Reservation, which is owned by the Seneca tribe. From there, less than thirty miles to the northeast is Gas Springs State Forest, a tract of public land that gets its name from gas seeps. It’s hardly a surprise that oil and gas prospecting has a legacy in this region.
For generations, farmers have leased their land cheap to prospectors and wildcatters who drilled small wells like the one on Uncle David’s property, sometimes to produce energy for the homestead. More than 75,000 wells have been drilled within the state, according to DEC data, most of them now abandoned. The one on David Barber’s property—far above the commercial production zones targeted today—is an artifact from a time when skid roads crisscrossed a countryside freshly denuded of old-growth forests to make way for an agricultural economy. Barber sees that well both as a symbol of the long history of petroleum development in Western New York and a talisman for a future fixed to the past. “We live in a petroleum-based world,” she notes. “We need it to survive. Even way back then, this area was a source.”
To ease concerns about fracking, the industry has held up this history to support the notion of a “clean, well-regulated industry” that has been producing gas from Western New York for generations without incident. It’s a claim that’s difficult to substantiate, and there is evidence that suggests otherwise. The absence of publicized problems is partly related to the absence of regulations that require the industry to report the pollution of water wells near drilling operations.
When problems arise near drilling operations, residents face a heavy burden of proof to hold gas companies accountable. Public disclosure also suffers because drilling companies are free to settle pollution matters privately with residents using confidentiality agreements that keep records out of the public domain. Despite this, signs of problems were tucked away in health department filing cabinets long before the shale gas became national news.
The burden of proof
As reported in a 2010 investigation by the Binghamton Press & Sun-Bulletin, William T. Boria, a water resources specialist at the Chautauqua County Health Department, began documenting problems during a period of exploration for traditional gas reserves in Western New York in the late twentieth and early twenty-first centuries. Boria reported his agency had received more than 140 complaints related to water pollution or gas migration associated with nearby drilling operations. “Those complaints that were recorded are probably just a fraction of the actual problems that occurred,” he stated in a 2004 memo summarizing the issue.
For fifty-three of those cases filed from 1983 to 2008, county health officials tabulated an informational spreadsheet that cited methane migration, brine pollution, and at least one home evacuation resulting from a water well explosion. “A representative I spoke with from the Division of Minerals [of the DEC] insists that the potential for drinking water contamination by oil and gas drilling is almost nonexistent,” Boria wrote in his memo to a party whose name was redacted. “However, this department has investigated numerous complaints of potential contamination problems resulting from oil and gas drilling.”
In spring 2009, the Allegany County Health Department documented a case in a report to a county legislator. Workers had been fracking a non-Marcellus well near a home where Dave Eddy lived with his wife and two young children. The water well at this location, 360 feet deep, “should provide water of very high quality as long as the integrity of the well or aquifer from which it draws water has not been compromised,” the report stated. Soon after the operation began, according to the memo, Eddy reported the water turned muddy and smelled like gas.
Like Western New York, northern Pennsylvania has a high density of abandoned and undocumented wells and rich concentrations of natural gas in both shallow and deep formations. Both factors complicate the dynamics of shale gas wells which, in penetrating both the water table and gas pockets in upper layers, sometimes provide conduits for methane to waft into places where its poses a hazard—well heads, crawl spaces, and basements.
Much of what New York state residents and officials have learned about the dangers of shale gas development has come from events in Susquehanna and Bradford counties in Pennsylvania, where flawed natural gas well casings allowed methane to mix in water tables, according to records from the Pennsylvania Department of Environmental Protection (DEP). On January 1, 2009, the explosion of Norma Fiorentino’s well in Dimock, Pennsylvania, triggered an investigation by Department of Environmental Protection officials that determined that methane from nearby shale gas drilling operations had contaminated a dozen nearby water wells.
In December 2009, New York State Senator Antoine Thompson, head of the Senate’s Environmental Conservation Committee (and a former Buffalo councilman) visited Dimock to hear firsthand accounts of how shale gas development had affected well water, and the difficulty and frustration of holding drillers accountable. At the time, the Pennsylvania DEP issued an order for Cabot Oil & Gas to fix the problem; this marked the beginning of a national conflict between pro-drilling and anti-drilling camps over the industry’s accountability for such problems and questions about the safety of shale gas development.
The future of fracking
Soon after his visit, Thompson successfully introduced a bill that would ban hydraulic fracturing in New York until May 2010, which would give legislators enough time to reach an “informed decision” about its risks. The DEC had suspended issuing permits pending the outcome of its review, but Thompson’s bill—like the Buffalo legislations—nonetheless served as a powerful symbolic message regarding the direction of state policy, and showed that lawmakers had the votes to legislate the outcome.
Since then, other New York state legislators have introduced bills to halt or restrict shale’s gas development. They include Robert Sweeney, head of the Assembly’s Environmental Conservation Committee, who is calling for an extended moratorium and a review on the impacts of fracking by the state Department of Health, and Senator Greg Ball, also calling for a moratorium. Meanwhile, in April, Senator Mark Grisanti, who defeated Thompson in 2010, released a plan naming five measures to restrict and control shale gas development, ranging from prohibiting publicly owned treatment works from accepting shale well wastewater to strengthening notification requirements for spills.
The outcome of shale gas development in New York will likely be unfolding for years to come. Someday David Barber’s back forty acres—verdant with hemlocks and hardwood approaching maturity after three generations—may again be cleared with infrastructure to extract its resources. When and if that time will come has a lot to do with the policy battle between those in favor and those against, and the political will to transition away from an economy based on cheap fossil fuel.
Tom Wilber is the author of Under the Surface: Fracking, Fortunes, and the Fate of the Marcellus Shale (Cornell University Press, 2012).