The Costs of Fracking vNY.pdf - Environment New York

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The Costs of Fracking vNY.pdf - Environment New York

Executive SummaryOver the past decade, the oil and gasindustry has fused two technologies—hydraulicfracturing and horizontaldrilling—to unlock new suppliesof fossil fuels in underground rock formationsacross the United States. “Fracking”has spread rapidly, leaving a trail of contaminatedwater, polluted air, and marredlandscapes in its wake. In fact, a growingbody of data indicates that fracking is anenvironmental and public health disasterin the making.However, the true toll of fracking doesnot end there. Fracking’s negative impactson our environment and health come withheavy “dollars and cents” costs as well. Inthis report, we document those costs—rangingfrom cleaning up contaminated water torepairing ruined roads and beyond. Manyof these costs are likely to be borne by thepublic, rather than the oil and gas industry.As with the damage done by previous extractivebooms, the public may experiencethese costs for decades to come.The case against fracking is compellingbased on its damage to the environmentand our health alone. To the extent thatfracking does take place, the least the publiccan expect is for the oil and gas industryto be held accountable for the damage itcauses. Such accountability must includeup-front financial assurances sufficient toensure that the harms caused by frackingare fully redressed.Fracking damages the environment,threatens public health, and affectscommunities in ways that can imposea multitude of costs:Drinking water contamination –Fracking brings with it the potential forspills, blowouts and well failures that contaminategroundwater supplies.• Cleanup of drinking water contaminationis so expensive that it is rarelyeven attempted. In Dimock, Pennsylvania,Cabot Oil & Gas reportedhaving spent $109,000 on systems toremove methane from well water for14 local households, while in Colorado,cleanup of an underground gasseep has been ongoing for eight yearsat a likely cost of hundreds of thousandsof dollars, if not more.Executive Summary


Pennsylvania estimated in 2010that $265 million would be neededto repair damaged roads in theMarcellus Shale region.• The need for vast amounts of waterfor fracking is helping to drivedemand for new water infrastructurein arid regions of the country. Texas’official State Water Plan calls forthe expenditure of $400 million onprojects to support the mining sectorover the next 50 years, with frackingprojected to account for 42 percent ofmining water use by 2020.• The oil and gas industry has leftthousands of orphaned wells fromprevious fossil fuel booms. Taxpayersmay wind up on the hook for theconsiderable expense of plugging andreclaiming orphaned wells—CabotOil & Gas claims to have spent$730,000 per well to cap three shalegas wells in Pennsylvania.• Fracking brings with it increaseddemands for public services. A 2011survey of eight Pennsylvania countiesfound that 911 calls had increased inseven of them, with the number ofcalls increasing in one county by 49percent over three years.Broader economic impacts – Frackingcan undercut the long-term economicprospects of areas where it takes place. A2008 study found that Western countiesthat have relied on fossil fuel extractionare doing worse economically comparedwith peer communities and are less wellpreparedfor growth in the future.• Fracking can affect the value ofnearby homes. A 2010 study in Texasconcluded that houses valued at morethan $250,000 and within 1,000 feetof a well site saw their values decreaseby 3 to 14 percent.• Fracking has several negative impactson farms, including the loss oflivestock due to exposure to spills offracking wastewater, increased difficultyin obtaining water supplies forfarming, and potential conflicts withorganic agriculture. In Pennsylvania,the five counties with the heaviestMarcellus Shale drilling activity sawan 18.5 percent reduction in milkproduction between 2007 and 2010.As with previous fossil fuel boomsthat left long-term impacts on the environment,there is every reason to believethat the public will be stuck with the billfor many of the impacts of fracking.Defining “Fracking”In this report, when we refer to the impacts of “fracking,” we include impactsresulting from all of the activities needed to bring a well into production usinghydraulic fracturing, to operate that well, and to deliver the gas or oil producedfrom that well to market. The oil and gas industry often uses a more restrictivedefinition of “fracking” that includes only the actual moment in the extractionprocess when rock is fractured—a definition that obscures the broad changes toenvironmental, health and community conditions that result from the use of frackingin oil and gas extraction.Executive Summary


• Existing legal rules are inadequateto protect the public from the costsimposed by fracking. Current bondingrequirements fail to assure thatsufficient funds will be available forthe proper closure and reclamationof well sites, and do nothing at allto ensure that money is available tofix other environmental problems orcompensate victims. Further, weakbonding requirements fail to providean adequate incentive for drillers totake steps to prevent pollution beforeit occurs.• Current law also does little to protectagainst impacts that emerge overa long period of time, have diffuseimpacts over a wide area, or affecthealth in ways that are difficultto prove with the high standardof certainty required in legalproceedings.The environmental, health and communityimpacts of fracking are severeand unacceptable. Yet the dirty drillingpractice continues at thousands of sitesacross the nation. Wherever frackingdoes occur, local, state and federal governmentsshould at least:• Comprehensively restrict andregulate fracking to reduce itsenvironmental, health and communityimpacts as much as possible.• Ensure up-front financialaccountability by requiring oil andgas companies to post dramaticallyhigher bonds that reflect the true costsof fracking. The Costs of Fracking


for cleaning up the damage they cause. Asfracking unleashes yet another extractiveboom, the time has come to ensure thatthis history does not repeat itself in the21 st century. The Costs of Fracking


Fracking: The Process and its ImpactsOver the past decade, the oil and gasindustry has married two technologies—horizontaldrilling and hydraulicfracturing—to create a potent newcombination that is being used to tap fossilfuels locked in previously difficult-to-reachrock formations across the United States.This technology, known as high-volumehorizontal hydraulic fracturing—or, colloquially,“fracking”—has broad implicationsfor the environment and public health.Defining “Fracking”Public debates about fracking often descendinto confusion and contradiction dueto a lack of clarity about terms. To the oiland gas industry, which seeks to minimizethe perceived impacts, “fracking” refersonly to the actual moment in the extractionprocess where rock is fractured by pumpingfluid at high pressure down the well bore.Limiting the definition of fracking in thisway also allows the oil and gas industry toinclude its long history of using hydraulicfracturing in traditional, vertical wells—aprocess with fewer impacts than the technologybeing used in oil and gas fieldstoday—to create a false narrative about thesafety of fracking. It is only according tothis carefully constructed definition thatExxonMobil CEO Rex Tillerson couldsay, as he did in a Congressional hearing in2011, that “[t]here have been over a millionwells hydraulically fractured in the historyof the industry, and there is not one, notone, reported case of a freshwater aquiferhaving ever been contaminated from hydraulicfracturing.” 5Just as only a small portion of an icebergis visible above the water, only asmall portion of the impacts of frackingare the direct result of fracturing rock.Each step in the process of extracting oilor gas from a fracked well has impacts onthe environment, public health and communities.Thus, any reasonable assessmentof fracking must include the full cycle ofextraction operations before and after themoment where rock is cracked open withfluid under high pressure.In this report, when we refer to theimpacts of “fracking,” we include impactsresulting from all of the activities neededto bring a well into production using hy-Fracking: The Process and its Impacts


Fracking imposes a range of environmental, health and community impacts. Above, a fracking wellsite is built in a forested area of Wetzel County, W.Va. Credit: Robert Donnandraulic fracturing, to operate that well, andto deliver the gas or oil extracted from thatwell to market.The Fracking ProcessFracking is used to unlock gas or oiltrapped in underground rock formations,allowing it to flow to the surface, where itcan be captured and delivered to market.Fracking combines hydraulic fracturing,which uses a high-pressure mixture of water,sand and chemicals to break up undergroundrock formations, with horizontaldrilling, which enables drillers to fracturelarge amounts of rock from a single well.The combination of hydraulic fracturingwith horizontal drilling has magnifiedthe environmental impacts of oil and gasextraction. Whereas traditional, lowvolumehydraulic fracturing used tens ofthousands of gallons of water per well,today’s high-volume hydraulic fracturingoperations use millions of gallons ofwater, along with a different combinationof sand and chemical additives, to extractgas or oil.A vast amount of activity—much of itwith impacts on the environment and nearbycommunities—is necessary to bring afracking well into production and to deliverthe gas extracted from that well to market.Among those steps are the following:Well Site Preparation and RoadConstructionBefore drilling can begin, several acres ofland must be cleared of vegetation and leveledto accommodate drilling equipment,gas collection and processing equipment,and vehicles. Additional land must becleared for roads to the well site, as well The Costs of Fracking


as for any pipelines needed to deliver gasto market.Materials AssemblyHydraulic fracturing requires massiveamounts of water, sand and chemicals—allof which must be obtained and deliveredto the well site. Water for fracking comeseither from surface waterways, groundwateror recycled wastewater from previousfracking activities, with millions of gallonsof water required for each well. Thespecial grade of sand used in fracking mustbe extracted from the ground—often fromsilica mines in the upper Midwest—andtransported to the well site. Water, sandand other materials must be carried towell sites in trucks, tearing up local roads,creating congestion, and producing locallevel air pollution.Drilling and Hydraulic FracturingOnce the necessary machinery and materialsare assembled at the drilling site,drilling can begin. The well is drilled tothe depth of the formation that is beingtargeted. In horizontally drilled wells, thewell bore is turned roughly 90 degreesto extend along the length of the formation.Steel “casing” pipes are inserted tostabilize and contain the well, and thecasing is cemented into place. A mix ofwater, sand and chemicals is then injectedat high pressure—the pressure causes therock formation to crack, with the sandpropping open the gaps in the rock. Someof the injected water then flows back outof the well when the pressure is released(“flowback” water), followed by gas andwater from the formation (“producedwater”).Equipment is put in place in preparation for hydraulic fracturing at a well site in Troy, Pa. Inhydraulic fracturing, a combination of water, sand and chemicals is injected at high pressure tofracture oil or gas-bearing rock formations deep underground. Credit: New York Departmentof Environmental ConservationFracking: The Process and its Impacts


Figure 1. Shale Gas and Oil Plays 6Gas Processing and DeliveryAs natural gas flows from the frackedwell, it must be collected, purified andcompressed for injection into pipelines anddelivery to market.Wastewater Management andDisposalFlowback and produced water must becollected and disposed of safely. Wastewaterfrom fracking wells is often storedonsite temporarily in retention pondsor tanks. From there, the fluid may bedisposed of in an underground injectionwell or an industrial wastewater treatmentplant, or it may be treated and re-used inanother fracking job.Plugging and ReclamationTo prevent future damage to the environmentand drinking water supplies,wells must be properly plugged and theland around them restored to somethingapproaching its original vegetated condition.This involves plugging the well withcement, removing all unnecessary structuresfrom the well pad, and replantingthe area.Fracking and the NewGas/Oil RushFrom its beginnings in the Barnett Shaleregion of Texas at the turn of the 21 st century,the use of fracking has spread across theUnited States with breathtaking speed. Adecade later, the combination of high-volumehydraulic fracturing with horizontaldrilling has been used in thousands of oil10 The Costs of Fracking


and gas wells across the country—despitepersistent questions about the impact ofthe technology and supporting activitieson the environment, public health andcommunities.Roughy half of U.S. states, stretchingfrom New York to California, sit atop shaleor other rock formations with the potentialto produce oil or gas using fracking. Asfracking has made oil and gas extractionviable in more of these formations, it isbringing drilling closer to greater numbersof people as well as precious naturalresources.• Between 2003 and 2010, more than11,000 wells were drilled in the FortWorth basin of Texas’ Barnett Shaleformation. 7 The Barnett Shale underliesone of the most populous regionsof the state—the Dallas-Fort WorthMetroplex—and drilling has takenplace in urban and suburban neighborhoodsof the region.• In Pennsylvania’s Marcellus Shale,more than 6,300 shale gas wells havebeen drilled since 2000; permitshave been issued that would allowfor more than 2,400 additional wellsto be drilled. 8 A 2011 analysis byPennEnvironment Research & PolicyCenter found that 104 day care centersand 14 schools in Pennsylvania werelocated within a mile of a shale gaswell; that figure is certainly highertoday. 9• In Colorado, fracking has taken offin the oil-producing Niobrara Shaleformation. Weld County, Colorado,located just north of Denver and justeast of Fort Collins, has seen the permittingof more than 1,300 horizontalwells since the beginning of 2010. 10Oil and gas companies are aggressivelyseeking to expand fracking to places wheremore people live (including the city ofDallas) and to treasured natural areas (includingthe Delaware River Basin, whichprovides drinking water for 15 millionpeople). Wherever this new gas rush isallowed, it will impose significant impactson the environment, public health andcommunities. To add insult to injury, theseimpacts also come with heavy price tagsthat will all too often be borne by individualresidents and their communities. Thefollowing section of this report provides abreakdown of fracking impacts along withexamples of the real-life costs already beingimposed on America’s environment andour communities.Fracking: The Process and its Impacts 11


• Spills and well blowouts have releasedfracking chemicals and flowback orproduced water to groundwater andsurface water. In Colorado and NewMexico, an estimated 1.2 to 1.8 percentof all gas drilling projects resultin groundwater contamination. 11• Waste pits containing flowback andproduced water have frequently failed.In New Mexico, substances fromoil and gas pits have contaminatedgroundwater at least 421 times. 12• Faulty well construction has causedmethane and other substances to findtheir way into groundwater. 13Recent studies have suggested thatfracking may also pose a longer-term threatof groundwater contamination. One studyused computer modeling to conclude thatnatural faults and fractures in the MarcellusShale region could accelerate themovement of fracking chemicals—possiblybringing these contaminants into contactwith groundwater in a matter of years. 14 Inaddition, a recent study by researchers atDuke University found evidence for the existenceof underground pathways betweenthe deep underground formations tappedby Marcellus Shale fracking and groundwatersupplies closer to the surface. 15 Thepotential for longer-term groundwatercontamination from fracking is particularlyconcerning, as it raises the possibilitythat contamination will become apparentonly long after the drillers responsible haveleft the scene.Among the costs that result fromdrinking water contamination are the following:Groundwater CleanupGroundwater is a precious and often limitednatural resource. Once contaminated,it can take years, decades or even centuriesfor groundwater sources to clean themselvesnaturally. 16 As a result, the oil andgas industry must be held responsible forrestoring groundwater supplies to theirnatural condition.Methane contamination of well waterposes a risk of explosion and is often addressedby removing it from water at thepoint of use. In Dimock, Pennsylvania,Cabot Oil & Gas reported having spent$109,000 on methaneremoval systemsfor 14 localhouseholds in thewake of drillingrelatedmethanecontamination oflocal groundwatersupplies. In addition,the companyspent $10,000 on“In Dimock,Pennsylvania,Cabot Oil & Gasreported havingspent $109,000 onmethane removalsystems for14 households.”new or extended vent stacks to preventthe build-up of methane gas in residents’homes. 17 Such measures do not removemethane from groundwater supplies, butmerely eliminate the immediate threat toresidents’ homes.Removing other toxic contaminantsfrom groundwater is so costly that it itrarely attempted, with costs of hundredsof thousands of dollars or more.In 2004, improper cementing of a frackingwell in Garfield County, Colorado,caused natural gas to vent for 55 days intoa fault terminating in a surface waterway,West Divide Creek. 18 In response to theleak, the company responsible for drillingthe well, Encana, engaged in regulartesting of nearby wells and installed equipmentthat injects air into the groundwater,enabling chemical contaminants in thewater to become volatile and be removedfrom the water, using a process known asair sparging. These activities began in 2004and were still ongoing as of mid-2012. 19The cost of groundwater remediationin the Garfield County case is unknown,The Costs of Fracking 13


ut likely runs into the hundreds ofthousands of dollars, if not more. A 2004Environmental Protection Agency (EPA)document, referring to the work of a federalroundtable on environmental cleanuptechnologies, estimated the cost of airsparging at $150,000 to $350,000 per acre. 20Adjusting for inflation, and assuming thatthe extent of the seep was correctly estimatedby Encana at 1.3 acres, one couldestimate the cost of the sparging operationin 2012 dollars at $248,000 to $579,000. 21In addition, as of May 2012, Encana andits contractors had collected more than1,300 water samples since the seep began. 22Again, the cost of this sampling and testingis unknown, but could be conservativelyestimated to be in the tens of thousands ofdollars. Cabot Oil & Gas, for example, incurred$700,000 in water testing expensesin the wake of concerns about groundwatercontamination from a fracking well in Dimock,Pennsylvania. 23The Colorado example shows thatthe process of cleaning up contaminatedgroundwater can take years to complete,underscoring the need for protectionsto ensure that drillers have the financialwherewithal to fulfill their obligations toclean up pollution.Water ReplacementAs noted above, the process of cleaning upcontaminated groundwater can take years.“Cabot Oil &Gas provided atleast $193,000worth of water tohomes affected bycontamination.”In the meantime,residents must beprovided with clean,temporary sourcesof drinking water.The Coloradoand Pennsylvaniae x a mple s ab ovedemonstrate thehigh cost of supplying replacement waterto households dependent on contaminatedwells. In Colorado, Encana offered“complete water systems and potable waterdelivery” to homes within a two-mile areaof the West Divide Creek gas seep, at anestimated cost of $350,000. 24 These deliveriescontinued into 2006. In Pennsylvania,Cabot Oil & Gas provided at least $193,000worth of water to homes affected by contaminationthere. 25 A permanent solutionto water issues in Dimock—the extensionof municipal water to the neighborhood—was estimated to cost $11.8 million. 26Water Treatment Costs Due toSurface Water ContaminationFracking and related activities may reducethe quality of rivers and streams to the pointwhere municipalitiesmust invest inadditional watertreatment in orderto make watersafe to drink.The most significantimpactsof fracking on riversand streamsused for drinkingwater come notfrom individualspills, blowouts or“Should gasdrilling requiredrinking water toundergo additionaltreatment, New Yorkwould be requiredto build one of theworld’s largestfiltration plants atan estimated cost of$6 billion.”other accidents, but rather from the effectsof fracking many wells in a given area at thesame time. Widespread fracking can damagewaterways through water withdrawalsfrom river basins, the dumping of frackingwastewater into rivers, or increased sedimentationresulting from land clearancefor well pads, pipelines and other naturalgas infrastructure.Damage from widespread fracking mayrequire water utilities to invest in expensiveadditional treatment. New York City’s watersupply, for example, comes from upstateNew York watersheds that are sufficientlypristine that water filtration is not required.Should gas drilling—or any other pollutingactivity—require additional treatment,New York would be required to build one14 The Costs of Fracking


The disposal of fracking wastewater in open pits contributes to air pollution, while leakage from improperlylined pits has contaminated groundwater and surface water. Chemicals present in fracking wastewaterhave been linked to serious health problems, including cancer. Credit: Mark Schmerlingof the world’s largest water filtration plants.New York has already had to take this stepfor one major source of drinking water,spending $3 billion to build a filtrationplant for the part of the watershed east ofthe Hudson River. 27 The cost of doing thesame for areas west of the Hudson, whichsit atop the Marcellus Shale formation,was estimated in 2000 to be as much as$6 billion. 28Health ProblemsFracking produces pollutionthat affects the healthof workers, nearby residentsand even people living faraway. Toxic substances in fracking chemicalsand produced water, as well as pollutionfrom trucks and compressor stations,have been linked to a variety of negativehealth effects. Chemical components offracking fluids, for example, have beenlinked to cancer, endocrine disruption,and neurological and immune systemproblems. 29The legal system often offers little relieffor those whose health is impacted bychemically tainted air or water. In orderto prevail in court, an individual affectedby exposure to toxic chemicals must provethat he or she has been exposed to a specifictoxic chemical linked to the healtheffects that they are experiencing and thatthe exposure was caused by the defendant(as opposed to the many other sourcesof possible exposure to toxic chemicalsthat most people experience every day). 30Meeting that high legal standard of proof iscostly—usually requiring extensive medicaland environmental testing and experttestimony—and difficult, given corporateThe Costs of Fracking 15


attorneys’ track record of exploiting gapsin scientific knowledge to cast doubt onclaims of harm from toxic chemical exposures.As a result, many citizens whosehealth has been affected by fracking may bediscouraged from taking their complaintsto court.Individuals and taxpayers, therefore—rather than polluters—may bear much ofthe financial burden for health costs resultingfrom fracking.Nearby Residents Getting SickEmissions from fracking wellsites containnumerous substances that make peoplesick.In Texas, monitoring by the TexasDepartment of Environmental Quality detectedlevels of benzene—a known cancercausingchemical—in the air that were highenough to cause immediate human healthconcern at two sites in the Barnett Shaleregion, and at levels that pose long-termhealth concern at an additional 19 sites.“Residents living nearfracking sites have longsuffered from a rangeof health problems,including headaches,eye irritation,respiratory problemsand nausea—imposingeconomic costs rangingfrom health carecosts to workplaceabsenteeism andreduced productivity.”Several chemicalswere alsofound at levelsthat can causefoul odors. 31Less extensivetestingc o n d u c t e dby the PennsylvaniaDepartmentofEnvironmental Protectiondetectedcomponentsof natural gas,particularly methane, in the air nearMarcellus Shale drilling operations. 32 Airmonitoring in Arkansas has also foundelevated levels of volatile organic compounds(VOCs)—some of which are alsohazardous air pollutants—at the perimeterof hydraulic fracturing sites. 33Residents living near fracking siteshave long suffered from a range of healthproblems, including headaches, eye irritation,respiratory problems and nausea. 34In western Pennsylvania, for example,residents living near one fracking well sitehave complained of rashes, blisters andother health effects that they attribute to awastewater impoundment. 35 An investigationby the investigative journalism websiteProPublica uncovered numerous similarreports of illness in western states. 36A recent study by researchers at theColorado School of Public Health foundthat residents living within a half-mile ofnatural gas wells in one area of Coloradowere exposed to air pollutants that increasedtheir risk of illness. 37 The reportnoted that “health effects, such as headachesand throat and eye irritation reportedby residents during well completionactivities occurring in Garfield County,are consistent with known health effectsof many of the hydrocarbons evaluated inthis analysis.” 38These health impacts are unacceptableregardless of the economic cost. But theyalso have significant economic impacts,including:• Health care costs, including inpatient,outpatient and prescription drug costs;• Workplace absenteeism;• “Presenteeism,” or reduced productivityat work. 39Major health problems such as cancerare obviously costly. The average case ofcancer in the United States in 2003 imposedcosts in treatment and lost productivityof approximately $30,000. 40The economic impacts of less severeproblems such as headaches and respiratorysymptoms can also add up quickly. Eachday of reduced activity costs the economyroughly $50 while a missed day of work16 The Costs of Fracking


costs approximately $105. 41 The economicvalue to individuals of avoiding one exposureto hydrocarbon odors per week isapproximately $26 to $36 per household. 42As fracking continues to spread, particularlyin areas close to population centers,the number of residents affected by thesehealth problems—already substantial—islikely to increase.Worker Injury, Illness, and DeathFracking is dangerous business for workers.Nationally, oil and gas workers are seventimes more likely to die on the job thanother workers, with traffic accidents, deathfrom falling objects, and explosions theleading causes of death. Between 2003 and2008, 648 oil and gas workers nationwidedied from on-the-job injuries. 43 Workers atfracking well sites are vulnerable to manyof these same dangers, as well as one that“The National Institute of OccupationalSafety and Health recently warned thatworkers at fracking sites may be at risk ofcontracting the lung disease silicosis frominhalation of silica dust. Silicosis is oneof a family of dust-induced occupationalailments that imposed $50 million inmedical care costs in 2007.”is specific to fracking: inhalation of silicasand.Silica sand is used to prop open thecracks formed in underground rock formationsduring fracking. As silica is movedfrom trucks to the well site, silica dust canbecome airborne. Without adequate protection,workers who breathe in silica dustcan develop an elevated risk of contractingsilicosis, which causes swelling in the lungs,leading to the development of chronicFracking can be a dangerous business for workers. The National Institute for Occupational Safetyand Health recently found dangerous levels of airborne silica at fracking sites in several states, whileworkers also risk injury from traffic accidents, falling objects, explosions and other hazards. Workers,their families and the public often bear much of the costs of workplace illness and injury. Credit: MarkSchmerlingThe Costs of Fracking 17


cough and breathing difficulty. 44 Silicaexposure can also cause lung cancer. 45A recent investigation by the NationalInstitute for Occupational Safety andHealth (NIOSH) found that workers atsome fracking sites may be at risk of lungdisease as a result of inhaling silica dust.The NIOSH investigation reviewed 116air samples at 11 fracking sites in Arkansas,Colorado, North Dakota, Pennsylvaniaand Texas. Nearly half (47 percent) of thesamples had levels of silica that exceededthe Occupational Safety and HealthAdministration’s (OSHA) legal limit forworkplace exposure, while 78 percentexceeded OSHA’s recommended limits.Nearly one out of 10 (9%) of the samplesexceeded the legal limit for silica by a factorof 10, exceeding the threshold at whichhalf-face respirators can effectively protectworkers. 46Silicosis is one of a family of dust-inducedoccupational ailments (includingasbestosis and black lung disease) that havelong threatened the health of industrialworkers. A recent study estimated that thiscategory of occupational disease imposedcosts in medical care alone of $50 millionin 2007. 47Workers, their families and taxpayersare often forced to pick up much of the costof workplace illnesses and injuries. A 2012study by researchers at the University ofCalifornia, Davis, estimated that workerscompensation insurance covers only about20 percent of the total costs of workplaceillness and injury, with government programssuch as Medicaid and Medicare, aswell as workers and their families, bearingmuch of the burden in health care costs andlost productivity. 48Air Pollution Far from theWellheadAir pollution from fracking also threatensthe health of people living far from thewellhead—especially children, the elderlyand those with respiratory disease.Fracking produces a variety of pollutantsthat contribute to regional airpollution problems. VOCs in natural gasformations contribute to the formationof ozone “smog,” which reduces lungfunction among healthy people, triggersasthma attacks, and has been linkedto increases inschool absences,hospital visitsand prematuredeat h. 49 SomeVOCs are alsoconsidered “hazardousair pollutants,”whichhave been linked“Air pollution fromdrilling in Arkansas’Fayetteville Shale in2008 likely imposedpublic health costsgreater than$10 million in 2008.”to cancer and other serious health effects.Emissions from trucks carrying waterand materials to well sites, as well as fromcompressor stations and other fossil fuelfiredmachinery, also contribute to theformation of smog and soot that threatenspublic health.Fracking is a significant source ofair pollution in areas experiencing largeamounts of drilling. A 2009 study in fiveDallas-Fort Worth-area counties experiencingheavy Barnett Shale drilling activityfound that oil and gas production was alarger source of smog-forming emissionsthan cars and trucks. 50 Completion of a singleuncontrolled natural gas well producesapproximately 22.7 tons of volatile organiccompounds (VOC) per well—equivalent tothe annual VOC emissions of about 7,000cars—as well as 1.7 tons of hazardous airpollutants and approximately 156 tonsof methane, which contributes to globalwarming. 51Well operations, storage of naturalgas liquids, and other activities related tofracking add to the pollution toll, playinga significant part in regional air pollutionproblems. In Arkansas, for example, gasproduction in the Fayetteville Shale regionwas estimated to be responsible for18 The Costs of Fracking


2.6 percent of the state’s total emissionsof nitrogen oxides (NO x). 52 An analysisconducted for New York State’s reviseddraft environmental impact statementon Marcellus Shale drilling posited that,in a worst case scenario of widespreaddrilling and lax emission controls, shalegas production could add 3.7 percent tostate NO xemissions and 1.3 percent tostatewide VOC emissions compared with2002 emissions levels. 53The public health costs of pollutionfrom fracking are significant. The financialimpact of ozone smog on publichealth has been estimated at $1,648 perton of NO xand VOCs. 54 Applying thosecosts to emissions in five counties of theDallas-Fort Worth region with significantBarnett Shale drilling, the averagepublic health cost of those emissionswould be more than $270,000 per dayduring the summer ozone season. 55 InArkansas, the nearly 6,000 tons of NO xand VOCs emitted in 2008 would imposean annual public health cost of roughly$9.8 million. 56Various aspects of fracking also createparticulate—or soot—pollution. A 2004EPA regulatory impact analysis for newstandards for stationary internal combustionengines often used on natural gaspipelines and in oil and gas production,for example, estimated the benefit ofreducing one ton of particulates under10 microns in diameter (PM 10) at $8,028per ton. 57 Using this figure, the economicbenefit of eliminating PM 10emissionsfrom Arkansas’ Fayetteville Shale wouldbe roughly $5.4 million per year.Air pollution from drilling in Arkansas’Fayetteville Shale in 2008, therefore,likely imposed public health costs greaterthan $10 million in 2008, with additional,unquantified costs imposed in the formof lost agricultural production and lowervisibility.Damage toNatural ResourcesFracking threatens valuablenatural resources allacross the country. Fracking converts ruraland natural areas into industrialized zones,with forests and agricultural land replacedby well pads, roads, pipelines and naturalgas infrastructure. The effects of thisdevelopment are more than just aesthetic,as economists have increasingly come torecognize the value of the services thatnatural systems provide to people and theeconomy.Threats to Our Riversand StreamsDamage to aquatic ecosystems has a direct,negative impact on the economy. The lossof a recreational or commercial fisherydue to spills, excessive withdrawals ofwater, or changes in water quality causedby the cumulative effects of fracking in anarea can have devastating impacts on localbusinesses.“The clearance of forest land inPennsylvania for fracking could leadto increased delivery of nutrientpollution to the Chesapeake Bay,which suffers from a nutrientgenerateddead zone. The cost ofreducing an amount of pollutionequivalent to that produced byfracking would be approximately $1.5million to $4 million per year.”In Pennsylvania, for example, fishinghad an estimated economic impact of $1.6billion in 2001. 58 Allocating that impact tothe roughly 13.4 million fishing trips takenin Pennsylvania each year (as of the late1990s) would result in an estimated impactof $119 per trip. 59The Costs of Fracking 19


The Monongahela River, shown here at Rices Landing, Pa., has been affected by discharges of frackingwastewater and by water withdrawals for fracking. A 2011 Army Corps of Engineers report concluded that“the quantity of water withdrawn from streams [in the Monongahela watershed] is largely unregulatedand is beginning to show negative consequences.” Credit: Jonathan DawsonSpills, blowouts and other accidentsrelated to fracking have caused numerousfish kills in Pennsylvania. In 2009, apipe containing freshwater and flowbackwater ruptured in Washington County,Pennsylvania, triggering a fish kill in atributary of Brush Run, which is part of ahigh-quality watershed. 60 That same year,in the same county, another pipe ruptureat a well drilled in a public park killed fishand other aquatic life along a three-quarter-milelength of a local stream. 61The clearing of land for well pads, roadsand pipelines can increase sedimentation ofnearby waterways and degrade the abilityof natural landscapes to retain nutrients. Arecent preliminary study by the Academyof Natural Sciences of Drexel Universityfound an association between increaseddensity of natural gas drilling activityand degradation of ecologically importantheadwaters streams. 62Excessive water withdrawals also playhavoc with the ecology of rivers andstreams. In Pennsylvania, water has beenillegally withdrawn for fracking numeroustimes, to the extent of streams beingsucked dry. Two streams in southwesternPennsylvania—Sugarcamp Run and CrossCreek—were reportedly drained for waterwithdrawals, triggering fish kills. 63Water withdrawals also concentratepollutants, reducing water quality. A 2011U.S. Army Corps of Engineers study of theMonongahela River basin of Pennsylvaniaand West Virginia concluded that, “Thequantity of water withdrawn from streamsis largely unregulated and is beginning toshow negative consequences.” 64 The Corpsreport noted that water is increasinglybeing diverted from the relatively cleanstreams that flow into Corps-maintainedreservoirs, limiting the ability of the Corpsto release clean water to help dilute pollu-20 The Costs of Fracking


tion during low-flow periods. 65 It describedthe water supply in the Monongahela basinas “fully tapped.” 66On a broader scale, the clearance offorested land for well pads, roads andpipelines reduces the ability of the land toprevent pollution from running off intorivers and streams. Among the waterwaysmost affected by runoff pollution is theChesapeake Bay, where excessive runoffof nutrients such as nitrogen and phosphoruscauses the formation of a “dead zone”that spans as much as a third of the bay inthe summertime. 67 The Chesapeake Baywatershed overlaps with some of the mostintensive Marcellus Shale fracking activity,creating the potential for additional pollutionthat will make the bay’s pollutionreduction goals more difficult to meet.A rapid expansion of shale gas drillingcould contribute an additional 30,000to 80,000 pounds per year of nitrogenand 15,000 to 40,000 pounds per year ofphosphorus to the bay, depending on theamount of forest lost. 68 While this additionalpollution represents a small fractionof the total pollution currently reachingthe bay, it is pollution that would need to beoffset by reductions elsewhere in order toensure that the Chesapeake Bay meets pol-Many waterways in the Marcellus Shale region drain into the Chesapeake Bay. The loss of forests tonatural gas development could add to pollution levels in the bay, threatening the success of state andfederal efforts to prevent the “dead zone” that affects the bay each summer. Sources: Skytruth, U.S.Energy Information Administration, Chesapeake Bay ProgramThe Costs of Fracking 21


Pronghorn antelope are among the species thathave been affected by intense natural gas developmentin Wyoming. Credit: Christian Dionnelution reduction targets designed to restorethe bay to health. 69 Based on an estimate ofthe cost per pound of nitrogen reductionsfrom a recent analysis of potential nutrienttrading options in the Chesapeake Baywatershed, 70 the cost of reducing nitrogenpollution elsewhere to compensate for theincrease from natural gas developmentwould run to approximately $1.5 millionto $4 million per year.Habitat Loss and FragmentationExtensive natural gas development requiresthe construction of a vast infrastructureof roads, well pads and pipelines, oftenthrough remote and previously undisturbedwild lands. The disruption andfragmentation of natural habitat can putspecies at risk.Hunting and other forms of outdoorrecreation are economic mainstays in severalstates in which fracking is taking place.In Wyoming, for example, non-residenthunters and wildlife watchers pumped $340million into the state’s economy in 2006. 73Fracking, however, is degrading the habitatof several species that are important attractionsfor hunters and wildlife viewers. 74A 2006 study found that the constructionof well pads drove away female mule deerin the Pinedale Mesa area of Wyoming,which was opened to fracking in 2000, andthat the deer stayed away from areas nearwell pads over time. The study suggestedthat natural gas development in the areawas shifting mule deer from higher qualityto lower quality habitat. 75 The mule deerpopulation in the area dropped by 56 percentbetween 2001 and 2010 as fracking inthe area continued and accelerated. 76Concerns have also been raised aboutthe impact of natural gas development onpronghorn antelope. A study by the WildlifeConservation Society documentedan 82 percent reduction in high-qualitypronghorn habitat in Wyoming’s naturalgas fields, which have historically been keywintering grounds. 77The Wyoming Game & Fish Departmentassigns “restitution values” foranimals illegally killed in the state, withpronghorn valuedat $3,000 peranimal and muledeer at $4,000 peranimal. 78 The declineof approximately2,910 muledeer estimated tohave occurred inthe Pinedale Mesabetween 2001 and2010, using this“The decline ofapproximately2,910 mule deerin the PinedaleMesa, using thisvaluation, wouldrepresent lostvalue of more than$11.6 million.”valuation, would represent lost value ofmore than $11.6 million, although thereis no way to determine the share of thedecline attributable to natural gas developmentalone. 79The impact of fracking on wildlifebasedrecreation is, of course, only oneof many ways in which harm to speciestranslates into lasting economic damage.Wildlife provides many importantecosystem goods and services. (See nextpage.) Birds, for example, may keep insectand rodent populations in check, help todistribute seeds, and play other roles in22 The Costs of Fracking


Loss of Ecosystem ServicesForests and other natural areas provide important services—they clean our air,purify our water, provide homes to wildlife, and supply scenic beauty and recreationalopportunities. Many of these services would be costly to replicate—forexample, as noted on page 14, the natural filtration provided by the forests of upstateNew York has thus far enabled New York City to avoid the $6 billion expense ofbuilding a water filtration plant to purify the city’s drinking water.In recent years, economists have worked to quantify the value of the ecosystemservices provided by various types of natural land. The annual value of ecosystemservices provided by deciduous and evergreen forests, for example, has been estimatedat $300 per acre per year. 71 Researchers with The Nature Conservancy andvarious Pennsylvania conservation groups have projected that 38,000 to 90,000 acresof Pennsylvania forest could be cleared for Marcellus shale development by 2030.The value of the ecosystem services provided by this area of forest, therefore, rangesfrom $11.4 million to $27 million per year. 72 Widespread land clearance for frackingjeopardizes the ability of the forest to continue to provide these valuable services.Other natural features affected by fracking—including groundwater, rivers andstreams, and agricultural land—provide similar natural services. The value of allof those services—and the risk that an ecosystem’s ability to deliver them will belost—must be considered when tallying the cost of fracking.Oil and gas development fragments valuable natural habitat. Above, the Jonah gas field in Wyoming.Credit: Bruce GordonThe Costs of Fracking 23


the maintenance of healthy ecosystems.Adding these impacts to the impacts onhunters, anglers and wildlife-watchersmagnifies the potential long-term costs offracking from ecosystem damage.Contribution to Global WarmingGlobal warming is the most profound challengeof our time, threatening the survivalof key species, the health and welfare ofhuman populations, and the quality of ourair and water. Fracking produces pollution“Emissions ofmethane during wellcompletion fromeach uncontrolledfracking well imposeapproximately$139,000 in socialcosts related toglobal warming.”that contributesto the warmingof the planet ingreater quantitiesthan conventionalnatural gasextraction.F r a c k i n g ’sprimary impacton the climate isthrough the releaseof methane,which is a far more potent contributor toglobal warming than carbon dioxide. Overa 100-year timeframe, a pound of methanehas 21 times the heat-trapping effect of apound of carbon dioxide. 80 Methane is evenmore potent relative to carbon dioxide atshorter timescales.Leaks during the extraction, transmissionand distribution of natural gas releasesubstantial amounts of methane to theatmosphere. Recent air monitoring near anatural gas field in Colorado led researchersat the National Oceanic and AtmosphericAdministration and the University ofColorado, Boulder, to conclude that about4 percent of the extracted gas was lost tothe atmosphere, not counting the furtherlosses that occur in transportation. 81Research by experts at Cornell Universitysuggests that fracking is even worse forthe climate than conventional gas production.Their study finds that methane leakagefrom fracking wells is at least 30 percentgreater than, and perhaps double, leakagefrom conventional natural gas wells. 82Global warming threatens costly disruptionto the environment, health andinfrastructure. Economists have investedsignificant energy into attempting to quantifythe “social cost” of emissions of globalwarming pollutants—that is, the negativeimpact on society per ton of emissions. A2011 EPA study estimated the social cost ofmethane as lying within a range of $370 to$2,000 per ton. Each uncontrolled frackingwell produces approximately 156 tons ofmethane emissions. 83 At a modest discountrate (3 percent) the social cost was $895 perton in 2010. 84 Emissions of methane duringwell completion from a single uncontrolledfracking well, therefore, would impose$139,620 in social costs related to globalwarming. 85 This figure does not includeemissions from other aspects of natural gasextraction, transmission and distribution,such as pipeline and compressor stationleaks. Leakage from those sources furtherincreases the impact of fracking on the climate—imposingimpacts that may not befully realized for decades or generations.Impacts on PublicInfrastructureand ServicesFracking imposes bothimmediate and long-term burdens ontaxpayers through its heavy use of publicinfrastructure and heavy demand for publicservices.Road DamageFracking requires the transportation ofmassive amounts of water, sand and frackingchemicals to and from well sites, damagingroads. In the northern tier of Pennsylvania,24 The Costs of Fracking


Fracking requires millions of gallons of water and large quantities of sand and chemicals, all of whichmust be transported to well sites, inflicting damage on local roads. Above, a well site in WashingtonCounty, Pa. Credit: Robert Donnan“The state of Texashas convened a taskforce to review theimpact of drillingactivity on local roadsand has approved$40 million in fundingfor road repairs inthe Barnett Shaleregion.”each fracking well requires approximately400 truck trips for the transport of waterand up to 25 rail cars’ worth of sand. 86 Theprocess of delivering water to a single frackingwell causesas much damageto local roads asnearly 3.5 millioncar trips. 87A d d e d u pacross dozensof well sites ina given area,these transportationdemandsare enough tolead to a noticeableincrease in traffic—as well as strainson local roads. Between 2007 and 2010,for example, the amount of truck traffic onthree major northern Pennsylvania highwaysincreased by 125 percent, according toa regional transportation study. The studyconcluded that state and local governmentswill have to repave many roads every 7 to 8years instead of every 15 years. 88The state of Texas has convened a taskforce to review the impact of drilling activityon local roads and has approved $40million in funding for road repairs in theBarnett Shale region. 89 A 2010 PennsylvaniaDepartment of Transportation documentestimated that $265 million wouldbe required for repair of roads affected byMarcellus Shale drilling. 90 Pennsylvaniahas negotiated bonding requirements withnatural gas companies to cover the cost ofrepairs to local roads and some other stateshave done the same, but these requirementsmay not cover the full impact of frackingon roads, including impacts on majorhighways and the costs of traffic delaysand vehicle repairs caused by congested ortemporarily degraded roads.The Costs of Fracking 25


Increased Demand for Water EarthquakesThe millions of gallons of water requiredfor hydraulic fracturing come from aquifers,surface waterways, or water “recycled”from previous frack jobs.In some areas, fracking makes up asignificant share of overall water demand. Nat ional ResearchCouncilIn 2010, for example, fracking in the BarnettShale region consumed an amount of identified eightwater equivalent to 9 percent of the city of cases in whichDallas’ annual water use. 91 An official at seismic eventsthe Texas Water Development Board estimatedthat one county in the Eagle Ford wastewater dis-were linked toShale region posal wells (not“Texas adopted a w i l l see t heState Water Plan share of waterin 2012 that calls consumptionfor $53 billion in d e v o t e d t oinvestments in thefrack ing andsimilar activities increasestate water system,including $400 millionf rom z ero ato address unmetfew years agoneeds in the miningto 40 percentsector (which includes by 2020. 92 Unlikeother uses,hydraulic fracturing).”water used infracking is lost to the water cycle forever,as it either remains in the well, is“recycled” (used in the fracking of newwells), or is disposed of in deep injectionwells, where it is unavailable to rechargeaquifers.Water withdrawals for fracking canharm local waterways (see page 20) andincrease costs for agricultural and municipalwater consumers (see page 31).They may also lead to calls for increasedpublic investment in water infrastructure.Texas, for example, adopted a State WaterPlan in 2012 that calls for $53 billion ininvestments in the state water system,including $400 million to address unmetneeds in the mining sector (which includeshydraulic fracturing) by 2060. 93 Frackingis projected to account for 42 percent ofwater use in the Texas mining sector by2020. 94Fracking also has the potential to affectpublic infrastructure through inducedearthquakes resulting from undergrounddisposal of fracking wastewater. A recentreport by the“The earthquakesraise concerns aboutthe potential fordamage to publicinfrastructure as wellas private property.”necessarily all for fracking wastes) inOhio, Arkansas and Colorado. 95 In Ohio,which has become a popular location forthe disposal of wastewater from Marcellusshale drilling, more than 500 milliongallons of fracking wastewater were disposedof in underground wells in 2011. 96That same year, the Youngstown, Ohio,area experienced a series of earthquakes,prompting Ohio officials to investigatepotential links between the earthquakesand a nearby injection well. While thestudy did not determine a conclusivelink between the injection well and theearthquakes, it did find that “[a] numberof coincidental circumstances appearto make a compelling argument for therecent Youngstown-area seismic eventsto have been induced (by the injectionwell).” 97The earthquakes that have occurredthus far have not caused significant damage,but they raise concerns about the potentialfor damage to public infrastructure(such as water and sewer lines) as well asprivate property.Cleanup of Orphaned WellsGas and oil companies face a legal responsibilityto plug wells properly when theycease to be productive and to “reclaim”well sites by restoring them to somethingapproaching their original vegetated26 The Costs of Fracking


condition. The oil and gas industry, however,has a long track record of failing toclean up the messes it has made—leavingthe public to pick up the tab.Pennsylvania alone has more than8,000 orphaned wells drilled over the lastcentury and a half, and the PennsylvaniaDepartment of Environmental Protectionis unaware of the location or status of anadditional 184,000 wells. 98Orphaned wells are not a problem of thepast; newer wells can be orphaned by theiroperators, too, and left to taxpayers to cleanup. Nearly 12,000 coal-bed methane wellsin Wyoming were idle as of 2011, neitherproducing nor plugged. 99 Wyoming officialsare concerned that several companiesthat operate coal-bed methane wells mayfile for bankruptcy if natural gas prices donot rebound or if the companies cannotsell off some assets to raise capital to complywith stateenvironmentalprotections. Ifthat were tohappen, t hestate could beforced to plugand remediatethe idledwells.A n o t h e rway in whichthe public mayface exposure“A 2011 study of aMarcellus Shale well byresearchers with theUniversity of Pittsburghestimated the costof site reclamation(including reclamationof retention pondsand repairs to publicroads) at $500,000 to$800,000 per well site.”to costs is when a well plug fails, requiringattention years later. Chemical, mechanicalor thermal stress can cause the cement toVolunteer firefighters respond to a fire in a wastewater pit at an Atlas Energy Resources well site inWashington County, Pa., in March 2010. Fracking places increased demands on emergency responders,creating new dangers that require additional training, and increasing demands for response to trafficaccidents involving heavy trucks. Credit: Robert DonnanThe Costs of Fracking 27


crack or loosen and allow contaminationfrom saline aquifers or gas-bearing layersto reach freshwater aquifers. The risk ofplug failure increases over time. 100 In somestates, such as Pennsylvania, plugging andreclamation bonds are released one year aftera well is plugged, leaving the state withno way to hold drillers accountable for thecost of plugging wells that fail later.The Pennsylvania Department of EnvironmentalProtection estimates that plugginga 3,000 foot-deep oil or gas well andreclaiming the drill site costs an averageof $60,000. 101 However, some well reclamationcosts have exceeded $100,000. 102And Cabot Oil & Gas Corporation claimsto have spent $730,000 per well to capthree shale gas wells in Pennsylvania. 103A 2011 study of a Marcellus Shale well byresearchers with the University of Pittsburghestimated the cost of site reclamation(including reclamation of retention pondsand repairs to public roads) at $500,000 to$800,000 per well site. 104While estimates of the costs of pluggingand remediation of fracked wells vary,those costs almost always exceed a state’sbonding requirements. Pennsylvania’s recentlyrevised bonding requirements, forexample, require drillers to post maximumbonds of only $4,000 per well for wellsless than 6,000 feet in depth and $10,000per well for wells deeper than 6,000 feet,creating the potential for the public to besaddled with tens or hundreds of thousandsof dollars in liability for plugging and reclamationof abandoned wells whose ownershave gone bankrupt or walked away fromtheir responsibilities. 105 The experience ofprevious resource extraction booms andbusts suggests that the full bill for cleaningup orphaned wells may not come duefor decades.In parts of the country, fracking takes place in close proximity to homes, schools and hospitals, creatingthe potential for conflict. A Texas study has found that some homes near fracking well sites have lostvalue. Above, a natural gas flare near homes in Hickory, Pa. Credit: Robert Donnan28 The Costs of Fracking


Emergency Response NeedsIncreasing traffic—especially heavy trucktraffic—has contributed to an increasein traffic accidents and fatalities in someareas in which“A 2011 survey ineight Pennsylvaniacounties foundthat 911 calls hadincreased in sevenof them, with thenumber of callsincreasing in onecounty by 49 percentover three years,largely due to anincrease in incidentsinvolving heavytrucks.”fracking has unleasheda drillingboom, as well asan increase in demandsfor emergencyresponse.In the BakkenShale oil regionof North Dakotafor example,the number ofhighway crashesincreased by 68percent between2006 and 2010,with the share ofcrashes involvingheavy trucks also increasing over thatperiod. The estimated cost of those crashesincreased by $31 million. 106The need to address traffic accidents isone driver of increased need for emergencyresponse in communities experiencingfracking. A 2011 survey by StateImpactPennsylvania in eight counties found that911 calls had increased in seven of them,with the number of calls increasing in onecounty by 49 percent over three years,largely due to an increase in incidents involvingheavy trucks. 107Social Dislocation and SocialService CostsThe influx of temporary workers that oftenaccompanies fracking also puts a squeezeon housing supplies, creating social dislocationthat, in some cases, creates newdemand for government social services.Rental prices have doubled or tripled incommunities experiencing a boom in MarcellusShale drilling. 108 Overheated localhousing markets have driven lower incomerenters into substandard housing or homelessness.Elderly residents have faced ashortage of subsidized housing. 109 Requestsfor assistance from social service agencieshave increased. 110 In Bradford County,Pa., the local children and youth servicesagency increased its spending on housingsubsidies by 50 percent or $10,000 peryear. 111 In the same county, a governmentagency purchased and distributed tentsfor use as temporary housing. 112 In GreeneCounty, in southwestern Pennsylvania, thedocumented number of homeless jumpedfrom zero to 40 in a single year. 113 Children“In Greene County,in southwesternPennsylvania, thedocumented numberof homeless jumpedfrom zero to 40 in asingle year.”of families thatlose permanenthousing may beat risk of beingseparated fromt heir familiesand placed intofoster care. A2010 survey ofPennsylvania localgovernments in municipalities experiencingMarcellus Shale drilling activityfound that more governments reported anincrease in municipal expenditures sincethe onset of fracking than reported anincrease in revenues. 114Broader EconomicImpactsFracking imposes damageon the environment, publichealth and public infrastructure, withsignificant economic costs. But poorlythought-out resource extraction also has alegacy of undercutting the long-term economicprospects of the very “boomtowns”it creates.A 2008 study by the firm HeadwatersThe Costs of Fracking 29


Economics found that Western countiesthat have relied on fossil fuel extraction aredoing worse economically compared withpeer communities and are less well-preparedfor growth in the future, due to a less-diversifiedeconomy, a less-educated workforce,and greater disparities in income. 115In addition, fracking can underminelocal economies in many ways, includingthrough its impacts on housing andagriculture.Value of Residents’ Homes at RiskFracking can reduce the value of nearbyproperties as a result of both actual pollutionand the stigma that may come fromproximity to industrial operations and“A 2010 study inTexas concluded thathomes valued at morethan $250,000 andwithin 1,000 feet ofa well site saw theirvalues decrease by 3to 14 percent.”the potential forfuture impacts.A 2010 study inTexas concludedthat homesvalued at morethan $250,000and within 1,000feet of a well sitesaw their valuesdecrease by 3 to14 percent—there was no discernibleimpact on property values beyond thatdistance or for lower-priced houses. 116 A2001 study of property values in La PlataCounty, Colorado, found that propertieswith a coalbed methane well had seentheir sales value decrease by 22 percent. 117Even where impacts on sales values aredifficult to establish, chronic conditionscaused by fracking—such as odor, traffic,noise, concerns about pollution of the airand water, earthquake concerns and visualimpacts—may adversely affect residents’use and enjoyment of their homes.Properties on and near locations wherefracking is taking place may also be moredifficult to finance and insure, potentiallyaffecting their value. Mortgage lenders andinsurers have recently taken steps to protectthemselves from fracking-related risks.Several mortgage lenders have begun to requireextensive buffer zones around homeson land with gas leases before issuing a newmortgage or to refuse to issue new mortgageson land with natural gas leases. 118 Forexample, Brian and Amy Smith live acrossthe street from a gas drilling site in Daisytown,Pa. In the spring of 2012, QuickenLoans denied their mortgage application,stating that “Unfortunately, we are unableto move forward with this loan. It is locatedacross the street from a gas drilling site.”The Smiths were also rejected by two othernational lenders. 125In addition, in July 2012, NationwideInsurance issued a statement clarifying thatits policies do not cover damages related tofracking, noting that “the exposures presentedby hydraulic fracturing are too greatto ignore.” 119 Nationwide’s announcementdrew attention to the fact that standardhomeowners’ insurance policies do notcover damage related to fracking.Farms in JeopardyFracking largely takes place in rural areas.Several aspects of fracking have the potentialto harm farmers.Direct exposure to fracking wastewatercan harm livestock. Researchers at CornellUniversity have identified multiple instancesof harm to animals associated with naturalgas operations in Colorado, Louisiana,New York, Ohio, Pennsylvania and Texas.In one case examined by the researchers,140 cows wereexposed whenthe liner of awastewater impoundmentwasslit, enablingwastewater to“The loss of 70 cowsfrom a single incidentwould have an impactof at least $112,000.”flow onto a pasture and into a pond thecattle used as a water supply. Of those 140cows, approximately 70 died. Assuming anaverage cost per cow of $1,600 120 , the loss of30 The Costs of Fracking


70 cows from a single incident would havean impact of at least $112,000. In additionto this direct replacement cost, exposureof livestock to contaminants from frackingis likely to cost farmers in other ways, forexample, by impeding the ability of animalsto reproduce or reducing the ability of afarmer to market his or her livestock.Researchers at Penn State Universityhave identified a link between increaseddrilling activity in the Marcellus Shaleand decreased production at dairy farmsin counties where drilling is taking place.The five counties in which drilling activitywas the heaviest experienced an 18.5 percentreduction in milk production between2007 and 2010. 121 The researchers did notreach a conclusion as to the cause of thedecline. But another review of the communityimplications of fracking suggestedthat rising transportation costs caused byworkforce competition with gas drillinghas added a new economic challenge fordairy farmers. 122 The demise of farmingin a community threatens to also bringdown stores and industries that were builtto support farmers, eroding a community’seconomic base.In arid western states, some farmersface higher costs for water as a result ofcompeting demands from fracking. A 2012auction of unallocated water conducted bythe Northern Water Conservation Districtsaw natural gas industry firms submit highbids, with the average price of water sold inthe auction increasing from $22 per acrefootin 2010 to $28 per acre-foot in the firstFracking poses threats to farming, both directlythrough the potential loss of livestock due toexposure to toxic contaminants, and indirectlyby increasing farmers’ costs of doing businessduring the “boom” portion of the boom-bustcycle of development. Here, cows graze in Erie,Colorado, which has experienced fracking activity.Credit: Jill/Blue Moonbeam Studio.part of 2012. 123 For the 25,000 acre-feet ofwater auctioned, this would amount to anadded cost of $700,000.Finally, farmers engaged in organicagriculture have raised concerns that frackingcould make it more difficult for themto sell their products to health-consciousconsumers. One New York City food coop,for example, has already stated that theymay stop purchasing agricultural productsfrom New York state farms in areas wherefracking takes place. 124The Costs of Fracking 31


Who Pays the Costs of Fracking?The oil and gas industry is unlikely everto be held accountable for many of thecosts of fracking documented in thisreport—at least under current law.Time and again in the history of theoil and gas industry, legal safeguards haveproven inadequate to protect the environmentand communities from exposure tolong-term costs. The public can be exposedto many different and significant costs fromfracking for several reasons:• Inadequate financial assurance.The boom-bust cycle typical of theoil and gas industry means that manyfirms (or their subcontractors) maybe unable or unwilling to fulfill theirfinancial obligations to properly plugwells, reclaim land, remediate environmentalproblems, and compensatethose harmed by their activities. Statebonding requirements are intendedto protect the public by ensuring thatfinancial resources exist to cover thecost of well plugging and reclamation,but the amounts of those bonds aregenerally too low to pay for properwell closure, and state laws generallydo not require drillers to obtain bondsto cover the cost of off-site environmentalremediation or compensationto victims.• Delayed appearance of harm. Somedamages from fracking are apparentright away—for example, the appearanceof tainted well water immediatelyafter fracking of a nearby well. Butother damages—especially ecosystemand health damages—may not appearfor years or even decades, making itlikely that the individuals and companiesresponsible will be long gonefrom the scene by the time the scopeof the damage becomes apparent. Thisis particularly worrisome given concernsabout the potential long-termimpact of fracking and wastewaterdisposal on precious groundwater supplies.• Diffuse, regional impacts. Someimpacts of fracking only appear whenmany wells are drilled in a concentratedgeographic area. For example, theerosion caused by clearance of a single32 The Costs of Fracking


well pad may not be enough to harmwildlife in a local stream, but theclearance of land for dozens of wellsin the same area may have a harmfulcumulative impact. In these cases,assigning legal responsibility for thedamage to any single well may provedifficult or impossible.• Inability to access legal remedies.Those who are harmed by frackingcan face an uphill battle in thelegal system. Litigation is frequentlya lengthy, expensive, time-consumingand difficult road for citizens topursue in seeking to resolve claims ofdamage from environmental conditions.This is particularly true withregard to health impacts. It is extraordinarilydifficult, for example, tomeet the legal standards of proof thatan individual’s illness was caused byexposure to a particular toxic chemicalat a particular time. Even whereproperty damage is concerned, suchlitigation typically requires expertanalysis and testimony to provecausation and diminished value of theaffected property.As a result, many of the costs of frackingare often borne not by the companies thatbenefit, but by nearby residents, taxpayers,those whose enjoyment of clean air, cleanwater and abundant wildlife is impacted byfracking, and even by future generations.Who Pays the Costs of Fracking? 33


THE COSTS OF FRACKINGThe Price Tag of Dirty Drilling’sEnvironmental DamageDAMAGE TO NATURAL RESOURCES$$ Threats to rivers and streams$$ Habitat loss and fragmentation$$ Contribution to global warmingDRINKING WATER CONTAMINATION$$ Groundwater cleanup$$ Water replacement$$ Water treatment costs BROADER ECONOMIC IMPACTS$$ Value of residents’ homes at risk$$ Farms in jeopardyHEALTH PROBLEMS$$ Nearby residents getting sick$$ Worker injury, illness and death$$ Air pollution far from the wellheadPUBLIC INFRASTRUCTURE AND SERVICES$$ Road damage$$ Increased demand for water$$ Cleanup of orphaned wells$$ Emergency response needs$$ Social dislocation and social service costs$$ Earthquakes from wastewater injectionInfographic design: Jenna Leschuk34 The Costs of Fracking


Accounting for theTrue Costs of Fracking:Conclusion and RecommendationsFracking harms the environment, publichealth and our communities in manyways.If fracking is to continue, the minimumthat citizens should expect is theenforcement of tough rules to reducefracking damage and up-front financialassurances that guarantee thatthe oil and gas industry cleans up thedamage it does cause and compensatesany victims. Current laws, however, areinadequate to ensure that even this basicstandard of protection is met. Failing tohold the oil and gas industry accountablenot only leaves the public exposed tomany types of costs, but it also creates adisincentive for the industry to take actionto prevent accidents and environmentalcontamination.Federal, state and local governmentsshould hold the oil and gas industry accountablefor the costs of fracking usinga variety of financial tools, including:• Bonding – Oil and gas companiesshould be required to post bonds (orother forms of financial assurance)sufficient to plug wells and reclaimwell sites, pay for road repairs andother physical damage caused byfracking, remediate environmentalcontamination, fully compensateanyone harmed by activities at wellsites, and address other costs imposedby fracking. Requiring drillingcompanies to post bonds for theseexpenses ensures that the oil and gasindustry will be able to take care of itsresponsibilities to the public and theenvironment even amid the “boombust”cycles typical of the oil and gasindustry.• Fees, taxes and other charges –Bonding may not be the best solutionfor recouping every cost imposed byfracking. For example, natural gascompanies could not be required totake out bonds to cover expenses relatedto a single well’s contribution toglobal warming—the effect of whichmight be felt half a world away. Whilestrong regulation should be used tolimit the broader environmental,public health and community impactsof fracking, fees and other charges canAccounting for the True Costs of Fracking: Conclusion and Recommendations 35


also recoup for the public some of thecosts imposed by fracking and createan economic incentive for the oil andgas industry to reduce its impact.The mounting evidence of fracking’simpact on our environment, health andcommunities is enough to spur reconsiderationof when and under what circumstancesit is permitted to take place. Iffracking is permitted to continue, Americansdeserve to know that the oil and gasindustry—not the public at large—willpick up the tab.36 The Costs of Fracking


Notes1 U.S. Geological Survey, Biology in Focus:New Hope for Acid Streams, April 1998.2 Railroad Commission of Texas, Oil FieldCleanup Program, Annual Report – FiscalYear 2011, 7 February 2012.3 Dave Fehling, “Orphans of the OilFields: The Cost of Abandoned Wells,”StateImpact Texas, 25 April 2012.4 Geoffrey H. Fettus and Matthew G.McKinzie, Natural Resources DefenseCouncil, Nuclear Fuel’s Dirty Beginnings:Environmental Damage and Public HealthRisks from Uranium Mining in the AmericanWest, March 2012.5 Ian Urbina, “A Tainted Water Well, andConcern There May be More,” New YorkTimes, 3 August 2011.6 U.S. Department of Energy, EnergyInformation Administration, Lower 48States Shale Gas Plays, updated 9 May 2011.7 Ed Ireland, Barnett Shale Energy EducationCouncil, History and Development of theBarnett Shale: Lessons Learned (Powerpointpresentation), downloaded from www.barnettshalenews.com,3 July 2012.8 Sean D. Hamill, “Powdermill NatureReserve Compiles Comprehensive Listof Shale Wells,” Pipeline (blog), PittsburghPost-Gazette, 25 May 2012.9 Travis Madsen, Jordan Schneiderand Erika Staaf, In the Shadow of theMarcellus Boom: How Shale Gas ExtractionPuts Vulnerable Pennsylvanians at Risk,PennEnvironment Research & PolicyCenter, May 2011.10 Colorado Oil & Gas ConservationCommission, Staff Report: July 9, 2012,downloaded from cogcc.state.co.us/Staff_Reports/2012/2012_07SR.pdf,11 August 2012.11 Ronald E. Bishop, Chemical andBiological Risk Assessment for Natural GasExtraction in New York, 28 March 2011.12 Joanna Prukop, “Setting the RecordStraight on Pit Rule,” Farmington DailyTimes, 17 September 2008.13 For example, in 2007, impropercementing contributed to the infiltrationof methane into several Ohio homes viagroundwater wells, triggering a houseexplosion and the evacuation of 19homes. Source: Cadmus Group, HydraulicNotes 37


Fracturing: Preliminary Analysis of RecentlyReported Contamination, prepared for U.S.Environmental Protection Agency, September2009.14 Tom Myers, “Potential ContaminantPathways from Hydraulically FracturedShale to Aquifers,” Ground Water,published online 17 April 2012, doi:10.1111/j.1745-6584.2012.00933.x.15 Nathaniel R. Warner, et al.,“Geochemical Evidence for PossibleNatural Migration of MarcellusFormation Brine to Shallow Aquifers inPennsylvania,” Proceedings of the NationalAcademy of Sciences, 109 (30): 11961-11966,24 July 2012, doi: 10.1073/pnas.1121181109.16 U.S. Geological Survey, GroundwaterQuality, downloaded from ga.water.usgs.gov/edu/earthgwquality.html, 11 August2012.17 Dan O. Dinges, Cabot Oil & GasCorporation, Letter to PennsylvaniaDepartment of Environmental ProtectionSecretary John Hanger, Exhibit B, 28September 2010.18 Geoffrey Thyne, Science Based Solutions,Analysis of the West Divide Creek Seep,prepared for Garfield County, undated.19 Ibid.20 U.S. Environmental ProtectionAgency, Technologies for Treating MtBE andOther Fuel Oxygenates, May 2004.21 Assumes that cost estimates are in 2002dollars, adjusted for inflation using theU.S. Bureau of Labor Statistics ConsumerPrice Index calculator, available at www.bls.gov/data/inflation_calculator.htm.22 Rule Engineering, LLC, Memo toCharlie Jensen, EnCana Oil & Gas, Re:West Divide Creek 2012 First QuarterSeep Status, Remediation #1815, 18 May2012, obtained from Colorado Oil &Gas Conservation Commission at cogcc.state.co.us/Library/PiceanceBasin/WestDivideCreekSeep/Divide%20Creek%20Report2012-03.pdf.23 See note 17.24 EnCana Oil & Gas (USA), Inc., Letterto Morris Bell, State of Colorado Oil & GasConservation Commission, Re: Notice ofAlleged Violation, Schwartz 2-15B Well, 18May 2004.25 See note 17.26 The Pennsylvania Department of EnvironmentalProtection (DEP) had originallycalled for construction of the pipeline, tobe paid for by Cabot. However, the DEPlater drew back from that demand when itnegotiated a settlement with the company.“$11.8 million”: Pennsylvania Departmentof Environmental Protection, Public WaterLines to Provide Safe, Permanent Water Supplyto Susquehanna County Residents Impactedby Natural Gas Migration (news release), 30September 2010.27 New York State Department ofEnvironmental Conservation, RevisedDraft Supplemental Generic EnvironmentalImpact Statement on the Oil, Gas and SolutionMining Regulatory Program: Well PermitIssuance for Horizontal Drilling And High-Volume Hydraulic Fracturing to Develop theMarcellus Shale and Other Low-PermeabilityGas Reservoirs, 7 September 2011, 6-44.28 New York City Independent BudgetOffice, The Impact of Catskill/DelawareFiltration on Residential Water and SewerCharges in New York City, November 2000.29 Theo Colborn, et al., “NaturalGas Operations from a Public HealthPerspective,” Human and Ecological RiskAssessment: An International Journal, 17(5):1039-1056, 2011, doi: 10.1080/10807039.2011.605662.30 David E. Bernstein, “Getting toCausation in Toxic Tort Cases,” BrooklynLaw Review, 74(1): 51-74, Fall 2008.38 The Costs of Fracking


31 Shannon Ethridge, Texas Commissionon Environmental Quality, Memorandumto Mark R. Vickery Re: Health Effects Reviewof Barnett Shale Formation Area MonitoringProjects, 27 January 2010.32 Pennsylvania Department of EnvironmentalProtection, Northeastern PennsylvaniaMarcellus Shale Short-Term Ambient AirSampling Report, 12 January 2011.33 Arkansas Department ofEnvironmental Quality, Emissions Inventoryand Ambient Air Monitoring of Natural GasProduction in the Fayetteville Shale Region, 22November 2011.34 Texas Oil & Gas Accountability Projectand Earthworks, Natural Gas Flowback: Howthe Texas Natural Gas Boom Affects Healthand Safety, April 2011.35 Abrahm Lustgarten and NicholasKusnetz, “Science Lags as HealthProblems Emerge Near Gas Fields,”ProPublica, 16 September 2011.36 Ibid.37 L.M. McKenzie, et al., “HumanHealth Risk Assessment of Air Emissionsfrom Development of UnconventionalNatural Gas Resources,” Science of the TotalEnvironment, 424: 79-87, 1 May 2012.38 Ibid.39 Ron Z. Goetzel, et al., “Health,Absence, Disability and Presenteeism:Cost Estimates of Certain Physical andMental Health Conditions AffectingU.S. Employers” Journal of Occupationaland Environmental Medicine, 46(4):398-412, April 2004, doi: 10.1097/01.jom.0000121151.40413.bd.40 Ross DeVol and Armen Bedroussian,An Unhealthy America: The EconomicBurden of Chronic Disease, Milken Institute,October 2007. Based on dividing totaleconomic impact by number of reportedcases.41 Calculation based on methodologydescribed in U.S. Environmental ProtectionAgency, Control of Hazardous Air Pollutantsfrom Mobile Sources: Regulatory Impact Analysis,February 2007, with median wage datafrom U.S. Social Security Administration,Automatic Increases: Measures of Central Tendencyfor Wage Data, downloaded from www.ssa.gov/oact/cola/central.html, 3 July 2012.42 U.S. Environmental ProtectionAgency, Final Regulatory Analysis: Control ofEmissions from Nonroad Diesel Engines, May2004. Dollar figures translated to 2012dollars using the U.S. Bureau of LaborStatistics CPI Inflation Calculator at www.bls.gov/data/inflation_calculator.htm.43 Kyla Retzer, Ryan Hill and GeorgeA. Conway, National Institute forOccupational Safety and Health, MortalityStatistics for the U.S. Upstream Industry,Powerpoint presentation to Society ofPetroleum Engineers SPE Americas2011 E&P Health, Safety, Security,Environmental Conference, Houston, 21-23 March 2011.44 Ebix, Inc., “Silicosis,” ADAM MedicalEncyclopedia, accessed at PubMed Health,www.ncbi.nlm.nih.gov/pubmedhealth/PMH0001191/, 3 July 2012.45 U.S. Centers for Disease Control andPrevention, et al., High Impact: Silica, LungCancer, and Respiratory Disease QuantitativeRisk, downloaded from www.cdc.gov/niosh/docs/2011-120/pdfs/2011-120.pdf, 3July 2012.46 U.S. Occupational Safety and HealthAdministration, Hazard Alert: Worker Exposureto Silica During Hydraulic Fracturing,downloaded from www.osha.gov/dts/hazardalerts/hydraulic_frac_hazard_alert.html,3 July 2012.47 J. Paul Leigh, “Economic Burden ofOccupational Injury and Illness in theUnited States,” The Milbank Quarterly,89(4): 728-772, 2011. An earlier study thatconsidered the direct and indirect costsNotes 39


of this family of diseases (including, forexample, lost earnings) put the cost ofthese illnesses at $381 million (1992$) in1992. Source: J. Paul Leigh, et al., Costs ofOccupational Injuries and Illnesses, Universityof Michigan Press, 2000.48 UC Davis Health System, Most OccupationalInjury and Illness Costs Are Paid by theGovernment and Private Payers Rather thanWorkers’ Compensation Insurance, UC DavisStudy Shows (news release), 25 May 2012.49 U.S. Environmental Protection Agency,Ozone and Your Patients’ Health: Training forHealth Care Providers, downloaded fromwww.epa.gov/apti/ozonehealth/keypoints.html#introduction, 11 August 2012.50 Al Armendariz, Emissions fromNatural Gas in the Barnett Shale Areaand Opportunities for Cost-EffectiveImprovements, prepared for EnvironmentalDefense Fund, 26 January 2009.51 VOC emissions: U.S. EnvironmentalProtection Agency, Oil and Natural GasSector: Standards of Performance for CrudeOil and Natural Gas Production, Transmissionand Distribution, April 2012; “7,000 cars”based on average emissions of 6.4 kg peryear for vehicles of model years 2005-2008from Maureen Cropper, et al., Resourcesfor the Future, Getting Cars Off the Road:The Cost-Effectiveness of an Episodic PollutionControl Program, April 2010; Hazardous airpollutant and methane emissions based onU.S. Environmental Protection Agency,Regulatory Impact Analysis: Final New SourcePerformance Standards and Amendmentsto the National Emissions Standards forHazardous Air Pollutants for the Oil andNatural Gas Industry, April 2012. Estimatedemissions of hazardous air pollutants andmethane from uncontrolled wells arecalculated based on the assumption thatemissions of those pollutants are reducedby the same percentage as VOC emissionsby proposed new EPA regulations. Theestimated per-well emission reductions ofhazardous air pollutants and methane weremultiplied by the ratio of uncontrolledemissions of VOC/reductions in VOCdue to the new regulations to arrive at anuncontrolled emission figure for hazardousair pollutants and methane.52 See note 33.53 See note 27, 6-175.54 Michael Chan and Michael D. Jackson,TIAX, for the American Lung Association inCalifornia, Comparing the Benefits of Clean CarRegulations (Powerpoint), 4 May 2011.55 Based on emissions estimates from note 50.56 See note 33.57 Based on an estimated benefit per tonof $6,619 in 2004 dollars, adjusted for inflationusing the U.S. Bureau of Labor StatisticsCPI Inflation Calculator, available atwww.bls.gov/data/inflation_calculator.htm.Cost per ton benefit estimate from U.S.Environmental Protection Agency, RegulatoryImpact Analysis for the Stationary InternalCombustion Engine (RICE) NESHAP:Final Report, February 2004.58 Pennsylvania Fish and BoatCommission, Economic Value of Fishingand Boating in Pennsylvania (fact sheet),downloaded from fishandboat.com/promo/funding/fact_economic_impact.htm,20June 2012.59 Andrew Smeltz, “Outdoor Economics,”Research/Penn State, September 1999.60 Brian M. Dillemuth, PennsylvaniaDepartment of Environmental Protection,Memorandum to Jack Crook Re: Frac WaterSpill (Range Resources), Unnamed Tributaryto Brush Run, Hopewell Township, WashingtonCounty, Pennsylvania, 8 October 2009.61 “Waste from Marcellus Shale Drillingin Cross Creek Park Kills Fish,” PittsburghPost-Gazette, 5 June 2009.62 Academy of Natural History of DrexelUniversity, A Preliminary Study on the40 The Costs of Fracking


Impact of Marcellus Shale Drilling on HeadwatersStreams, downloaded from www.ansp.org/research/environmental-research/projects/marcellus-shale-preliminarystudy/,18 June 2012.63 Don Hopey, “Region’s Gas DepositsReported to Be Nation’s Largest,”Pittsburgh Post-Gazette, 14 December 2008;fish kills: Katy Dunlap, Trout Unlimited,Shale Gas Production and Water Resources inthe Eastern United States: Testimony Beforethe U.S. Senate Committee on Energy andNatural Resources, Subcommittee on Waterand Power, 20 October 2011.64 U.S. Army Corps of Engineers,Monongahela River Watershed InitialWatershed Assessment, September 2011.65 Ibid.66 Ibid.67 Maryland Department of NaturalResources, Keeping Tabs on Chesapeake Bay’sSummer Dead Zone, late July 2012 update,downloaded from mddnr.chesapeakebay.net/eyesonthebay/stories/DeadZoneStatus_LateJuly2012Update.pdf,11 August2012.68 Karl Blankenship, “Marcellus ShaleDrilling May Take Huge Chunks out of PAForests,” Bay Journal, December 2011.69 Small fraction: Chesapeake BayProgram, Factors Impacting Bay andWatershed Health, downloaded from www.chesapeakebay.net/track/health/factors 20June 2012.70 Cy Jones, et al., World ResourcesInstitute, How Nutrient Trading Could HelpRestore the Chesapeake Bay (working paper),2010.71 Trust for Public Land, NorthCarolina’s Return on the Investment in LandConservation, 2011, Appendix.72 Nels Johnson, et al., PennsylvaniaEnergy Impacts Assessment, Report 1:Marcellus Shale Natural Gas and Wind, 15November 2010.73 U.S. Fish and Wildlife Service andU.S. Census Bureau, 2006 National Surveyof Fishing, Hunting, and Wildlife- AssociatedRecreation: Wyoming, May 2008.74 Natural gas development in Wyomingtypically employs multiple, directionallydrilled, vertical wells from a well pad to accessreservoirs of gas in underground rockformations. It does not generally involvehorizontal drilling along the formationsthemselves. Because the impacts of thisform of natural gas extraction are similarto those created by horizontally drilledwells, and are indicative of impacts thatmay occur in other parts of the country, weinclude them in our discussion of the costsof fracking in this report.75 Hall Sawyer, et al., “Winter HabitatSelection of Mule Deer Before and DuringDevelopment of a Natural Gas Field,”Journal of Wildlife Management, 70(2): 396-403, 2006.76 Hall Sawyer and Ryan Nielson, WesternEcosystems Technology, Inc., MuleDeer Monitoring in the Pinedale AnticlineProject Area: 2011 Annual Report, preparedfor the Pinedale Anticline Planning Office,downloaded from www.wy.blm.gov/jiopapo/papo/wildlife/meetings/2011/MuledeerMonitoringUpd.pdf,29 August 2012.77 Wildlife Conservation Society, NaturalGas Development Linked to Wildlife HabitatLoss (news release), 2 May 2012.78 Wyoming Fish & Game Department,2011 Annual Report, undated.79 “2,910 mule deer”: see note 76.80 United Nations Framework Conventionon Climate Change, Global Warming Potentials,downloaded from unfccc.int/ghg_data/items/3825.php, 3 July 2012.81 Jeff Tollefson, “Air Sampling RevealsNotes 41


High Emissions from Gas Field,” Nature,483(7384): 139-140, 9 February 2012, doi:10.1038/482139a.82 Robert W. Howarth, Renee Santoroand Anthony Ingraffea, “Methane and theGreenhouse-Gas Footprint of Natural Gasfrom Shale Formations,” Climatic Change106 (4): 679-690, 2011, doi: 10.1007/s10584-011-0061-5.83 See note 51.84 Alex L. Marten and Stephen C.Newbold, U.S. Environmental ProtectionAgency, National Center for EnvironmentalEconomics, Estimating the Social Costof Non-CO 2 GHG Emissions: Methane andNitrous Oxide, January 2011. Social costsestimated at $810 per ton in 2007 dollars,adjusted for inflation using U.S. Bureau ofLabor Statistics CPI Inflation Calculator,available at www.bls.gov/data/inflation_calculator.htm.85 See note 51.86 Northern Tier Planning and DevelopmentCommission, Marcellus Shale FreightTransportation Study, November 2011.87 C.J. Randall, Hammer Down: A Guide toProtecting Local Roads Impacted by Shale GasDrilling, December 2010.88 See note 86.89 Jim Efstathiou, Jr., “Taxpayers Pay asFracking Trucks Overwhelm Rural CowPaths,” Bloomberg Businessweek, 15 May2012.90 Scott Christie, Pennsylvania Departmentof Transportation, Protecting Our Roads, testimonybefore the Pennsylvania House TransportationCommittee, 10 June 2010.91 Jean-Philippe Nicot and BridgetR. Scanlon, “Water Use for Shale-GasProduction in Texas, U.S.,” EnvironmentalScience and Technology, 46(6): 3580-3586,2012, doi: 10.1021/es204602t.92 Kate Galbraith, “Texas FrackingDisclosures to Include Water Totals,” TexasTribune, 16 January 2012.93 Texas Water Development Board,Water for Texas: 2012 State Water Plan,January 2012.94 Based on projected water use forproduction of oil and gas from shale, tightgas and tight oil formations from TexasWater Development Board, Current andProjected Water Use in the Texas Mining andOil and Gas Industry, June 2011.95 National Research Council, Induced SeismicityPotential in Energy Technologies, 2012.96 Mark Niquette, “Fracking Fluid SoaksOhio,” Bloomberg Businessweek, 22 March2012.97 Ohio Department of NaturalResources, Preliminary Report on theNorthstar 1 Class II Injection Well and theSeismic Events in the Youngstown, Ohio, Area,March 2012.98 Pennsylvania Department ofEnvironmental Protection, Bureau of Oiland Gas Management, Pennsylvania’s Planfor Addressing Problem Abandoned Wells andOrphaned Wells, 10 April 2000.99 Dustin Bleizeffer, “Wyoming Bettingon Coal-Bed Methane Comeback DespiteIndustry Bankruptcies,” WyoFile, 22 March2011.100 Austin Mitchell and ElizabethCasman, “Economic Incentives andRegulatory Framework for Shale GasWell Site Reclamation in Pennsylvania,”Environmental Science and Technology, 45(22):9506–9514, October 2011.101 Ibid.102 Ibid.103 Cabot Oil & Gas Corporation, Summaryof Cabot’s Good Faith Efforts, down-42 The Costs of Fracking


loaded from cabotog.com/pefs/exhibitb.pdf, 12 June 2012.104 William E. Hefley, et al., Universityof Pittsburgh Joseph M. Katz GraduateSchool of Business, The Economic Impactof the Value Chain of a Marcellus Shale Well,August 2011.105 Pennsylvania Session Law 2012, Feb.14, P.L. 87, No. 13, §3225(a)(1)(i)(A). Note,these are the maximum per-well bondingrequirements. Owners of multiple wellsface lower per-well bonding requirements.106 Upper Great Plains TransportationInstitute, Rural Transportation Safety andSecurity Center, ND Traffic Safety: OilCounties (issue brief), Summer 2011.107 Scott Detrow, “Emergency ServicesStretched in Pennsylvania’s Top DrillingCounties,” StateImpact Pennsylvania, 11 July2011.108 Jonathan Williamson and Bonita Kolb,Center for the Study of Community andthe Economy, Lycoming College, MarcellusNatural Gas Development’s Effect on Housingin Pennsylvania, 31 October 2011.109 Ibid.110 Steve Orr, “Fracking: Bane or Boon?A Look into Industry’s Presence in Pa.,”Democrat and Chronicle (Rochester, NY), 18December 2011.111 Institute for Public Policy andEconomic Development, Impact on Housingin Appalachian Pennsylvania as a Result ofMarcellus Shale – Social Services (issue brief),November 2011.112 Ibid.113 Ibid.114 Timothy W. Kelsey, et al., MarcellusShale Education and Training Center, EconomicImpacts of Marcellus Shale in Pennsylvania:Employment and Income in 2009, 2011.115 Headwaters Economics, Fossil FuelExtraction as a County Economic DevelopmentStrategy: Are Energy-Focused CountiesBenefiting?, revised 11 July 2009.116 Integra Realty Resources, FlowerMound Well Site Impact Study, prepared forTown of Flower Mound (Texas), 17 August2010.117 La Plata County, La Plata CountyImpact Report, October 2002.118 Elisabeth N. Radow, “Landownersand Gas-Drilling Leases: Boom or Bust?”NYSBA Journal, November/December 2011.119 Mike Tsikoudakis, “NationwideMutual Insurance Responds to LeakedFracking Memo,” Business Insurance, 19 July2012.120 Average cow size: 1,350 lbs. from AlanNewport, “Larger Cattle Need Larger LandBase,” Beef Producer, February 2010; averagecost (slaughter, heifer, live basis) $119 perhundredweight from U.S. Department ofAgriculture, USDA Market News: DailyLivestock Summary, 20 June 2012.121 Riley Adams and Timothy W. Kelsey,Penn State Cooperative Extension,Pennsylvania Dairy Farms and MarcellusShale, 2007-2010, 2012.122 Susan Christopherson and Ned Righter,Cornell University, How Should We ThinkAbout the Economic Consequences of Shale GasDrilling? (working paper), May 2011.123 Bruce Finley, “Fracking Bidders TopFarmers at Water Auction,” Denver Post, 2April 2012.124 Tracy Frisch, “Farmers Get Fracked,”The Valley Table, September-November 2011.125. Couple Denied Mortgage Because ofGas Drilling,” WTAE.com, 8 May 2012.Notes 43

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