Behind the Ohio earthquakes: Big money leads to big risks

By Betsey Piette

Jan 14, 2012

After 11 earthquakes recently rocked northwestern Ohio, seismologists acknowledged there is strong evidence linking the quakes to the disposal of waste water produced in the process of drilling for natural gas, known as hydraulic fracturing.

On New Year’s Eve, an earthquake registering a magnitude of 4.0 occurred five miles from Youngstown and very close to a 9,000-foot-deep disposal well owned by D&L Energy. The company receives most of its waste water from drilling operations in Pennsylvania’s Marcellus Shale.

Hydraulic fracturing involves pumping millions of gallons of water mixed with sand and toxic chemicals deep into underground shale formations to release natural gas. This brine water contains carcinogenic chemicals and radioactive particles.

Initially, the water was sent to treatment plants in Pennsylvania and discharged into rivers. This practice was halted in early 2011 after alarming levels of pollutants were found in streams. Now, there is more reliance on the deep-well disposal process.

Since the earthquakes, Ohio Gov. John Kasich, a drilling booster, has been forced to shut down the Youngstown-area disposal well and four others. Similar unusual seismic activity in Arkansas, Colorado and Oklahoma has also led to temporary bans on the use of some disposal wells.

It’s a lot like closing the barn door after the horses escape.

As many as 800,000 underground injection wells exist across the U.S. Some 30,000 dispose of waste water from oil and gas operations.

With the rapid expansion of drilling in neighboring Pennsylvania, Ohio was expected to become the leading importer of fracking waste water. The estimated amount of waste water pumped into Ohio’s disposal wells increased to more than 9 million barrels in 2011. Even with five wells now shut down, 176 others are still operating there.

Natural gas industry representatives continue to deny there is any link between hydraulic fracturing and increased seismic activity, even though earthquakes were previously almost unheard of in these areas. Kasich even told reporters that he didn’t think the energy industry should be blamed for problems arising from the disposal of their byproducts.

The link between increased earthquake activity and injection wells was established more than five decades ago, after scientists connected a Colorado earthquake of magnitude 5.5 to U.S. Army disposal of toxic fluids into a 12,000-foot-deep injection well. Nevertheless, there is still no government regulation of such practices.

An estimated $1 trillion worth of shale gas is trapped underground in Pennsylvania. Geologists predict that around 5 million acres of rural Ohio also sit atop the Marcellus and Utica Shale gas and oil deposits, which contain the energy equivalent of billions of barrels of oil. (The Plain Dealer, Nov. 18)

In Ohio, energy companies have already distributed $1 billion to landowners to sign lease deals for future wells. Some of these earlier lease agreements paid landowners as little as $25 per acre. Now property owners are being offered signing bonuses of up to $5,100 per acre, even though few shale wells have actually been drilled in the state.

Chesapeake Energy, forced to suspend its Pennsylvania drilling operations after a well blowout in April 2011, applied for 99 shale drilling permits in Ohio with lease rights to more than 1.5 million Ohio acres. Total S.A., a multinational company operating in 130 countries, just bought a 25 percent share of Chesapeake’s Ohio operations for more than $2 billion. ExxonMobil, Chevron and Hess are expected to begin filing for permits in 2012.

Campaign contributions pay off

In the last three years, campaign contributions from natural gas companies have more than tripled, especially in the wake of the January 2010 Supreme Court’s Citizens United decision giving corporations the same rights as individuals.

Kasich came to office in 2010 thanks to heavy financial backing from the oil and gas industry. He received $213,519 in campaign contributions from oil and gas interests — the most of any politician in Ohio, according to Common Cause. It found Ohio’s fracking regulations to be among the weakest of any state.

The report tracked $2.8 million in energy industry campaign contributions to Ohio politicians, including House Speaker John Boehner, who raised $186,900 from fracking interests.

Pennsylvania’s governor, Tom Corbett, beat them both — taking in more than $1.6 million from the energy industry. It has shelled out $747 million in political contributions in the last 10 years, according to Common Cause.

Aubrey McClendon, Chesapeake’s chief executive officer and one of Corbett’s earliest backers, contributed $450,000 to finance Corbett’s 2004 run for attorney general in Pennsylvania. McClendon has told shareholders that Ohio’s Utica Shale could be worth $15 billion to $20 billion.

Corbett’s first political appointment after taking office in January 2011 was to name energy company executive, C. Alan Walker, to head the Pennsylvania Department of Community and Economic Development, charged with overseeing “job creation” in the state.

Michael Krancer, Corbett’s appointee to head the state’s Department of Environmental Protection, issued an internal directive in October 2011 telling DEP field agents they could no longer issue a notice of violation related to Marcellus Shale drilling without first getting permission from a DEP deputy director in Harrisburg. Public protest quickly forced Krancer to rescind this memo.

Kasich appears to be reading from the same script. His appointee to head the Ohio Department of Natural Resources, responsible for regulating disposal wells, was David Mustine, a former executive at American Electric Power, who directed an oil and gas services business in Dubai. After less than a year on the job, Mustine left to become general manager of JobsOhio, the newly privatized department of development, where he will focus on developing oil and gas reserves in eastern Ohio.

The gas industry’s political “investment,” which has so far helped to avoid government regulation of fracking, will be even more critical in 2012 when the Environmental Protection Agency will publish new findings about the potential dangers of fracking.

“Players in this industry have pumped cash into Congress in the same way they pump toxic chemicals into underground rock formations to free trapped gas,” said Common Cause president, Bob Edgar. “Thanks to the Supreme Court and its Citizens United decision, the natural gas industry will be free to spend whatever it likes next year to elect a Congress that will do its bidding. The industry’s political investments already have largely freed it from government oversight.” (“Deep Drilling, Deep Pockets in Congress & Ohio,” Nov. 10)