Jump to content



Photo
- - - - -

Shale criminal charges stun drilling industry


  • Please log in to reply
8 replies to this topic

#1 concert andy

concert andy
  • VibeTribe
  • 10,932 posts
  • LocationPhilly

Posted 12 September 2013 - 05:05 PM

http://www.philly.co...g_industry.html

 

Pennsylvania Attorney General Kathleen Kane's decision to prosecute a major Marcellus Shale natural-gas driller for a 2010 wastewater spill has sent shock waves through the industry.

 

But environmentalists Wednesday hailed the prosecution of the Exxon Mobil Corp. subsidiary as a departure from the soft treatment they say the industry has received from Pennsylvania regulators.
 

"We have been very concerned about enforcement in the Marcellus, and we welcome the attorney general's taking an active role," said Myron Arnowitt, Pennsylvania director of Clean Water Action.

 

Kane's office announced charges Tuesday against XTO Energy Inc. for discharging more than 50,000 gallons of toxic wastewater from storage tanks at a gas-well site in Lycoming County.

 

XTO in July settled federal civil charges over the incident by agreeing to pay a $100,000 fine and deploy a plan to improve wastewater-management practices. The consent decree included no admissions of liability.

 

The Fort Worth, Texas, drilling company, which Exxon acquired in 2010, said it had worked cooperatively with federal and state authorities to clean up the spilled waste, known as "produced water." XTO excavated and removed 3,000 tons of contaminated soil from the site.

 

"Criminal charges are unwarranted and legally baseless because neither XTO nor any of its employees intentionally, recklessly, or negligently discharged produced water on the site," XTO said in a statement.

 

Kane's office said it did not need to prove intent to prosecute the company for crimes. XTO is charged with five counts of unlawful conduct under the Clean Streams Law and three counts of unlawful conduct under the Solid Waste Management Act.

 

Industry leaders said the prosecution of a company for what they called an inadvertent spill creates a hostile business environment.

 

"The incident has been fully addressed at the state and federal levels, and this action creates an untenable business climate that will discourage investment in the commonwealth," Kathryn Z. Klaber, president of the Marcellus Shale Coalition, said in a statement.

 

The Pennsylvania Chamber of Business and Industry also protested.

 

"This decision sends a chilling message to all businesses looking to locate in Pennsylvania that they could be held criminally liable in the event of an unintentional spill by a contractor that resulted in no injury to humans or wildlife and that had no lasting impacts on the environment," said Gene Barr, its president.
 

First to be charged

 

XTO is the first Marcellus Shale production company to face criminal charges.

 

A Western Pennsylvania waste-hauler, Robert Allan Shipman, was convicted of illegally dumping waste in 2012, and sentenced to serve seven years of probation and 1,750 hours of community service, and to pay $382,000 in restitution and fines. The attorney general has appealed the sentence, arguing that Shipman deserved jail time.

 

 

In the XTO case, a grand jury did not charge any individuals. XTO faces a fine of $25,000 a day per violation, said Kane spokeswoman Carolyn E. Myers. The leak took place during the two months the company stored wastewater on the site.

 

Activists believe that Kane, a Democrat, has been looking to make a statement on shale drilling since she assumed office in January.

 

"She has indicated that she is on the watch for a criminal prosecution opportunity in the Marcellus Shale," said Arnowitt, of Clean Water Action.
 

The XTO case was referred to the attorney general by the Department of Environmental Protection before Kane took office.

 

"The prosecutorial powers of this office are used carefully and with great consideration," First Deputy Attorney General Adrian R. King Jr. said through a spokeswoman. "We closely examine the facts and the applicable law in each case and proceed accordingly."

 

The XTO spill received very little public attention when it occurred.

 

A DEP inspector discovered wastewater leaking from an open valve on a storage tank during an unannounced visit to the Marquardt well site on Nov. 16, 2010. The wastewater spilled into a tributary of the Susquehanna River and also contaminated a spring. Pollutants were present in the stream for 65 days after the spill.

 

The grand jury's presentment does not say who opened the valves on the tank or why. XTO officials at the time suggested vandals might be responsible. But it noted that the drilling site had no secondary containment, little security, and no alarm system for leaks.

 

Shale-gas wells produce huge quantities of wastewater after they are hydraulically fractured, which involves the injection of water, chemicals, and sand deep underground. The wastewater contains fracking chemicals and pollutants from the shale formation itself, including barium, calcium, iron, magnesium, manganese, potassium, sodium, strontium, bromide, and chloride.
 

As part of its federal settlement, XTO agreed to implement an estimated $20 million plan to recycle more wastewater and to install a remote monitoring system at all well sites in the region to trigger alarms in case of a spill.
 

 

BY THE NUMBERS 

50,000:  Gallons of toxic wastewater were discharged from storage tanks at a gas-well site in Lycoming County in 2010.

 

$100,000: Fine XTO Energy agreed to pay. The drilling company also agreed to improve wastewater management practices.
 



#2 Jabadoodle

Jabadoodle
  • VibeTribe
  • 5,403 posts
  • LocationBoston MA

Posted 12 September 2013 - 08:21 PM

"Criminal charges are unwarranted and legally baseless because neither XTO nor any of its employees intentionally, recklessly, or negligently discharged produced water on the site," XTO said in a statement.

 

If it wasn't intentional, reckless, or negligent -- and if it wasn't an act of sabotage by outsiders and it wasn't an act of god, such as an earthquake -- then how did it spill? 

 

Sounds like negligence at some level.



#3 MeOmYo

MeOmYo
  • VibeTribe
  • 7,465 posts

Posted 12 September 2013 - 08:31 PM

If I was XTO, I'd blame God



#4 concert andy

concert andy
  • VibeTribe
  • 10,932 posts
  • LocationPhilly

Posted 25 September 2014 - 02:31 PM

Fracking - gas industry wants final word on word

Read more at http://www.philly.co...BoZrwQ1s4cLB.99

 

 

PITTSBURGH - The Marcellus Shale industry is trying to reclaim a word that has become one of the most effective weapons of natural gas foes: Fracking.

 

The Marcellus Shale Coalition, which opened its annual conference Wednesday in Pittsburgh, is launching a campaign aimed at countering the negative connotations associated with fracking, the term derived from the gas-extraction technique of hydraulic fracturing, which has become a catchall pejorative among activists for all aspects of drilling.

 

"Fracking's a good word," the narrators say in the industry's radio and television spots, which will roll out Thursday in Pennsylvania. The advertisements extol the energy security, job growth, lower heating costs, and tax revenue generated by the natural gas boom.

 

"Fracking: Rock solid for PA," the ads conclude.

 

"Folks have tried to hijack that word and paint it as something negative," said David J. Spigelmyer, the president of the industry trade group. "It's our effort to take that word back."

 

Michael Pavone, chief executive of the Harrisburg ad agency that created the campaign, unveiled the ads as the coalition's two-day conference opened at the David L. Lawrence Convention Center.

 

"It's about time your voices have been heard," Pavone told the audience. Nearly 1,800 participants have registered for the event.

 

A recurring lament at the shale coalition's fourth annual conference - the first three were held in Philadelphia - is that the oil and gas industry's discovery and development of shale gas is distorted by anti-fossil-fuel activists, and underappreciated by the public.

 

Bruce Rutherford, international director of the Jones Lang LaSalle real estate firm, said there was a "great sentiment" in the public of fear that gas producers "are making all this money, and they're raping us. It's just not true."

 

Randy J. Cleveland, president of XTO Energy, the ExxonMobil subsidiary that is the nation's largest gas producer, encouraged the industry to step up outreach with local communities.

 

"If you look across the country, in areas where we are welcomed vs. areas where we see resistance, local engagement is the common thread," he said. "Where it's strong, we thrive. And where it's weaker, we have difficulty."

 

Stephen Moore, chief economist of the Heritage Foundation, told the audience about talking to a group of students, most of whom soured when he spoke about fracking.

 

"My one piece of advice to the industry is to fight back," he said. "How can you be against fracking?"



#5 TakeAStepBack

TakeAStepBack
  • VibeTribe
  • 18,544 posts

Posted 25 September 2014 - 05:03 PM

http://www.slideshar...m=save_on_embed



#6 concert andy

concert andy
  • VibeTribe
  • 10,932 posts
  • LocationPhilly

Posted 25 September 2014 - 06:30 PM

What?  Is it fracking day?

 

 

Shale revolution reshaping crop nutrient sector

 

http://www.ft.com/cm...l#axzz3ELyZoh4F



#7 Tim the Beek

Tim the Beek
  • VibeTribe
  • 16,068 posts

Posted 25 September 2014 - 08:18 PM

 

"Criminal charges are unwarranted and legally baseless because neither XTO nor any of its employees intentionally, recklessly, or negligently discharged produced water on the site," XTO said in a statement.

 

If it wasn't intentional, reckless, or negligent -- and if it wasn't an act of sabotage by outsiders and it wasn't an act of god, such as an earthquake -- then how did it spill? 

 

Sounds like negligence at some level.

 

It does. Even if it was sabotage (which I doubt), XTO didn't have backups in place to prevent the wastewater from leaving the facility.



#8 TakeAStepBack

TakeAStepBack
  • VibeTribe
  • 18,544 posts

Posted 25 September 2014 - 08:22 PM

I wish I could see Andy's last offering.

 

My slide shows a latest study indicating that fracking is entirely safe. HOWEVER, wells, and pipes need to be enhanced. In other words, the procedure is safe, we simply need to upgrade a few very do-able items in the process. All the hype is destroyed.

 

That all said, I think criminal liability will be hard to prove for the new PA watchdog. I do not think these companies should ever be exempt from them either. Limited liability has always led to abuses.



#9 concert andy

concert andy
  • VibeTribe
  • 10,932 posts
  • LocationPhilly

Posted 25 September 2014 - 08:41 PM

I wish I could see Andy's last offering.

 

My slide shows a latest study indicating that fracking is entirely safe. HOWEVER, wells, and pipes need to be enhanced. In other words, the procedure is safe, we simply need to upgrade a few very do-able items in the process. All the hype is destroyed.

 

That all said, I think criminal liability will be hard to prove for the new PA watchdog. I do not think these companies should ever be exempt from them either. Limited liability has always led to abuses.

 

It was not an easy read that slide, but that is what I took from it.  Agree.  The only way the PA watchdog gets them is if we elect a new governor of PA in November.

 

 

Here is the article:

 

High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email ftsales.support@ft.com to buy additional rights. http://www.ft.com/cm...l#ixzz3EMVXhMgJ
 
he merger talks between fertiliser groups Yara International and CF Industries to create a $27bn agribusiness is another sign of how the shale revolution is changing the face of industry in the US.
Both companies are leading producers of nitrogen fertiliser, of which natural gas is a crucial component. The deal comes as US nitrogen crop nutrient producers are enjoying a huge boost in profits thanks to low-cost shale gas.
 
High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. 
 
Chicago-based CF reported gross margins of 52 per cent last year in its nitrogen fertiliser division, compared with a 9.4 per cent margin for phosphates.
Yara, the world’s largest nitrogen producer by market share, lost out to CF when they were involved in a bidding war for Terra, another US nitrogen fertiliser maker. The Norwegian company, whose presence in North America is not large, also missed out on the shale boom which followed.
US-based fertiliser makers are also benefiting from the export ban on crude and the lack of liquefied natural gas facilities that is keeping oil and natural gas prices depressed in the US relative to international prices.
 
So why is CF looking at a tie-up with Yara if it is reaping the benefits of shale?
 
High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. 
 
From CF’s point of view the geographic and product diversification that the Norwegian group brings to the table is certainly attractive. Yara has sales operations in more than 150 countries and is especially strong in South America, a growing agricultural market.
Analysts at Rabobank, the Dutch lender, say that the US nitrogen fertiliser market is reaching a point of saturation, with new production expected to come online in the next few years.
 
Rabobank also warns that the US nitrogen fertiliser industry may lose its edge when (and if) the price of natural gas starts to increase.
 
“Various factors could put upwards price pressure on natural gas prices in the short to medium term,” says the bank.
 
Disappointing returns on investments in shale exploration, especially if crude oil prices fall further, will lead to a decline in shale drilling, potentially putting upward pressure on natural gas prices. In addition shale gas exports are scheduled to start in the next few years as LNG processing facilities come online, while a rise in domestic demand as coal power plants switch to gas, will also push up prices.
 
In spite of the possible declines in the future profitability for the US nitrogen sector, CF, known as a well-run company with one of the highest profit margins in the sector, is still an attractive partner.
 
High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. 
 
Many shareholders tend to question the efficacy of mergers of equals, and in this case, the largest shareholder in the merged group could be the Norwegian government as Oslo, together with a state investment fund, owns 41 per cent of Yara.
 
As such, it would be hardly surprising if CF’s shareholders welcome other suitors looking to buy themselves into the US market to try and break up the negotiations.