To Drill or Not to Drill
A Natural Gas Rush in the Northeast Is Forcing Farmers to Choose Between Income and Land.
When Joyce Stone and her husband moved to Dimock, Pennsylvania 34 years ago, they found themselves in the middle of what would be the first of many environmental battles. It was not long after the oil shock of 1973 and there were plans to build a massive energy park in nearby Ararat consisting of ten nuclear and ten coal-fired power plants. Stone and her husband opposed the idea, and together with a small group of local residents they were able to defeat the proposal. One of the organizers described it as “an amazing example of the ‘power of the people,’ and even more amazing that it happened in Susquehanna County.”
Over the years, there were repeated efforts to exploit the area. Stone and others fended off two attempts to locate low-level radioactive waste sites in the region, one of Pennsylvania’s poorest. She remembers arranging a concert at the local high school auditorium to raise money to fight the dump: More than 400 people showed up and they raised $2,000.
Today, Stone wishes she were ten years younger, because the biggest battle of her life has just begun. In 2006, Cabot Oil and Gas, a Houston-based energy company, tapped its first natural gas well in Dimock. Since then, the Marcellus Shale, a geologic formation that stretches from New York to Tennessee and is believed to contain some of the world’s largest reserves of natural gas, has become something of a household name. Last year, Pennsylvania’s Department of Environmental Protection issued 1,984 Marcellus Shale drilling permits, 763 of which were tapped. In New York, drilling hasn’t yet begun, but the state’s Department of Environmental Conservation is expected to start issuing permits this year. The potential threat to New York City’s drinking water – its reservoirs are located within the Marcellus Shale – has been a flashpoint in the debate over gas drilling.
Last spring, Stone reached out to some of her neighbors after learning that Cabot was considering storing 55-gallon drums of methanol at a site close to her home. Methanol – a flammable toxin that can cause blindness if consumed – is used to prevent pipes from freezing, and Stone was worried that the tanks were too close to residential areas. She thought it would be wise to ask Cabot how they were planning to store the chemicals and what they would do in the event of a spill. “I thought, well, I’ll see if I can get people on the road to go in with me to talk to the Cabot representatives,” she said. She didn’t hear back from anyone and finally called one of her neighbors who said he’d rather go on his own. Another told her she’d go with her only if Stone wasn’t rude and disrespectful. “These are people I’ve known for 34 years, half my life,” Stone told me. “The people who’ve known me and my children growing up and who knew my husband and loved my husband and who are just treating me like I’m the enemy or something.”
Previous efforts to organize opposition to the nuclear waste industry were far less complicated in at least one respect: Today, nearly everyone in Dimock has leased their land to Cabot and has a personal investment in the promise of gas drilling. Dozens of gas wells were drilled in 2009, and Cabot has plans to tap at least 70 more in 2010. “Definitely the factor of people getting money for their land I think has to be the difference,” Stone said.
On the surface, gas drilling doesn’t seem to have changed Dimock. The landscape – a patchwork of forest, farmland, and rolling hills – obscures many of the 150-foot-tall drilling rigs. Because vantage points are rare, one could easily drive through town – the center of which is little more than a blinking yellow light and a one-room post office – without noticing a single well. But evidence of seismic testing is everywhere. The irregularity of the terrain has forced gas companies to drop by helicopter what are known as “shot hole drills” over a large area to measure gas depth. Explosives are placed in the holes and the sound waves measured. Orange cables, connected to geophone receivers and energy source stations, line the roads. According to Stone, every day for two months helicopters circled her property.
Indeed, few in this township of 1,500 have been left untouched. Last November, 15 families in Dimock announced that they were suing Cabot for poisoning their water, and that exposure to toxic chemicals related to natural gas drilling had led to personal injury, including neurological and gastrointestinal complications. The lawsuit was prompted, in part, by the explosion of a drinking water well on New Year’s Day 2009. Investigators later determined that the migration of methane gas released because of faulty well casings had likely caused the explosion. Soon after, neighbors started to report foul smelling tap water the color of unpasteurized cider.
In September, Pennsylvania’s Department of Environmental Protection (DEP) fined Cabot $56,650 for three hydraulic fracturing fluid spills that emptied more than 8,000 gallons of a lubricant gel mixed with water at a Dimock drill site. Some of the chemicals leached into a nearby wetland and creek, resulting in a fish die-off. Two months later, the DEP levied an additional fine of $120,000 and ordered the company to provide temporary water supplies to 13 families in the affected area. Meanwhile, the drilling continues.
On a cold evening in December I met Stone, a wetlands specialist who lives in a house her husband built after they moved to Dimock in the 1970s (he died ten years ago in a kayaking accident). They came to the area to work as naturalists at the Woodbourne Preserve, a 648-acre parcel of forest and wetlands owned by The Nature Conservancy. Set aside in 1956, it contains the largest remaining stand of old growth forest in northeast Pennsylvania and is home to more than 180 species of birds and nine kinds of salamanders.
The preserve abuts Stone’s property and may be the only swath of land this large that will be spared Cabot’s reach. Not that the company isn’t interested. According to The Nature Conservancy, Cabot representatives have made several offers to drill in Woodbourne. There is still discussion about whether the conservancy will lease the subsurface rights.
Stone is a lively woman in her late sixties with a weathered face and youthful eyes. She has been speaking out on environmental issues since her early twenties and seems to measure her life in terms of environmental battles won and lost. She sees herself as a scientist whose role is to weigh the facts and present them to the public. But she has always taken a clear position in defense of the environment. “She would lay down in front of a bulldozer,” an acquaintance told me.
The question of gas drilling, though, has presented a sweeping challenge to her environmental principles, as it has to many in the region. “The whole thing is unreal,” she explained. “I’ve worked since I was twenty to try to get clean water and clean air. So many people have. We’ve made such huge strides. Back in Connecticut, where I’m from, so many rivers have been cleaned up. And Pennsylvania. And it’s like the gas industry is just exempt from everything. They are reversing everything and poisoning the rivers that have been so clean now for forty years.”
Yet in October 2008, after holding out longer than most, Stone reluctantly signed a no-surface lease with Cabot; the company can drill underneath her land, but not on it. She’ll avoid the intrusion and impact of having a well pad on her property, but the risk to her water remains. She owns 12 acres and lives on social security, about $10,000 a year. She needed the money. At the same time, all of the landowners around her had leased their land and Stone felt that even if she refused, there was no guarantee that her land and water would be protected. She also believes that there is an environmental case to be made for natural gas – it burns 50 percent cleaner than coal and a third cleaner than petroleum.
Still, it was a decision she made with deep reservations. She told me, “I just felt like I was betraying who I am to do it. Like I was signing my life away.”
The promise of quick riches and a regional economic revival has driven a frenzied land rush in New York’s southern tier and much of Pennsylvania since the discovery of the Marcellus Shale. The term “discovery” is slightly misleading, given that for more than 75 years the Marcellus Shale has been known to hold large reserves of gas. It is only in the last few years, however, that unconventional shale gas – trapped in tight rock formations deep underground – has become profitable. The integration of two technological advancements, horizontal drilling and hydraulic fracturing (often referred to as “fracking”), has made shale gas economically viable. It has also made it controversial. The method involves pumping large quantities of water, sand, and chemicals under high pressure into the well bore to shatter the rock and release the gas.
In the Marcellus Shale, it has been reported that more than two-thirds of the fracking fluid (up to three million gallons for each well) stays underground. Meanwhile, the wastewater that comes to the surface, which often contains naturally occurring radioactive materials, must be treated and disposed of. Yet the Safe Drinking Water Act, designed to regulate the injection of fluids underground so that they don’t contaminate drinking water aquifers, does not apply to hydraulic fracturing. The so-called Halliburton Loophole (Halliburton invented fracking), inserted into the 2005 energy bill, essentially said that the EPA no longer had the authority to regulate hydraulic fracturing; the industry has never been forced to disclose the fluids it uses to fracture wells, a major sticking point as it seeks to expand production in the Northeast. Since 2005, the industry has also been exempt from the Clean Water Act, Clean Air Act, and Superfund rules.
The investigative news Web site ProPublica has documented more than a thousand cases of water contamination related to gas drilling, both from spills and underground seepage, across the country. According to the site, “a string of documented cases of gas escaping into drinking water – not just in Pennsylvania but across North America – is raising concerns about the hidden costs of this economic tide and strengthening arguments across the country that drilling can put drinking water at risk.”
Reports of groundwater contamination, however, have not dampened shale gas expansion. Fear of eventual petroleum shortages and the fact that there are large domestic reserves of natural gas have made fracking extraction attractive to investors, politicians, and cash-strapped state and local governments. In October, a Congressional Natural Gas Caucus was formed, led by Pennsylvania Republican Congressman Tim Murphy. The caucus is pushing hard for the passage of the 2009 Natural Gas Act, which would provide funding for natural gas vehicle manufacturing facilities and fueling infrastructure.
Environmental groups are not wholly against the practice either. The Sierra Club’s former Executive Director, Carl Pope, has supported natural gas as a so-called “bridge fuel” in the transition from oil and coal to wind and renewables (though many local affiliates are opposed). Robert F. Kennedy Jr., has written that, “a quick conversion from coal to gas is the quickest route for jumpstarting our economy and saving our planet.”
Even though the price of natural gas has remained relatively low and the International Energy Agency has said there will likely be a “looming glut” until at least 2013, the race for lease holdings in the Marcellus Shale has only intensified. In December, Exxon Mobil purchased XTO Energy, which has large holdings in the Marcellus Shale, for $31 billion. Remarkably, the terms of the agreement include an escape clause that says Exxon may back out of the deal if Congress regulates hydraulic fracturing to the point that it becomes “illegal or commercially impracticable.” In the last year, Congress has moved to reverse the exemptions granted the industry in 2005 and the EPA has undertaken its first full review of the controversial drilling method.
Still, many industry observers believe it is only a matter of time before other big players – Dutch Royal Shell, British Petroleum, and Chevron – move in. In rural parts of New York and Pennsylvania, residents are already speaking of a future industrialized landscape, one that will forever alter the character of the region. Small roads will have to accommodate heavy truck traffic – a recent study of gas drilling in Texas found that an average of 592 one-way truck trips were needed for each well. Noise, air, and light pollution (rigs are often active 24 hours a day) are also part of the cumulative impact of gas drilling. As Brett Chedzoy, a forester with Cornell Cooperative Extension, noted recently, gas drilling is “perhaps the largest rural land issue that we’ve ever been faced with in upstate New York.”
New York’s southern tier, which refers to the counties west of the Catskill Mountains just north of Pennsylvania, was once known as New York City’s milkshed and egg basket. Dairy farmers are some of the region’s largest landowners and most are ready to lease their land, if they haven’t already. “We’re hugely in favor of gas drilling,” Peter Gregg, a spokesman for the New York Farm Bureau told me. “It turns out that a lot of the drilling potential happens to lay underneath our farms,” he added. “So we’ve advised our farmers that they negotiate good and fair leases with the gas companies.”
Stefan Gieger, who lives in the New York township of Callicoon and has 70 head of cattle, says that there are probably only a handful of dairy farmers who will resist the pressure to lease. In recent years, the price of milk has fallen to levels last seen in the 1970s even as the cost of feed and equipment has skyrocketed. “Farmers have been cash strapped and unable to make a living for decades,” he told me.
Gieger fears that rather than save dairy farmers, gas drilling will mark the end of an agrarian economy with roots in the region since at least the mid-1800s. Indirectly, he says, gas drilling will kill agriculture: The easy earnings from the extraction industry will dissuade people from continuing the hard work of farming. “I think people should be very concerned about the farmers going out of business,” he said.
And not only dairy farmers. Mark Dunau, an organic vegetable farmer with 50 acres in nearby Hancock, says that he bought his land more than 20 years ago because of the access to clean, abundant water. His livelihood is dependent on the quality of his well and a spring fed pond. “I resent people who say this is the only way farmers can survive, because I’m a farmer and it’s threatening me,” Dunau said.
He also says it is wishful thinking to suggest that dairy farmers will continue to farm once they’ve leased their land. His neighbor, Brian Begeal, who owns a 312-acre dairy farm, has already leased his land and plans to retire as soon as possible. Two of Dunau’s close friends – a fifth-generation and a third-generation dairy farmer – also plan to lease. “Farmers who are signing are stopping production,” Gieger said.
In late October, I caught up with Earl Myers, one of Gieger’s neighbors, on a ridgeline overlooking a valley on the outskirts of Callicoon. The earth was wet from a steady rain that had fallen since early morning and the clouds had parted, filling the fields with late afternoon sunlight. Across several fields, Gieger’s farm was visible. That evening Myers would attend the first public hearing for comments on New York State’s draft environmental impact statement for drilling in the Marcellus Shale. The comment period, which ended December 31, revealed the faultlines that have opened up over gas drilling. State officials received more than 12,000 comments and, at what were often marathon sessions, pro- and anti-drilling factions faced off over the potential impacts of gas drilling on the environment, economy, and communities of the southern tier. Myers had already attended close to 15 public meetings and information sessions, as well as several screenings of Split Estate, a harrowing film on natural gas drilling contamination in Colorado.
When Myers started farming 50 years ago, he had more than 20 neighbors. Today, he and his family farm nearly 1,000 acres, more than half of it acquired from neighbors who have left. He can see why dairy farmers would lease their land. He knows many who have. “The money’s the one that talks really,” he told me. “That’s what worries me.” As for whether he’ll lease his own land, Myers said, “I think about it. At the same time I still don’t endorse it.”
In the last decade, as dairy farms have declined, the number of organic vegetable farms in New York has grown. Last year, the North East Organic Farming Association certified 569 farms in the state, up from 200 a decade ago. Greg Swartz came to the region in 1999 to apprentice on an organic farm in Sullivan County and recently purchased 12 acres in nearby Abrahamsville, PA, where he grows 50 varieties of vegetables. This year he started a community supported agriculture (CSA) program and says that interest is high. “There’s really endless potential for making a living with the land,” he told me in December. “Dairy farmers know that the only way for farming in this area to be revitalized is to not be focused on dairy.” But if the choice is one of diversifying or leasing to a gas company, there is little hope that they will choose the former.
When I met Swartz, the last of the end-of-season leeks and celeriac could be seen in the field in front of his house. A light rain was falling and the valley was quiet and empty. Swartz pointed out a stream to the east, a wetland to the north, and several small creeks that border his field. All of Swartz’s neighbors have leased their land to gas companies and Swartz now faces a dilemma: whether to sell his land (he has no intention of leasing it to the gas companies), or stay and make an investment in the future of his farm. Over Thanksgiving his brother advised him to sell. But Swartz is wedded to the area – his wife runs a small theater company, they have an infant son, and the success of the farm is tied to the community. He can’t just pick up and start over.
“I wouldn’t be nervous about making the investment if gas drilling wasn’t part of the equation,” Swartz says. There’s an old saying, Swartz told me, that a farmer’s bank account is his soil. “Anytime you have something that you can reinvest, you put that back in the soil to ensure that the soil is going to continue producing for you.”
For the first time in years dairy farmers stand to profit. But they may be betting against their farms and the agricultural history of an entire region. In January, Swartz sent me an email and said that he and his wife, after many sleepless nights, had decided to go ahead and make the investment. “The risks are great,” he wrote, “but we can’t leave.”
Swartz’s situation is hardly an exception. In the last few years, nearly everyone who owns land along the Upper Delaware has been presented with offers to lease their mineral rights. Some of the heaviest leasing activity in New York has occurred in Hancock, where the east and west branches of the Delaware River converge. As of April 2009, nearly 25,000 acres, or 25 percent of the total land area, had been leased.
“Everyone looked at the up front money and was blinded by it because to challenge it was like tearing up a winning lottery ticket,” said Hancock-area vegetable farmer Dunau. Many landowners were approached long before the Marcellus Shale was being celebrated, and leased their land for as little as $25 an acre. Today, gas companies are offering as much as $6,000 an acre in addition to royalties.
Perhaps more than anything, the oil and gas companies have promised small towns like Hancock a way out of economic freefall. Katie DuBois grew up in Hancock and recently returned with her husband, a contractor. They live on the Pennsylvania side of the river, and own 100 acres, which they leased to Hess last summer after several years of deliberation. DuBois’s parents have also leased their property and she has relatives who have found work as surveyors as a result of drilling. “If you look at it, it’s really not scary,” she told me. “If you look at the benefit of what it will do for people who really have just been blue collar people their whole life, you know, that’s something not to be taken for granted.”
In the last 15 years, Hancock, along with many of the towns in the region, has experienced a steady decline. Industries have left, including Bard Parker, a surgical blade manufacturer that once employed 750 people. Today, the largely empty space is rented to a dental supply company with 12 employees. Shrubs have overtaken the entrance. Inside, the clocks are stopped at some forgotten time and an old photograph of the factory shows a gleaming white building with an American flag in front. A sign above the door reads, “Bard-Parker celebrates 75 Years of Surgical Blade Excellence.”
But will gas drilling save Hancock? The experience of oil and gas towns in the West offers a cautionary example. In 1974, ElDean Kohrs, a clinical psychologist working in Gillette, Wyoming, coined the phrase “Gillette Syndrome” to describe the disruptions often associated with the boom and bust cycle of oil and gas drilling. Crime rates and drug use skyrocketed. The influx of temporary workers placed unexpected burdens on municipalities. Families were torn apart.
A more recent analysis of drilling in Texas’s Barnett Shale shows that the largest gains have gone to the oil and gas companies and that leasing and royalty incomes account for a small percentage of the total gross product. But for individual landowners, that small percentage can be a windfall.
According to Jeffrey Jacquet, a natural gas consultant who lived in Sublette, WY for four years before moving east to Ithaca in 2008, the size of a town and its previous experience with resource extraction often determines its ability to absorb the social and environmental pressures of drilling. In a sweeping report on the potential impacts of gas drilling in the Marcellus Shale, Jacquet writes that many of the communities in the region are “sufficiently small and rural” so that large-scale development will produce similar outcomes to those that have been documented in other parts of the country. For example, in Towanda, PA, a town of about 3,000 residents where nearly everyone has leased their land, rents have ballooned, in some cases to triple what they were a year ago. Those unable to pay their rent are being evicted. A sign in front of the Towanda Motel, which has been entirely occupied by gas company employees since April reads, “Welcome Chesapeake and Nomac & Thank You.”
Although there will undoubtedly be some economic growth, Jacquet writes that, “Expectations for economic benefits are often unrealistically high.”
Of course, the Northeast differs from Wyoming in significant ways. Population densities are far greater, exposing more people to the risk of contamination and pollution. There’s also more forestland throughout the Northeast, much of it undisturbed, in areas where gas drilling will occur. (This is particularly true of the land that surrounds the Catskill Park). Land disturbance will be greater but Jacquet says it may also be easier to reclaim than western lands. For both regions, the potential damage to critical water resources – rivers, aquifers, and wetlands – is the greatest concern.
The entire Delaware river basin, which includes surface water diversions (rivers, streams, and reservoirs) and groundwater withdrawals (aquifers), provides drinking water for about 17 million people in four states. This fact has prompted a sizable opposition movement, especially in New York, where the threat to the city’s watershed has become a potent rallying cry. Those same water resources, however, are part of what makes Hancock, known as the “Gateway to the Upper Delaware,” so attractive to the gas companies; between two and nine million gallons of water are needed to frack each well.
Yet the area’s uniqueness could also be its saving grace. In 1978, Congress added the Upper Delaware to the National Wild and Scenic Rivers System. In the early 1990s, the Delaware River Basin Commission designated the same stretch as part of a “specially protected area” subject to heightened regulatory measures. Farmers like Dunau and Swartz see their proximity to the Upper Delaware as perhaps their greatest asset. Its distinction may, in the end, protect them.
Just beyond the center of Hancock a narrow road follows the east branch of the Delaware for several miles. On a chilly afternoon in December I met Tim Connolly, a third generation landowner who has lived along this stretch of river for his whole life. At 49, Connolly gets by cutting stone and firewood, and he seems the ideal candidate to sign a gas lease. Last year, he was approached by a landman who offered him $3,000 an acre and 14 percent royalties. He refused. “People have got to have money,” he told me. “But they don’t need their land messed up at the same time.”
Connolly led me along a muddy trail behind his house, across a small stream, and to a clearing where he gets his drinking water from what he says is one of the best springs in the world. As far as the eye can see, Connolly is surrounded by neighbors who have leased their land. A well site 500 feet away is already marked with a surveyor’s stake. This landscape of dense northeast forest intercut with rivers, streams, and springs is said to be one of the sweetest spots for gas deposits within the Marcellus Shale.
When I asked Connolly what will happen once they start drilling he said, “We’ll probably have a war between drillers and non-drillers.”
Adam Federman is a journalist in New York City. He has written for The Nation, Columbia Journalism Review, and Adirondack Life.