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July 31, 2013

Some say industry arrogance fueled fracking anger

CHICKASHA — The boom in oil and gas fracking has led to jobs, billions in royalties and profits, and even some environmental gains.

But some experts say arrogance, a lack of transparency and poor communication on the part of the drilling industry have helped fuel public anger over the process of hydraulic fracturing, or fracking.

"It's a big issue for the industry. I have called for greater transparency. That is the only way to have an honest conversation with the public," said John Hofmeister, a former Shell Oil Co. president and author of "Why We Hate Oil Companies."

As an example, Hofmeister said, some industry leaders have suggested that the fracking boom has never caused water pollution. But while the vast majority of wells don't cause problems, "everybody knows that some wells go bad," Hofmeister said.

Over the last five years, advances in technology have led to a surge of drilling in states such as Pennsylvania, Colorado, Arkansas and North Dakota. Previously inaccessible deposits of shale oil and gas have been unlocked by fracking, a process in which large amounts of water and sand along with chemicals are injected deep underground to break apart the rock.

One of the biggest promoters of the Marcellus Shale drilling boom in Pennsylvania says that while fracking opponents have exaggerated some risks, the industry hasn't always handled key issues well, either.

Terry Engelder, a Penn State geologist, cited the highly publicized case in Dimock, Pa., where 18 families began complaining in 2009 that nearby drilling had polluted their water supply with methane gas and toxic chemicals.

State environmental regulators ultimately agreed, imposing large fines on Houston-based Cabot Oil & Gas Co, and temporarily banning the company from drilling in a 9-square-mile area around the town. Cabot paid the fines but denied responsibility for the contamination.

Engelder said at least some of the industry's missteps have been unintentional and come from inexperience.

In Dimock, the land had so many layers of rock and the drilling boom was so new that both the industry and regulators struggled to understand and explain the problems with the water wells, Engelder said.

Cabot spokesman George Stark said that in retrospect, the company realized that the geology around Dimock was "highly unusual" and that pre-drilling tests for methane would have helped determine which wells had natural contamination of methane.

In 2010, Cabot began holding summer picnics in the Dimock area to answer questions about the industry, drilling and local geology, Stark said. More than 8,000 people attended last week's event, up from about 2,000 the first year, he said.

While many issues were at play, Engelder said, experts came to believe that the well construction techniques used in the early years of Pennsylvania's drilling boom "were just inadequate to the task" of protecting groundwater in that area. Regulations for well cement jobs were later strengthened considerably, but by that time, anger and negative publicity had started building, and the damage was done.

Engelder and Hofmeister say that to the industry's credit, the drilling boom has brought many benefits. Many communities haven't had major problems and welcome the jobs and the royalty payments that can reach hundreds of thousands or even millions of dollars for a single landowner.

But Engelder said the industry can't just focus on positives.

"There never will be a risk-free gas industry in Pennsylvania, just like there never will be risk-free driving a car," he said.

Engelder said he believes the industry should work more closely with opponents and give them detailed explanations of the geology, the risks and the benefits of drilling. "I would do whatever it took to try and engage these people over a period of time," he said.

But some industry critics are skeptical.

"You can't change the spots on a leopard," said Jim Switzer, a Dimock resident who says drilling ruined his water. "They would spend a billion dollars to say they weren't responsible for something rather than spend a couple million dollars of taking care of who they screwed."

Another drilling critic who battled Colorado's Encana Oil & Gas for 10 years over its work around his property said he was angered not only by noise and pollution but also by industry attitudes.

"Those people moved into our valley like a conquering army," said Thomas Thompson, who complained that the heavy equipment that accompanied drilling in Rifle, Colo., created endless dust storms that caused health problems for him and his wife.

Thompson said he's never said the U.S. shouldn't develop natural gas resources, just that it should be done responsibly. After years of asking government agencies and the industry to address the problems, Thompson and his wife relocated to Texas and settled a lawsuit over his claims.

The company said Thompson essentially "did not like having oil and gas activity on his property."

"We realize that this is sometimes the case, particularly if an individual doesn't have mineral rights and receives no economic benefit from our presence and activity," Encana spokesman Doug Hock said in an email. "Generally, we're able to reach some sort of accommodation. In other cases, such as this one, it's not possible."

Despite the anger from some critics, Hofmeister thinks many in the industry are "rather unemotional" about the opposition.

"It's a big world," Hofmeister said. "The industry will move on to where it will be successful."

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