Ethics and Extreme Extraction: Local Reflections on Global Issues

By S. Tom Bond, Retired Chemistry Professor & Resident Farmer, Lewis County, WV

Ethics is an increasing issue in unconventional resource extraction.  Taken individually, the issues which have been heard from the beginning have had an ethical component.  The complaints include destruction of aquifers, air pollution, reduction of property values, costs deferred to the public including roads, record room crowding, traffic (including emergency vehicles) held up, mud slides and so on.

These have largely been thought of as individual matters and as a loss to individuals.  They have been shrugged off by business and government, and largely ignored by the general public which feels little involvement and powerless to stop the well funded extraction companies, supported by endless public relations ploys and advertising.

As understanding diffuses (slowly) to the public at large,  and more and more people come to know someone involved, the unifying theme of ethics becomes stronger.  People are not without empathy.

Another slowly dawning awareness was discussed by Professor Garrett Hardin in an article published in Science, the Journal of the American Association for the Advancement of Science, all the way back in 1968.  This article is well worth the readers time if not familiar with the phrase “tragedy of the commons.” It is the perception that in reality much of the physical world belongs to all of us.  All of us in the present, and all who follow.  Life is short, and while we live and die in the present, we are bound, for our descendant’s sake, to plan for the extended future as far as we can see it.   It is gross incompetence in the use of our minds to ignore that responsibility.  It is ethical bankruptcy.  It is properly the stuff of ethics and religion.  It is a threat to civilization.

Not only has the fossil fuel industry continued trading human lives for profit, but, since it is difficult to convince free people to poison their own water sources or blow up their own backyards, it has increasingly killed democracy in order to keep killing people for profit. is part of of an article titled, ” The Church Should Lead, Not Follow on Climate Justice.”  The author spoke at a conference at Harvard Divinity School, “Spiritual and Sustainable: Religion Responds to Climate Change.” And, in June he will join many global thinkers at a process theology conference on climate change in Claremont, California.  Although his emphasis is on climate change brought about in considerable part by burning fossil fuels, much of the argument applies to other aspects of extreme extraction.

This is once religion and science stand shoulder to shoulder. Science takes time, but is coming. Three quarters of the available studies on the impacts of shale gas development were published in the two years 2013 and 2014. The number of peer reviewed studies doubled between 2011 and 2012 and then doubled again between 2012 and 2013 while in 2014 there were at least 154 peer reviewed studies, according to Brian Davey in an unfavorable book review of a poorly written book.

Global warming is well established and there are thousands, perhaps tens of thousands of scientists working on it.  The various kinds of contamination from mountaintop removal and fracking are being studied also, and doubtless they will be attacked by the greedy in the same way as climate change.  But public knowledge is growing.  Private knowledge, I will call it, of the victims, has always been around. And the public has growing understand of these processes.

One of the older groups, headquartered in San Francisco, has this to say: “The Regeneration Project is an interfaith ministry devoted to deepening the connection between ecology and faith. Our goal is to help people of faith recognize and fulfill their responsibility for the stewardship of creation. We do this through educational programs for clergy and congregations that achieve tangible environmental results and impact public policy.  [We are] committed to a process of personal, institutional, and societal transformation starting at the grassroots level. We believe that addressing environmental concerns from a faith perspective merits our attention because the moral authority that religion carries is the necessary ingredient for wide social and political change.

A very active offshoot of this group is Interfaith Power and Light.  They provide Faith-based resources, such as Earthkeeping, including congregational resources and green sermons; information on climate change science and climate change policy.  They also provide tools to calculate home and congregational carbon footprints and examples of energy efficient improvements.  A database of State incentives for renewables and efficiency is made available.

Interfaith Power and Light is trying to develop awareness of the situation among a wide variety of congregations, many different churches are involved.  The Ohio Interfaith Power and Light is located in Columbus. A page containing their activities this month is located here.

The Presbyterians have the Stewardship of Creation Ministry Team in West Virginia. An affinity group of the Presbytery Mission Committee, the members of the team share concerns for caring for God’s creation. Team members serve the presbytery as educators, motivators, and facilitators of action to protect God’s Creation. They provide a specific “theological foundation” here, and provide specific steps for the congregation to protect the environment.

Another important movement is sponsored by the Appalachian Preservation Project, LLC.  Their philosophy statement includes “As a social enterprise, we apply commercial strategies that are intended to maximize improvements for people and the environment.”

It publishes two blogs, the Appalachian Chronicle and The Barrick Report.  The first provides news on land and water problems, how government and industry affect the ecology, public health and safety of the people of Appalachia, and suggests places people can get help.  The Barrick Report focuses on analysis and reports on emergency management and community preparedness.  This provides insight on local, regional, state and national efforts at disaster preparedness.

Appalachian Preservation Project recently held the Earth Day week conference, “Preserving Sacred Appalachia: Gathering, Acting, and Speaking in Unity.” It was held April 20th and 21st at the St. John’s XXIII Pastoral Center in Charleston, WV.  This conference was sponsored by St. Luke’s UMC in Hickory, N.C.  Partners included the Sierra Club – West Virginia chapter and West Virginia Interfaith Power & Light.

Also, there is comic relief if you look for it hard enough.  At least one such article results from philosophers splitting the same hair too many times, and several that one can smell the oil and gas or coal dust on the money that paid for the article. The industry has plenty of money to pay for many such excursions, of course. The energy industry receives half a trillion dollars in subsidies, world wide.  According to a graph in this article, roughly 70% of the half a trillion is for oil and gas.

This may be considered a payment to destabilize climate, if you think about it. It certainly encourages the use of gasoline and natural gas, to say nothing more about coal!

Representative Gas Well Depletion Curves

Part 4. The future expense(s) to investors, to drillers, to government, and to you!

Original Article by S. Tom Bond, Retired Professor of Chemistry and Resident Farmer, Lewis County, WV

The drilling treadmill. This is a name given to the result of rapid decline in production of shale wells. Most shale wells produce substantially for a year, then rapidly decline thereafter. Thus if a field is to maintain production, another well must be drilled in three to five years, then another, then another.

The “drilling treadmill” was first recognized by David Hughes, a prominant geologist in Canada after studying 65,000 different wells from 31 different unconventional shale rock formations. He “warned that shale gas and tight oil operations shared four big challenges: escalating capital costs, uneven performance and a growing environmental footprint, all followed by rapid depletion.” And “Shale gas can continue to grow, but only at higher prices and that growth will require an ever escalating drilling treadmill with associated collateral financial and environmental costs — and its long term sustainability is highly questionable…” This study was done in 2012.

Geological consultant Arthur Berman has seconded that analysis and expanded it. In an article published in March of this year he says ” On the gas side, all shale gas plays except the Marcellus are in decline or flat. The growth of US supply rests solely on the Marcellus and it is unlikely that its growth can continue at present rates.”

On oil, ” The idea that Texas shales will produce one-third of global oil supply is preposterous.” He also says, “Oil companies have to make a big deal about shale plays because that is all that is left in the world. Let’s face it: these are truly awful reservoir rocks and that is why we waited until all more attractive opportunities were exhausted before developing them. It is completely unreasonable to expect better performance from bad reservoirs than from better reservoirs.” And “None of this is meant to be negative. I’m all for shale plays but let’s be honest about things, after all! Production from shale is not a revolution; it’s a retirement party.”

The Telegraph of London Calls the fossil fuel industry the “subprime danger of this cycle. The article begins ” The epicentre of irrational behaviour across global markets has moved to the fossil fuel complex of oil, gas and coal. This is where investors have been throwing the most good money after bad.” Then “Data from Bank of America show that oil and gas investment in the US has soared to $200 billion a year. It has reached 20 % of total US private fixed investment, the same share as home building. This has never happened before in US history, even during the Second World War when oil production was a strategic imperative.”

One of the world’s premiere financial newspapers, it says, “A large chunk of US investment is going into shale gas ventures that are either underwater or barely breaking even, victims of their own success in creating a supply glut. One chief executive acidly told the TPH Global Shale conference that the only time his shale company ever had cash-flow above zero was the day he sold it – to a gullible foreigner.”

Energy Aspects, a consulting firm which also publishes material on the web at www.energyaspects.com, in an article entitled “The other tale of shale” has this to say about shale: “The very nature of shale wells, which exhibit high decline rates, results in the need to constantly allocate capital towards exploration drilling in order to maintain and grow production volumes. As a result, the average capital expenditure spending of the 35 companies analyzed to serve as a guide to the industry has amounted to a staggering $50 per barrel of oil equivalent (BOE) over the last five years, at a time when their revenue per BOE has averaged $51.5. For these same companies, free cash flow has been negative in almost every quarter since Q2 07.” (Free cash flow is the money a company has to distribute to investors, assuming they don’t want to use it to grow.)

This sort of explains why your friends who have royalties haven’t been getting them lately – in effect they have been making a forced loan to the driller that doesn’t cost him interest, and one he can take out without going to the bank. I know of one family suing for retained royalties in the amount of $8,000,000! And others.

Continuing damage.  As long as wells are drilled more damage is going to be done. Land use will be converted, roads broken, people made sick, future production of food and timber prevented, out door recreation destroyed, retirement possibilities for out of state couples denied, and living in the drilling field made unpleasant to impossible.

Pennsylvania state inspection records, no less, show compromised cement and/or casing integrity in up to 9.1% of the active oil and gas wells drilled since 2000, with up to a  2.7-fold higher risk in un-conventional wells drilled since 2009 relative to conventional well types. Hazard modeling suggests that the cumulative loss of structural integrity in wells across the state may actually be slightly higher than this, and upward of 12% for unconventional wells drilled since January 2009.

A recent investigative report of water contamination cases confirmed PA-DEP determination letters and enforcement orders indicating that at least 90 private water supplies across the state were damaged due to subsurface gas migration between 2008 and 2012.

Keep in mind that water in an aquifer may move very slowly. It may take years or decades for contamination to reach some water wells. Hydraulic cement decays over time. So it is not unreasonable to expect water wells will continue to be contaminated by shale drilling for a long indefinite time.

There is no formal provision for plugging shale wells. The permits only cost $25,000 and plugging is not in the leases. Plugging would cost something like $100,000. West Virginia has 51,000 abandoned wells. Can you expect history to repeat itself? I am predicting here that most shale wells that will be plugged in the next 100 years will be done at public expense.  Mark Twain is supposed to have said “History doesn’t repeat itself, but it rhymes.” I think we can anticipate this, unless we can get our citizens to intervene.

What We Are Learning From Shale Drilling – Earth Sciences

Analysis by S. Tom Bond, Retired Chemistry Professor and Resident Farmer, Lewis County, WV
 
Geologists and petroleum engineers are learning that the earth is really much more complicated than the simple conceptual diagrams that are in their textbooks and that they put out to the companies that want to drill.  Those diagrams are a bit like a layer cake.  They appear to have uniform thickness and consist of uniform, homogenous, single component layers. 

However, buried landscapes, compression and extension, lateral thrusts, percolating waters of various compositions, often highly corrosive or oxidizing, radioactivity, an immense amount of detail which changes unpredictably in a few yards vertically or a few tens of yards horizontally are left out.
 
They have to be, because every location is different.  Fracking gives an opportunity to find details which don’t appear in published diagrams.  Things like abandoned wells, cracks large enough for migration at depth, variations in the thickness and quality of the target rock.  Terry Engelder is quoted here as saying certain joints in the source rocks may “break out of the gas shales and populate the rock above these gas shales. [This] joint set may appear about 1000 feet above or even as much as 4000 feet above the gas shales.”  The industry vigorously denies this.  The economic value of shale varies tremendously within a few miles.  Nobody (almost) says anything about this.
 
Chesapeake Energy began selling investments with the assumption all drilling locations were more or less identical, and the wells would provide economic amounts of gas for 30 or 40 years, like conventional wells.  This has not proven true.
 
Something petroleum geologists and petroleum engineers are learning that they did not suspect is the rapid decline in production and the spottiness of production within a field.   Look up graphs of decline rates for various shale fields here.

Much more information for a sample of the Marcellus is printed here, but the graphs are harder to read.  Each diamond shape indicates a well’s production decline as of June 30, 2013.  The months it has been in production is along the horizontal axis and the percent decline is a long the vertical axis.  For example, the extreme right upper diamond represents a well in production for 48 months (just a little left of the 50 months line) and it has lost 79% of its production in that time.  Another, the diamond shape lowest in the left has lost 58% of its production in 12 months time. The beauty of this reference is that the information reported to Pennsylvania DEP (which by law is open to the public) is printed along with the graphs.  No argument can be made with this!

If you read much about shale drilling, you are already aware of the rapid decline in production of shale wells, compared to drilling in conventional reservoirs.  James Stafford quotes Arthur Berman: “… nobody thinks very much about is the decline rates shale reservoirs. Well, I’ve looked at this. The decline rates are incredibly high. In the Eagleford shale, which is supposed to be the mother of all shale oil plays, the annual decline rate is higher than 42%. They’re going to have to drill hundreds, almost [thousands of] wells in the Eagleford shale, every year, to keep production flat. Just for one play, we’re talking about $10 or $12 billion a year just to replace supply.”  What this means is illustrated in an article about the Barnette in The Oil Drum.  Instead of drilling wells and being able to sit back and relax and count on initial production to hold up for years at nearly the initial level, tens of billions of additional investment will be required to maintain initial levels. 

Another big thing discovered is what happens when pressures of thousands of pounds per square inch are applied to liquids pumped down disposal wells in volumes equal to several houses day after day, with only cracks and pores the size of a grain of sand in them to receive it.  Rumble, rumble!  It takes about 4.0 on the Richter Scale to cause damage, but one in South Texas got up to 4.8.  The Richter is a logarithmic scale so 4.8 is 6.3 times the magnitude of 4.0.  Definitely connected with the well, as many small quakes have between verified to be connected to disposal wells. 

Cliff Frohlich, speaking at WVU, recently identified one of 5.7.  He thinks injection wells shouldn’t be sited in cities, but out in the country is OK.  (The “country hicks” don’t care if they are injured or their property is destroyed?  The insurance companies will compensate them for their losses?)  Earthquakes don’t happen at all disposal wells, but when one considers the facts above, then one has to wonder just where these toxic waste liquids do go and how long they will stay put.
 
Frohlich has the life expectancy of the Marcellus field down to less than 30 years (to 2040).  That’s assuming future wells do as well as the present wells, no doubt, in spite of the fact drillers avidly seek out the “sweet spots” and highest returns first.  And, assuming the investors are willing to cough up money to drill and drill and drill. 

Then there will be all those wells to plug.  Any body willing to say this generation of drillers will be more responsible about plugging their wells than those in the past?  What do you suppose it takes to plug a well that takes 3 to 8 million to drill?  Don’t you think that expense will be left for the public, just as wells and mines worked in the past must be remediated by government money, our taxes, or not at all?
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