Energy

Fracking Creates Political, Legal Turmoil

Image of anti-fracking sign

The environmental impact of the hydraulic fracturing process, known as oil and gas fracking, has long been a contentious political conflict around the world.

Now that conflict is starting to manifest itself here in Oklahoma in the form of legal action, community protest and energy-industry supported legislation aimed at shutting down any dissent from those concerned about their own personal safety and their quality of life. The fight is on in full force here and across the country.

Here are three local recent developments to consider:

(1) The Oklahoma Supreme Court, according to media reports, will consider if they should decide if oil companies can be held responsible for the 5.6-magnitude earthquake that struck Prague in 2011, causing damage. The lawsuit, brought by Prague resident Sandra Ladra, claims she suffered serious injuries in the earthquake. After the earthquake, scientists claimed it was caused by the injection well process used in the fracking process. In that process, wastewater used in fracking is injected by high pressure into rock formations into what are called wastewater disposal wells. This process, according to scientists, causes enough instability along existing fault lines to trigger earthquakes.

(2) Hundreds of people turned out at a December meeting to protest a proposal for new hydraulic fracturing near Lake Hefner, which is one of Oklahoma City’s main water supplies. For years, environmentalists have claimed that fracking can lead to water contamination. After the meeting, which included chanting protestors carrying signs, the company requesting city permission to frack around and actually under the lake withdrew its request.

(3) At least eight bills have been introduced in the Oklahoma Legislature in the upcoming legislative session by oil and gas industry supporters that will prohibit that state's local authorities to ban oil and gas drilling in city limits. This comes as places such as Denton, Texas, the state of New York and even the entire country of Scotland have issued different forms of bans on fracking.

In the fracking process, water laced with chemicals is injected into the ground to create fissures in rock formations that release oil and gas. The wastewater from the process is then often injected into the ground again by high pressure, where it’s “stored” in some form. Oil and gas companies, of course, claim the process is safe and environmentally sound. But critics of fracking and the wastewater disposal well process argue that’s simply untrue, claiming it leads to polluted water and now a tremendous surge in earthquakes here and elsewhere.

Oklahoma, which now leads the contiguous United States in the number of earthquakes of 3.0-magnitude or higher, has experienced a fracking boom recently, which has helped create a world oil glut that has driven down prices and now threatens to do much damage to the state’s economy. Meanwhile, the state’s conservative legislature and Gov. Mary Fallin have granted steep tax cuts to oil and gas companies to continue fracking.

Here are my corresponding views on these three issues:

(1) Those companies operating wastewater injection wells should be held financially responsible for the damage caused by earthquakes if scientists determine the overall process causes earthquakes. Rejecting science is a sign of willful neglect. These companies wouldn’t reject the basic scientific engineering that creates the protocols of fracking or the injection well process.

(2) New fracking should never be allowed near an area’s main water supply. There’s too much evidence that fracking can pollute water supplies. There have been films about it and lawsuits over it. The evidences grows that fracking is harmful to our planet and especially to our drinking water.

(3) People in Oklahoma and elsewhere on the local level have the right to vote to protect their water and ensure their safety. There are plenty of places outside urban areas to frack for oil and gas. Given the growing environmental evidence, oil and gas companies should keep their fracking operations as far away as possible from densely populated areas.

As I mentioned, all this comes as world oil prices continue to drop. The price of oil per barrel has dropped from more than $100 last summer to below $50 now. This is an example of our country’s lack of a sensible energy policy. The obvious overall answer is to continue to develop renewable energy sources, such as solar, wind and hydro power, but with Republican conservatives in POWER both in Washington and Oklahoma, the planet’s environmental future, and especially here in Oklahoma, seems tragically bleak. There’s no other way to put it.

Now Replaying The 1980s

Image of oil gusher

There are two things making the fracking bust here in Oklahoma difficult to comprehend and analyze.

First, the world oil glut caused by the hydraulic fracturing boom in Oklahoma and other states was based on poor planning and greed and was entirely predictable.

Second, the local energy news reporting about the situation continues to be shallow if not simply propaganda, making it difficult to determine what major reductions lie ahead in terms of layoffs and overall reductions in government revenues, which affects everyone.

Let’s deal with the first issue. It’s a case of simply supply and demand economics, a concept fairly neutral in terms of political affiliation. When there’s an over supply of anything for sale, either more demand must be created or the prices will drop. In the case of oil, which gets refined into gasoline, this country has made great and needed strides in recent years to reduce demand by producing cars that use less gasoline. In the case of natural gas, some of which fuels power plants and warms our houses and buildings, the country has reduced demand through solar and wind power.

These basic facts don’t take a Harvard MBA to decipher. What has happened is that local big oil and gas companies have continued to deploy hydraulic fracturing or fracking to extract as much oil and gas from the ground here in Oklahoma despite clear warning signs the boom would go bust. These companies did this to make as much money as possible when oil prices were soaring artificially above $100 a barrel, knowing full well prices would eventually drop and production would slow. Right now, oil is below $50 a barrel. Companies need fracked-extracted oil to be at around $80 a barrel to break even.

Meanwhile, local oil and gas companies with this full knowledge agitated for and won gross production tax cuts supported by Gov. Mary Fallin and the Republican-dominated legislature. What’s even worse, thousands of workers are facing possible layoffs here and elsewhere, which leaves even less money for the economy and government operations. Education funding in Oklahoma, for example, which is already one of the lowest in the nation, will probably see even more cuts. How low can we go? We’re going to find out.

A sensible over-arching national and Oklahoma energy policy, one that protects the interests of citizens while allowing profits for oil and gas companies, is probably not possible in today's political climate, especially here. But as we get ready to relive the bleak 1980s here in this Oklahoma, let’s not forget this was preventable, and it was caused by conservatives inside and outside of government. It’s a teachable moment, of course, but I’m afraid no one will learn a thing.

Reconsidering the 1980s in Oklahoma, a bleak economic time that I lived through as an adult, brings me to my next point about the local media. According to local energy writers here, the story goes like this: Yes, oil and gas companies will face a slump, but it will be nothing like the 1980s because the state’s economy is so diversified. Also oil prices will rise soon enough. Okay, in their defense, these local journalists are quoting the same old type of local “experts” saying the old predictable things they said in the 1980s, but given the ramifications and lessons learned one might expect some more enterprise and more piercing questions.

How is the economy more diversified here? I don’t believe there’s been such a big shift. What about the fact that the ensuing layoffs from a major oil bust affects all sectors of the economy? Sure, auto dealers might sell more cars and trucking companies might benefit from lower gas prices, but that hardly compensates for a major oil bust. For example, a small business—let’s say it’s an upscale restaurant—might have to close because it now doesn’t have enough customers. That means more unemployed people who won’t be buying new cars or ordering the consumer goods trucked right to their front doors.

The local energy writers don’t often consider in their calculations that an oil bust also can lead to a banking bust because banks leverage themselves during a boom because of the same greed motivating oil and gas companies. This is what happened to Penn Square Bank in Oklahoma City. It was closed in 1982 and led to the collapse of the larger Continental Illinois National Bank and Trust Company in 1984.

If oil prices remain low, and there’s no reason to suspect otherwise unless—and here’s the basic trick played on us all, folks—there’s a sudden major war or violent conflict truly destabilizing oil-producing countries in the Middle East, then expect bank failures and/or nationally affiliated bank failures in Oklahoma and across the country. That means even more unemployed people.

I don’t want to exaggerate how bad the economy was here in parts of the 1980s in Oklahoma because of the oil bust, but there wasn’t a lot of economic opportunity and there were a lot of empty buildings and the layoff announcements came in droves. The boom created a lot of new development that then went under during the bust. The malaise was palpable.

Could Bricktown and other Oklahoma City downtown hot spots cool off economically in the recent bust if it’s an extended one, which then has a domino effect on other businesses? What about Oklahoma City Thunder ticket sales, especially the expensive seats? What about all those new apartment complexes in downtown Oklahoma City? Who’s going to live in them?

I say get ready for the worst. If it doesn’t happen, then great. But I’m no way convinced that we’re not heading for a 1980s-style crash if not something worse.

Don’t Frack Lake Hefner

Image of wind turbines

(Oklahoma City has sent out a notice that a public meeting on the issue will be held at 6 p.m. Thursday, Dec. 18 at the Will Rogers Conservatory, 3400 W. 36th Street in Oklahoma City. The discussion will be over a proposal by Pedestal Oil Company to proceed with “oil and gas exploration on the Lake Hefner Reservation.”)

Oil prices could drop soon to the $50 a barrel range and earthquakes rumble daily here as oil and gas companies in this country, especially in places such as Oklahoma and Texas, refuse to address the negative economic and environmental consequences of their fiendish fracking frenzy ways.

It’s about as obvious as it gets at this point the boom has gone bust, which it always does and always will, until there’s not a single drop of oil left in the ground here in Oklahoma.

So what does the government of Oklahoma City do in this period of uncertainty in the energy market here? Well, right now, it appears poised to allow a company to deploy directional drilling and hydraulic fracturing or fracking just south of Lake Hefner, one of the area’s main water supplies.

This would be a huge risk for everyone in central Oklahoma, not just for Oklahoma City or people who live near the lake. Environmentalists have long argued that fracking leads to water contamination. Scientists have recently linked earthquakes to the disposal wells used in the fracking process. It’s a filthy process with negative environmental consequences. To allow new fracking near a larger metropolitan city’s water supply would simply be a blatant if not intentionally craven act of sheer madness. Perhaps, that’s too much hyperbole, but common sense would dictate a city government would do everything in its power to protect its drinking water.

Maybe the federal government can get involved to stop it under some type of preventative water crisis management. Surely, there’s some act or law that would allow the federal government to take over the management of a water supply for thousands upon thousands of people. What if Lake Hefner gets polluted and is non-usable for several months or even years?

Oklahoma City has sent out a notice that a public meeting on the issue will be held at 6 p.m. Thursday, Dec. 18 at the Will Rogers Conservatory, 3400 W. 36th Street in Oklahoma City. The discussion will be over a proposal by Pedestal Oil Company to proceed with “oil and gas exploration on the Lake Hefner Reservation.”

The notice indicates the company officials will “present an overview of the project and protective measures that will be taken.” In other words, there’s a real chance citizens will be given little input at that particular meeting as the corporate hacks drone on with double-speak. Will they bring some confusing charts to display and then end the meeting early? It wouldn’t surprise me.

The notice doesn’t specifically mention fracking, but a Facebook site associated with Oklahoma City’s Ward 2 Councilor Ed Shadid notes:

With less than a week's notice, a public meeting will be held in which Pedestal Oil Co. will announce their plans for oil and gas drilling, including directional drilling and fracking, immediately adjacent to Lake Hefner. Three years ago nearly 100 people came to a community meeting to protest. It has been quiet until this week when the OKC Water Trust announced this meeting one week before Christmas. Although this is the busiest of times, please attend if you are interested and able.

Note “one week before Christmas.” This seems like it’s an obvious ploy of collusion between some Oklahoma City officials—not Shadid, of course—and the oil company to limit citizen participation and protest in the meeting. That’s how the power structure operates here. It limits free speech. It marginalizes and bullies. Its trademarks are secrecy and sneakiness and collusion.

The KFOR news site quoted Shadid this way about concerns over the proposal: “For the neighborhoods in ward two, it’s the sounds, the traffic, it’s damage to the area, it’s those, the thousands of people who use the trails in Lake Hefner, it’s any potential risk to the city’s water supply.” Shadid makes great points. It could affect EVERYONE in this area in one way or another.

Meanwhile, The Oklahoman editorial board continues crying over the world’s oil glut caused by the fracking boom that has dropped prices from more than $100 a barrel to the $60 a barrel range in just a few months. Some experts predict it could even go into the $50 a barrel range. I predict it will drop below $50. (I’ve been right before on this issue.) Sure, that’s bad in certain ways for the state economy because of an expected decline in gross production tax revenues and perhaps a loss of some jobs, but this glut was easily foreseeable and the newspaper has done nothing but encourage more and more drilling.

Meanwhile, the fight against the filthy process of fracking continues. The city of Denton, Texas, has even voted to ban fracking within its city limits. (Yes, a TEXAS city voted to ban fracking.)

Fracking is a process in which massive amounts of chemicals and water are injected by high pressure into rock formations releasing fossil fuels. The can lead to drinking water contamination, according to environmentalists. The wastewater is then injected into what are known as disposal wells. The disposal well process is believed by scientists to cause earthquakes. Oklahoma has experienced a dramatic surge in earthquakes during the recent fracking boom. The overall oil and gas industry, with the support of The Oklahoman editorial board, have basically argued there’s no conclusive proof this is the case.

I don’t know how much oil and gas drilling there has been around the Lake Hefner area through the years, and, yes, it’s conceivable that extra measures could be taken to protect one of the area’s main and important water supplies. But, really, why take any chance at all of polluting Lake Hefner?

We need water to survive. We can’t drink or water our lawns with oil.

Syndicate content