Predatory Companies

Page - June 7, 2012
An inherently dangerous process, fracking is made worse by irresponsible oil and gas companies.

As gas drilling spreads across the country, community concerns and uncertainties about the safety of drilling and fracking have been met by aggressive and disingenuous attacks by the gas industry. 

In response to criticism from the public and media, gas companies have repeatedly lied about the dangers posed by hydraulic fracturing and have worked hard to obscure the externalities of the fracking process. 

Watch this video by director Josh Fox which chronicles the fracking industry's disingenuous behavior:

One of the most common fallacies spread by the gas industry is that there has never been a case of groundwater contamination by hydraulic fracturing. This claim is repeated over and over again by gas corporations and their front groups. In reality, many wells have been contaminated at some stage of the drilling process (see contamination of water wells). In addition the companies require landowners to sign non-disclosure agreements when settling claims while prevailing upon courts to seal case records – a practice that the EPA documented as early as the 1980s.

For more information see the “Drilling Doublespeak” report by the Environmental Working Group.

Eroded regulations and government protections

Currently, there are no national standards that regulate proper disposal of fracking wastewater (See earlier section on regulation). This climate of impunity is a direct result of the fracking industry’s political clout and lobbying efforts. Shale companies have successfully wielded their formidable political and media power to suppress attempts at regulation, at both the state and federal level. A glaring example of this is the gas industry’s exclusion from the Clean Water Act, called the “Halliburton Loophole.” Created during the Bush administration, the “Halliburton Loophole” is a piece of legislation that exempts the billions of gallons of toxic frack fluid from being regulated as industrial waste.

This stifling of regulators’ oversight has endured for over a decade. The gas industry today resists regulation in any form, especially attempts to regulate from the federal level. Instead, frackers prefer ineffectual regulation at the state level where regulators and politicians are underfunded and beholden to industry promises of donations and jobs. Pennsylvania is a prime example of this, where Governor Tom Corbett overturned a moratorium on fracking in state forests and “put a leash” on fracking regulators, all while accepting upwards of $1.6 million in donations from fracking interests.

Compounding the difficulties of underfunding, a Greenwire investigation found that 40% of State drilling regulators have ties to the gas industry.  This atmosphere of compromised regulation and enforcement has greatly benefited the industry: In Texas, 96% of the 80,000 violations by oil and gas drillers in 2009 resulted in no enforcement action.West Virginia issued 19 penalties and has 56,000 wells.

Even when gas companies are properly investigated and convicted of breaking laws, the fines can be so small that the gas industry has little incentive to change its behavior. When Chesapeake energy was fined $900,000 (the largest such fine in history) for water contamination in Pennsylvania, the penalty represented less than three hours of profits for the company, which made a $2.8 billion profit last year. (Mike Sorhgahan, "Puny fines, scant enforcement leave drilling violators with little to fear" E&E News)

Influencing Fracking Studies

Another way the gas industry has attempted to blunt criticism and control the public debate is by influencing the study of gas impacts. Funding studies that obscure the industry’s role in water contamination allow fracking companies to claim that there are no conclusive links between drilling and groundwater contamination. 

Such is the case in Colorado, where community members found methane bubbling from creeks near a gas development by the company Encana. In lieu of paying a fine, the company convinced the regulatory agency in Colorado to let it fund a study of the impacts of gas drilling in the area.  Tellingly, the study never posed the question of whether the company was responsible for any contamination and failed to draw any conclusions, a standard component of any scientific report.  A subsequent study of the area, on the cusp of proving a definitive link between fracking and methane contamination of the aquifer, “evaporated into thin air” according to a regulator involved with study (who was fired shortly before the study should have been released). 

Gas companies also provide a significant amount of funding for university studies.

Front Groups

Industry-funded front groups use studies funded by the companies themselves to promote biased policy and bolster sophisticated PR campaigns designed to undermine fracking regulations.  Well-funded groups like the America Natural Gas Alliance or ANGA (founded and funded in part by Chesapeake CEO Aubrey McClendon), and Energy in Depth (funded by a consortium of oil and gas companies) are two such industry front groups. These groups attack journalists and activists that raise concerns about fracking. Journalists such as the New York Times’ Ian Urbina have been subjected to scathing personal and professional attacks by the gas industry. ANGA created a website attacking Josh Fox, the creator of the movie "Gasland," and advertised the site on google. ANGA hired Hill and Kowlton, a PR firm that was paid by the tobacco industry to disbute the health effects of tobacco smoke to run its pro-fracking advertising campaign.

Fracking Industry's use of "psy-ops"

As the truth about the dangers of fracking has become better known, the gas industry has become even more aggressive in its approach to community relations.  At an industry conference in 2012, a gas executive was recorded recommending the use of the Army and Marine Corps counterinsurgency manual as a tool for dealing with recalcitrant land owners. The executive recommended treating community opposition to the gas industry like an “insurgency.”  At the same conference, another gas industry executive told attendees that his company has several former military psychological operations, or “psy ops” specialists on staff, applying their skills on communities in Pennsylvania.

Lying to landowners

The fact that gas corporations are using military tactics against American citizens underlines the predacious ways that gas companies have treated the people who live on top of shale plays.  The irresponsible behavior of gas companies can also be seen in the way they cheat landowners into signing oil and gas leases. In order to secure the right to drill on private property, gas companies must convince the landowner to sign a lease, allowing gas development.  In order to lock people into leases favorable to the drillers, gas companies have resorted to manipulative and disingenuous tactics, such as downplaying the footprint of gas drilling.  An investigation by the New York Times investigators that analyzed over 11,000 gas leases found that drilling companies rarely explain to landowners the potential environmental and other risks that federal laws require them to disclose in filings to investors. The investigation also found that fewer than half the leases require companies to compensate landowners for water contamination after drilling begins. Furthermore, two-thirds of the leases allow gas companies to extend the length of the lease without additional approval from landowners.

Communities faced with proposed drilling projects are encouraged to talk to organizations that have addressed these issued and communities that have succeeded in resisting the industry. A good guide for landowners is Oil and Gas at Your Door? A Landowner’s Guide to Oil and Gas Development (Second Edition) (PDF) published by Earthworks’ Oil and Gas Accountability Project.