Daniel B. Markind, Esq.
Weir and Partners, LLP

Is it possible some of the biggest anti fossil fuels advocates are changing their minds? Mark Zuckerberg appears to be; even meeting with oil and gas workers.

Facebook founder Mark Zuckerberg visited Williston, North Dakota last week as part of his quest to visit all 50 states, sparking questions about a possible Presidential run.  While in Williston, Zuckerberg met with oil and gas workers in an unusual display for a Silicon Valley mogul.

He actually talked to the people and did not issue the standard “fossil fuels are evil” press statement.  Instead, Mr. Zuckerberg donned a hard hat, mingled and took to Facebook to remind people that while he sees climate change as one of the world’s most important issues, he encourages people to go out and learn about the situation from all perspectives.

Mr. Zuckerberg’s break with current PC tradition followed an editorial in the Los Angeles Times about a proposal from some members of the Los Angeles City Council to put new limits on oil drilling in LA, including restricting all oil production within 2,500 feet of residences, schools, etc.  The Times did not parrot the hysteria so common in editorials from papers such as the New York Times. Instead, it suggested that we should study the problem first and then make a decision based on the facts.

Noting that there are more than 1,000 oil wells in the City of Angels (who knew?), a 2,500 foot setback would prevent production from 90% of them.  L.A. City Council has given the City’s petroleum engineer and the Department of Public Health 120 days to complete studies on the health effects of living near these wells (which often have very little in common with the types of wells now drilled in the Marcellus).  Taking one small step for intelligence, the Times wrote, “Minds should remain open in the meantime, and the studies should weigh all of the impacts of further restrictions.”

Meanwhile, California state legislators voted Tuesday to extend their “cap and trade” law through 2030.  In doing so, Governor Gerry Brown found environmental groups fighting with each other.  On July 11 the San Jose Mercury News reported that “grassroots” environmental groups were shocked by the Governor agreeing to allow a proposal to block local air regulators from establishing additional carbon emissions rules for the industry.

The agreement also limits the California Air Resources Board’s ability to set rules for carbon outside the cap-and-trade program.  Alternatively, more “mainstream” groups such as the Natural Resources Defense Council stated that while this is a bitter pill, it is necessary to ensure that the limits are enforceable.  In some ways, this dispute mimics the issues we have in the Marcellus about whether localities can go further than the State in enacting environmental legislation.  California, which has the most extensive statewide emissions program, now answers no.

With all the stories coming out about possible Russian collusion in our Presidential election, one story beginning to circulate is possible Russian involvement in the anti-shale drilling campaign.  One curious event happened last week, with the publishing of a study by Penn State, Colorado State and Dartmouth University about the possible contamination of Pennsylvania streams from fracking wastewater.  The study found that increased amounts of radium, barium and other elements remain even after being treated.  While none of the samples would be considered radioactive waste, the elevated levels raised questions about the wastewater process.  These concerns must be addressed by the industry.  It is part of the continued need to more fully and completely deal with the entire wastewater issue.

The fascinating subtext, however, was how quickly the Russian news agency RT picked up the story.  Within just a few hours after the story was first published, RT noticed it and produced and disseminated its own story.  For those looking into collusion, it’s hard to avoid the possibility that the Russians may be participating in the anti-fracking campaign.  There is no hard evidence of this as of yet (although there has been smoke), but Russia certainly has a vested interest in preventing the expansion of the shale industry.

While shale production continues to skyrocket, shale transmission via pipelines continues to struggle.  Partly, of course, this is due to disinformation and scare tactics, but not entirely.  The pipeline companies remain their own worst enemies.  Energy Transfer Partners continues to have problems with Ohio’s Rover Pipeline.

ETP received orders from the Ohio Environmental Protection Agency on July 7 and FERC on July 12 resulting from spills of drilling mud and questions about diesel fuel contamination.  ETP’s actions in spilling the mud now have been referred to the Ohio Attorney General’s Office for possible further action, and were characterized by a spokesman for the OEPA as “basically a stiff arm to the state of Ohio”.  Due to these problems, opening of the Rover Pipeline could be delayed for months, if not longer.

Meanwhile, Sunoco Logistics is running into problems in Chester County, Pennsylvania outside of Philadelphia for drilling issues with its Mariner 2 East pipeline.  The problem, located mostly in Uwchlan Township, resulted in about a dozen households claiming that Sunoco’s drilling had contaminated their wells.  After first being silent on the matter, Sunoco Logistics then agreed to provide drinking water for the families and for a short time even shut down drilling – which has since resumed.

As I’ve noted innumerable times, there is much about oil and gas drilling and transmission that borders on hysteria.  There also, however, are legitimate concerns that need to be addressed.  To date, much of the public interaction from the production and transmission companies has been amateurish.  It needs to improve.  The industry also needs to appreciate that it is, and should be, held to the highest standards.  If it’s not prepared to play in the big leagues, go back to the minors.