Should The U.S. Ban Fracking? — Transcript

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1. 0:01The shale revolution has turned the energy world upside down.
2. 0:05Finally, the United States may be nearing the long term goal of every
3. 0:09president since Richard Nixon becoming energy independent.
4. 0:14Net exporter of energy
5. 0:17According to the U.S. Energy Information Administration, the U.S.
6. 0:20will become a net energy exporter by 2020.
7. 0:24What's gone on the last few years has been nothing short of a miracle.
8. 0:27Western Pennsylvania, the new Saudi Arabia, of the United States.
9. 0:32But it's not at no cost.
10. 0:34Because you own the mineral rights, you essentially get very well paid to
11. 0:37take that environmental and personal risk.
12. 0:39While many have benefited,
13. 0:41There's hope for a long time that there wasn't.
14. 0:45Some say they have lost a great deal.
15. 0:47I've been hospitalized for drinking this water.
16. 0:49It took one sip.
17. 0:50My kidney fell, my spleen fell and was left with a 2mm ulcer in my
18. 0:55duodenum and then spent four days in the hospital.
19. 0:58With so much at stake in the fight for energy independence and protecting
20. 1:02our environment, should the U.S.
21. 1:04ban fracking?
22. 1:08In what became known as a shale revolution, hydraulic fracturing became
23. 1:12widely used across the U.S.,
24. 1:15both natural gas and oil can be extracted using this process.
25. 1:19About half the natural gas in the United States comes out of the same
26. 1:23wells that produce crude oil.
27. 1:25So in other words, you produce crude oil and natural gas comes along with
28. 1:29it. As of 2017, the U.S.
29. 1:34Energy Information Administration estimated there were about 2459 trillion
30. 1:40cubic feet of dry natural gas in the U.S.
31. 1:44Assuming the rate of production stays the same, that means the U.S.
32. 1:47has enough dry natural gas to last about 80 years.
33. 1:51The Marcellus Shale holds the largest natural gas reserve in North
34. 1:55America. In 2018, 6.2
35. 1:59trillion cubic feet of gas was produced in Pennsylvania alone.
36. 2:03That's nearly a third of total U.S.
37. 2:05consumption. What's gone on the last few years has been nothing short of a
38. 2:10miracle in terms of companies being able to reduce their cost and produce
39. 2:16crude gas, NGLs or whatever it is.
40. 2:19Far, far below what anybody thought they could do.
41. 2:22The real revolution, which was first in natural gas but then moved to oil,
42. 2:26was to combine horizontal drilling with fracking, and that then totally
43. 2:30revolutionized U.S.
44. 2:31oil production. The revolutionary breakthrough combined two existing
45. 2:35technologies. First is horizontal drilling.
46. 2:39Essentially drilling straight down and then turning at an angle to target
47. 2:42part of the shale formation.
48. 2:44The second is hydraulic fracturing or fracking.
49. 2:48This involves pumping water, sand and chemicals at high pressure into
50. 2:52shale formations to fracture the rock, allowing oil and gas trapped inside
51. 2:57to flow. From 2007 to 2018, natural gas production increased by nearly 60
52. 3:04percent. Prices dropped from almost $9 to $2.5
53. 3:08per BTU. Crude oil production grew from 5 to over 10 million barrels a
54. 3:13day, which led to a drop in imports by 40 percent.
55. 3:17That meant big energy savings for the everyday consumer.
56. 3:21In October 2019, the Council of Economic Advisers estimated the shale
57. 3:26revolution saves American families of four about $2,500 annually.
58. 3:33They claim nearly 80 percent of the total savings comes from a lower price
59. 3:38for natural gas.
60. 3:39Today, natural gas mining and extraction employs more than 162,000 workers
61. 3:44in the U.S. From 2004 to 2018, over 350,000 jobs were created nationwide.
62. 3:52And many of those jobs were based in places above the Marcellus Shale in
63. 3:57states like Pennsylvania.
64. 4:00In PA, the first unconventional well was drilled in Washington County in
65. 4:042004. By 2009, there were 821 active wells in 2011,
66. 4:111956.
67. 4:13There's a lot of hope in this area because people are doing well when you
68. 4:17can provide... This is Diana Irey Vaughn.
69. 4:20She's been the Washington County Commissioner for 24 years and a staunch
70. 4:24supporter of the gas industry.
71. 4:26We've heard from so many individuals who are leaseholders in the industry
72. 4:32how this has changed their financial future for generations to come.
73. 4:36There have been a number of farmers that have told us that if it had not
74. 4:39been for the leases, they probably would have been out of business.
75. 4:43With the downturn in the steel industry and the coal industry, there was
76. 4:48like this vacuum. And a lot of the people that I went to school with, they
77. 4:52have since moved away.
78. 4:53But now there's something filling that void there.
79. 4:57There are jobs. There's hope where for a long time, there wasn't.
80. 5:02This is Richard and Bonnie Moore.
81. 5:05They are farmers in Washington County in southwestern Pennsylvania.
82. 5:10This farm has been in Bonnie's family since the 1860s.
83. 5:14It's 185 acres just a mile and a half up the road.
84. 5:18Rich has a 90-acre farm that he inherited from his family.
85. 5:22In 2005, the oil and gas industry came knocking on the door.
86. 5:27Both farms, at least two range resources.
87. 5:29Everybody was excited.
88. 5:32About oh boy, we're going to have gas wells. And when Range came here and
89. 5:36drilled the wells, they told us everything that they would do.
90. 5:41And they did what they said.
91. 5:44It was really exciting for a lot of the people around here that owned
92. 5:48their mineral rights.
93. 5:52Bonnie and Rich didn't feel comfortable sharing how much they've made from
94. 5:56their gas leases.
95. 5:58But according to documents CNBC has analyzed, it's significant.
96. 6:03They've since bought two farms worth nearly 2 million dollars.
97. 6:07You have the ability to essentially pay someone for the environmental
98. 6:12risk, which is as much about the problems under the surface as about on
99. 6:16the surface, such as, for example, from all the trucks and all the guys
100. 6:19working on the oil that you don't really want those people around if you
101. 6:23have the choice or unless you're paid.
102. 6:25In the U.S., because you own the mineral rights, you essentially get very
103. 6:29well paid to take that environmental and personal risk.
104. 6:33Bryan Lakonich is also a Washington County resident with a gas lease.
105. 6:38They sold it as the new Saudi Arabia of the United States, western
106. 6:43Pennsylvania. Your kids aren't going to have to go to the Middle East to
107. 6:46fight wars again.
108. 6:47For having two boys of age, now 18 and 19.
109. 6:51It felt wonderful that we could be energy self-sufficient.
110. 6:56So when the company came to me with four people in my living room here and
111. 7:01said, hey, you're looking at 8 to 13 million dollars in the first three
112. 7:05years. I said, where do I sign?
113. 7:08Would you like to put it on my front porch?
114. 7:15Bryan's lessee is Chevron.
115. 7:17His contract included a $25,000 signing bonus and a royalty payment that
116. 7:23was $12,000 at its peak to now between $500 to $800 a month.
117. 7:29I used a nice few acre orchard here and I used to plant tomatoes, peppers
118. 7:34and vegetables here.
119. 7:40Every week or so, I'd go up on the pad and talk to them and hang out.
120. 7:45I was the cheerleader, you know, I wore my boots and my helmet.
121. 7:49That particular day I carried a camera.
122. 7:52Accurate date is 12/17/12.
123. 7:54And what you can see here is the frack ponds.
124. 7:57They pulled the liners out of them and left the polluted material right on
125. 8:03the ground. They pumped the other one out, pulled the liner, left the wet
126. 8:07soil, and they were in a rush to fill this in.
127. 8:09But what I found was a trash pump in that pit pumping water out of there
128. 8:15onto my own property.
129. 8:17This wasn't trucked out.
130. 8:18Here's your liners right there on the ground.
131. 8:20That's not permitted.
132. 8:21That's toxic.
133. 8:23They never restored to site, never so much water runoff that it came down
134. 8:27against my house and fractured the foundation and actually pushed this
135. 8:31house about three inches.
136. 8:33Bryan made these allegations in dozens of complaints he filed with the
137. 8:37Pennsylvania Department of Environmental Protection, or DEP.
138. 8:42I've had six years of water testing already.
139. 8:45Still, DEP and Chevron stand firm that the issue with Bryan's drinking
140. 8:50water is not a consequence of gas drilling on his property.
141. 8:54Chevron told CNBC that Bryan's water quality is about the same now as
142. 8:59before the wells were drilled and that the chemical composition of his
143. 9:03water is distinctly different than the water from their operations.
144. 9:08It also appears that DEP was aware of Chevron's alleged lack of oversight.
145. 9:13According to documents CNBC has reviewed, they issued Chevron at least two
146. 9:18violations three days prior to Bryan's photos.
147. 9:21One for discharge of pollutional material to waters of Commonwealth and
148. 9:26the other for improperly discharging topol water.
149. 9:30Chevron corrected these violations.
150. 9:32According to an appraisal ordered by Bryan's insurance company, the damage
151. 9:37to the house was partly due to the runoff from the drill site.
152. 9:40However, Chevron's own report, done by another company, did not find a
153. 9:45link. This is a sample from Bryan's house and showing that it's...
154. 9:52John Stolz is a professor of environmental microbiology at Duquesne
155. 9:57University. He's an outspoken supporter of renewable energy and ran for
156. 10:02Congress in 2017.
157. 10:04This is a summary of all his, with the exception of the two samples that
158. 10:09my group took, it just shows you the pre-drill sample and then the DEP
159. 10:14water samples. Clearly as the months go on, you can see that bromide is
160. 10:20consistently there.
161. 10:21Bromide is one of those things that you don't typically expect to find in
162. 10:26freshwater aquifer or a water source, groundwater source.
163. 10:30When we ran Bryan's samples in this analysis, it was clear to me at least
164. 10:36that they did share some of the characteristics that you see that are
165. 10:41characteristic of oil and gas brines.
166. 10:46So that's important to me because this is what Bryan is talking about,
167. 10:49that, you know, these wells on his property affected his source of water.
168. 10:54That's a responsibility of our Department of Environmental Protection.
169. 10:58When they look at pre-drill testing and testing is done afterwards, if
170. 11:02there's been an alteration in the quality of that water, then replacement
171. 11:06is required. Good morning your honors may please the court.
172. 11:10My name is John Smith.
173. 11:11This man is John Smith.
174. 11:13He's considered somewhat of a legend in Washington County.
175. 11:17He's been before the Pennsylvania Supreme Court three times.
176. 11:22The DEP has a limited set of parameters and what they're testing for.
177. 11:27So they're not going to the site and asking the company, the drilling
178. 11:31company, what did you use?
179. 11:32What did you release? They're coming with a preconceived set of parameters
180. 11:36that they're testing for.
181. 11:40Bryan says his nine year old son, Ryan, has struggled with his health
182. 11:44since he was three.
183. 11:46A toxicology report shows that his asthma, headaches, coughing, tinnitus
184. 11:51and leg pain could be linked to the water contamination.
185. 11:54They haven't figured out why he's incontinent.
186. 11:57The acute medical therapy is indicated in the exposure.
187. 12:00Certainly we agree with more DEP and EPA involvement to address this
188. 12:05exposure. Our main recommendation from a toxic, logical and exposure
189. 12:10perspective is to stay away from the exposure source and in parentheses
190. 12:15the house slight air and water as much as possible.
191. 12:19How do you stay away from your home?
192. 12:22I'd like to know.
193. 12:26Bryan, what are you doing about all of this?
194. 12:28What can you do about this?
195. 12:30The level of documentation that somebody is going to need to bring, for
196. 12:34instance, water contamination case there again, should be, should start
197. 12:38with the DEP that the DEP does itss job successfully, then they will
198. 12:43provide the necessary documentation.
199. 12:46Why the numbers are, in my opinion, relatively low is the way the DEP
200. 12:51deals with these issues, is that if your water is contaminated and you can
201. 12:56work out a deal with the will and gas industry, the DEP will not issue a
202. 13:00citation or will not issue a notice of violation for that water
203. 13:04contamination. Ultimately, at this point, I just want to get a buyout and
204. 13:09move my son away from here and myself so we can try to get better and have
205. 13:13a normal life.
206. 13:21What's the amount that you ask for?
207. 13:24100,000 a year for 6 years for the lack of use of my property and 70,000
208. 13:31to fix the house. What was their reaction when you said 670?
209. 13:37They reacted like that was fine.
210. 13:39They were going to take it back and give me an answer.
211. 14:02When folks see dollar signs behind stuff, they'll try and chase it all day
212. 14:06long. I would share with you that our industry is highly compliant, or
213. 14:09highly focused, and I think when it's all said and done with, you'll find
214. 14:13that most folks have been vindicated of any wrongdoing.
215. 14:17Clearly, the shale revolution's contributions are nuanced.
216. 14:21Abolishing the practice of fracking would have protected people like
217. 14:24Bryan, but also would have barred families like the Moores from profiting
218. 14:27off of their mineral rights.
219. 14:30Since renewables are not yet able to sustain American energy consumption,
220. 14:34banning fracking would take the U.S.
221. 14:36off the path to energy independence, and we would also return to importing
222. 14:40more energy. Consumers would likely pay a premium for importing oil and
223. 14:45natural gas, but would be protected from the potential environmental harm
224. 14:49caused by fracking.
225. 14:51We're really stuck right here and we've got to see it through.
226. 14:54Hopefully it doesn't kill us while we're doing it.
227. 14:58One state senator proposed a constitutional amendment to ban the
228. 15:01procedure, while others proposed adding a tax on the citizens to help
229. 15:05build out new infrastructure.
230. 15:07The Pennsylvania attorney general's office is pursuing a criminal
231. 15:11investigation of environmental crimes in Washington County, Pennsylvania,
232. 15:15as it relates to the oil and gas industry.
233. 15:18In an e-mail to CNBC, the AG's office did not confirm and declined to
234. 15:23comment. On the national level, in 2019, the Trump administration
235. 15:28announced plans to allow fracking on over a million additional acres of
236. 15:32public and private lands in California.
237. 15:36Presidential candidates Senators Elizabeth Warren and Bernie Sanders have
238. 15:40both publicly called for a nationwide ban on fracking.
239. 15:44However, former Vice President Joe Biden has said he would not ban
240. 15:48fracking and does not oppose new drilling on federal lands.
241. 15:52In a CNN town hall on climate change, Biden said he would examine existing
242. 15:57fracking sites to see if they are safe, but that states have control of
243. 16:01their lands. We could pass national legislation, but I don't think we
244. 16:06would get it done. The development of fracking has changed the debate on
245. 16:10energy in the U.S. forever.
246. 16:12While some have profited significantly, others have faced incredible
247. 16:17hardships. You know what Lincoln said?
248. 16:21You know, you can you can please some of the people some of the time, but
249. 16:25you can't please all of them all the time.