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Statement of Dusty Horwitt, JD

Statement of Dusty Horwitt, JD

Monday, September 15, 2008

Oversight Hearing on Natural Gas Drilling in the New York City Watershed Before the New York City Council Committee on Environmental Protection

Wednesday, September 10, 2008 at 1:00 p.m.

Submitted for the Record


Introduction

Mr. Chairman, distinguished Members of the Committee: My name is Dusty Horwitt, and I am a Senior Analyst for Public Lands at Environmental Working Group (EWG), a nonprofit research and advocacy organization based in Washington, DC, and Oakland, California. I thank the members of the Committee for this opportunity to testify.

For the last several years, Environmental Working Group has used government and industry records to track a virtually unprecedented increase in oil and gas drilling in the Western United States. Higher prices for oil and particularly natural gas have sparked this rush to drill as has the Bush Administration by aggressively promoting energy development on federal land.

To provide some idea of how big this boom is, and what might be in store for New York and other eastern states, consider that between 2001 and 2006 the number of wells drilled on Western lands averaged 12,400 per year, the highest number in at least 25 years and higher even than the 8,200 wells drilled annually during the 1980s when the Reagan Administration opened vast areas of the West to energy companies.

Until recently, seeing a drilling boom like this in New York or other eastern states would have seemed about as likely as Brett Favre coming to play for the New York Jets. But thanks in large part to hydraulic fracturing, the boom is here, and New York City’s water quality could be in grave danger.

Environmental Working Group is not opposed to all natural gas drilling. But due to the highly polluting nature of the oil and gas industry, the likelihood that thousands of wells could be drilled, and the multi-billion-dollar cost of building a treatment facility to clean up contaminated water, we strongly recommend that New York officials not allow any drilling in New York City’s watershed.

Hydraulic Fracturing

Gas companies have already begun to drill in New York, attracted by a formation known as the Marcellus Shale, located under New York, Kentucky, Maryland, Ohio, Pennsylvania, Virginia and West Virginia. Geologists believe it may contain as much as two years worth of U.S. consumption of natural gas. In New York, the shale extends under a large portion of the state from Albany to Buffalo including the upstate areas that hold New York City’s drinking water supply.

The state Department of Environmental Conservation’s website shows that some wells are already operating in the Marcellus Shale west of New York City’s watershed. Platt’s Oilgram News recently reported that companies have been actively leasing land in Sullivan and Delaware counties that include reservoirs that supply New York City’s drinking water. In Sullivan County, Cabot Oil & Gas and another company, Chesapeake, had leased a combined 4,522 acres as of July 30; the county did not lease any acres last year. Delaware County had leased at least 17,000 acres this year. A spokesman for the DEC told Platt’s that the state had already issued 500 permits to drill this year compared to 507 in all of 2007. (The state issued some permits for substances other than oil and gas.)

Shale is what is known in the natural gas industry as an “unconventional deposit,” with pores in the formation so tight that gas flow is slow or the gas is tightly adhered to the rock. Both conditions are likely to be present in shale formations. To extract natural gas from shale, companies have used a process known as hydraulic fracturing to increase flow of the gas combined with horizontal, rather than vertical, drilling.

In hydraulic fracturing, companies inject water laced with toxic chemicals under high pressure to break open rock formations allowing more natural gas or oil to flow up the drilling pipe. Companies also inject acid to dissolve the rock to increase the flow of natural gas or oil -- a process known as "acidizing" or, if the acid is injected under high-pressure to fracture the rock, "acid fracturing." In addition, companies inject "proppants" such as sand to prevent the fracture from closing.

Though it is used to tap unconventional deposits, hydraulic fracturing has become standard practice for virtually all oil and natural gas wells. Victor Carrillo, a representative for the Interstate Oil and Gas Compact Commission, told Congress in 2005 that 90 percent of the United States' oil and gas wells are hydraulically fractured.

It is at best unclear what might happen if hydraulic fracturing fluids are injected underground. One industry report from 2003 found that “even if natural barriers, such as dense shale layers, separate the different fluid zones and a good cement job exists, shales can heave and fracture near the wellbore. As a result of production, the pressure differential across these shales allows fluid to migrate through the wellbore. More often, this type of failure is associated with stimulation attempts. Fractures break through the shale layer, or acids dissolve channels through it.” The report also noted that “an improperly designed or poorly performed stimulation treatment can allow a hydraulic fracture to enter a water zone.”

Heavy Chemical Use at Drilling Sites

Gas drilling presents other serious risks to New York City’s drinking water. Drilling operations are large and messy involving drilling rigs and other heavy equipment, dozens of tanker trucks to haul toxic chemicals and contaminated water, extensive pipelines, noisy compressors and waste pits full of polluted and unknown fluids. Western states have documented thousands of spills and leaks from gas drilling, at least some of which have contaminated water supplies. No matter how careful the industry says it will be, accidents are inevitable.

Between 2003 and 2008, the Colorado Oil and Gas Conservation Commission recorded more than 1,500 chemical spills by the oil and gas industry. The Oil and Gas Accountability Project found that of these 1,500, 20 percent contaminated water and seven percent polluted surface water.

A recent Environmental Working Group analysis of oil and gas drilling in Colorado found that these operations use at least 65 chemicals listed or regulated as hazardous compounds under federal environmental laws. As we noted in a recent letter to mayor Bloomberg and Governor Paterson, if any of these 65 chemicals were emitted or discharged from an industrial facility, reporting to the U.S. Environmental Protection Agency would be mandatory, and in most cases permits would require strict pollution limits and companies would be subject to specific cleanup standards. But when these same chemicals are used at a natural gas well, they are exempt from permitting, reporting requirements and cleanup standards under the Clean Air Act, the Clean Water Act, the Toxic Release Inventory, and Superfund.

If natural gas drilling operations are allowed to proceed in the New York City watershed, some of these chemicals will be used. The only uncertainty is which ones.

That is because companies typically guard the identity of the chemicals they use as a trade secret. This spring, the Durango (Colorado) Herald reported that a nurse became gravely ill after being exposed to fracturing fluids that had spilled on a natural gas worker she was treating. As the nurse suffered from liver failure, heart failure and respiratory failure, the company that manufactured the fracturing fluid refused to tell her doctor what was in it, citing the need to protect trade secrets. The doctor had to guess how to treat his patient (she later recovered).

Vast Amounts of Water, Chemicals

Hydraulic fracturing, which will almost certainly be used in the proposed drilling operations, can require a staggering amount of water and equipment. The industry publication Oilfield Review reported in 1995 that a fracturing operation could involve as many as 40 vehicles, a million gallons of fluid and three million pounds of sand. Here is a photo of a fracturing operation in the Barnett Shale near Houston, Texas. This photo is from a PowerPoint presentation given this year by a representative of Texas-based Dale Resources and is available on the website of Barnett Shale News. You can see the scale of the operation with well over 40 vehicles pictured. Here is a close-up of the same operation. The Dale Resources presentation suggested that in the Barnett shale, companies may use up to four million gallons of fluid for hydraulic fracturing.

These numbers are consistent with what we found in a recent analysis of drilling in Colorado. According to records from Englewood, Colorado-based IHS Energy, Delta Petroleum Corp. injected a natural gas well in Mesa County, Colorado with one of the highest volumes of fluid in the state. Between April 14, 2007 when Delta drilled the well and November 6, 2007 when drilling was completed, the Denver-based company injected the well with 1.4 million gallons of unknown fluids and acid and 361 tons of sand (IHS 2008). The records also show that between February 3, 2004 and June 28, 2004, Canada-based Encana injected a natural gas well in Garfield County with 1 million gallons of fluid and 454 tons of sand (IHS 2008).

Overall, the IHS records show that as of this May, there were 9,037 wells in Colorado that received 431.7 million gallons of treatments with fluids. Most of the treatments are listed as fracturing or acid treatments (IHS 2008). These figures likely significantly understate the total number of wells treated and the gallons of fluid used.

Water Supply, Quality Concerns

The sheer volume of water used highlights another concern for New York City’s drinking water. If permitted to drill, companies could extract water from New York’s watershed for hydraulic fracturing that would otherwise be used for drinking. The Susquehanna River Basin Commission that has jurisdiction over an area of New York, Pennsylvania and Maryland, part of which borders the watershed for New York City’s drinking water, will begin requiring natural gas companies to receive a permit before withdrawing any quantity of water from the Basin. Officials have expressed serious concerns that gas operations may cause local streams to dry up completely.

An equally large concern is water quality. Earlier this year, Environmental Working Group and the Colorado-based organization, The Endocrine Disruption Exchange (TEDX) found that in Colorado, natural gas companies were using at least 65 chemicals that are listed as hazardous under six major federal laws designed to protect Americans from toxic substances including the Clean Air Act, Clean Water Act and Superfund. At least some of these chemicals are used in hydraulic fracturing operations. I have attached a list to my testimony.

EWG and TEDX found that natural gas companies use both methanol and naphthalene in Colorado. A Freedom of Information Act request from the Oil and Gas Accountability Project revealed that the U.S. Environmental Protection Agency had identified these chemicals as among those that companies inject into underground drinking water sources in fracturing operations at concentrations that may pose risks to human health.

The 65 chemicals we identified are associated with a range of health effects from skin and eye irritation to nervous system and brain problems. Of the chemicals, 95 percent can cause skin, eye, and sensory reactions; 90 percent have respiratory effects that include asthma, sore throats, and chronic sinus and upper and lower respiratory infections; 75 percent affect the nervous system, causing headaches, unexplained tingling, numbness and pain in the extremities, blackouts, and convulsions; more than 70 percent can cause more long-term effects such as cardiovascular, kidney and immune system disorders; and approximately 45 percent are associated with cancer.

Some of these substances may be used in the Marcellus Shale formation that companies are planning to drill in New York. The Independent Oil and Gas Association of West Virginia has reported that a fracturing method called “slickwater” is one of three methods best used to extract gas from the Marcellus shale. At least two companies, Range Resources and Cabot Oil and Gas Corporation, say that they have used slickwater to fracture wells in the Marcellus shale. Dale Resources has indicated that slickwater is used in Texas’ Barnett shale and has suggested that the operations may include biocides, friction reducers, scale inhibitors and surfactants.

EWG and TEDX found that several of these substances are used in Colorado and listed as hazardous under federal laws. For example, naphthalene and methanol are used in biocides; ethylene glycol and hydrochloric acid are used in scale inhibitors; and butanol and ethylene glycol monobutyl ether (2-BE) are used in surfactants.

Chemicals Veiled in Secrecy

And yet, companies are not required to disclose the chemicals they use under federal or state law whether in New York or in the Western United States, and the companies are exempt from federal laws that would set standards for the use of these chemicals. Among the exemptions is a waiver for hydraulic fracturing under the Safe Drinking Water Act (SDWA) passed as part of the 2005 Energy Bill. The SDWA sets standards for underground injection of toxic substances and prohibits the polluting of underground sources of drinking water.

In addition, natural gas companies typically guard the identity of their chemicals as a trade secret. TEDX identified the chemicals and other substances used in oil and gas drilling through Tier II reports that companies are required to file with emergency first responders under the Emergency Planning and Community Right-to-Know Act; Material Safety Data Sheets (MSDS) that companies are required to file with first responders by the Occupational Safety and Health Administration (OSHA), environmental impact statements written by the Bureau of Land Management and Forest Service; and accident reports completed by first responders.

While these data sources provide a glimpse of the chemicals used by energy companies, the sources are incomplete. Companies sometimes list names of products described in general terms such as "plasticizer" or "crosslinker." Data on the products' chemical ingredients is often missing. Sometimes product labels state "proprietary." The documents do not reveal -- nor are they designed to reveal -- what volumes or concentrations of the chemicals are used in the drilling and fracturing process. The MSDSs are designed to protect employees and first responders in the case of an accident and focus on acute exposure, but the information on the sheets often does not reflect the health impacts from long-term exposure.

Fracturing Behavior: Could Surface Water be Contaminated?

It is at best uncertain what might happen if chemicals are injected underground. One industry report from 2003 found that improper fracturing can cause fracturing fluids to enter a water zone, and the Oil and Gas Accountability Project has identified several uncertainties with fracturing behavior underground including how far the fractures will extend.

One recent case in Colorado shows that at least some substances from drilling can affect not only groundwater but also surface water. In March and April 2004, the Rocky Mountain News reported that natural gas seeping from a well drilled by Encana contaminated drinking water 3,500 feet away in Garfield County, Colorado, forcing local residents to drink bottled water. The Colorado Oil and Gas Conservation Commission (COGCC) determined that the contamination came from an improperly cemented well. Encana had drilled four wells within a mile of the gas leak.

Inspectors found high levels of toxic benzene in the water the day after residents noticed unusual bubbles in Divide Creek. A report prepared for Garfield County found that the contamination also included methane gas and toxic toluene, ethylbenzene and xyleneithin. In August 2004, the COGCC fined Encana a record $371,200 and imposed a moratorium on drilling within a two-mile radius of the seep. It was not clear if the well had been fractured, but hydraulic fracturing is common in the area.

At the very least, New York and other states should have a better understanding of fracturing behavior including whether fracturing could impact underground sources of drinking water and whether such underground fluids could affect surface water.

Other Concerns: Waste Pits and Spills

There is also the problem of waste pits and spills from which chemicals could leak into ground or surface water supplies. Often, after companies inject fracturing fluids, they remove the fluids and dump them in a pit near the drilling rig. The pits can also be used to store so-called “produced water,” or groundwater that is extracted in the drilling process. According to the U.S. Geological Survey, produced water can contain dissolved salts, hydrocarbons, trace metals, and radionuclides. New Mexico documented 800 cases of groundwater contamination by the oil and gas industry of which about half were due to waste pits.

In addition, chemicals can spill during hydraulic fracturing or other drilling operations. The nurse who nearly died this year in Durango, Colorado, was treating a natural gas worker who had fracing chemicals spilled on his clothing. The spill occurred on Indian land and was not required to be reported to the state. Between 2003 and 2008, the Colorado Oil and Gas Conservation Commission recorded more than 1,500 spills, 20 percent of which polluted water supplies.

Tweeti Blancett, who operates a ranch in New Mexico with her husband that has been in the Blancett family since the 1870s, says that natural gas operations including waste pits and fracturing have negatively affected her water supply.

“My water when it comes up, ninety-seven percent of the time, it’s deadly,” she said. “It’s full of heavy metals, petroleum products and things you don’t even want to talk about.”

“We didn’t know we were going to have these problems when they started drilling out here,” she said, adding that New York officials “have an open invitation to come to the ranch,” for a tour. “You don’t want what we have.”

Oscar Simpson, a representative for the National Wildlife Federation who spent nearly 20 years working for the state of New Mexico enforcing standards for the oil and gas industry and drinking water, says that drilling in the watershed for New York City’s drinking water is simply too risky and should not be permitted. Simpson called contamination from oil and gas drilling “a continuous problem from beginning to end.”

Recommendations

New York should adopt standards to ensure that natural gas drilling is safe:

  • Water supplies for drinking, agricultural and other uses should be fully protected from potential impacts from drilling and/or hydrofracing operations; no permits should be issued for operations that could negatively affect water quantity or quality.
  • That means no drilling in the watershed for New York City’s water supply.
  • The state should prohibit the use of chemicals that could compromise the quality of water supplies and that are not demonstrated to be safe for humans and the environment.
  • Before drilling begins, companies should make public the chemicals they plan to use through several outlets including the state’s web site and local first responders, and the state should approve the use of each chemical; in making public the chemicals they plan to use, companies should list each ingredient in every chemical product.
  • Once drilling begins, the state should maintain the availability of these lists of approved chemicals for each natural gas well to increase public knowledge and for immediate access in the case of accidents or spills.
  • Once drilling begins with approved chemicals, companies should provide advance notice and secure approval before using additional chemicals.
  • The state should approve a plan to protect both water quality and water quantity to ensure that existing and future water needs are met.

New York should follow the example of Klickitat County in Washington State that recently required Delta Petroleum to disclose the chemicals the company would use before drilling in Klickitat County. The county also required Delta to give local officials three days advance notice before adding new chemicals to its operations. Under the agreement, the company provided a list of 76 substances to Klickitat County, some of which appear to be product names rather than more informative chemical ingredients of the products. Klickitat County also prohibited the use of several substances including 2-BE, also known as 2-butoxyethanol or ethelyne glycol monobutyl ether, a chemical found in at least six products used by natural gas companies in Colorado and listed as hazardous under the Clean Air Act.

If Klickitat County, Washington, can require a natural gas company to operate under these standards, New York can – and should – enact standards that are at least as strong. Thank you for the opportunity to testify. I look forward to your questions.