Louis W. Allstadt – From Supporter to Skeptic on New York State Fracking, DEC Not Up To The Job – Oil & Gas Industry Influences Regulators

Louis W. Allstadt – From Supporter to Skeptic on New York State Fracking, DEC Not Up To The Job – Oil & Gas Industry Influences Regulators by Peter Mantius, on October 1st, 2012, Natural Resources News Service
COOPERSTOWN, N.Y. – Former Mobil Oil Corp. executive Louis W. Allstadt did not start out as an anti-fracking activist. He had to analyze the issue and then switch sides. Initially, he bought into the natural gas industry’s gaudy promises that high-volume horizontal hydrofracturing could work economic miracles in rural upstate New York. He wrote in a 2009 newspaper opinion article that gas drilling “could provide enormous quantities of clean-burning natural gas with great economic benefits” to the state. But after digging deeper, Allstadt veered away from the party line. Now he is convinced the economic prospects are largely hype and that the state’s environmental regulators are disturbingly unprepared to deal with the side effects of such an invasive industrial activity. “It’s a bad idea for New York State,” Allstadt said in recent interview, echoing detailed letters he has written to Gov. Andrew Cuomo and other state officials.

The industry has tried to downplay the fact that he has switched sides, challenging his credentials. “Lou was a policy guy in refining,” said Scott Cline, an industry spokesman who holds a Ph.D in petroleum engineering. “He’s talking about things he doesn’t know anything about.” Actually, Allstadt headed Mobil’s oil and natural gas drilling in the western hemisphere before he retired to this tony lakeside village about a decade ago. He also supervised Mobil’s side of the company’s 1999 merger with Exxon that created the world’s largest corporation. … Cline questions Allstadt’s authority to weigh in. “Talk to his former company, Exxon,” Cline said. “They’ve invested heavily in (gas driller) XTO and they believe in shale gas … I classify Lou as somebody who lives in Cooperstown who doesn’t want drilling in his backyard.” But Allstadt says it is not so much his personal property, but rather the state’s waters and taxpayers that are threatened. He points out that the Cooperstown area is not prime fracking territory for reasons of both geology and politics. Although much of the surrounding countryside has been leased by zealous landmen, three test wells recently drilled nearby were all plugged and abandoned after yielding almost no gas. And when Cuomo indicated in June that he was close to allowing fracking in a few areas near the New York-Pennsylvania border, Cooperstown clearly fell outside his target area. Since then, the governor has extended a moratorium on all high-volume fracking in New York State, pending a new health impact study that will take months. The state should have ordered the health study years ago, Allstadt argues, and its failure to do so is a symptom of a deeper problem. In his view, regulators at the state Department of Environmental Conservation are so steeped in the industry mindset that they continue to sidestep a host of costly challenges, such as disposing of toxic fracking wastewater and financing repairs on roads and bridges beaten up by fracking trucks. … As the fracking debate rages on, Allstadt has not been a particularly splashy activist. He has limited his public speaking to a few even-tempered, rather dry, presentations to local community groups. “Lou is a very careful man. He’s low-key and he knows his facts. He doesn’t jump to conclusions,” said Lang Keith, a former Virginia circuit court judge who retired to Cooperstown.

The Marcellus Shale formation, which extends from upstate New York down through Pennsylvania, West Virginia and Ohio, is widely viewed as one of the world’s largest stores of natural gas. Most experts agree that high-volume fracking is the best way to tap it. Allstadt appreciated the potential, but was attuned to the need to regulate it strictly. Over time he concluded that that was not likely, given the DEC’s apparent pro-industry bias. If he had one wake-up call that turned him into a skeptic, he said, it was drilling setbacks – the minimum distances gas wells must be from homes, public buildings and public sources of drinking water. He hunted for details in the DEC’s 1,000-plus-page, boiler-plated guide to fracking regulations known as the 2011 Supplemental Generic Environmental Impact Statement, or SGEIS. No luck. “The distance from a person’s home to an invasive industrial activity is of utmost importance,” Allstadt wrote DEC Commissioner Joseph Martens in January. “The public had every reason to expect that this information would be prominent in the 2011 SGEIS. It is not.”

The 1992 GEIS said it was OK to drill beyond 100 feet from a home or 150 feet from a public building. Presumably, Allstadt concluded, those limits carry over for fracking. The 1992 setbacks seemed inappropriate for modern fracking, given that current setbacks in Midland, Tex., an oil and gas hotbed, are 1,320 feet from either a house or a public building. Setback rules for public water supplies in upstate New York were also troubling. The 2011 SGEIS calls for a 2,000-foot setback around such lakes and rivers, but steams that feed them would be protected by only a 500-foot setback. And those distances are subject to change back to as little as 150 feet after three years. By contrast, water supplies in the New York City and Syracuse watersheds are protected by 4,000-foot setbacks. Cline, the industry spokesman, acknowledged that the state’s setbacks are “in flux.” Allstadt’s response: “I certainly hope so. They’re totally inadequate.”

As Allstadt cruised through the 2011 SGEIS, he found it to be full of little tricks and loopholes that invite exploitation by the industry, especially its less responsible players. “If you read the SGEIS and you’ve worked in the industry, you know who wrote it. It’s pretty blatant,” he said. … The DEC’s failure to establish – let alone enforce – rules that adequately protect the environment is not the only subject that gives Allstadt pause. “The economics no longer look as compelling,” he said. … Hot spots are uncommon in New York State, where the Marcellus Shale tends to be shallower and drier than ideal. … While Allstadt might not accept the term radicalization, he has expressed concern that New York’s inferior geology will tend to draw the industry’s marginal players, at a potentially significant cost to taxpayers. … Allstadt even urges the DEC to require drillers to use tracer agents in their drilling chemicals in order to clearly identify the culprits when private water wells are contaminated. The industry tends to resist that level of strict accountability, and Allstadt believes the DEC has shown a willingness to defer. [Emphasis added]

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