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June 2, 2015

Shale gas development threatens dairy industry

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Posted: Friday, February 8, 2013 2:00 am | Updated: 11:47 am, Fri Feb 8, 2013.

Editor’s note: This is the eighth in a series of stories, “Poland to Pennsylvania: An international reporting project underwritten by Calkins Media and the Pulitzer Center.” To see all the stories, go to http://www.shalereporter.com/projects/pulitzer/)

When Sheila Russell decided to move back to her ancestral home in Bradford County, Pa., she wanted to start a new life. A seventh-generation Russell, whose family had settled the land in 1796, the last year of George Washington’s presidency, she left her corporate job at a catalog company to do what she loved best: farming.

There was only one problem: shale gas. As luck would have it, the Russell farm happened to sit on top of the Marcellus shale, a large underground formation rich in natural gas. In 2010, just as Russell was embarking on her new career in organic farming, Chesapeake Energy drilled two shale-gas wells across the road, less than a thousand feet from the farm.

Although not worried at first and even hopeful that future royalties from the gas may help her expand her business, Russell soon found herself in a nightmare, when she discovered that one of the wells on her property had been leaking methane gas into the ground, due to a faulty casing, for over a year.

Today, Russell has stopped drinking the water from her private well and even refuses to water her produce with it, preferring instead a nearby spring-fed pond. Water tests have shown elevated levels of methane and metals, still within state norms, but she does not want to take any chances.

“It’s a concern for me – it’s a concern for my customers,” she says. “We all thought [the gas] was a lot of money coming and that it was safe. And it’s neither safe, nor a money-maker. Do I stay on this seventh-generation farm and keep it going? I don’t know.”

Russell’s case is hardly an exception. Bradford County, a bucolic region in northern Pennsylvania full of woodlands, rolling hills, and pastures dotted by red barns and hay bales, with a population of just 63,000 people, has been undergoing a massive industrial transformation for the past few years, as both American and international companies have joined the rush for gas.

This is not the first natural-resource boom in Bradford County. In the 19th and early 20th centuries, coal mining and logging were big economic drivers — until the coal ran out and the hills were stripped bare — but the shale gas may prove to be the biggest industry yet.

About 2,000 shale-gas wells have been drilled and permitted in the county so far, making it the most heavily drilled region in Pennsylvania and the Marcellus as a whole. And while the economic benefits for companies, larger leaseholders, and some local businesses have been significant, the gas rush threatens to undermine the venerable farming and dairy operations in the area, while creating a host of environmental and social problems.

The changes are hard to ignore. From a sleepy Pennsylvania town on the banks of the Susquehanna River, Towanda, the county’s seat, has metamorphosed into a real boomtown, with industry trucks and large pickups jamming the single main street. Crime has gone up by about 40 percent, while rents and food prices have skyrocketed.

Meanwhile, new restaurants and hotels have sprung up along the river valley to service the rig and pipeline workers, many of them coming here from as far as Texas, Oklahoma, and Mississippi.

Since 2008, when drilling for shale gas began in the county, revenues from sales tax have jumped up 61 percent, while unemployment has hovered at around six percent, lower than the national average. So far, local landowners have received $160 million in leases, which have boosted spending, as well as the county’s tax base.

“The shale gas industry has had a very positive economic impact on the region,” says Anthony Ventello, the executive director of Progress Authority, the local chamber of commerce, pointing out that the gas industry continues to bring in new investments. A new 800 MW gas-fired power plant, worth between $600 million and $800 million, has been already planned, while other, smaller gas-related projects are soon to follow.

“We’re looking to create a value-added economy and not just ship natural gas out of here like a third-world country,” he says.

Yet, behind the upbeat statistics, a darker side lurks. Blowouts, toxic spills, water contamination, and gas migration have accompanied development.

Chesapeake Energy, the company with the most substantial presence, was fined $900,000 — the largest environmental fine in the state’s history — for allowing gas migration to contaminate the water of 16 families in the county in 2010. Later, a blowout of one of the company’s wells caused large amounts of “produced water” — liquid waste associated with shale gas extraction — to spill into Towanda creek. In Bradford County, according to the Department of Environmental Protection, overall there have been more than 600 violations so far.

Most often, accidents occur due to faulty casing and cementing, with gas and a variety of dangerous metals migrating into the water table. The industry calculates that six percent of all new wells have some kind of casing or cementing problem, but in reality that percentage could be much higher.

Carol French, a long-time dairy farmer, experienced the adverse consequences of shale-gas drilling first hand when her well water turned white and murky in 2011. Soon, her whole family started having skin rashes, while her 24-year-old daughter fell extremely ill with intestinal, liver and spleen problems (she quickly improved when she moved away from the farm). Meanwhile, the family’s cattle began suffering from skin rashes and breeding issues.

“I got to see my farm lose 90 percent of its property value,” she says. “I’m losing my milk market and probably I won’t be able to sell my cows. The gas industry had negatively impacted our health, our water, our business, our society.”

French has made the conscious decision to keep her dairy operation going, despite the fact that there are about 340 shale-gas wells within a 10-mile radius of her farm. Many of her neighbors, on the other hand, have simply opted to take the money from their gas leases and sell their dairy herds. Out of about 12 dairy farmers in the immediate vicinity, only three have kept their farms running, according to French’s estimates. Even the local milk hauler has gone on to work as a truck driver for the shale-gas industry.

Another serious impact has been the fragmentation of farmland by the wells pads, compressor stations, and the thousands of miles of pipelines already crisscrossing the hills or currently under construction.

Certainly, there are other factors contributing to the decline of dairy farms in Bradford County beyond the gas industry. Low milk prices and expensive feed have kept the business on the edge of survival for years and many have seen the windfall from gas leases and royalties as the perfect exit.

The choice was clear for Howard Keir, a neighbor of Carol French. After leasing the mineral rights of his property to Chesapeake Energy, he immediately sold off his dairy herd. He believes shale-gas extraction is generally safe and today has three wells on his property, out of which he soon expects to receive royalties.

“With the price of milk going mostly down, farmers were going out of business anyway, so you can’t blame it all on the industry,” he says.

Ventello, of the chamber of commerce, agrees. “Don’t get me wrong, but farming is doomed, no matter what you do. It has to do with milk prices mostly. Yes, things will change, but I don’t see that as a danger.”

Anecdotal evidence suggests that some farmers use the proceeds from gas exploration to upgrade their operations, but the general trend has been in the opposite direction.

A 2012 study by Penn State’s College of Agricultural Sciences draws a direct correlation between the decline of cow numbers and dairy production in areas with higher drilling activity. Between 2007 and 2010, in counties with 150 or more gas wells cow numbers have decreased by 18.7 percent on average, compared to only 1.2 percent decrease in counties with no Marcellus wells. In Bradford County the decline has been 18.8 percent for that time period.

Timothy Kelsey, professor of agricultural economics and a co-author of the study, sees a danger for the entire dairy industry in the region if the decline continues.

“If the number of farms and agricultural activity fall too low, these essential supporting businesses [like feed stores, large animal veterinarians, machinery dealers, and agricultural processors] will leave or quit, making it difficult for remaining farmers to access needed inputs and markets and thus remain in business,” he writes.

If such a domino effect takes place and farming and dairy production in Bradford County collapse along with the entire supply chain, even the large financial inflow from the shale gas industry might not be able to make up for the difference.

A law that came into effect last year in Pennsylvania, Act 13, tries to mitigate some of the negative effects of shale gas drilling by providing an impact fee. In 2012, Bradford County received $8.2 million with another $6.8 million projected for 2013.

“It’s a chunk of change that Bradford County never had before,” says Mark Smith, one of the county commissioners. “Is it enough? I don’t think we know that answer yet.”

Without a doubt shale gas has made a serious contribution to the economy of Bradford County and Pennsylvania as a whole, yet risking a sustainable industry like farming for an unsustainable one like fossil-fuel extraction may prove too expensive in the end.

Already a bust is on the horizon: drilling in the county has seen a substantial decline, from 408 shale-gas wells drilled in 2011 to 149 well through November of 2012, due to low gas prices. The construction of thousands of miles of pipeline continues in preparation for the new boom when prices pick up, but it is far from certain whether farming in the area could recover so easily.

“The story is always different at the kitchen table where they come to sign you on than it is out in the field,” says Bruce Kennedy, a long-time farmer whose family roots in Pennsylvania go back 200 years. In 2011, three accidents related to shale gas extraction happened on his property, including a large diesel spill.

Dimiter Kenarov is a freelance journalist based in Istanbul, Turkey, and a contributing editor at the Virginia Quarterly Review.

His work has also appeared in Esquire, Outside, The Nation, the International Herald Tribune, and others, and has been twice anthologized in “The Best American Travel Writing.”

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Welcome to the discussion.

3 comments:

  • transparent36 posted at 3:55 pm on Tue, Feb 19, 2013.

    transparent36 Posts: 1

    No farmer should have to decide between gas royalties and giving up a farm because of environmental damages. Communities should not have to suffer environmental degradation for the profits of gas companies. It has been made clear that fracking is not safe. It uses four to seven million gallons of water per well in a time of water shortages; it pollutes air and ground water, and it makes people sick. What better argument do you have for clean energy resources like wind and solar? We should ban fracking in PA now!

     
  • Jackie Root posted at 7:21 pm on Tue, Feb 12, 2013.

    Jackie Root Posts: 1

    The decline in dairy cow numbers is a story begun long before Marcellus Shale development began. Royalty income will allow some farmers an OPPORTUNITY to retire if they choose and others the $$ needed to upgrade, to attract the next generation. Carol French repeatedly tells stories of human and livestock illness but does not provide proof, how about a report from her veterinarian. She has claimed in other articles that DEP refuses to test her water, not likely. The media continues to quote Carol without verifying any of her allegations.

     
  • Luigie posted at 9:04 am on Sat, Feb 9, 2013.

    Luigie Posts: 1575

    Same old story a corporation comes to town promising wealth and safety. It takes what it wants, with no real concern for the community, then leaves when it has drained the natural resourses that make it rich and powerful. Leaving behind polluted land, water, and throwing the people of the area back into high unemployment. Then as usual it is up to the taxpayer to clean up their pollution, if that can be done.

    As soon as these corporations have a large market for natural gas in this county and abroad the price will go way up as it did in the 1960’s. The government needs to help to develop renewable sources of energy which will help to create permanent jobs and affordable energy sources.

     
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