New NY Times series highlights a new risk of rushing forward with fracking: the supposed upsides may not be all they're cracked up to be

In the New York Times’ ongoing “Drilling Down” series, which has been providing groundbreaking coverage of the potential dangers of industrial gas drilling, three articles appeared in the past two days that call into question the industry’s economic forecasting of shale gas drilling (see here, here,  and here).  Specifically, the articles focus on emails obtained by the Times in which scientists, energy experts, senior industry executives and government officials express growing concern that gas companies are overestimating, perhaps intentionally: (1) the present and future supplies of domestic natural gas; (2) the production times of fracked wells; and (3) the overall profitability and potential economic boon of shale gas production.  According to the articles, the industry is essentially painting an exaggerated picture of good things to come which may be misleading investors, landowners and regulators.

The internal e-mails and documents that the Times relied on for its stories show industry officers and federal officials concerned that companies are perhaps intentionally overstating the amount of gas they can economically produce in a given period.  Known as “overbooking,” this practice is illegal because it misleads investors.  One energy market analyst, who was reportedly fired from Merrill Lynch in 1998 for refusing to recommend Enron stocks, compared the gas industry now to what he saw with Enron, and ultimately, to Alice in Wonderland.  (Some of the most telling details can be found in the text of the emails themselves, all of which are reproduced on the Times’ website.)

As usual, the real victims are not in industry board rooms or government offices but on the ground in places like Fort Worth, Texas, where homeowners deal with air and water pollution problems and, according to the articles, several churches that signed leases on the promise of big money from massive gas wells instead end up not making royalties and owning land that may no longer be tax exempt. The articles raise the prospect that if development isn’t as profitable as its proponents contend – and some companies even go bankrupt – others may find themselves holding the bag for an industry that can’t pay the bill when the tab comes due to clean up contamination or properly close abandoned wells.

The take-home message from the skepticism voiced by industry experts should be clear for landowners and regulators across the country: If you can’t count on the supposed upsides of yet another risky fossil fuel-based extraction, there is even less justification to rush forward with high-volume fracking without first ensuring that necessary environmental and health safeguards are in place. 

Here in New York, Governor Cuomo seems to be holding his Department of Environmental Conservation to arbitrary deadlines in an effort to move drilling forward.  He has directed the agency to release a revised draft of its assessment of the environmental risks associated with fracking on July 1st, despite the fact that it is reportedly not yet complete.  Indeed, DEC stated earlier this year that it was still processing the almost 14,000 comments received on its first (deeply flawed) draft, raising serious questions about how an agency – even one with the best of intentions – which has been subjected to repeated and disproportionate staffing cuts could have adequately addressed the many deficiencies in the original document.

As we have often observed, New York has the opportunity to serve as a national model of how to properly apply the precautionary principle to ensure that the state’s resources and the health of its citizens are protected before moving forward on the promise of a quick buck.  In light of this most recent series from the Times, the importance of holding firm and taking the time to do it right is only amplified.