Sunday, June 27, 2010

Beam Me Up Scotty.....We're Done.

It's Nuts Down Here
It's time for my wife and I to prepare to move out of the state so I will be concluding all of the email alerts and the blogging.
We are taking our minds and our money and leaving this "State of Confusion" called Pennsylvania.
For those who only have time for a short read, we are basing our decision to move on three primary things;

1. Banks are not lending against frac-drilled properties and adjoining properties, here in Washington County. That should tell you something.
HUD Handbook 4150.2, page 2.7 states that: "No existing dwelling may be located closer than 300 feet from an active or planned drilling site. Note that this applies to the site boundary, not to the actual well site." A property with a gas or oil lease is, therefore, not eligible for FHA financing, indicating that the federal government is concerned about property devaluation and consequent loss of their money.
2. Our public water supply is being used as a frac wastewater dump now - this is not some future thing. With 150,000 wells planned for Pennsylvania alone, it is accelerating. How many national/international corporations will stick around (i.e. Southpointe) when they can't get clean water?

3. Many Drillers (not all) are creating a massive financial bubble (which will burst), by inflating and flipping their leased and purchased drilling rights for up to 50 times their cost. This will exacerbate the environmental problem because it will pull the plug on a multitude of job and tax revenue producing businesses abruptly. Residents will also get stuck with environmental clean-up and remediation.

Just three examples:



There is one positive factor (which will eventually work against you) in this environmental fiasco; Pennsylvania has more rivers, lakes and streams than any state in the nation, second only to Alaska. There is such a massive amount of state water resources that the process of contaminating the soil, water and air in many areas ( not near well sites ) will be masked temporarily. And while abundant water a good thing, it will also help the problem grow to biblical proportions. One of the things that attracts the predator frack drillers is the abundance of fresh water available for fracking. The massive water supply will buy the drillers a lot of time before the majority of people realize they are in imminent danger.

I appreciate the help some of you have given in helping me understand this whole phenomenon and I wish you all the best.

If you want to stay informed;EVENTS:

We wish you all the best,Angelo

Josh Fox: "I could take a car battery and throw it in the watershed, and go to federal prison. But these guys can take the same chemicals and inject it by the thousands of gallons and they're exempt. It makes no sense."

I leave you with the report of the North Strabane hearing from last week. I did not attend the hearing because I wasn't sure if I could contain my natural and unquestionably, justified outrage. I didn't want to risk being tazed by the N. Strabane police who were present. Nor am I willing to take the heat for a community that appears indifferent right now.
As N. Strabane mulls gas drilling regulations, residents voice concern6/24/2010by Brad Hundt, Staff Writer

As supervisors in North Strabane Township ponder an ordinance regulating oil and gas drilling, residents had their say about it during a public hearing Tuesday night.
As in other communities that have considered or approved similar ordinances thanks to the rush of natural gas drilling in the region, residents expressed concerns over noise, the potential environmental impact and where out-of-town employees at drill sites will be housed.

Pat Smider, North Strabane's solicitor, said the township was considering "competing interests" - the rights of energy companies and land owners to profit from drilling, and the health and safety of residents.
Smider also pointed out that oil and gas drilling is allowed throughout the commonwealth, subject to local regulation, and "if you're here to say you don't want oil and gas drilling at all, that's not the law. ... This is what we think we can control."
OMG! Next Solicitor Smider will drag out the Constitution to convince you that it's their Constitutional Right to commit crimes of fraud and destruction of public (your's) property and private property(also your's)!
Nonetheless, several residents said they worried about the prospect of it, particularly in light of natural gas well accidents earlier this month in Clearfield County and West Virginia and, even though it doesn't involve natural gas, the oil spill in the Gulf of Mexico.
"It's ridiculous that this kind of thing can go on in this township," said Katie Stayduhar, who is a member of the township's planning commission.
"It's deeply concerning to me that something like this can happen so close to homes, so close to businesses, so close to schools," said Cindy Koniet, a resident of the Fox Chase subdivision. "These things just don't affect a few people. They cause catastrophes."

Some residents accused Greg Sulc, the board's chairman, of having a conflict of interest because he is an employee of the oil and gas company Range Resources. Sulc acknowledged that he worked for Range and that he would be abstaining from the debate and vote on the ordinance.
As long as Sulc is upfront that he works for Range Resources and abstains from the vote, "I think the basics have been met," said Melissa Melewsky, media law counsel with the Pennsylvania Newspaper Association.

Jon Volkwein, who lives on Walker Road, spoke up in support of natural gas drilling, and shrugged off concerns about noise. "I think I can put up with 18 days of drilling," he said.

Representatives from both CNX Gas Corp. and Range Resources were at the meeting. Carl Carlson, the director of community and government relations for Range Resources, noted that "everyone has natural gas in their home" and characterized it as "a tremendous resource to society."

The board is considering two separate ordinances: one would allow drilling as a permitted use with specific conditions; and the other would make it a conditional use that would require a public hearing. Both proposed ordinances would allow compressor and natural gas processing plants only in areas that are zoned for industrial use and would require a conditional use permit.
A vote is expected in July.

More detail from Angelo;

I will be ending the emails and blogging for the Shale Gas situation. At this time, I don't see the gas play slowing down or being stopped, barring some miracle.

After 60 days of non-stop research on the effects of Marcellus Shale Gas Drilling, it's crystal clear to me that Washington County is doomed for a level of economic and environmental destruction never witnessed before.... after the boom bubble bursts.

Last fall, the news that geologists increased their findings from 50 trillion to 500 trillion cubic feet of shale gas in the Marcellus, helped me decide to go forward with investments in commercial properties in our area that have been sitting on the market for 3 years in some cases.

I met with North Strabane and Peters township officials to discuss 6 different projects. I sifted through dozens of properties and consulted with developers, architects and builders. I worked with real estate agents. I was very excited about investing in the 'sweet spot' we have in contrast with many other suffering regions.

Even the corrupt state politics and mis-management didn't discourage me. It appeared as though Washington County, especially North Stabane and Peters Township were insulated from the rest of the state. They certainly have been doing well through this whole 'financial crisis'.
I didn't 'make-up' the facts. I just found them and tested them.

The Banks
First of all, regardless of my own desire to have locally produced energy and a robust economy, the banks... the banks are refusing to write mortgages against frac-drilled properties and neighboring properties within 300 feet of the boundary lines of a frac-drilled property. Even properties with no existing debt and owners with perfect credit records are being refused for credit against millions of dollars of equity.

I got this from a lawyer who specializes in this area:
"Hydrofracturing has already resulted in reduced real estate values and assessments, not only on the property being fracked, but also on the neighboring properties. In addition, the mere signing of a lease may result in reduced property values in the neighborhood. The rationale is that it may be difficult or impossible to obtain future mortgages on leased or drilled properties, and also in obtaining future property insurance, generally known as homeowners insurance. For instance, HUD, a leading federal lender has a regulation which states, "No existing dwelling may be located closer than 300 feet from an active or planned drilling site. Note that this applies to the site boundary, not the actual well site." HUD Handbook 4150.2, page 2.7. It also applies where there is only a lease, and drilling is only "planned" for the future." George A. Mathewson, Esq.

This is not a big deal unless you realize that the proposed well coverage for the area is massive and widespread. So far, Washington County has only a few hundred active well applications, but there are thousands approved for future development. That means no matter where your property is it may be negatively affected by the lack of mortgage funding available and rapidly declining property values. That decline will occur suddenly when the general public becomes aware. And it will seem to be un-expected because it will have been developing under the radar over a period of, so far 5 years.

I didn't know this on April 23rd.

The WaterThe next indisputable fact is the current dumping of frac waste water into the local drinking water supply. The primary measure being taken to 'clean' the frac waste water is 'dilution'. Well, eventually dilution is going to lose ground to higher levels of saturation. Some of the chemicals and elements being dumped are not bio-degradable.

Uranium is not bio-degradable. Most of the toxins have very long life spans and build up over time. At a certain point the balance will tip, seemingly suddenly, and the entire area will have an pernicious water problem.

If you believe anything the drillers say about water re-cycling and safe frac water you are making a big mistake.

The Economic Bubble & FraudSince 2007 most of us now know what an economic bubble is and what happens when it bursts. The Marcellus Shale bubble is far more complicated than the mortgage and credit bubble that we just witnessed in 2008.

In the case of this gas bubble we have U.S. drillers selling off highly inflated drilling rights and equity in their companies to foreign corporations. In many cases the drillers pay a few hundred to a few thousand dollars per acre to lease land. They then turn around and sell-off those same lease rights for $30,000 to $55,000 per acre. In many cases they don't even care about the gas long term. There is a very fast, very big, financial windfall in just appearing to be a leading drilling company. Think ENRON.... They pump up the value of the lease rights by misrepresenting the life span of these wells. Shale gas wells are not known for long life spans but the drillers are telling the public, the politicians and the off-shore investors that the life span is 40, 50 and even 60 years. In fact the production has been dropping off by 75% on 'good' wells in the first 6 months. This is normal for shale gas wells. That is not speculation. That's what IS happening right here in Washington County.

We're talking about millions of acres and many trillions of dollars in Pennsylvania alone. And in large part the representations are fraudulent.

When the bubble pops, thousands of employees will be out of work and the economic activity will spike downward abruptly.

I could write a book about this stuff. There is so much more coming our way, it's difficult to comprehend. But at this point writing about it won't make a difference. So I won't waste anymore time, money or energy. People are still (amazingly) conditioned to trust the government agencies.

What I'm writing now will go un-heeded for the most part. It will only be valuable to a few people who take action to protect themselves.

I never set out to be a defender of the environment. This all started on April 23rd, when I got an email from a property owner I was negotiating with. I was pro-drilling and had planned to benefit from drilling myself. I was far from being an environmentalist or a "tree hugger".Here's a list of other detrimental aspects to the 'gas play'
* Property values here will plummet. Florida real estate is collapsing (again)
just on the fear of the Gulf oil spill coming ashore. And bargain hunters were just getting busy a few months ago, snapping up bargains.

* The taking of private property - Emminent domain will be used to make way for gas transmission pipelines and processing stations.

* Pooling - A form of emminent domain (AKA theft) where property owners are compelled to have their property drilled. Well drilling is only one part of the emminent domain issue. Gas companies also need property access for pipelines, processing plants and underground storage cavities. Hint: Combine this with banks refusing mortgages on leased properties. Who is going to buy it? And what will the state or gas company be motivated to offer if a owner wants to evacuate a toxic industrial site?
* Degradation of infrastructure, roads, bridges.
* The state and local governments will experience revenue shortfalls against spiralling expenses and be unable to repair damages to infrastructure and the environment. They can't print money like the federal government, so they will raise taxes. This too will drive more businesses and residents away.
* Air quality will continue to decline.
* Soil contamination from airborne and run-off effects of VOC's.
* Exodus of capital when things don't pan out according to the hype. Some investors who put up millions between 2006 and 2009 have already taken millions in profits and liquidated their positions to cut their risk exposure and avoid bad publicity.
* Conflict between land owners who lease and those who only receive the negative consequences.
* Higher local energy prices due to the export of our gas resources.
* The destruction of many environment intensive industries, fishing, tourism, agriculture etc.
* Older, more reputable drilling firms, have told me they are staying away from the shale gas play. They see the backlash that's coming because of the tactics most drillers are using.
* There is a pattern of corporate activity that strongly resembles military tactics. And many of those that do this, have a long history of distorting projections, buying off key people in local communities and intimidating whistleblowers.
* Vast amounts of radioactive material will be brought to the surface via thousands of gas wells. This will destroy the air, water and soil in our environment for decades to come. Forget the frac fluids, being dumped into public water supplies statewide. Forget the toxic spills. Forget the blow-off from compressor stations. Forget the 421 DEP documented, toxic spills just in the first six months of 2010.
* All of the industry propagandists, most of the state politicians and local town officials are either lying or are ignorant of the documented incidents regarding public and private water supplies being contaminated in every area of the state where frac drilling is going on.
I didn't know any of this before April 23rd. Now I do... And so do you.