CLASH OF THE TITANS

13 04 2013

Those of us who recognize the many grave dangers that fracking poses to our environment and social fabric have often felt that we were in a real David vs. Goliath  struggle, but without the benefit of the sling that enabled David to topple the giant.  Recent developments indicate that we may have not one,but two Goliaths entering the fray on our side.

Our two unlikely champions are the insurance providers and the mortgage bankers.

Here’s how Nationwide Mutual Insurance put it in an internal memo:

“After months of research and discussion, we have determined that the exposures presented by hydraulic fracturing are too great to ignore. Risks involved with hydraulic fracturing are now prohibited for General Liability, Commercial Auto, Motor Truck Cargo, Auto Physical Damage and Public Auto (insurance) coverage.”

This applies to

….landowners who lease land for shale gas drilling and contractors involved in fracking operations, including those who haul water to and from drill sites; pipe and lumber haulers; and operators of bulldozers, dump trucks and other vehicles used in drill site preparation.

Other insurers are growing increasingly uncomfortable with the difficulty of calculating potential damages from fracking, and, while insurance for gas and oil companies is still available, the cost is rising.

But, for banks that issue mortgages, no price is right.  Leasing mortgaged property for fracking without  approval of the bank that holds the mortgage is a violation of the terms of most mortgages, and could lead to foreclosure, because fracking may create a hazard on the property, such as a toxic tailings pond, polluted wells and springs, or other hazards that devalue the land.  Even if the water supply escapes contamination, the evidence shows that fracked properties lose value–who wants to buy a home in an industrial sacrifice zone? The switch from bird songs and fireflies to pump motors and gas flares may be “the sound of money,” to some people, but it’s not what most people who move to the country want to hear.  A Cornell University study of fracking in Pennsylvania found that:

noise is a major concern related to compressor stations: they produce noise levels in the 85 to 95 decibel range. These levels are at or above the federal Occupational Safety and Health Administration (OSHA) threshold of safety for an 8-hour day, and compressors work a 24-hour day. These environmental “stressors” can have an effect on adjacent property values or on regional industries….

…such as tourism.  A New York Department of Environmental Conservation study noted that

… property values in (a fracked) region… generally rise because of an influx of drilling company workers, increased economic activity, and the value of the oil and gas. But once mineral rights are signed away or if drilling takes place nearby, the value of residential properties may drop. In conclusion…being in proximity to a well could reduce the value of a property,

Rising property values are not a tide that lifts all boats.  They frequently sink the boats of the poor and underprivileged.  As the Cornell study observed,

Driven by the high wages of workers in the mining sector and their increased demand for goods and  services, local prices increased by twice the national rate over the six-year study period….This is especially true of rental housing. Rents skyrocket,  (and) local renters who cannot afford their apartment any longer are displaced….
In an interview, one of the authors of the study put this in more concrete terms:
“In some places in Pennsylvania a gallon of milk costs $7.”  That’s twice the national average.
And the jobs that fracking is touted for creating frequently come at the expense of other jobs.  Agriculture declines in fracking areas, as does tourism, and, unable to compete with the high wages paid by oil companies, other industries will leave, or avoid moving to, fracking zones.
Gee…I haven’t even gotten to the many drawbacks of the “boom and bust cycle” that fracking, like all resource extraction schemes, puts communities through.  F’rinstance, ever hear of a “rich West Virginian”?  Besides coal mine owners and politicians? The owners get the coal and the gold, and the miners and other residents,as the old song says, get the shaft.  Fracked communities will suffer the same fate.  And I haven’t touched on the issues of the long-term environmental cost of fracking, nor the dangers continued fossil fuel dependence and climate change.  These big picture issues are simply off the radar of those who are focused on this month’s revenue and this quarter’s earnings.
So, the good news is, the pushback against fracking is gathering strength, as other sectors of our economy realize that the frackers’ profits will come, in part, at their expense.  Many of us who oppose fracking do so on the practical, moral, human grounds that it will destroy the only planet we have to live on, an argument that, alas, fails to impress those who worship at the Church of the Holy Dollar.  Losing money, on the other hand, is a message that dollar-worshippers clearly understand, and more and more of them are starting to “get” that unlimited environmental exploitation in general, and fracking in particular, are bad for business.  The further good news is that, between sagging natural gas prices and overoptimistic yield estimates, many of the companies engaging in fracking are running out of steam all by themselves, although that’s small comfort to communities already infested with gas or oil wells.
It’s too bad that there isn’t some mass conversion to a saner way of seeing the world taking place around the fracking issue, but, considering how dire our situation is, we need to accept whatever allies we can find, and talk philosophy later.
music:  Terry Allen, “The Doll”  (not available on the net!)
Bill Laswell, “Driftwork” (ditto)
Eliza Gilkyson, “Unsustainable” (preceded by a short talk by Robert Jensen)
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