Hydraulic Fracturing, Newspaper Coverage, and Social License to Operate

We have been hard at work transforming research originally prepared for our report for Canadian Water Network into a series of interdisciplinary peer-reviewed publications. The first of what we hope will be a trilogy of articles was published today in the open access journal Sustainability. The article — “Comparative Analysis of Hydraulic Fracturing Wastewater Practices in Unconventional Shale Development: Newspaper Coverage of Stakeholder Concerns and Social License to Operate” — was co-authored by an interdisciplinary team, including Joel Gehman (professor at the University of Alberta, Department of Strategic Management & Organization), Dara Y. Thompson (former M.Sc. student at the University of Alberta, Department of Resource Economics and Environmental Sociology), Daniel S. Alessi (professor at the University of Alberta, Department of Earth and Atmospheric Sciences), Diana M. Allen (professor at Simon Fraser University, Department of Earth Sciences), Greg G. Goss (professor at the University of Alberta, Department of Biological Sciences).

The starting point for the overall project was the conceptualization of the hydraulic fracturing wastewater context as comprised of three potentially interrelated spheres of action (Figure 1). By delineating between operator practices, regulatory requirements, and stakeholder concerns, our goal was to better understand the extent to which these different spheres affected one another, if at all. In essence, we conceptualized the hydraulic fracturing wastewater context as a dynamic process in which any one sphere has the potential to influence the other two. Relative to the overall conceptual framework, this article focuses on one of these spheres specifically: stakeholder concerns.

Figure 1. Conceptualization of the hydraulic fracturing wastewater context.

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Showing Versus Telling and the Debate Over Unconventional Shale Development

Over the past decade, it has become clear that unconventional shale development poses major challenges to the state agencies tasked with regulating it. In many cases, the concerns are related to issues of information containment and information disclosure. For instance, Pennsylvania and its state agencies have been criticized repeatedly, most recently in a scathing report by the Commonwealth’s Auditor General.

Although the Department of Environmental Protection has born the bulk of this criticism, the Department of Health has come under fire too. According to StateImpact Pennsylvania, two retirees from the Department say “its employees were silenced on the issue of Marcellus Shale drilling.” The issue of “organizational silence,” or the collective-level phenomenon of saying or doing little in the face of significant problems, is an area of considerable research. Although in many cases organizational silence comes about tacitly, in this case, the retired employees claim the silence was deliberate.

Michael Wolf is Pennsylvania’s current Health Secretary. In a recent newspaper editorial, he responded to these criticisms of the Health Department. Below are some excerpts from his editorial, as well as some observations that occurred to me in the course of reading his comments:

The Pennsylvania Department of Health has specific protocols for all public health inquiries and concerns that employees must follow.

This sounds very promising. Inquiring minds want to know:

  • What are these protocols?
  • Are they adequate for handling inquiries and concerns related to unconventional shale developing and hydraulic fracturing?
  • How often are the Department’s protocols followed and ignored?
  • How do these protocols compare, such as with other state protocols and with peer-reviewed literature regarding the potential health impacts of unconventional shale development and hydraulic fracturing?

All inquiries are immediately reported to the department’s Bureau of Epidemiology, the experts who have training in controlling and preventing the spread of disease or illness, for review and follow-up. This is a strict and standard protocol for any health report the department receives, whether it’s related to Marcellus Shale or other environmental health issues. The process includes a review, investigation, data collection and a formal response to the complainant. The Bureau of Epidemiology works directly with the caller or patient’s physician in charge for follow-up, and any immediate threats to the public’s health found would be given a priority…. A log is kept of each complaint that comes in, responses are tracked, and outcomes noted.

Based on this statement, it seems that the Department of Health (unlike the Department of Environmental Protection) should be able to quickly provide answers to questions such as:

  • How many inquiries related to Marcellus Shale have been received?
  • What is the status of the review process and what responses have been issued in relation to these inquiries?
  • What are the outcomes of the investigations?
  • What “immediate threats to the public’s health” have been found and how are these being prioritized?
  • Are there any examples of situations where these procedures “controlled” or “prevented” the spread of potential health impacts related to unconventional shale development and hydraulic fracturing?

Our goal is, and will continue to be, to provide information and a forum for discourse on public health issues.

This is an admirable goal. As one check on how the Department has done with regard to its goal of providing information and a forum for discourse on public health issues related to unconventional shale development and hydraulic fracturing, I used the “search Agency” box on the Department website to search for terms such as “Marcellus,” “shale,” “hydraulic fracturing” and “fracking.” The results below suggest that the Department is not providing any such information on its website:

  • For “Marcellus” there were 23 results. Of these, 22 reported on the number of newborn children who were named “Marcellus.” The other document was entitled “Final Progress Report for Research Projects Funded by Health Research Grants.” The document refers to a $66,000 grant from the William Penn Foundation for “Use of information in Marcellus Shale environmental and health quality public discourse debates.”
  • For “shale” there were 8 results. Of these, 6 reported on the number of newborn children who were named “Shale.” Another result was to the same Final Progress Report referenced above. The final result was entitled “Boron Fact Sheet,” according to which, “Boron is a naturally occurring element found in many types of rocks including shale.”
  • There were no results for the terms “hydraulic fracturing” or “fracking.”

We may not have a multi-million dollar health registry right now at the department as some have called for, but the records are kept, the proactive follow-up and coordination is happening and we are leveraging the talents and resources we have to get the job done.

The expression “show, don’t tell” is well known among writers of all kinds. By comparison, the Secretary’s editorial is long on telling and short on showing. Perhaps in the future, the Department of Health will provide evidence of its claims? After all, the strongest rebuttal to the allegations that have been made would be evidence to the contrary. But on that point the Department of Health remains … silent.

2014 Peoples Choice Award

On May 9, my paper with Dror Etzion — An Exploratory Analysis of Cultural Vulnerability and Opportunity Exploitation in Marcellus Shale Drilling — won the 2014 Peoples Choice Award from the Alliance for Research on Corporate Sustainability (ARCS). This year’s conference was hosted at Cornell University’s Johnson Graduate School of Management from May 7-9, 2014.

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Oil and Gas Well Facility Siting

This week I’ll be giving an invited talk to the University of Alberta’s Department of Resource Economics and Environmental Sociology (REES) in the Faculty of Agriculture, Life & Environmental Sciences (ALES). The talk will be on Thursday, March 20 at 3:30 pm in 550 General Services Building. For more details, visit the REES Seminars and Lectures website. The title of my talk is: “Community Vulnerability and Facility Siting: The Case of Marcellus Shale Gas Drilling, 2004-2012.” This work is joint with Dror Etzion of McGill University.

Abstract: Hydraulic fracturing (“fracking”) has rapidly emerged as an ubiquitous technology for extracting oil and gas from previously inaccessible geological formations. Due to the nature of the technology and its relatively small surface footprint, wells can be sited virtually anywhere, including in close proximity to homes, schools and other sensitive locations. With many uncertainties about the technology still unresolved, critics point to the potential for unequally distributed negative health outcomes among those in regular proximity to drilling sites. Accordingly, for oil and gas companies, deciding upon well sites can be a contentious activity, incorporating not only economic and geological factors but social and community ones as well. In this study, we examine all hydraulically fractured wells in the Marcellus shale play from 2004-2012 in the state of Pennsylvania and assess whether community vulnerabilities played a role in well siting decisions. We find that indicators of socio-demographics, social cohesion and municipal governance are predictors of well siting decisions, beyond the traditional attributes of race and income usually highlighted in the environmental justice literature. Our findings suggest that research on community health should not be limited to phenomena like nuclear power plants and hazardous waste facilities, but should expand to include routine, commonplace and autonomous organizational siting decisions characterized by minimal regulatory involvement.

We are scheduled to present subsequent iterations of this research at the Alliance for Research on Corporate Sustainability, in May 2014 at Cornell University, and again at the Academy of Management Annual Meeting, in August 2014 in Philadelphia.

Marcellus Shale Drilling Talk

This week I was invited to give a talk to the University of Alberta’s Department of Resource Economics and Environmental Sociology (REES) in the Faculty of Agriculture, Life & Environmental Sciences (ALES), and I am really looking forward to it. The talk is scheduled for March. I’ll be presenting research related to Marcellus Shale Drilling that I have been working on with Dror Etzion from McGill University.

For more details, check back here, or visit the REES Seminars and Lectures website: http://www.rees.ualberta.ca/SeminarsandLectures.aspx

Some Recent Unconventional Shale Research

Recently, I’ve stumbled across a growing number of studies related to various aspects of unconventional shale drilling and hydraulic fracturing, a number of which are specific to the Marcellus Formation. Below are a few highlights:

Estimation of Regional Air-Quality Damages from Marcellus Shale Natural Gas Extraction in Pennsylvania, by Aviva Litovitz, Aimee Curtright, Shmuel Abramzon, Nicholas Burger and Constantine Samaras, in Environmental Research Letters

The Relationship between Marcellus Shale Gas Development in Pennsylvania and Local Perceptions of Risk and Opportunity, by Kai A. Schafft, Yetkin Borlu, and Leland Glenna, in Rural Sociology

Source Signature of Volatile Organic Compounds from Oil and Natural Gas Operations in Northeastern Colorado, by J. B. Gilman, B. M. Lerner, W. C. Kuster, and J. A. de Gouw, in Environmental Science & Technology

Analysis of BTEX Groundwater Concentration from Surface Spills Associated with Hydraulic Fracturing Operations, by Sherilyn A. Gross, Heather J. Avens, Amber M. Banducci, Jennifer Sahmel, Julie M. Panko, and Brooke E. Tvermoes, in Journal of the Air & Waste Management Association

Generation, Transport, and Disposal of Wastewater Associated with Marcellus Shale Gas Development, by Brian D. Lutz, Aurana N. Lewis, and Martin W. Doyle, in Water Resources Research

These studies are all in addition to the 13 articles published as part of Environmental Practice’s December 2012 special issue on hydraulic fracturing.

Fracking Patents Paper Accepted

A bit belated, but I am pleased to report that last month my paper with Dan Cahoy and Zhen Lei on Fracking Patents: The Emergence of Patents as Information Containment Tools in Shale Drilling was accepted for publication in the Michigan Telecommunications and Technology Law Review (MTTLR). According to the MTTLR website, its primary purpose is “to examine the tensions created by advances in computing, telecommunications, biotechnology, multimedia, networking, information and other technologies,” making it an especially good outlet for the paper.

In particular, the paper argues that patents can be used to control the creation of new information by limiting the evaluation of an invention by third parties. We argue that such control is more likely in situations where third-party use and assessment may produce information damaging to the patent owner, and show this is potentially the case in the context of natural gas extraction. Already, the paper has received a bit of attention — both as a top download at SSRN, and as the subject of an article in EnergyWire.

Pine Creek Marcellus Shale Gas Photos

I received a link to this video produced by the Lock Haven Express.

It contains aerial photos of Marcellus shale exploration and production in and around Pine Creek and the Pine Creek Gorge (which run through Pennsylvania’s Lycoming, Tioga and Potter Counties).

Earlier this summer I was in the Little Pine Creek Valley and took dozens of my own photos.

Energywire Covers Fracking Patents Paper

My working paper – Fracking Patents: The Emergence of Patents as Information Containment Tools in Shale Drilling – with Dan Cahoy and Zhen Lei was the subject of a recent story by Gayathri Vaidyanathan in Energywire, a publication of E&E Publishing.

HYDRAULIC FRACTURING: Flurry of patents could hinder chemical research, legal experts warn  (Monday, July 23, 2012)

Gayathri Vaidyanathan, E&E reporter

Companies that invent novel hydraulic fracturing chemicals or methods could use patents filed with the Patent and Trademark Office to stop scientists from studying the environmental and health impacts of the chemicals, some legal experts warn.

The situation has not yet occurred but needs to be on the government’s radar as a possibility, said Daniel Cahoy, associate professor of business law at Pennsylvania State University.

Since 2005, the patent office has issued an increasing number of patents related to fracking, a process in which pressurized water, sand and chemicals are injected into the earth to extract oil and gas. Most of these patents have been for chemical additives used in the fracturing process, such as gelling agents used to keep proppants suspended in water or nanochemicals that increase production.

Patents are meant to promote knowledge sharing by granting the patentee sole rights to an invention for some time, in exchange for revealing the details of the invention to the world.

But due to court decisions in the United States, patents also allow companies to stop unauthorized use of the invention by scientists for noncommercial purposes. This role of patents could be used to limit independent research into environmental and health effects, according to draft legal study, Cahoy said.

“Given that experimentation with some of the chemicals and methods used in hydraulic fracturing are necessary to understand the dangers, it is possible patents could be used as a means of controlling that information,” he said.

The issue highlights the controversy surrounding the secrecy in fracking. Companies often designate certain components in fracking fluids as “trade secrets,” which are different from patents because they hinge on complete secrecy. Industry says the secrets give companies a competitive edge in particular shales that are challenging to drill.

But the secret can be broken and details about the invention can become well-known. This is especially true as state governments such as Pennsylvania’s and Wyoming’s have exerted pressure on companies to reveal, confidentially to the government, their secrets. This increases the likelihood that secrecy could be challenged in court or that other ingredients in a recipe could be figured out. Once a secret is out, there can be no further safeguard against competition or unauthorized use; a company cannot have a trade secret and a patent for the same chemical.

“If you are the only one in your field that is doing something, and nobody is going to figure it out independently, you might as well keep it as a trade secret,” said Rochelle Dreyfuss, a professor at New York University School of Law. “But as the number of participants in the field starts to increase, the chances that somebody else is going to figure out what you figured out will increase, too, so at that point it might be worth getting patents.”

With the proliferation of drilling companies and greater governmental pressure to reveal fracking fluid recipes, even more patents could be filed in the future to protect against competition, said Cahoy. And those intellectual property rights can be enforced uniformly, against competitors and even scientists.

“As trade secrets become less viable as information disclosure is compelled [by government], patents become the only alternative or the better alternative,” he said.

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 The full paper is available for download from SSRN.

Paper on Fracking Patents a Top 10 Download

A few weeks ago, I posted my latest working paper – Fracking Patents: The Emergence of Patents as Information Containment Tools in Shale Drilling – on SSRN. Over the past few weeks, the paper has been a top ten download in the following categories.

Co-authored with Dan Cahoy, Associate Professor of Business Law at Penn State’s Smeal College of Business and Zhen Lei, Assistant Professor of Energy and Environmental Economics at Penn State’s College of Earth and Mineral Sciences, the paper argues that patents can be used to control the creation of new information by limiting the evaluation of an invention by third parties. We argue that such control is more likely in situations where third-party use and assessment may produce information damaging to the patent owner, and show this is potentially the case in the context of natural gas extraction.