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1. http://www.echo.net.au/2014/05/csg-may-reduce-property-values-report/

Can’t sell, can’t insure in a gasfield

A detailed report by the NSW valuer-general suggests that a mature seam gas (CSG) may reduce property values.

And a northern rivers property owner says her company has warned her would be cancelled if the CSG industry came onto her property.

Greens NSW spokesperson on Jeremy Buckingham expressed alarm at the report, commissioned the valuer-general in 2013 to investigate if the CSG industry is having a material impact on land values in NSW.

Mr Buckingham also said the letter to Woodenbong landowner Marilyn Scott was evidence of a real that property values would be devastated by CSG.

He said the valuer-general’s report found that as the industry is in its infancy in NSW, there are not enough data to make an accurate assessment of the impact of coal seam gas on property values in NSW specifically.

Mr Buckingham said it also found there was anecdotal evidence that indicates that in some parts of NSW ‘negative perceptions of CSG [have] led to a reduction in the number of potential purchasers and an increase in the time taken to sell properties’.

He said that the report said there were studies in America that found that a net reduction in property values of up to 22 per cent had occurred on properties with a gas well located on them

‘Overseas experience clearly shows that a mature unconventional gas industry will have a negative impact on land valuation,’ Mr Buckingham said.

‘Currently there is a perception issue that is affecting land prices, but in the future we can expect to see further reductions as the inevitable environmental damage and legacy of ageing infrastructure become apparent.

‘Coal seam gas production will see the disruption of other land-use activities such as farming and and this will contribute to further property price falls.

‘Landholders are starting to ask themselves if the -term per well offered by the industry is worth the -term write-down in their values.

‘It is unacceptable that farmers and should be slugged with a reduction in their land values to support the profits of multinational gas companies.’

Woodenbong local Ms Scott told media her insurance company wrote to her recently to say that if CSG came onto her property she had to notify them within seven days ‘and my will be cancelled’.

The policy was taken out with one of Australia’s largest , the NAB, and underwritten by global insurer . Lock the Tweed spokesperson Michael McNamara told Echonetdaily that the growing evidence that CSG posed such a risk to property values came as no surprise but was a real worry to all northern rivers landowners.

‘This has happened in the USA and I have been waiting for it to raise its head here,’ Mr McNamara said.

Unable to sell Meanwhile a man who bought a tree-change property just years before the industrialisation of the Tara region of southeast Queensland told local media this morning he is contemplating walking off the property he is unable to sell.

‘If I have to, I’ll just pack up and walk out,’ Tara landholder Ian Jenkins, told ABC North Coast this morning. ‘My entire life’s is down the mine.’

He is visiting the region to get away from the gasfields surrounding his home, and to warn north-coast locals not to be lured into supporting the industry, which he says is destroying his health.

Mr Jenkins said since the establishment of the gasfields he has been suffering from an array of symptoms that are baffling doctors, including leg pains, which he says go away whenever he leaves the area around his home for more than a week.

‘If they put a thousand wells in here, you guys are gone,’ he said

He added that his property had been on the for four years, during which time he had only had two people come to look at it.

Mr Jenkins said even the gas companies haven’t offered to buy him out.

‘I dropped the price $100,000 two months ago – and still no interest. Nobody wants to live in the gas.’ http://www.theland.com.au/story/3365648/csg-too-risky-for-insurers/

2. CSG too risky for insurers

By RUTH CASKEY Sept. 18, 2015

Sarah Ciesiolka is a potato and peanut farmer at Wee Waa.

NORTH West farmers are questioning the viability of coal seam gas (CSG) production in their paddocks as fresh evidence reveals the risk of potential contamination to water and soil makes their properties and produce uninsurable.

A leading environmental insurance specialist said the risk of contamination from CSG activities couldn't be insured, but Santos general manager NSW Peter Mitchley refuted the claim and argued the company itself was insured against property damage.

Wee Waa potato and peanut grower Sarah Ciesiolka, whose farming relies heavily on groundwater, learnt her property couldn't be covered after asking for a quote to cover potential contamination from CSG activities in the area.

Mrs Ciesiolka and her husband Matt live and about six kilometres from the northern edge of Santos' Narrabri Gas Project area.

"We were absolutely staggered to learn that our insurer can't provide a policy for coal seam gas ," Mrs Ciesiolka said.

"We expected there'd be insurance available but it'd mean much higher premiums.

"They were not aware of any insurance available in Australia for those circumstances."

The Land contacted multiple insurance and three major insurance providers, but none could identify a product to insure against potential CSG contamination was available.

Sydney-based environmental insurance specialist Anthony Saunders, EnviroSure, was the only insurance to confirm the lack of insurance covering the sector which includes the farmers, the explorers and the indigenous land owners.

He said one international had made available an insurance policy for the CSG explorers, but the excludes the financial costs to rectify the effects of gradual contamination to the land or the aquifer.

"If the trigger in the policy is any accident the deliberate process of injecting a cocktail of chemicals and air to extract the gas negates the cover," Mr Saunders said.

"Logically, if the process of contamination is deliberate there is no cover in the event of .

"The coal seam gas companies are 100 per cent responsible for that chance and because of that, there's no insurer that will cover an event that has a likelihood of certainty.

"If there's no cover available then why are they licensed to carry out the process?"

Mr Saunders said he recognised the concerns of farmers who were viewing the CSG industry as risky.

"No insurance company wants to be responsible for a future claim that is quite likely," he said. "In order to calculate the premium they look at the future potential risk, which includes contamination created as a result of water from an aquifer to irrigate crops, meaning the farmers may not be able to use their land for its intended purpose.

"If future financial loss to the landowner as the result of CSG mining being carried out 300 kilometres away is uninsurable, then the activities of the CSG company could be considered as reckless."

Mr Saunders said the message was clear - CSG production risks aren't mitigated unless an insurer would cover all liabilities.

However, Santos's Mr Mitchley said the possibility of contamination was "pretty far fetched".

"Oil and gas always has and continues to have insurance products which cover environmental accidents or contamination and I find it staggering that somebody would say otherwise," he said.

"We take great care to make sure there is not going to be contamination but if there were to be contamination we would be liable for that damage.

"Only Santos can take insurance for that because it is Santos's liability."

"The insurance policy that covers Santos would cover us from any claims made by any other party, including farmers.

"Santos has insurance in place to cover those risks and moreover the NSW government has a in its favour from Santos to cover remediation costs in the event that Santos or its insurance doesn't cover the event."

Wee cover in Wee Waa

WATER is the most valuable resource on Matt and Sarah Ciesiolka's potato and peanut farm at Wee Waa.

Both the crops are irrigated adding to their value.

"Through the years we've invested a lot of money in centre pivot irrigators to farm as efficiently and sustainably as we possibly can because we're mindful of our water resources," said Mrs Ciesiolka (pictured).

The Ciesiolkas grow about 6500 tonnes of potatoes annually, 1000t of peanuts and depending on the season, about 1000t of wheat.

"The concern for us is we're growing a food product and we have to sign a declaration saying it's safe," Mrs Ciesiolka said.

"In the event that any contamination is picked up, we will be liable and we can't mitigate that risk through insurance.

"We would have to take an action against the third party, being the coal seam gas company.

"The burden of proof would ultimately rest with us and we'd have to finance a case against them, which would bankrupt any farmer." Mrs Ciesiolka has spoken to other farmers who were unaware of the issue.

"The reality is the market has spoken," Mrs Ciesiolka said.

"An entire model which is premised on mitigating risk is saying the risk of the gas industry to our farmland and our water is too great.

"Not being able to insure our business and our produce I think speaks volumes of how risky this industry is."

3. Links to story re 2012: prices for rural residential properties may nosedive as a result of coal seam gas activity, an independent property adviser has stated, but Metgasco challenges the claim. http://m.dailyexaminer.com.au/news/csg-to-cut-property-values/1644228/ SHARE 4.TWEET Boom & Bust http://www.abc.net.au/landline/content/2015/s4263145.htm There are issues in this Landline story showing many not knowing what their future will be now the boom is over. USA insurance experiences: 1.

from New York State Bar Association Journal Nov/Dec 2011 p12 Paragraph 1: ‘Homeowners can be confronted with uninsurable property damage for activities that they cannot control. And now a growing number of banks won’t give new mortgage on homes with gas because they don’t meet secondary mortgage market guidelines.’

Paragraph 2: ‘Also, New York’s compulsory integration law can force neighbors who do not want to their land into a drilling pool, which can affect their liability and mortgages as well.’ p 15 last paragraph: ‘ jeopardise a home mortgage’ p16 Hazardous Activity/Hazardous Substances

Space leases expressly prohibit hazardous activity and the presence or storage of hazardous substances on the property, such as chemicals and flammable or toxic petroleum products. Gas leases permit both the drilling activity and the use of hazardous substances and flammable products, such as the methane gas itself. Gas leases reserve the right to store gas of any kind, indefinitely, underground, regardless of the source, which can create additional risk to the homeowner’s personal and adversely impact, as will be discussed, a homeowner’s responsibility to its lender. p16: Insurance/Indemnification-Risk Allocation Space to Hom leases eow typically ner require the tenant to post a deposit to cover late rent or property damage. Gas leases do not contain a similar provision. Space leases also require tenants to purchase general naming the landlord as an additional named insured with an covering costs for uninsured damage and other costs occasioned by the tenant and its invitees. Risks associated with typical leasehold property damage belong to tenants since they control the space. Drilling leases typically omit these points. Absent negotiation, gas leases contain no insurance and no indemnification. p17 Gas Lease Mortgages….’It is worth noting that , one of Chesapeake’s lenders, stands among national lenders that do not grant mortgage loans to homeowners with gas leases.’ p18 Compulsory Integration….’ Yet, the updated statute’s effect eliminates the homeowner’s right to control the homestead, creates for the driller’s acts by not expressly holding the driller responsible, and jeopardizes access to a mortgage or the ability to sell the property.’ p18.. $6.7 Trillion Secondary Mortgage Market p19.. Reveals Collateral Flaws Home W ith R e s id e n tia l Appraisal

‘Federal Housing Authority guidelines for federally insured mortgage loans, which make up a portion of the secondary mortgage market , require that a site be rejected “if property is subject to hazards, environmental contaminants, noxious odors, offensive sights or excessive noise to the point of endangering the physical improvements or affecting the livability of the property, its marketability or the health and safety of its occupants,”14 all of which are potential characteristics of residential fracking.’ p19 Lender’s Insurance p19 Homeowner’s Insurance p20 The Mortgage: No Hazardous Activity/Substances, No Gas/Gas Storage, No Radioactive Material p20-21 Homeowner and Lender Vulnerability p21 New Mortgages for Homeowners With Gas Leases and New Construction18

http://www.eenews.net/stories/1059985449

2. HYDRAULIC FRACTURING: Insurance issues loom over shale gas development Peter Behr, E&E reporter EnergyWire: Thursday, August 1, 2013 Insurance providers want a clearer picture of the potential hazards of deep well hydraulic fracturing in U.S. shale plays as they weigh the costs of covering the risks -- or consider whether to provide insurance at all, industry officials and experts say.

Some major global reinsurers, which traditionally pick up substantial parts of insurance exposure, remain unwilling to take on fracking and well drilling risks in shale plays until operating, regulatory and issues become clearer, said Justin Russo, senior vice president of energy insurance provider Energi Inc., based in Peabody, Mass.

A more consistent, visible and effective set of best operating practices is needed, said Russo. "We think it [drilling for oil and gas] can be done safely," said Russo, who described the dilemma at a meeting of the Environmental Council of the States last month.

"We've developed 'best practices.' But the isn't convinced," he said.

The unique nature of fracking and horizontal drilling operations presents new legal issues that could bear critically on the effectiveness of insurance coverage, said Earl Hagström, an attorney with the Sedgwick law firm's hydraulic fracturing group.

"The issue that insurance companies and their counsel are wrestling with is: Is this risk covered under existing ?" he said.

"Environmental risk has been around for a long time. Insurance companies know how to deal with it. But there are a lot of unknowns [in shale gas operations], and a lot of conflicting information. If something goes wrong, how big a problem is it?" Hagström said.

"It is an unresolved issue that will have to play out over the next few years, maybe longer" as a new block of lawsuits moves through state courts, Hagström said.

"The insurers and the reinsurers are reticent to participate if they can't understand the risk. If they can't understand the risk, they can't price it. That's what the insurance industry is wrestling with: 'If we write this policy, is it going to be profitable for us?'" he added.

Several major reinsurers declined to comment on their on shale gas and oil development for this story. "The whole business of reinsurance is based on that premise that you can understand and quantify risk and spread it around to an insurance pool," said Andrew Logan, director of insurance program at Ceres, a Boston-based advocacy group for sustainable resources strategies.

"If an insurer can't measure and quantify that, the choice would be to stay out of the business entirely.

"Insurance is one side of the issue. Bank financing is another," he said. ", the Dutch financial firm, has declared it won't finance fracking projects at all," he added. "They don't understand the risk, and they don't think it is justified by the returns.

"We've certainly heard other banks are trying to come up with some set of indicators to judge which [drilling] companies to lend to and which not to," Logan said. "Given the tight constraints on gas operations, that's a pretty big deal."

Best practices checklist

Energi's insurance underwriting process includes a compliance of a client's operations to ensure that safety and loss-prevention "best practices" are followed, the company says. The audit results are part of decisions on reviewing coverage, Energi said.

For example, the company's best practices checklist includes pre-drilling evaluations of well sites to identify abandoned wells, natural fractures, shallow zones and other geological features that could increase risks of aquifer or surface contamination. Private wells should be sampled to determine water quality before drilling, the checklist says.

Fracking chemicals should be disclosed and usage should be tracked, Energi said. Waste fluids should be contained in a "closed loop" system if possible, or managed in properly lined pits, it said. The list includes measures to assure proper well construction.

"A common agreement among states on a would certainly make life easier for everybody, and you'd get a better result," Russo said in an interview.

Russo's colleague, Energi Senior Vice President David Tiedgen, noted that the American Petroleum Institute has developed extensive guidelines on best practices for shale gas and oil development. "Now it's a matter of people accepting them on a state regulatory basis and implementing them," he said.

State rules on shale gas and oil development vary widely, and public visibility into state regulation of shale gas and oil production is limited, according to an analysis by Resources for the Future, a Washington think tank.

Drilling operators and state officials generally oppose standardized "top-down" environmental standards in shale plays, saying states know best how to oversee the industry. "Some consistency of regulation would be helpful, but it's so political," Russo said.

Going without coverage

Insurance issues have not kept shale gas and oil development from surging in the past half- dozen years. Traditional liability and environmental damage policies have been available for drilling companies. Shale wells require fleets of trucks transporting water, chemicals and drilling equipment, and standard liability policies are common, experts said. "While some environmental insurance markets are being very selective when it comes to underwriting and employing their capacity for fracking risks, we are not seeing carriers universally attaching exclusions or declining fracturing risks across the board," the Willis Environmental Risk Newsletter reported last year. Willis is a major insurance broker.

Russo said his firm is writing policies that cover most exposures up to the "over the hole" operations, when the well pad and materials are in place and drilling is ready to begin. The most common coverage choice is a limited pollution insurance policy, and the major oil companies may add pollution coverage through "captive" self-insurance, Energi said. Also, some states require producers to obtain bonds and/or insurance to meet their potential liability obligations.

Some operators or subcontractors may be going without drilling and fracking coverage, said Seth Chandler, a of Houston law professor. "Standard liability insurance policies don't cover the fracking issues," he said. It is unlikely that policies would cover damage caused by related to deep underground injections of fracking waste fluids, he added.

"If you frack and you don't have liability insurance that covers you, you're betting that nothing bad is going to happen," Chandler said. "And if you believe the frackers, nothing does happen."

Lawsuits and 'fortuity'

Lawsuits linked to fracking and deep horizontal well operations are increasing. In the wake of several multimillion-dollar settlements, the insurance industry has "a major stake in understanding the scope and extent of risks potentially posed by fracking," attorney Michael Case of the LeClairRyan law firm wrote this year in Claims magazine.

An investigation by EnergyWire found that spills, blowouts and other mishaps at onshore oil and gas well sites increased 17 percent from 2010 to 2012 as shale drilling activity accelerated, according to state and federal data. There were more than 6,000 spills in 2012, an average of more than 16 spills a day, EnergyWire reported last month.

"One of the big issues is the issue of fortuity," Hagström said. If an accident happens and a well goes out of control and spews out oil or gas, and it clearly was unintended or fortuitous, that is the kind of accident that policies are intended to ensure against, he said.

"The problem I see with some of the coverage that's being considered for the fracking issue is that you are intentionally pumping down millions of gallons or water" with chemicals to assist the shale rock fracturing. "If that then results in migration of methane or fracking fluids into unintended zones, is that a fortuitous event or the result of intentional actions?

"This issue has not made its way through the courts," Hagström said.

LoophoLes for poLLuters – the oil and gas industry’s exemptions to major environmental laws

Loopholes: The oil and gas industry is exempt from key Unfortunately, the CAA exempts oil and gas wells, and in provisions of seven major federal environmental laws — some instances pipeline compressors and pump stations, allowing practices that would otherwise be illegal. Some from aggregation. This exemption allows the oil and gas exemptions date back decades. Others were adopted as industry—which often operates many small facilities. recently as 2005. In addition, in 1991 hydrogen sulfide was removed from the While states and tribes have tried to fill the gaps with their list of Hazardous Air Pollutants under the CAA. This elimi- own rules and regulations, they vary widely in effectiveness nation has remained despite a 1993 EPA study, Hydrogen and enforcement. Federal laws provide consistent standards Sulfide Air Emissions Associated with the Extraction of Oil and that equally protect all Americans. That’s why it’s essential Natural Gas, which clearly concludes that accidental releases to reverse these federal loopholes. of hydrogen sulfide during oil and gas development are a serious air quality concern and pose a great risk to public 1. The Safe Drinking Water Act – SDWA health. Common symptoms of exposure to low levels of The Safe Drinking Water Act1 (SDWA) of 1974 was estab- hydrogen sulfide can include headache, skin complications, lished to protect America’s drinking water. It covers waters respiratory problems and system damage, confusion, verbal actually or potentially designated for drinking, whether impairment, and memory loss. from above ground or underground sources. 3. Clean Water Act – CWA The Energy Policy Act of 2005 exempted hydraulic fractur- Enacted in 1972 , the Federal Water Pollution Control Act5, ing (fracking) from SDWA2 oversight, leaving drinking water commonly known as the Clean Water Act (CWA), establishes sources in the 34 oil and gas producing unprotected from the basic structure for regulating discharges of pollutants the host of toxic chemicals used during fracking. Congress qualified this exemption to regulate additives into the waters of the . used during fracking, which requires industry to apply for In 1987, Congress amended the CWA to require EPA to a SDWA permit if they are using diesel fuel to hydraulically develop a permitting program fracture a well. for stormwater runoff — but exempted oil and gas produc- 2. The Clean Air Act – CAA tion6. The Clean Air Act3 (CAA), adopted in 1970, is the compre- The 2005 Energy Policy Act hensive federal law that regulates air emissions from area, amended the CWA to redefine stationary, and mobile pollution sources. The CAA estab- sediment as a nonpollutant. lished limits for major pollution sources called the National This redefinition broadened the Emission Standards for Hazardous Air Pollutants (NEHAPS)4. existing exemption for storm- NEHAPS must be met by installing the Maximum Achievable water discharges to oil and gas The oil and gas industry is Control (MACT) for each source. construction. These exemptions exempt from key provisions leave streams and rivers in high of seven major federal envi- Smaller sources of pollutants that are under common con- ronmental laws — allowing trol by a single operator, are located in close proximity to oil and gas areas unprotected practices that would otherwise each other, and perform similar functions are considered from sediment run-off caused by be illegal. the construction and operation } Read ouR complete as one source of emissions. This aggregation allows for the exemptions white papeR CAA oversight of smaller sources that, when concentrated, of well pads, pipelines, drill rigs, http://oilgas-exemptions. may actually be as harmful as larger sources. and other infrastructure. earthworksaction.org } moRe next page

EARTHWORKS • 1612 K St., NW, Suite 808 Washington, D.C., USA 20006 www.earthworksaction.org • www.ogap.org • [email protected] • 202.887.1872 TM OIL & GAS ACCOUNTABILITY PROJECT ogap LoophoLes for poLLuters – the oil and gas industry’s exemptions to major environmental laws

4. Resource Conservation and Recovery Act – RCRA 6. National Environmental Policy Act – NEPA Adopted in 1976, the Resource Conservation and Recovery Act7 The National Environmental Policy Act11 (NEPA) of 1970 (RCRA) is the principal federal law that governs the disposal of establishes the broad national framework for protecting solid and hazardous wastes. The law takes a “cradle to grave” our environment. NEPA’s ensures the federal government approach to ensure that wastes are handled properly from the gives proper consideration to the environment before point of creation to to disposal. undertaking any major federal action (including involve- In 1980, Congress exempted oil field wastes (which includes ment in industrial projects) that significantly affects the waste from natural gas production) from RCRA8 until EPA environment. proved they were a danger to human health and the environ- The Energy Policy Act of 2005 stripped NEPA’s strong ment. Rather than do so, EPA eventually ceded authority to requirements for public involvement and environmen- regulate these wastes to the states. tal review when it comes to several oil and gas related 12 This exemption leaves produced water, drilling fluids, and activities . It stipulated that they should be analyzed and hydraulic fracturing fluids from oil and gas production unregu- processed by the Interior and Agricultural Departments lated under the nation’s premier law. This under a much narrower and weaker process known 13 allows unsafe handling of toxic substances, including their con- as a “categorical exclusion ” (CE), as opposed to the ventional transport on and treatment in municipal rather more comprehensive and stringent Environmental 14 15 than specialized facilities. Assessment (EA) or Environmental Impact Statement (EIS) required under NEPA. In addition, a CE does not 5. Comprehensive Environmental Response, allow for any public comment. In 2006 and 2007, the BLM Compensation, and Liability Act – CERCLA granted this exemption to about 25 percent of all oil and gas wells approved on public land16 in the West. Commonly known as the “Superfund” law, the Comprehensive Environmental Response, Compensation, and Liability Act9 7. The Toxic Release of EPCRA (CERCLA) of 1980 makes liable those responsible for a spill or The Toxic Release Inventory17 (TRI) was created by section release of a hazardous substance into the environment. 313 of the Emergency Planning and Community Right-to- Included in the list of hazardous substances under CERCLA are Know Act18 (EPCRA) of 1986. It requires most industries to benzene, toluene, ethylbenzene, and xylene (Btex)– chemicals report significant of toxic substances to the EPA, which then found in crude oil and petroleum. aggregates and disseminates the information to the public. Yet CERCLA exempts these substances from liability require- The information on chemical use and release includes ments if they are found in crude oil and petroleum10 (which point and fugitive onsite air releases, water releases, are used in natural gas production). Thus, hazardous chemicals on and off-site land releases, underground injection, that would otherwise be regulated under CERCLA are immune transfers to a Publicly Owned Treatment Works (POTW) from the statute. The definition of hazardous substance also or waste management facility (including the name and excludes natural gas, natural gas liquids, liquefied natural gas, of the facility), and the use of specific on-site and synthetic gas usable for fuel. waste treatment and management practices. In addition, Superfund allows “Potentially Responsible Parties” But despite their use of toxic chemicals throughout pro- to be held liable for clean-up costs for a release or threatened duction, oil and gas facilities are not required to report to release of a “hazardous substance.” But CERCLA defines this the TRI19. This exemption leaves communities in oil and term to exclude oil and natural gas. Consequently, industry has gas producing areas in the dark about what chemicals are little incentive to clean up its hazardous waste, or to minimize being released—making it difficult to attribute responsi- leaks and spills, in part because the exemption allows compa- bility and seek remedy for resulting health and environ- nies to escape liability when these problems occur. mental problems.

Sources

1 http://water.epa.gov/lawsregs/rulesregs/sdwa/index.cfm cgi?dbname=browse_usc&docid=cite:+42usc4321 2 http://halliburton.earthworksaction.org/ 12 http://www.fs.fed.us/geology/guidance_nov2005.pdf 3 http://www.epa.gov/air/caa/ 13 http://en.wikipedia.org/wiki/national_environmental_policy_ 4 http://cfpub.epa.gov/compliance/resources/policies/civil/caa/ act#ce_.28categorical_exclusion.29 TM details.cfm?cat_id=&suB_id=92&templatepage=7&title=natio 14 http://en.wikipedia.org/wiki/national_environmental_policy_ EARTHWORKS nal%20emissions%20standards%20for%20hazardous%20air%20 act#ea_.28environmental_assessment.29 OIL & GAS ACCOUNTABILITY PROJECT ogap pollutants%20(neshaps) 15 http://en.wikipedia.org/wiki/national_environmental_policy_ 5 http://cfpub.epa.gov/npdes/cwa.cfm?program_id=45 act#eis_.28environmental_impact_statement.29 6 http://ncseonline.org/nle/crsreports/10sep/97-290.pdf 16 http://www.gao.gov/new.items/d09872.pdf EARTHWORKS 7 http://www.epa.gov/epawaste/inforesources/online/index.htm 17 http://epa.gov/tri 1612 K St., NW, Suite 808 Washington, 8 http://www.epa.gov/osw/nonhaz/industrial/special/oil/oil-gas.pdf 18 http://www.epa.gov/tri/guide_docs/pdf/2001/lead_doc.pdf D.C., USA 20006 • 202.887.1872 [email protected] 9 http://www.epa.gov/superfund/policy/cercla.htm 19 http://www.epa.gov/tri/lawsandregs/naic/ncodes.htm www.earthworksaction.org • www.ogap.org 10 http://www.epa.gov/superfund/policy/release/rq/index. htm#substance note: this fact sheet is a synopsis of a more comprehensive white 11 http://frwebgate.access.gpo.gov/cgi-bin/getdoc. paper available at http://oilgas-exemptions.earthworksaction.org California aquifers contaminated with billions of gallons of fracking wastewater Published time: October 09, 2014 17:35 Edited time: October 11, 2014 09:27

California, United States (Reuters / Lucy Nicholson) 28.5K2.5K59

Industry illegally injected about 3 billion gallons of fracking wastewater into central California drinking-water and farm- irrigation aquifers, the state found after the US Environmental

Protection Agency ordered a review of possible contamination. According to documents obtained by the Center for Biological Diversity, the California State Water Resources Board found that at least nine of the 11 hydraulic fracturing, or fracking, wastewater injection sites that were shut down in July upon suspicion of contamination were in fact riddled with toxic fluids used to unleash energy reserves deep underground. The aquifers, protected by state law and the federal Safe Water Drinking Act, supply quality water in a state currently sufferingunprecedented drought. The documents also show that the Central Valley Water Board found high levels of toxic chemicals - including arsenic, thallium, and nitrates - in water-supply wells near the wastewater- disposal sites. Arsenic is a carcinogen that weakens the immune system, and thallium is a common component in rat poison. “Arsenic and thallium are extremely dangerous chemicals,” said Timothy Krantz, a professor of environmental studies at the University of Redlands, according to the Center for Biological Diversity. “The fact that high concentrations are showing up in multiple water wells close to wastewater injection sites raises major concerns about the health and safety of nearby residents.” The Center for Biological Diversity obtained a letter from the state Water Board to the USEnvironmental Protection Agency (EPA) that said the Central Valley Regional Water Board discovered the health violations. Following the July suspension of the 11 injection sites, the EPA ordered a review of aquifers in the area to be completed within 60 days. The state Water Board also said that 19 more injection wells may have also contaminated sensitive, protected aquifers, while dozens more wells have been the source of wastewater dumped into aquifers of unknown quality. Despite these damning findings, the extent of wastewater pollution is still undetermined, as the Central Valley Water Board has thus far only tested eight water wells of the more than 100 in the area, according to the documents. Half of those tested came up positive for containing an excessive amount of toxic chemicals. To unleash oil or natural gas, fracking requires blasting large volumes of highly pressurized water, sand, and other chemicals into layers of rock. The contents of fracking fluid include chemicals that the and many government officials will not name, yet they insist the chemicals do not endanger human health, contradicting findings by scientists and environmentalists. Toxic fracking wastewater is then either stored in deep underground wells, disposed of in open pits for evaporation, sprayed into waste fields, or used over again. Fracking has been linked to groundwater contamination, an uptick in earthquakes, exacerbation of drought conditions and a host of health concerns for humans and the local environment. A recent study by the US Drought Monitor noted that 58 percent of California is experiencing “exceptional drought,” which is the most serious category on the agency’s five-level scale. Meanwhile, a fracking job can require as much as 140,000 to 150,000 gallons of water per day, water that then cannot be consumed or used in farming operations. The Center for Biological Diversity noted that the contamination of water sources could be much worse in another regard, as flowback water that comes from oil wells in the state can contain levels of benzene, toluene, and other toxic chemicals that are hundreds of times higher than legally allowed. Flowback fluid is then released back into wastewater storage wells. Chemicals like benzene can take years to eventually find their way to water sources. “Clean water is one of California’s most crucial resources, and these documents make it clear that state regulators have utterly failed to protect our water from oil industry pollution,” said Hollin Kretzmann, an attorney for the Center for Biological Diversity. “Much more testing is needed to gauge the full extent of water pollution and the threat to public health. But Governor [Jerry] Brown should move quickly to halt fracking to ward off a surge in oil industry wastewater that California simply isn’t prepared to dispose of safely.”