Category Archives: Keep it in the ground

The Bakken Boom Goes Bust With No Money to Clean up the Mess

Desmog, by Justin Mikulka, August 8, 2020
Northwestern ND Aerial Photos  Credit: NDDOT Photos, CC PDM 1.0

More than a decade ago, fracking took off in the Bakken shale of North Dakota and Montana, but the oil rush that followed has resulted in major environmental damage, risky oil transportation without regulation, pipeline permitting issues, and failure to produce profits.

Now, after all of that, the Bakken oil field appears moving toward terminal decline, with the public poised to cover the bill to clean up the mess caused by its ill-fated boom.
Historical Bakken oil production. Energy Information Administration

In 2008, the U.S. Geological Service (USGS) estimated that the Bakken region held between 3 and 4.3 billion barrels of “undiscovered, technically recoverable oil,” starting a modern-day oil rush.

This oil was technically recoverable due to the recent success with horizontal drilling and hydraulic fracturing (fracking) of oil and gas-rich shale, which allowed hydrocarbons trapped in the rock to be pumped out of reservoirs previously unreachable by conventional oil drilling technology.

The industry celebrated the discovery of oil in the middle of North America but realized it also posed a problem. A major oil boom requires infrastructure — such as housing for workers, facilities to process the oil and natural gas, and pipelines to carry the products to market — and the Bakken simply didn’t have such infrastructure. North Dakota is a long way from most U.S. refineries and deepwater ports. Its shale definitely held oil and gas, but the area was not prepared to deal with these hydrocarbons once they came out of the ground.

Most of the supporting infrastructure was never built — or was built haphazardly — resulting in risks to the public that include industry spills, air and water pollution, and dangerous trains carrying volatile oil out of the Bakken and through their communities. With industry insiders recently commenting that the Bakken region is likely past peak oil production, that infrastructure probably never will be built.

Embed from Getty Images

Meanwhile, the petro-friendly government of North Dakota has failed to regulate the industry when money was plentiful during the boom, leaving the state with a financial and environmental mess and no way to fund its cleanup during the bust.

Haste Makes Waste: Booms Move Faster Than Regulations

After the USGS announced the discovery of oil in the Bakken, the oil and gas industry moved fast, with both the industry and state and federal regulators ignoring whether what amounted to essentially new methods of extracting and transporting large amounts of oil called for new rules and protections.

The Bakken’s big increase in oil production quickly exceeded its existing pipeline capacity, leading producers to turn to trucks to move their oil out of the fields. But as the Globe and Mail reported in 2013, this stop-gap solution wasn’t working well: “The trucking frenzy was chewing up roads, driving accident rates to record highs and infuriating local residents.”

The industry could have restricted production until new pipelines and processing equipment were built but instead moved to rail as the next transportation option. High oil prices motivated drillers to get the oil out of the ground and to customers as fast as possible. Moving oil by rail was essentially unregulated and would not require the permits, large investment, or lead times required for pipelines, leading to the Bakken oil-by-rail boom.

Moving large amounts of this light volatile oil on trains had never been done before — but there was no new regulatory oversight of the process. Without proper oversight, the industry loaded the Bakken’s volatile oil into rail tank cars originally designed to carry products like corn oil. That’s despite the National Transportation Safety Board warning that these tank cars were not safe to move flammable liquids like Bakken crude oil.

The industry waved away these warnings. July 6, 2013 marked the first major derailment of a Bakken oil train, resulting in a massive explosion, 47 deaths, and the destruction of much of downtown Lac-Mégantic, Quebec. Bakken “bomb trains” (as train operators called them) continued to derail, creating large oil spills and often catching fire and burning for days. Regulators have still failed to address the known risks for oil trains in the U.S. and Canada. 

Fracking for oil also resulted in large volumes of natural gas coming out of the same wells as the oil, further contributing to the financial troubles of shale producers. However, with no infrastructure in place to process or carry away that gas, the industry chose to either leave it mixed in with the oil loaded onto trains (making it more volatile and dangerous) or simply burn (flare) or release (vent) the potent greenhouse gas into the atmosphere.

More than a decade after the Bakken boom started, North Dakota was flaring 23 percent of the gas produced via fracking — making a mockery of the state’s flaring regulations. In July, The New York Times detailed the environmental devastation caused by flaring in the oil fields of Iraq, where they flare about half of the gas as opposed to the quarter of the gas that North Dakota has flared.

Also in July, researchers at the University of California, Los Angeles and University of Southern California published research that found pregnant women exposed to high levels of flaring at oil and gas production sites in Texas have 50 percent higher odds of premature birth when compared to mothers with no exposure to flaring.

Flare from an oil well in the Permian region of Texas. Credit: © 2020 Justin Hamel

Another major blindspot for the industry and regulators has been the radioactive waste produced during fracking. When the industry did finally acknowledge this issue in North Dakota, its first move was to try to relax regulations to make it easier to dump radioactive waste in landfills — a practice that is contaminating communities across the country.

In 2016, a study from Duke University found “thousands of oil and gas industry wastewater spills in North Dakota have caused ‘widespread’ contamination from radioactive materials…”

The fracking boom in North Dakota has resulted in widespread environmental damage and is worsening the climate crisis, given its high flaring levels, methane emissions, and, of course, production of oil and gas. As major Bakken producers go bankrupt and continue to lose money while the oil field goes bust, who will pay to clean up the mess?

Like most oil-producing states, North Dakota had the opportunity to require oil and gas producers to put up money in the form of bonding which would be designated to properly clean up and cap oil and gas wells once they were finished producing. Unfortunately, the state didn’t put that precaution in place, and now bankrupt companies are starting to walk away from their wells.

It’s starting to become out of control, and we want to rein this in,” Bruce Hicks, Assistant Director of the North Dakota Oil and Gas Division, said last year about companies abandoning oil and gas wells.

The state recently decided to use $66 million in federal funds designated for coronavirus relief to begin cleaning up wells the oil industry has abandoned — costs that the industry should be covering, according to the law, but that are now shifted to the public.

The Bakken boom made a lot of money for a select few oil and gas executives and Wall Street financiers. But as the boom fades, taxpayers and nearby residents have to deal with the financial and environmental damage the industry will leave behind.

Bakken’s Best Days Are a Thing of the Past

As DeSmog reporting has revealed, shale producers have not been profitable for the past decade, even though they have drilled and fracked most of the best available shale oil deposits. While the prolific Permian region in Texas and New Mexico still has some of the best “tier one” core acreage for oil production left, that isn’t the case in the Bakken.

In June, oil and gas industry analysts at Wood MacKenzie highlighted this discrepancy in remaining core acreage between the Permian and the Bakken. According to Wood MacKenzie, the top quarter of remaining oil well inventory in the Permian would result in over 8,000 new wells. For the Bakken, however, the analysts put that number at 333 wells.

This difference is why John Hess, CEO of major Bakken producer Hess Corporation, predicted in January that Bakken production would soon peak.

The drop in oil demand due to the pandemic has hit the industry as a whole, but the Bakken was already in decline, with the best producing wells a thing of the past well before the novel coronavirus reached U.S. shores.

In September 2019, The Wall Street Journal reported on the dismal outlook for Hess Corporation’s oil wells, noting last year: “This year’s wells generated an average of about 82,000 barrels of oil in their first five months, 12 percent below wells that began producing in 2018 and 16 percent below 2017 wells.”

Legal Reviews of Pipelines Potentially Causing Shutdowns

Even when the industry did try to construct oilfield infrastructure in the Bakken, its rush to build and manage pipelines hasn’t always worked out well. Legal challenges to two major Bakken pipelines, one old, one new, may shut down both of them soon.

The controversial Dakota Access pipeline (DAPL) is facing a potential shutdown after a judge ruled that the Army Corps of Engineers did not properly address oil spill risks and now must complete a full environmental review, which could result in a long-term shutdown of the pipeline while the Corps completes the study. Energy Transfer, DAPL‘s owner, appealed that ruling, and a subsequent court decision has allowed the pipeline to remain in operation while the legal battle over the environmental impact study continues.

At the same time, the Tesoro High Plains pipeline — in operation since 1953 — is facing a shutdown because it failed to renew an agreement with Mandan, Hidatsa, and Arikara Nation landowners on the Fort Berthold Indian Reservation, meaning the pipeline’s owner, Marathon, now is trespassing on that land.

These pipelines together ship more than one-third of the oil out of the Bakken, and if they are shut down, Bakken oil producers likely would turn to rail again to move their oil. However, rail is significantly more expensive than pipelines and not economically viable at current low oil prices.

However, at current production levels, existing pipelines (other than the two in question) and current long-term rail contracts can likely handle most of the Bakken’s oil production, especially as the region becomes less attractive to investors.

Energy consulting group ESAI Energy recently released a new report on U.S. pipelines, with analyst Elisabeth Murphy concluding, “An uncertain outcome for Dakota Access will have knock-on effects for the Bakken, such as capital being diverted to other basins that have better access to markets.”

The ESAI analysis also concludes that the Bakken will decline by approximately 270,000 barrels per day on an annual basis in 2020 and by a further 65,000 barrels per day in 2021.

With declining total production and new wells producing less than the past, Bakken producers are facing rising debts without the means to pay them back.

End of the Unconventional Bakken Boom

Oil produced by fracking is called “unconventional oil” due to the new technologies used to extract it from shale. However, it is unconventional in other ways as well. One, it has never been profitable. Another is a change in the boom-and-bust cycle, which has been a part of the oil industry since its inception in the U.S. in the 1850s.

Traditionally the boom-and-bust cycle for conventional oil production was tied to the price of oil. Low prices caused busts. This was true of the shale oil industry in 2014 when oil prices crashed. However, the industry returned to record production after that.

Williston "Rockin' the Bakken" marketing slogan
Screen shot of a marketing slogan for Bakken oil and gas development. Source: https://willistondevelopment.com

But it’s different this time. Unlike conventional oil fields, shale field production declines much more quickly. While shale producers could retreat to the top-producing acreage during the 2014 bust, most of that acreage is now gone.

The shale industry is faced with trying to come back from a historic downturn in which even the companies that don’t go bankrupt are saddled with crippling debts. That’s because for most of the past decade, shale companies borrowed more money than they made producing fracked oil and gas, to the tune of hundreds of billions of dollars.

All of the evidence strongly suggest that the Bakken is an oil field on the decline. Its best acreage has been depleted and the economics of the remaining acreage don’t pan out these days.

Reviewing the economics of the Bakken, investment site Seeking Alpha recently concluded that the “Bakken Will Never Be The Same Again.”

Seeking Alpha was purely commenting on the economics of oil production in the Bakken. However, the same could be said about the water, air, and land in the Bakken. Shale companies polluted the environment and are now walking away from the damage — leaving the cleanup bill to the public. It is a tried-and-true approach for industries in resource extraction. Privatize the profits and socialize the losses.

Hess Corporation CEO John Hess knows more about the economics of the Bakken than most people. In February Reuters reported, “Hess plans to use cash flow from the Bakken to invest in longer-term offshore investments.” A major Bakken producer is apparently no longer viewing the region as a good long-term investment.

From here, the outlook only gets worse for the Bakken.

Main Image: Northwestern ND Aerial Photos  Credit: NDDOT PhotosCC PDM 1.0 

Orcem/VMT Letter: Environmental Misdirection

Repost from the Vallejo Times-Herald, Letters

Environmental misdirection

By Jeff Carlson, March 12, 2019 at 6:00 am

The corporate interests desperate to salvage an ill-conceived waterfront slag cement mill application, now staggering on its last legs under appeal, will attempt to pull off a sly last minute magic trick. Like most magic tricks, it relies on misdirection to draw the observer’s attention away from what they should really be looking at. Instead of talking about community values and our aspirations for the future character of our city for decades to come, the applicants want us to focus on the arcane intricacies of a technical environmental review process.

It’s a cynical calculated strategy designed to take a process intended to inform decision-makers and the public and turn it into an inaccessible debate among “experts” — impossible for the general public to follow or critically evaluate. Just check out the EIR analysis of traffic impacts from all the heavy diesel truck and crosstown freight train trips the project would generate at various intersections. See if you can make heads or tails of how they arrive at their numbers. Likewise for the modeling of the impacts to air quality from all the various pollutants the project would release. One more version of an environmental report and re-hash of emissions thresholds and mitigations adds nothing useful to the discussion, but the applicants are determined to create the illusion that the decision should hinge on nothing else.

The city staff who worked on this project application for years recommended that the permits be denied, not because the project crossed this or that threshold of significance in the environmental review, but because a heavy industry project in that location is fundamentally incompatible with the surrounding neighborhood land uses. The city commission primarily responsible for making rational decisions about land use compatibility and planning overwhelmingly agreed, and voted to deny the permits. The city’s general plan update process conducted at a cost of millions of dollars with broad public participation over a period of years resulted in a very different vision for a walkable connected waterfront, in line with the Bay Commission’s public access guidelines.

Why should we pay any attention to one more round of technical environmental analysis? If a deep-pockets corporation can pay experts-for-hire to come up with greatly improved numbers at this late date, it only goes to show what those numbers are really worth. It’s particularly galling after years of trying to avoid and game the environmental review process that the applicant’s would now so desperately cling to it as their last hope.

Former City officials and some members of the lead agency repeatedly demonstrated impermissible pre-approval of the project over a period of years prior to environmental review, beginning with the resurrection and transfer of a lease for public trust land with amendments that anticipate major impactful development. A one-vote majority of the Vallejo City Council colluded in secret with the applicants in a private planning initiative, and explicitly tied the goals of their ad hoc committee with approval of the project before even a first draft EIR was ready. CEQA requires that the public be allowed to evaluate and comment on an environmental analysis based on a stable project description. All the talk of trying to approve a final version of a radically altered project now without re-circulating a new draft EIR for public comment is not at all realistic and will never fly.

This decision is not about thresholds of significance or mitigation measures, it’s about what we value as a community and consider worth preserving and protecting. Residents in the proposed project impact zone already suffer some of the highest rates of pollution-related health effects in the state, including low birth weight babies and heart and lung diseases. No matter what a final EIR and the mercenary experts have to say, it won’t change the fact that instead of an accessible walkable waterfront, local residents would get heavy neighborhood truck traffic and another load of particulate and gas pollutants on top of the unfair burden they already carry.

Let’s ignore the magical misdirection and expert dog and pony shows masquerading as participatory public forums, and keep our attention focused where it belongs. The quality of economic development matters, and the old take-whatever-comes-along approach to city planning is completely irrational. The council is under no legal obligation to wait for another version of the EIR, and I’m sorry — the applicant’s fairness argument is laughable. This project was never worth anywhere near the resources and effort the city put into it, and the costs in terms of political division and acrimony continue to pile up. Time to pull the plug and turn out the lights on this magic show.

— Jeff Carlson/Vallejo

Local and Ecuador leaders protest at Chevron in Richmond

Press Release from AmazonWatch

Bay Area environmental and indigenous organizations join protest to call attention to Chevron’s key role in causing destruction to people and planet

MAY 17, 2018, FOR IMMEDIATE RELEASE
Tell Amazon.com to Protect the Real Amazon!
AMAZON WATCH

Richmond, CA – Indigenous leaders from the Ecuadorian Amazon joined Bay Area allies at Chevron’s Richmond Refinery on Thursday morning to call on California’s political leadership to phase out oil and gas production and processing in the state, including its importation of crude oil drilled in the Amazon rainforest.


For more information contact:
Moira Birss 1.510.394.2041 moira@amazonwatch.org
Zoë Cina-Sklar 1.510.671.1878 zoe@amazonwatch.org
Interviews, photos, and more information available upon request


Gloria Ushigua and Manari Ushigua, leaders of the Sapara people, called attention to the impacts that the fossil fuel economy – including Chevron’s key role in causing destruction to people and planet. In addition to Chevron’s toxic legacy in Ecuador, the Sapara leaders and allies from Communities for a Better Environment, Green Action, and Bay Area indigenous-led organization Idle No More SF Bay outlined how California’s oil and gas extraction and processing is harming communities from the Ecuadorian Amazon to Richmond, California.

The Sapara Nation of the Ecuadorian Amazon is recognized by UNESCO as an “Intangible Cultural Heritage of Humanity” because their language and culture are in danger of disappearing. There are about 500 Sapara people still living in their ancestral home, a large territory that is a critical part of the Amazonian ecosystem. However, Sapara territory – and the Sapara themselves – are in serious danger from oil drilling planned for two oil blocks that overlap with approximately 500,000 acres of their ancestral territory.

Chevron refineries throughout California are the largest purchasers and processors of crude oil imported from the Amazon rainforest, as well as one of the state’s biggest overall polluters. A 2017 Amazon Watch report demonstrated that half of crude oil exports from the Western Amazon come to California, adding to the toxic impact of the California’s fossil fuel production and refining industry.

Manari Ushigua Santi, Sapara Nation, said: “The possibility of oil drilling in our territory – something the Ecuadorian government is pushing – could be the end of the Sapara people, and certainly an end to our strong connection with the forest. After all, there are few of us, and we have seen the deforestation and cultural destruction already caused by oil drilling in other parts of the Amazon. Now that we know about the link between oil from the Amazon and California refineries, we know that the state government’s continued support of the oil industry also puts us and other peoples of the Amazon in danger.

Gloria Ushigua Santi, Sapara Nation, said: “We are all fighting for our survival, to protect our little pieces of land. I have seen how destructive the fossil fuel industry is for California’s own communities. I don’t want our land to become polluted, like this land by the refinery. We call on California’s leadership to move quickly from an unsustainable reliance on a fossil fuel economy to a sustainable one based on renewable energy. Anything less puts the Sapara, the Amazon and other Amazonian indigenous peoples, California communities, and our entire global climate in danger.”

Isabella Zizi, Idle No More SF Bay, said: “It’s important to be here today because it shows that the very resistance starts in our own backyards. It makes a direct connection to what is happening down in the Ecuadorian Amazon with our indigenous brothers and sisters and our relatives down there who are facing the same destruction and harms to their own people and that we can come together and unite and make change together and stand up to Big Oil.”

Andrés Soto, Communities for a Better Environment, said: “I’m here today representing Communities for a Better Environment with our ongoing solidarity with Amazon Watch and the advocacy that connects the extractive activities in Ecuador directly to the refining activities in Richmond and the commonalities of not only health impacts but also political corruption. We need to link our resistance because we’re dealing with transnational corporations and so we also need to have a transnational resistance.”

Leila Salazar-López, Amazon Watch Executive Director, said: “Continued oil and gas extraction in California – both on land and offshore – and its imports of Amazon crude is a significant obstacle to doing what science says must be done to prevent the worst outcomes from climate change: keeping fossil fuels in the ground.”

ALBANY NY: Break Free’ Protest Against Fracking, Bomb Trains

Repost from DeSmogBlog
[Editor:  See also Climate Activists Block Port Of Albany ‘Bomb Trains’ In New York, Popular Resistance.  – RS]

“Whatever God May Bring”: Albany ‘Break Free’ Protest Against Fracking, Bomb Trains

By Zach Roberts • Tuesday, May 17, 2016 – 11:39

On May 14, thousands of people around the world joined together for marches, rallies and civil disobedience against dirty energy. While their specific causes may have ranged from stopping pipelines to preventing crude oil “bomb trains,” the unifying idea was to ‘break free’ from fossil fuels.

According to organizers, 2,000 people attended the Break Free Albany rally that featured speeches from different groups, such as Iris Marie Bloom of Protecting Our Waters.

As one of the final speakers at the rally she spoke about the Pilgrim Pipeline but in general the cause for the action, “We are all here to protect our climate, because the oil bomb trains are bad for climate, Bakken oil extraction is bad for climate… From the beginning — the cradle, the Bakken Shale, the tar sands — to the grave, Philadelphia refineries, other refineries, and the end use… we got to stop it all!”

Moving from Lincoln Park, the rally took to the streets in a planned march to the Port of Albany.

The first stop along the way was a low-income housing development which shared a back yard with a defacto “bomb train” parking lot. According to activists speaking at the protest the oil cars sit and idle for hours within yards of children’s bedrooms. The road that the marchers were standing on and blocking was also an oil transportation route used regularly by trucks to get to and from the port.

Carolyn McLaughlin, president of the Albany Common Council, demanded that people in Washington listen to the marchers:

“We have to make sure the black wall of environmental injustice does not return down here to Ezra Prentice… the people of Ezra Prentice and all along these tracks deserve better, we demand better, we will not take no for an answer.”

Moving parallel to the tracks, the march moved to its final destination, a road crossing that allowed the activists to set up a stage and prevent railroad cars from passing through. Music, dancing and speakers filled the small stage, along with an amplified audio set-up powered by a solar panel.

Finishing out the evening’s speakers was actor and activist James Cromwell who spoke to DeSmog:

“Even though we have a ban on fracking in New York, the governor and the legislators didn’t see fit to ban the use of fracked products. So now what we have is the build-out of hydrofracking infrastructure, pipelines, compressors, metering stations. This commits us for the next 30 to 40 years to fossil fuels. It cannot happen, we will not have a planet.”

Actor James Cromwell is a long-time activist, but it wasn’t until he move to Upstate New York that he got involved in the fight against fracking. In an interview with DeSmog, he called for the Governor of New York to end fracking infrastructure that still runs throughout the state. © 2016 Zach Roberts

To the march organizers’ surprise, the Albany police allowed the activists to stay long past their agreed upon permit — refusing to arrest anyone for occupying the tracks.

So the Break Free organizers decided to try to build an encampment. Immediately they set to work getting rope, tarps and other necessities like cinder blocks to make large tents for people to stay under as the weather forecast called for heavy rain.

The police allowed the now occupiers to build their tents with many warnings that any ‘structure’ would be taken down. 15-minute warnings expanded as organizers negotiated with police — but the police were standing firm.

Joking with one of the cops, I asked: “You’re just waiting until the rain starts to take the tents down… aren’t you?” The officer responded with a smirk, “Whatever God may bring.”

God brought torrential rain and wind.

And then the police swooped in. With activists singing and locking arms, the police aggressively, but with care not to harm anyone, ripped the tarps from their place and hauled them off in vehicles so that they couldn’t be used again.

Activists lock arms to protect the poles that hold up the tent from police. The Albany Police would go around this and just cut the ropes. © 2016 Zach Roberts

Thankfully for the protesters, the rain slowed soon after, and conversation turned to figuring out next steps. After a time debating specifics, it was decided that they would stay and try to make it through the night without tents, laying on the railroad tracks with only cardboard and tarps to cover them from the weather.

By the time I left at 11pm, they were still there, sending out parties to gather supplies of dry clothing, food and whatever else they might need to make it through the night.

Photos from the Albany #BreakFree protest


Within view of the Capitol, climate activists call for a clean energy future — ending fracking, stopping pipelines and much more. © 2016 Zach Roberts


Activists write phone numbers on their arms so they can call for legal support if they are arrested. © 2016 Zach Roberts


Local Albany activists and organizers joined in with the Break Free march, calling for cleaner air in their communities.  © 2016 Zach Roberts


Clara Phillips, an Albany native, was marching for an end to the “bomb trains” that are causing air quality problems in her community. © 2016 Zach Roberts


A banner drop along one of the main highways that run through Albany reads “Health and Safety Matter.” This was just one of several that took place around Albany. © 2016 Zach Roberts


Founder and Director of AVillage, Willie White, speaks to the Break Free marchers in the Ezra Prentice neighborhood. © 2016 Zach Roberts


Co-Founder of Upstate New York Black Lives Matter, Taina Asili, sang a moving song “And We Walk” to the crowd blocking the road in the Ezra Prentice neighborhood. © 2016 Zach Roberts


Willie White leads the march along a road that runs parallel to the railroad tracks that oil train cars often run. © 2016 Zach Roberts


Canada Pacific put up temporary fences to block the protesters from going any further along the tracks, so the protesters decided to use it as a gallery for their posters and banners. © 2016 Zach Roberts


Break Free organizers and protesters begin planning for their night stay on the railroad tracks. © 2016 Zach Roberts


Volunteers risk injury setting up ropes that run across the tracks to lay tarps over to form a tent. © 2016 Zach Roberts


The tents are up – but not for long. High winds later caused the activists to double up some cinderblocks for weights. © 2016 Zach Roberts


Albany Police take the remnants of the tents back to their cars, so that they can’t be used again. © 2016 Zach Roberts


Break Free organizers and activists form a circle in the rain making plans for the rest of the night.  © 2016 Zach Roberts


Albany Police give the activists space as they settle in for a cold wet night. © 2016 Zach Roberts