[Our current Benicia City Manager, Lorie Tinfow, is said by many to be the most highly qualified and best City Manager we’ve ever had. She has brought stability in staffing, visionary planning and tough financial oversight in these hard times. I hope she stays for a long, long time! In today’s email newsletter, City of Benicia This Week, Lorie describes the work she does as our City Manager, published here with permission. Incredible! We should ALL be glad we’re not juggling everything she deals with every day. Read on…. – R.S.]
City of Benicia This Week
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August 10, 2020
Hello Everyone,
Lorie Tinfow, Benicia City Manager
During a recent conversation with the Mayor, she asked if I thought people in Benicia knew what my job as the City Manager actually entailed. I said, “no”. In fact, even my mother didn’t know what I do until about 4 years ago. I was visiting my parents and while there I was sending an email on my smart phone. My mom said, “Honey, what are you doing?” and I responded, “Sending an email to the Police Chief.” She looked puzzled and then said, “You’re in charge of the Police Chief?” I said, “Yes, and the Fire Chief, the Public Works Director, etc.” She said, “I thought you were a City planner.”
That reaction wasn’t a total surprise. City Managers tend to be in the background and mostly we like it that way. The Council/Manager form of government that Benicia (and most California cities) operates under has the City Council as the face of the City to the community, where it sets the policy direction and the City Manager implements that direction. Because of this structure, community members often don’t know much about what City Managers do. At the Mayor’s suggestion, I decided to share some information here.
One way to think of a City Manager is to compare the City to a company structure-think of me as the CEO of a $90 million non-profit corporation that provides critical services to everyone who lives or has a business in Benicia. Other executive level staff report to me and help me oversee all City operations. The Finance Director could be compared to the Chief Financial Officer, the Assistant City Manager is similar to a Chief Operating Officer and so on. Of course, there are major differences between running a City and running a business so the comparison isn’t perfect-for example, there’s really no private sector version of a Fire Chief or a Police Chief, and private sector businesses are not required to operate with the public sector’s breadth of service delivery, transparency rules, limits on pricing, and required service to all.
I’ve worked in city government for almost 25 years. My experience is broad and that’s necessary to be successful in this position. The work is fast-paced so knowledge and expertise about a variety of areas is important in order to keep the City moving. I’ve overseen many functional areas such as Human Resources, Information Technology, Finance and Economic Development. I’ve been the project manager for the construction of two large scale capital projects (the Saratoga Library and the Walnut Creek Library) and led many community-based efforts around traffic calming, community problem-solving, communication, etc. If you’re interested in knowing more, my resume at the time I was hired is attached here.
One of my primary responsibilities is delivering a balanced budget to the City Council and overseeing the City finances. I also enforce all the laws, ordinances and contracts; hire and supervise directly all the department directors; make staffing decisions related to all employee positions (except the City Attorney); negotiate labor contracts; conduct studies, reorganize work and exercise general supervision over all public buildings, parks and property. In all hiring decisions, I am always looking to recruit top talent from an increasingly small, competitive pool of qualified people. In short, I’m responsible for all the operational elements of the City. And, I serve as the Emergency Services Director during emergencies.
I also provide leadership by supporting and guiding the City Council through establishing its vision and helping to translate that into a work plan. In the City organization, my leadership is often a blend of overseeing the day-to-day activities with keeping an eye on the shifting long-term needs that require change and innovation.
I first learned what a “City Manager” was during an undergraduate class at Stanford taught by two City Managers. I was already interested in government and this position intrigued me-serving the community and being part of something bigger than myself was attractive. As I continued into graduate school at Harvard and ultimately decided on working in city government, I stayed focused on becoming a City Manager. It’s a very challenging job and a very rewarding one.
So, now you know something more about what I do and how the City is structured. Let me know if you have any questions.
Children and the virus: As schools reopen, much remains unknown about the risk to kids and the peril they pose to others
Washington Post, by Haisten Willis, Chelsea Janes and Ariana Eunjung Cha, August 10, 2020
Parent Amanda Seghetti was concerned when photos on social media showed students — bereft of masks and not observing social distancing — crowding Georgia schools last week. (Lynsey Weatherspoon for The Washington Post)
DALLAS, Ga. — The photos showed up on social media just hours into the first day of school: 80 beaming teens in front of Etowah High School near Atlanta, with not a mask on a single face and hardly six inches of distance between them — let alone the recommended six feet.
Amanda Seghetti, a mom in the area, said her parent Facebook group lit up when the pictures of the seniors were posted. Some people thought the images were cute. Others freaked out. Seghetti was in the latter constituency.
“It’s like they think they are immune and are in denial about everything,” Seghetti said.
Pictures of packed school hallways in Georgia and news of positive tests on the first day of classes in Indiana and Mississippi sparked the latest fraught discussions over the risk the coronavirus presents to children — and what’s lost by keeping them home from school. Friday brought reports of more infections among Georgia students, with dozens forced into quarantine in Cherokee County, among other places.
For months, parents and teachers, epidemiologists and politicians have chimed in with their views on the many still-unanswered questions about the extent to which the virus is a threat to children — and the extent to which they can fuel its spread.
A report from leading pediatric health groups found that more than 97,000 U.S. children tested positive for the coronavirus in the last two weeks of July, more than a quarter of the total number of children diagnosed nationwide since March. As of July 30, there were 338,982 cases reported in children since the dawn of the pandemic, according to data from the American Academy of Pediatrics and the Children’s Hospital Association.
President Trump has repeatedly maintained the virus poses little threat to children.
“The fact is they are virtually immune from this problem,” Trump said Wednesday in an interview with Axios.
Eight months after the World Health Organization received the first report of a “pneumonia of unknown cause” in China, much remains uncertain about the coronavirus and children.
Doctors are more confident that most children exposed to the virus are unlikely to have serious illness, a sentiment backed by a report published Friday by the Centers for Disease Control and Prevention that concluded children are far less likely to be hospitalized with covid-19, the illness caused by the virus, than adults. But when children do fall seriously sick, the burden of illness is borne disproportionately: That same CDC report concluded that Hispanic children are approximately eight times more likely and Black children five times more likely to be hospitalized with covid-19 than their White peers.
Early studies on children and the virus were small and conflicting. But accumulating evidence suggests the coronavirus may affect younger children differently than older ones.
For example,doctors say themultisystem inflammatorysyndrome linked to the virus — known as MIS-C —that has appeared in some children weeks after infectionpresents differently in younger children than in teens and young adults. Infants and preschoolers who have been diagnosed with the syndrome have symptoms mirroring Kawasaki, a disease of unknown cause that inflames blood vessels.In the older group, the consequences appear more severe, with doctors describing it more like a shock syndrome that has led to heart failure and even death.
Several studies suggest adolescence could mark a turning point for how the virus affects youths — and their ability to spread the pathogen.
One paper published in July in the journal JAMA Pediatrics found that children younger than 5 with mild to moderatecases ofcovid-19 had much higher levels of virus in their noses than older children and adults — suggesting they could be more infectious. That study, conducted by doctors at the Ann & Robert H. Lurie Children’s Hospital of Chicago, used data from 145 children tested at drive-through sites in that region.
A study out of South Korea examining household transmission also found age-based differences in children. Puzzlingly, it seemed toreach an opposite conclusion about transmission than the Chicago researchers did. Children under age 10 did not appear to pass on the virus readily, while those between 10 and 19 appeared to transmit the virus almost as much as adults did.
Max Lau, an epidemiologist at Emory University tracking superspreader events in the state in collaboration with the Georgia Department of Public Health, said two striking trends have emerged even as work continues on an analysis of recent data.
Disease detectives have found relatively few infections among young children even after the state loosened its coronavirus-related shutdown. Researchers elsewhere have noted there hasn’t been a clear, documented case of a young child triggering an outbreak. In contrast, cases spiked among 15- to 25-year-olds, suggesting they may be driving the spread of the virus.
“When the shelter-in-place lifted, they perceived that they could go back to normal life and that’s what I observed,” Lau said.
In May, Jerusalem’s Gymnasia Ha’ivrit high school was the center of a major outbreak that public health officials said seeded transmission to other neighborhoods. In June, an overnight YMCA camp in Georgia was forced to close after 260 of 597 children and staff members tested positive for the virus — an event some experts heralded as a parable for what can happen when young people are allowed to gather without being attentive to wearing masks or maintaining physical distance. At that camp, the first to come down with symptoms and be sent home was a teenage counselor.
Other gatherings among teens have led to smaller outbreaks. In New Jersey, it was a party at a country club that left at least 20 teens infected. In Michigan, health officials said more than 100 teens in three counties have tested positive since mid-July following graduations and other parties.
Sadiya S. Khan, an assistant professor of cardiology and preventive medicine at Northwestern University’s Feinberg School of Medicine, said social practices, rather than biology, may explain why teens and young adults appear to be spreading infection.
“They are more likely to be out and about. They are more likely to not have experienced any consequences,” Khan said. “There has been a lot of attention to the fact that people who are older have a worse course and if you’re young, it doesn’t feel as dangerous, so they might think, ‘Why be as careful?’ ”
Khan said she worries schools that don’t enforce mask-wearing and social distancing can be laboratories for superspreader events rippling out to the broader community.
For years, the flu vaccine was targeted to adults. Then, researchers recognized the role of children in spreading the virus and advised they be inoculated. (Joe Raedle/Getty Images)
Medical history tells us that children’s role in infectious diseases is not always what we first assume. In 1960, in response to significant deaths among the elderly during the 1957-1958 influenza pandemic, the surgeon general recommended flu vaccines for people 65 and older. It wasn’t until decades later that studies showed that mortality among older people could be reduced by vaccinating the young. In 2002, the CDC recommended flu shots for infants and in 2008 expanded that to school-age children.
With the coronavirus pandemic, like any disease outbreak, research takes time, and experts say decisions being made about reopening schools are necessarily being made without the full picture of the risk the virus poses to children.
For example, the CDC’s study of that Georgia YMCA camp did not include detailed tracing of how cases spread among campgoers. Did one teenage counselor spread the virus to the whole camp? Did that counselor infect a few younger children, who in turn infected other younger children?
Similarly, that study did not document what happened to families of the infected when the children returned home. Did they bring the virus back to their families, thereby dispelling the notion that children do not transmit the virus to adults? Or, if infections did spread, was it simply the result of high viral prevalence in Georgia, and not the result of contact with a campgoer?
As the case of the Georgia camp illustrates, measuring the risk younger children face in returning to school continues to be an inexact art. Parents are left with the agonizing and anxiety-riddled task of evaluating that potential peril for themselves. And they must weigh the potential health risks of the virus against the educational, social, developmental and economic consequences of children remaining out of the classroom.
Teachers unions from Florida to Ohio have protested plans to fully reopen schools, arguing that even if a few months of data suggests children are not likely to suffer severe outcomes from the virus, they could still pass it to vulnerable adults.
On Aug. 2 — hours before the first day of school — the principal of North Paulding High School near Atlanta sent a letter to parents informing them of coronavirus infections on the football team. Video on the Facebook page for the team’s parent-run booster club showed members of the team, with no masks or distance between them, lifting in a weight room as part of a fundraising event a weekearlier.
Within days, the school burst into the national spotlight, and the issue spawned heated arguments in a local Facebook group called “What’s Happening Paulding,” with parents occasionally descending into name-calling and expletive-laced tirades as they argued over whether the pictures should warrant concern. Sunday night, North Paulding High sent a letter to parents announcing the school would be closed to in-person learning for at least two days because of nine cases of the coronavirus.
John Cochran, the father of a ninth-grader and middle-schooler in the Georgia school system, said in an interview he felt it wasn’t safe for his children to attend school in person, in part because multiple adults in their family are immunocompromised.
“That was one thing we stressed to the kids — they’ve got too many adults that they are regularly in contact with who could be in bad shape if they pick this up from them,” Cochran said. “Personally, I didn’t want that on my kids’ conscience that they went to school and got their mother, stepdad, dad or grandparents sick.”
Seghetti has decided to keep son Kaiden, 11, out of his Georgia school. (Lynsey Weatherspoon for The Washington Post)
In Georgia’s Cherokee County, where the 80 students gathered for that unmasked photo, Seghetti said she knows she’s in the minority in deciding to keep her 11-year-old son, Kaiden, home from school.
Seghetti said after seeing photos shared by parents from inside schools and learning that two elementary campuses in the district already had reported coronavirus cases — a second-grader Tuesday and a first-grader Wednesday — she is confident she made the right decision.Cherokee County schools spokeswoman Barbara P. Jacoby said the schools have implemented changes to try to keep students safe, including staggering bell times to avoid hall crowding and providing students with two masks each they can wear if they wish.
Karin Jessop’s two children, ages 12 and 13, attended that YMCA day camp at Lake Burton where the residential camp outbreak unfolded. Her children, who were at the camp for four weeks but came home each night, did not get infected; the outbreak was among those who stayed overnight, another reminder of the unpredictability of the spread.
Jessop, a technology company executive, said after news of the outbreak broke, “a lot of moms were getting stressed out about making the wrong decision and worried what people will think.”
“At the end of the day, it’s your family,” she said, adding she believes staying home affects her children’s development, which makes the camp experience worth the risk.
“Many of these kids have been home since March, and if you have super gregarious, extroverted kids, they are used to and need that interaction.”
Vallejo cops accused of bending badges to mark kills may be bulletproof from consequences
San Francisco Chronicle, by Rachel Swan & Demian Bulwa, Aug. 9, 2020
Police investigate a shooting involving a Vallejo officer in 2016. Now the police chief is opening an “official inquiry” into a report that officers have bent their badges to mark on-duty killings. Chris Preovolos / Hearst Newspapers 2016
Vallejo police officers accused of bending their badges to commemorate their killings may be immune from consequences because the city waited too long to investigate, according to legal experts and the attorney for the fired ex-captain who blew the whistle on the purported practice.
Police Chief Shawny Williams said last week that his department is opening an “official inquiry” into allegations by a former police captain that some officers bent the tips of their seven-point stars, which he said would amount to misconduct. “I’m not going to tolerate something like that,” Williams said.
But the state’s Peace Officers’ Bill of Rights sets a one-year deadline for taking disciplinary action against officers after police officials learn of alleged misconduct. That sets up a potential legal fight in Vallejo if badge-bending officers are identified.
The ex-captain, John Whitney, who was second-in-command in the Vallejo force, said through his attorney that he learned of the badge-bending ritual in April 2019, informed then-Chief Andrew Bidou that month and unsuccessfully sought an investigation. Whitney was fired four months later.
His attorney, Alison Berry Wilkinson, said that before his ouster he ordered supervisors to inspect officers’ uniforms and collect any bent badges. After 10 badges were turned in and held in a box in the office of Bidou’s executive assistant, Wilkinson said, Bidou told Whitney the repair costs could raise suspicion and cost him his job. Instead, the chief had the badges returned to officers, who were to fix them on their own, Wilkinson said.
“We’re skeptical that any investigation of badge-bending will be effective in holding any officer accountable, both because they destroyed the evidence of the misconduct, by returning the badges to the officers, and because the statute of limitations has expired,” Wilkinson said.
She said then-Chief Bidou and Vallejo City Manager Greg Nyhoff “were aware of the badge-bending in April 2019 but did nothing. The statute of limitations runs from the date of discovery. Anyone involved can now deny it with impunity.”
Assistant City Manager Anne Cardwell told The Chronicle on July 28 that the city is aware of previous complaints about badge-bending.
“In conferring this evening with the City Manager,” Cardwell wrote, “he noted that the Mayor had advised him last year regarding rumors of such a prior practice in years past at the Police Dept., and that he, the City Manager, then immediately consulted with former Police Chief Bidou, who indicated it had been previously investigated and such claims had not been substantiated.”
Attempts to reach Bidou and Nyhoff were unsuccessful Friday. Williams said the investigation would go on regardless of these concerns.
“There is no statute of limitations on moral obligations,” he said. “The ethical standards of conduct and the moral imperative to honor dignity and life exceeds legal statutes of limitations. As chief of police, it is my responsibility to uncover the truth, increase trust through accountability and take corrective actions when warranted.”
A badge-bending investigation could be important for reasons besides discipline, if it led to changes in department policies or mended public distrust. It could also be driven by a desire to improve training, said San Francisco union attorney Gregg Adam, who has represented police officers in disciplinary proceedings and has no involvement with the Vallejo case.
Still, Adam agreed with Wilkinson’s analysis, saying she “is 100% correct.”
“The chief is quoting from the gospel, not the Peace Officers’ Bill of Rights,” Adam said.
California legislators enacted the one-year deadline to force police agencies to promptly address misconduct.
The statute carries several exceptions that can allow the one-year limit to be extended, including if an allegation is also the subject of a pending criminal investigation or lawsuit or if an investigation “involves more than one employee and requires a reasonable extension.” But authorities would need to show they were stymied by one of these factors.
Adam noted that the statute’s clock starts ticking when someone of sufficient authority “knew or should have known” about the alleged misconduct. And the person initiating the investigation doesn’t necessarily have to be a chief or city manager, Adam said. It could have been Whitney himself.
“If a captain knew about it, there’s a strong argument that that’s when the clock started,” he said.
Vallejo Mayor Bob Sampayan insisted there is no statute of limitations on the issue, and that Vallejo is still pursuing it. Bidou’s successor, Chief Williams, who was sworn in in November, has hired an outside investigator to do a “deep dive analysis into this culture of the bent badge,” Sampayan said.
He recalled feeling alarmed and distressed when Whitney approached him with the allegations, some time after he’d purportedly gone to Bidou.
Sampayan is a former police officer who joined Vallejo’s force in 1985 and trained many in the rank and file — including Whitney, he said. He’s frustrated with the recent string of alleged misdeeds in the city.
“If indeed they come up with things, then people will be disciplined,” the mayor said. “My position is because these have all been people of color that have been shot, I’m curious if this is not a civil rights violation” that could initiate an investigation by state Attorney General Xavier Becerra.
“This isn’t right to me — you don’t do this,” Sampayan said. “I’m appalled, I’m angered, and this is not what policing is all about.”
Whitney, who now works for another Bay Area police agency, is planning to sue Vallejo for wrongful termination after filing a legal claim seeking back pay, benefits, attorneys’ fees and $25,000. He says he was targeted for speaking out.
According to his claim, the city tied his firing to an investigation into a leak of confidential information, saying he improperly erased data from his phone amid the probe. Whitney said he had only erased personal information; he was exonerated in the leak case, Wilkinson said.
The Peace Officers’ Bill of Rights came into play during a 2015 scandal in San Francisco, in which several police officers were accused of exchanging racist, sexist and homophobic text messages.
Sent in 2011 and 2012, the texts included “white power” jeers and slurs against African Americans. Department brass learned about the content when it surfaced during a corruption investigation in 2012, but did not disclose it to the public until March 2015. At that point, Chief Greg Suhr announced he would fire nine of the officers involved, and discipline others.
A San Francisco Superior Court judge halted the disciplinary proceedings that December, however, ruling that the one-year time limit had run out. A state appeals court overturned that decision in 2018. In the 3-0 decision, Justice Martin Jenkins argued that the messages “displayed unacceptable prejudice against members of the communities SFPD is sworn to protect.”
At least one Vallejo police officer involved in a pending disciplinary case is seeking to assert the one-year deadline, according to Solano County Superior Court records.
In a court filing last month on behalf of an unnamed officer, attorney Justin Buffington said he was seeking to prevent the city from “imposing discipline that is time-barred by the relevant statute of limitations.” A judge sealed details of the case, and Buffington did not respond to requests for comment.
Rachel Swan and Demian Bulwa are San Francisco Chronicle staff writers.
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.
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.
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.
North Dakota #oil#production fell in May by the largest amount ever, 350 thousand bo/d, to ~850 thousand bo/d.
Over 40% of the 16,000 horizontal #wells were completely shut-in for the month (the average utilization was 52%). The latest data is already available in our services. pic.twitter.com/e3BnH7Pd5J
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.
Stunning. DAPL customers told the Court that it would be the end of the world if the pipeline is shut down. The message to investors? No big deal. https://t.co/D5KUsKZep3
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.
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.
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.
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