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Colorado: the More Things Change, the More They Stay the Same.

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Colorado Governor John Hickenlooper labored mightily for three months and brought forth a gnat.  He had promised the people, after an uncontrolled leak from an oil well had caused two deaths in a fiery explosion of a home in the bedroom community of Firestone, Colorado, that it would never happen again.  To fulfill this promise, he asked the oil industry, the people who caused the explosion, to tell him how it happened and how to correct their mistakes.  He rigorously guarded against invoking an independent investigation, though many in the crosshairs of the frackers had asked for one.

If most of life is preparation for things that never happen, then Hickenlooper never disappoints.  After three months of fronting for the oil industry and defending its good intentions and overall safety record, he gave birth to his gnat. Dubbed a 7-point program, this speck of a plan is so slight in its impact and reach that even the Denver Post demurred.   It is basically a repeat of his dithering Blue Ribbon panel of yesteryear, which was also monopolized by industry executives intent on making sure nothing happened.

The Governor’s press conference might have been more worthy of public attention had the National Transportation Safety Board, which has done an independent investigation as required by federal law, presented its finding.  Lawyers for that agency have put a gag order on its findings, however, for a period undefined and for reasons unknown.  The public be damned.

Chief among Hickenlooper’s corrective measures was a call for improving the oil and gas emergency response telephone system by hiring more people to man the 811 phones.  How a phone call to Denver to find out where the nearest gas line is located would have helped the people who died at Firestone or the contract oil worker at an Anadarko Facility who died from another explosion a couple of days later while relocating a gas line at the facility is unknown and unexplained.

Since 2013 there have been over 50 fires reported at oil and gas facilities in Colorado.  The number of actual fires is likely much higher since reporting is voluntary and is only required by Colorado Oil Gas Conservation Commission (COGCC) rules if a fire or explosion has caused harm “to a member of the general public which requires medical treatment” or “significant damage to equipment or well site.”

Over this same time frame, the industry has reported roughly 93,000 oil or liquid waste spills from their operations.  The amount spilled is almost 4 million gallons, indeed, more than enough liquid toxic waste to fill a 13-gallon kitchen sink in every home in Denver—there are 298 thousand housing units in Denver.  Here again, this staggering amount of waste reported as spilled is much less than what is actually spilled since spills of less than 200 gallons need not be reported.  That threshold up until 2014 was 800 gallons.  That’s right, until a couple of years ago you could spill the equivalent of 60 kitchen sinks full of toxic liquid and no one need know.  Even today you can get away with a 15-sink spill and feel good about yourself.

Much of what hasn’t been spilled of the reported 5.6 billion gallons of liquid waste the industry has generated over the same time frame has been injected into the earth for safe keeping.  Actual cleanup so that this water based toxic waste could be reintroduced into the water cycle would be too expensive.  The unspoken plan, like climate change itself, is to leave it to future generations to deal with.

Clearly, there is a lot of contamination from industry spills that is exempted and goes unreported.  Undoubtedly adding to the under reporting is the fact that this is an honor system, or as Hickenlooper likes to say, its a voluntary system, for… ”working together is how we always find the right solutions for Colorado.”

But the industry is going broke, rather rapidly according to many analysts, the smaller operators in particular.   Hence, they are not going to voluntarily increase their operating expenses with costly reporting and cleanups of toxic waste when they can see that in the very near future their cash flow wont be enough to cover the interest payments on their suffocating debt unless the price of oil almost doubles.  In the past they’ve covered the interest debt with cash flow generated by selling oil and gas at a loss, and with new loans from Wall Street, hedge funds mostly, but the borrowing days are drawing to a close.

Pity all those state retirement systems, like Colorado’s PERA, that have bought into investing in fossil fuels with the promise of high returns.  PERA has an unfunded liability of between 42 and 54 percent, depending on assumed return on investment.  Over the past decade returns have been at a little over 5 percent.  This does not jibe with their assumed return rate of 7.25 percent to keep the fund solvent.  As a result PERA has invested in fracking companies like Extraction Oil & Gas, the bete noir of communities along the front range.  Extraction’s development model is to drill in residential areas, near schools and homes.  Recently Moody’s rated Extraction’s bonds as junk; yet, desperate for high returns, PERA invested anyway.  The fall out from the fracking Ponzi scheme will be wide and brutal.

Mostly Hickenlooper, in his 7-point program, sought continued hand-in-glove cooperation with the industry.  In this spirit, he declined to require the mapping of all industry oil and gas lines in a publicly accessible database as even the Denver Post advocated.  The industry said that would be prohibitively expensive and would require continual updating as new lines were buried, as if that weren’t the fundamental intent.  In a rather odd but not unusual fallback position, Hicklooper said he would disallow the continued tapping of gas lines by local farmers and ranchers.  Free natural gas is the carrot the industry has apparently used to get reluctant landowners to let the industry bury gas lines across their property.   An attempt to give the industry the right of eminent domain was defeated several years ago at the legislature.  One of its legislative champions, Democrat Mary Hodge, is now an Adams County commissioner.  Adams County is one of the epicenters for urban unrest with the industry.

The industry also warned that publication of pipelines might lead  to people stealing their product.  Natural gas stealing has not been a pronounced problem in cities, all of which are underlain by gas lines, the whereabouts of which are monitored and mapped.  Permitting by city governments to identify underground power cables and gas lines before excavation can begin is practically universal.  Then, too, Wyoming, hardly noted for its fierce Sans-culottes population base, publishes all pipeline alignments on a public website and has done so for some time with little reported incident.

The fact of the matter is that nothing approaching full disclosure of oil and gas lines was ever contemplated.  Hickenlooper only asked the industry to test the lines at wellheads, where the COGCC has statutory authority.  These are basically low-pressure lines that power onsite facilities or flow to separators where the oil, gas, and waste begin to be separated and processed for downstream use or storage.  And he only asked that they test lines at old vertical wells like the one next to the house that exploded in Firestone–In total, 19,000 of the state’s 54,000 active wells.  He exempted the new industrial-sized fracking sites, those over which people in threatened neighborhoods are most concerned.  He also excepted all lines leading off the wellheads, those that carry oil and gas to markets in high-pressure lines.  In Colorado the feds claim there are 45,000 miles of such buried line, though the actual mileage is probably much higher since it is unlikely all the collector lines from well heads to storage tanks and compressor stations are in that inventory. Add to this that the state allows abandoned oil and gas lines to remain in the ground.  These alone have been estimated to measure thousands of miles, but no one really knows.

Except for the interstate lines, which a small agency within the U.S. Department of Transportation has oversight, this vast inventory is a regulatory no-man’s land.  No one is in charge.  One should also add the underground storage reservoirs that store natural gas.  These are like the Aliso Canyon site in California which was responsible for what is thought to be the largest single leak of methane into the atmosphere in modern times.  Nine of these reservoirs exist in Colorado, some near populated areas.  In total they store more methane than Aliso.  Since the reservoirs are old played out oil and gas deposits, leaks can be expected.  At Aliso, tens of thousands of people had to be evacuated for weeks until the leak could be controlled.

Professor Robert Howarth at Cornell, using satellite data, which is generally recognized as more accurate than low-level measurement, says the overall methane leak rate may be 12 percent.  Setting aside the fire and explosion danger, and Trump’s and Hickenlooper’s scientific evaluations to the contrary, this sort of leak rate is a disaster for the planet, since methane retains 86 times more heat than does CO2 over a 20-year period.  Because Colorado is one of the leading producers of natural gas in the country, the state is almost certainly one of the country’s greatest climate crisis contributors.  This will shock the Patagonia wearing liberal elites in places such as Aspen, Vail, and Boulder, as well as the self proclaimed liberals who convene under the Dome at the state capitol building each January.

Add to this that there are perhaps 56,000 nonproducing wells in the state, some of them undoubtedly connected to the old pipelines the state allows the industry to leave buried in place.  The cost of controlling methane leaks from these wells may well be astronomical, and may become the responsibility of the citizens if the industry goes broke or flees the state. In the long haul, insuring safe closure and maintenance of the 54,000 presently producing wells could also become the public’s responsibility.

A recent British study estimates the cost of closing methane-leaking wells in the North Sea at $85 billion. Closer to home, the Canadian province of Alberta, which recognized methane leaks as a health and climate problem well before Hickenlooper pronounced fracking safe and drank fracking fluid from a cup before his intellectual peers in the Congress, estimates the cost of cleaning up just 75,000 of the provinces 440,000 wells could be as high as $82 billion.  Alberta has, in addition to the 440,000 wells, 680 thousand miles of pipeline, 2,300 square miles of tar sands development, 572 square miles of tailings ponds.  The Koch brothers have helped buy the American political system by buying bitumen from Alberta tar sands cheap and selling gas high after refining at their plant in Minnesota.  It is a big part of their fossil fuel swag.

It is against this background that Hickenlooper, as a point in his 7-point program, proposed that industry voluntarily clean up 700 to 800 “orphaned wells,” a very small subset of the 56,000 non-producing wells in the state.  He also suggested the industry might fund methane meters for people that wanted them for home monitoring.  Knowing if you are going to blow is always quieting, apparently.

The gargantuan health, safety, and climate impact problems oil and gas development have created in this state were left unaddressed.  In fact, they were savagely ignored.

In Colorado, the bonding requirement per well is $10,000, with a limit of $200,000 for all wells.  In Alberta, the attempt to stop a methane leak in just one well has cost in excess of $1 million, and the well is still not satisfactorily plugged, but five homes had to be demolished in the unsuccessful process.  This difficulty has been described as the poster child for residential encroachment on oil and gas development.  Hickenlooper has been asked by citizen groups to apply the same set backs to housing developers, 500 foot minimum, as the frackers are supposed to observe.  He has declined.

One need only to look at the explosion of a gas line in San Bruno, California, in 2010 to gain understanding of how truly feeble, if not fully criminal, Hickenlooper’s response has been.  In that explosion of a leaking 30-inch steel gas line, 8 people were killed and 38 homes demolished.  The explosion created a crater 167 feet long, 26 feet wide, and 40 feet deep. The state demanded a complete review and revamping of the utility’s (PG&E) safety procedures.

Moreover, the state found the utility had diverted $100 million in customer payments for safety and maintenance to pay bonuses to executives and stockholders.  The state eventually fined the utility $1.6 billion in 2016.   In federal court in 2017, PG&E was “fined $3 million and ordered to perform 10,000 hours of community service for criminal actions in violating the Natural Gas Pipeline Safety Act and for obstruction of justice. In addition, it must institute a compliance and ethics monitoring program and spend up to $3 million to ‘publicize its criminal conduct’.”

Of course this was not the first time PG&E has been sued or fined.  The small town of Hinkley, California, made famous by the film, “Erin Brockovich,” received a $330 million settlement.  Leaking unlined ponds at the company’s compressor station contaminated the town’s groundwater with chromium 6, a cancer causing heavy metal. But compensation couldn’t save the town whose residents worried about their drinking water supply.  As one of the few remaining residents remarked, “you had a great community out there, but now it’s gone.”

And of course, we shouldn’t forget Anadarko, the people whose operation caused the explosion in Firestone.  In 2014, the Justice Department fined the company $5.5 billion.  The largest cash settlement for environmental damage ever in this country, Anadarko must “clean up dozens of sites across the country and compensate more than 7,000 people living with the effects of the contamination.” And this is the company Hickenlooper insists the people of Colorado can and should trust, for they’ve shown an “abundance of caution” and will do the right thing.

William Saroyen, the American playwright, wrote with characteristic exuberant good will toward our troubled lot: “Remember that every man is a variation of yourself.  No man’s guilt is not yours, nor is any man’s innocence a thing apart.”

Surely he would have excepted Hickenlooper’s political tribe of corporate nesting vermin?

 

 

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PHILLIP DOE lives in Colorado. He can be reached at: ptdoe@comcast.net

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