Energy development comes too close to home
When it comes to oil and gas development, most would say, not in my backyard. Yet across the U.S., state courts and legislatures have been preventing communities from regulating oil and gas development within city limits.
Last May, Texas made local hydraulic fracturing (fracking) bans illegal in response to Denton’s passage of a local fracking ban. The Texas law came after at least 11 bills that sought to preempt local governments from regulating the oil and gas industry. Communities in Oklahoma, Colorado, New Mexico and Ohio have faced opposition as fracking bans are outlawed or towns are prevented from enacting drilling rules that conflict with state or federal law, or impinge on the rights of corporations. Similar arguments continue to be heard in states around the country.
In St. Tammany Parish, one of the wealthiest and most conservative parishes in Louisiana, citizens have been battling Helis Oil & Gas, a New Orleans-based energy company to prevent drilling near their homes. Helis first leased land in St. Tammany in October 2013 to tap the estimated 7 billion barrels of oil in the Tuscaloosa marine shale, which can be stimulated by horizontal drilling and fracking.
When Helis was issued a permit to drill, St. Tammany Parish Council and the town of Abita Springs filed a lawsuit against the state Department of Natural Resources. The suit argued that parish zoning ordinances prohibit drilling at the proposed site and that the parish has authority over local development. In mid-December, Concerned Citizens of St. Tammany joined the parish’s suit against the DNR.
To the people of St. Tammany, energy development is threatening its community and its autonomy. As a representative of CCST stated, “Our primary opposition to the project is that we have a Home Rule Charter and we are allowed to zone our land as we want to zone it. We don’t allow anyone to come in and say your land use requirements don’t mean anything to us. That’s offensive.”
The debate over energy development has roiled St. Tammany. At times, feelings of misgiving have been so aggravated that the community flew a surveillance plane over the proposed drilling site. Local efforts have drawn the support of celebrity and Louisiana-native, Ian Somerhalder who has protested fracking alongside community members.
Distrust spurred CCST to file a Freedom of Information request for emails between Don Shea, the Economic Development Director of St. Tammany, Helis and Edward Poitevent, who co-owns the land Helis seeks to develop. Due to the cordial nature of the emails uncovered by the FOI request, there were calls for Shea to resign, and in March 2015, Shea stepped down.
Legal disputes continue in St Tammany as state courts determine whether Helis’ well development will proceed. Until the lawsuits are settled, Helis has been ordered to halt development. The company states it will proceed with its plans in due course.
While fracking is new to St. Tammany, it is no stranger to Louisiana. The state’s northwestern Haynesville shale was the nation’s most productive gas field in 2011, surpassing Texas’ Barnett Shale and producing 5.5 billion cubic feet of gas per day. The land has changed radically during that time, with energy development replacing many agricultural fields and forests.
Haynesville fracking operations increased as energy companies enjoyed the state’s generous tax policies for fracking development. Over the past five years, energy companies saved more than $1.2 billion, and once development of Tuscaloosa shale is underway, they may save more than $1 billion in taxes annually. Meanwhile, the energy industry helped buffer the impacts of the 2008 recession and employs approximately 300,000 people.
However, this close relationship exposes Louisiana to price volatility. As oil and gas revenues account for approximately 13 percent of the state budget, the recently plummeting oil prices have increased the state’s budget shortfall and prompted job cuts in state government. Louisiana loses $12 million for every $1 drop to the annual average price of a barrel of oil.
The energy industry’s influence in Louisiana has spurred St. Tammany to defend its Home Rule Charter and to emphasize environmental concerns due to fracking. In particular, citizens are concerned energy development will contaminate the regional Southern Hills aquifer that supplies its drinking water.
Helis’ leases and options in St. Tammany total 60,000 acres and as of May 2014, seven companies were leasing land or drilling in parishes along the border with Mississippi. At that time there were 22 producing wells and five pre-production wells targeting the Tuscaloosa shale, according to the Louisiana Environmental Action Network. While there has been no clear indication of water contamination of the aquifer, elevated chloride levels have been measured in the aquifer by the U.S. Geological Survey since development began.
In order to lessen environmental concerns and assuage friction with the community, Helis has accommodated changes to the initial permit application and responded to public concerns about the project. Yet, questions remain. Helis has not indicated where it will drill monitoring wells to establish baseline water quality, but a Helis spokesperson states that multiple private water wells will be tested in the vicinity of the proposed well, with permission from the landowners. In addition, Helis plans to drill water wells within a few hundred feet of the actual well to monitor freshwater zones, and to publish the test data. Wilma Subra, a chemist and a technical advisor at LEAN, recommends establishing baseline rate of heavy metals, volatile organics and radioactive components. Extending the monitoring network also ensures any change in water quality and availability is documented over time.
There is an additional inquiry into where Helis will acquire its water for drilling. Helis will need 800,000 gallons of freshwater from private ponds within three to five miles of the drill site to drill the vertical well. A Helis spokesperson said, “sources of surface water are subject to negotiation and contract when and if the process reaches that point. As such, it is not appropriate to elaborate on these options yet, except to say that we have a number of parties who are very interested in being a source of surface water for the project.”
Throughout the development and permitting process “the company has fallen silent on where the water will come from, and there’s been no disclosure of where the wastewater will be disposed of out of the parish,” said Subra. By law, Helis will have to transport the wastewater to a state-certified waste disposal site outside of St. Tammany. However, oil and wastewater spills are common. In North Dakota, spills have been steadily rising, with more than 18.4 million gallons of oils and chemicals spilled leaked or misted into the air, into the soil and waters from 2006 to early October 2014.
In St. Tammany “no one is out there watching and enforcing; even under the best circumstances [of oil and gas development] there is huge contamination. The land’s surface is ruined by trucking, and will never be the same again,” said Subra.
Beyond the environmental concerns of energy development, the social ramifications of the industry’s presence in the parish are cause for anxiety among residents. “St. Tammany is pastoral, it’s a place for community and family. Energy development will threaten that, there’s no question,” the CCST representative emphasized. Cases of towns damaged by energy booms are abundant. Williston, North Dakota has radically transformed under the weight of the oil boom from a small town into a community besieged by crime, such as drug use and sex trafficking. The FBI has opened an office in the town to help monitor illicit activity, and North Dakota Senator John Hoeven received $1.4 million in federal funding to combat sexual assault and domestic violence, and women are carrying weapons to defend themselves due to physical threats and sexual extortion.
Tuscaloosa’s future is still being decided in court and in the world energy markets. At $30 a barrel, oil prices have tumbled to 12-year price lows. As a result, the pace of Tuscaloosa’s development is uncertain. Last year, Comstock Resources and Halcon Resources pulled out of northern sections of the shale formation and relocated rigs and investment to Texas.
With the average well costing $13 million to drill and complete, oil prices will need to rise to at least $80 per barrel to develop the Tuscaloosa. Regardless of energy forecasts, the Helis spokesperson emphasized that the company remains “committed to this important energy initiative” and oil prices “have no bearing on this project.”
As Helis’ plans advance, and as St. Tammany fights for control of its land, the state courts and governing bodies will define local authority and the future. When the gavel falls, it may be the first strike in a hammering cascade of drill bits against shale in St. Tammany.
Note: Mr. Shea and the St. Tammany government were unable to provide comment for this article due to the pending litigation surrounding the drilling permit.
Read more of Ms. Sohns work in water and energy issues.