Spectra Energy Watch

Spectra Energy, Eminent Domain, Water Pollution

Making News on WHRW-FM Radio at Binghamton University

(Part of State University of New York - SUNY - System);

Internet Access Spreads 1^st Person Accounts

1)    Are you dealing with property rights issues related to the threat of eminent domain from energy or utility companies that want your property for gas pipelines, underground gas storage fields or other uses?

2)    Are gas drillers asking you to sign leases because your property sits above the gas-rich Marcellus Shale?

3)    Are you wondering about increasing reports of water contamination that may be related to gas drilling operations?

Thanks to internet technology, you have an opportunity to listen to a first-person conversation with property owners who are sharing their experience and recommendations of how to deal with these issues.

Houston-based Spectra Energy Corporation’s performance record at its underground gas storage field in Bedford County, PA (dubbed Steckman Ridge), was front and center in a talk radio program hosted by Vince Fronda and called The Point.

The program airs every Tuesday between 10:00 am - 1:00 pm on WHRW radio 90.5 on the FM dial.  The best part is that you can listen to it online via your computer.  (See links provided in this post.)

Mike Benard, Bedford County property owner who launched this website, was asked to talk about eminent domain, which is the forced “taking” of property and/or property rights under the badge of government.

Benard spoke in detail about the experience he and other property owners shared in a two-year fight against eminent domain actions launched by Spectra Energy, a natural gas storage and pipeline company, backed by the power of the Federal Energy Regulatory Commission (FERC).

Mike Benard Interview on WHRW:

http://www.radio4all.net/files/vfronda@gmail.com/4028-1-mike_benard_interview.mp3

By clicking the audio file link above, you can listen to that broadcast.  Among other topics, Benard talks about what property owners can do if faced with losing their property rights under the threat of eminent domain.

For property owners who might be approached by gas companies that want to drill on their property, he recommended four steps before signing any lease:

1)    If water is on your property, have it tested before any drilling activity begins. Get your water tested for any byproducts related to gas operations, because you will want proof of the baseline quality of your water, if it changes later.  One property owner spent $900 for such comprehensive tests.

2)    Do your homework. For example, understand comparable value in lease agreements.  If the gas companies are also leasing public lands (e.g., game lands or state forest lands), ask to see a copy of that lease agreement.  Gas companies will be reluctant to share that information because the lease agreements with government entities tend to be much better than the lease agreements with private property owners.

3)    Use available resources. In addition to this website, check out a website called the “Natural Gas Lease Forum for Landowners” at this link:  http://pagaslease.com/index.php

4)    Get competent legal advice before signing any lease. It makes sense to find an attorney who specializes in mineral rights, but don’t be surprised to learn that they also work for energy companies.  It is your job to weed out any potential conflict of interest by asking questions.

Following the interview with Mike Benard, Angel and Wayne Smith called in to continue the discussion.  The Smith’s are very familiar with Spectra Energy and gas operations as they are among the property owners in Bedford County, PA.

Angel & Wayne Smith Interview on WHRW:

http://www.radio4all.net/files/vfronda@gmail.com/4028-2-angel_and_wayne_smith_interview.mp3

Mr. and Mrs. Smith recently sued Spectra Energy for an alleged illegal taking of their property rights for the company’s Steckman Ridge underground gas storage field.  In addition, their legal action contends that the Houston-based company is responsible for the contamination of their water supply, via its Steckman Ridge joint venture.

The Smith’s lawsuit was the subject of a front-page article in the Bedford Gazette (October 24-25).  Among other details, the article reported:  “The Smith’s arsenic levels [in their water] became so serious that they purchased a complex $11,000 treatment system they now keep in their basement.”

It is easy for some folks to theorize about issues like eminent domain and the contamination of a water supply - especially when they have no skin in the game.  Angel and Wayne Smith put a human face on the reality of these issues.  Their experience offers important lessons for property owners.

In addition to the WHRW-FM broadcast, you can find out more at these links:

Clearville’s Blog: http://clearville.wordpress.com/

Clearville Compressor Station: http://www.youtube.com/watch?v=Goq21cuNQkg&feature=channel

Spectra Energy Lobbying $ Puts It in Top 10%

of Oil & Gas Industry Spenders at Federal Level

Spectra Energy spent more than two million dollars lobbying the federal government over the last 2 1/2 years.  This is according to lobbying disclosure reports available online from The Center for Responsive Politics.  (Links are found at the bottom of this post.)

Separate from that, Spectra Energy spent nearly one-quarter million dollars lobbying in Pennsylvania in less than 1 1/2 years, according online data available from the Pennsylvania Department of State.  (Links below.)

PA Politics & Energy Industry

Pennsylvania politics is a big money play for the oil and natural gas industry, which contributed nearly one million dollars to Pennsylvania politicians in 2008-2009, according to a news report in The Times-Tribune (Scranton, PA) by Robert Swift, its Harrisburg Bureau Chief (Oct. 18, 2009).

Link: http://www.thetimes-tribune.com/news/special_interests_spared_from_state_budget_cuts

Or pdf file: special-interests-spared-from-state-budget-cuts-news-the-times-tribune

In addition, as the Philadelphia Inquirer reported (October 7), the deputy chief of staff for Governor Rendell stepped down to join Range Resources Corporation as VP of government relations and regulatory affairs for the Texas-based company that has “a major drilling stake in Pennsylvania,” according to the Inquirer.

There has long been a revolving door between government and the energy industry.  Public servants who become lobbyists move from representing the public interest to representing the self interest of the energy industry.  Companies like Spectra Energy are focused on protecting its self interest on issues such as:  tax, the environment, and “clean air and water” (which doesn’t necessarily mean that citizens will get clean air and water).

Money Talks

The Times-Tribune headline says it all:  “Special interests spared from state budget cuts.”  Bureau Chief Robert Swift reports that:

“While taking their knives to programs covering everything from the environment to economic development and the arts, Pennsylvania legislators protected some special interests in the new $27.8 billion budget.

“They declined to tax natural gas drillers, while opening more state forest land to them.”

The two million lobbying dollars that Spectra Energy spent at the federal level break down as follows:

Year                                           Spectra Energy’s Total Lobbying Expenditures

2009 (Partial Year)                                                   $448,997

2008                                                                        $865,981

2007                                                                        $776,450

TOTAL                                                                  $2.09 million

Roughly half of the $2 million spent on federal lobbying went to two professional lobbying firms in Washington:  Daryl Owen Associates and Van Scoyoc Associates, according to data provided online by The Center for Responsive Politics.

Spectra Energy:  Top 10% of Spenders

This puts Spectra Energy in the top 10% of oil and gas industry spenders in 2008, if my arithmetic is correct.  The Center for Responsive Politics lists 195 companies and organizations in its profile of the oil and gas industry (e.g., Exxon Mobil, Chesapeake Energy, American Petroleum Institute).

At number 17 on the spending hit parade, Spectra Energy outspent 178 other companies and organizations in the industry last year.

Meanwhile, back in Pennsylvania, Spectra Energy was busy spending money via its Spectra Energy Transmission, LLC.  As noted, the company spent nearly one-quarter million dollars lobbying in Pennsylvania in less than 1 1/2 years, according online data available from the Pennsylvania Department of State.

Here is the breakdown for its Pennsylvania state lobbying dollars:

Year                           Spectra Energy’s PA Lobbying Expenditures

2009 (Partial Year)                                                   $105,000

2008   (3 quarters of the year)                                 $140,357

TOTAL                                                                      $245,357

Its Pennsylvania lobbying firm is Tri State Strategies PA, L.L.C.  Considering that Spectra Energy opened an office in Pittsburgh, that amount will likely increase.

In the company press release (June 29), Bob Riga, general manager of Northeast marketing for Spectra Energy Transmission and the one in charge of the new Pittsburgh office is quoted as saying (emphasis added):  “And, given our years of experience and existing footprint, we’re able to expand responsibly, managing costs and minimizing impacts to landowners, communities and the environment.”

Spectra Energy’s Worrisome Track Record

Property owners who have dealt with Spectra Energy know that the company’s “existing footprint” is worrisome given its poor track record to date.  And the notion of “minimizing impacts to landowners, communities and the environment” is a platitude, not an operating principle.

For specific details on its poor track record where public safety and the environment is concerned, read about the “Emergency Shutdown” at its huge compressor station in Bedford County, PA.  Spectra Energy’s lackadaisical response earned it a Notice of Violation from the Pennsylvania Department of Environmental Protection.  Click on the link: http://www.spectraenergywatch.com/blog/?p=372

Fortunately, lots of citizens and grass/netroots activists are telling legislators in Harrisburg, Washington and elsewhere that companies like Spectra Energy must be closely monitored and held to the highest standards of safety and environmental performance.

But the governing class needs to hear your voice too.  For three easy references, check out the following links:

Legislative Alert: http://www.spectraenergywatch.com/blog/?p=399

Legislator on Property Rights: http://www.spectraenergywatch.com/blog/?p=311

Government Directory: http://www.spectraenergywatch.com/blog/?page_id=8

Link to Federal Lobbying Info:

Here is the link for The Center for Responsive Politics that takes you to Spectra Energy’s 2008 federal lobbying expenditures.  From here, you can navigate to examine 2007 and 2009 (partial year) expenditures, plus you can click on the Oil & Gas Industry profile for that year:

http://www.opensecrets.org/lobby/clientsum.php?lname=Spectra+Energy&year=2008

Link to PA State Lobbying Info:

For ease of use, here is a pdf file of the Pennsylvania lobbying expenses for Spectra Energy: pa-lobbying-exp-for-spectra

But if you like to noodle around on the internet, first go to the Pennsylvania Department of State home page: http://www.dos.state.pa.us/dos/site/default.asp

Look at the links down the left hand side of the page and click on “Lobbying Disclosure” this will take you here: http://www.dos.state.pa.us/campaignfinance/cwp/view.asp?a=1337&Q=447471&campaignfinanceNav=|&dosNav=|

Then click on “Registration/Report Search” near the top left of the page and that will take you here -

https://www.palobbyingservices.state.pa.us/Act134/Default.aspx

Then click on “Search” near the top left of the page and that will take you to “Registration Quick Search” -

https://www.palobbyingservices.state.pa.us/Act134/Public/EnhancedSearch.aspx

Under that first paragraph at the top of the page, there are five categories to choose from.  Choose “Expenses” and use the form.  Spectra Energy’s lobbying registration number is P09041.  On the form that opens, you can fill in the name of the company, or the registration number, or both.

Link to Spectra Energy Press Release regarding Pittsburgh Office:

http://investors.spectraenergy.com/phoenix.zhtml?c=204494&p=irol-newsArticle&ID=1303134&highlight=

Spectra Energy’s Underground Gas Storage Field

Reduces Property Value in Bedford County, PA;

County Board of Assessment Should Consider Impact of Eminent Domain, Public Safety & Environmental Issues;

Threat from Underground Gas Leaks in PA

Subject of November Geologists’ Workshop in Pittsburgh

As Bedford County property owners know well, county officials launched the first property assessment to revise property tax valuations since 1957. As part of that, a company known as Tyler Technologies was reportedly paid nearly $2 million in taxpayer dollars to do on-site inspections of properties in order to set current values.

Our experience and that of every property owner I’ve talked with indicates that Tyler Technologies’ assessment forms are replete with errors. The formal appeal process is now filling meeting rooms at the Bedford County Commissioners’ offices on South Juliana Street.

Citizens who appeal are asked to sign a waiver because Pennsylvania law requires the board to issue a decision on each appeal within five days – which will be impossible, given the overwhelming number of appeals.

Part of our formal appeal is that Spectra Energy’s 12 billion cubic feet underground gas storage field – called Steckman Ridge – negatively impacts property values of those landowners who are on top of, or near, the Steckman Ridge field.

There are two primary reasons for this:

Eminent domain & the storage field reduces property owner rights & the use they can make of their own property

Public safety & environmental risks

Steckman Ridge Reduces Property Rights & Value

Many properties in the Clearville area (perhaps as many as 150 or more) now sit on top of, or near, a huge 12 billion cubic feet underground gas storage field. To do this, property rights were seized by Houston-based Spectra Energy under the threat of eminent domain, given to it by the Federal Energy Regulatory Commission (FERC). It is dubbed the Steckman Ridge project.

The seizure of property rights under the threat of eminent domain and the presence of this underground storage field with its pipelines and huge compressor station restricts the use that property owners can make of their own land.

For example, area property owners who possess mineral rights once enjoyed an annuity stream from royalties paid by Pennsylvania General Energy for the extraction of natural gas from the Oriskany formation.

Once Spectra Energy, under the badge of FERC, seized these property rights for its storage field, the possibility of further potential recovery from other formations (including but not limited to the Marcellus Shale) is virtually eliminated.

In fact, Spectra Energy filed motions with a federal judge in Johnstown that, in the event of a jury trial over just compensation, property owners should not be permitted to even argue lost economic value related to any potential recovery of native gas from the Marcellus Shale or other formations. Nor should they be permitted to question Spectra Energy or any of its expert witnesses on the subject.

In addition, buildings cannot be erected nor can trees be planted over right-of-way areas (e.g., pipelines). In some cases access is denied. All of this reduces economic value to the property owner.

Furthermore, property owners were not compensated in the same manner as Spectra Energy’s March 11, 2009 lease agreement with the Pennsylvania Game Commission for the neighboring game lands (#49, Tract 49A-01). Perhaps Spectra Energy can explain why “just compensation” for the state government is different than the “just compensation” it typically offers private property owners.

Threats to Public Safety & the Environment Reduce Property Value

Spectra Energy had a real-life opportunity to demonstrate its commitment to public safety and rapid response during an unexpected emergency shutdown on August 23. For details, see our blog post at this link: http://www.spectraenergywatch.com/blog/?p=372

The emergency shutdown occurred when the nearly 5,000 horsepower compressor sitting on top of the 12 billion cubic feet underground gas storage field shut down due to a gas leak. There was a blow off of natural gas and a spray of contaminant on neighboring homes and properties.

Spectra Energy’s operational response was so bad that the Pennsylvania Department of Environmental Protection (DEP) issued a “Notice of Violation” on September 16 to the company for its problematic response. To view a pdf copy of the DEP notice, click here:                   dep-violation-notice-p1 dep-violation-notice-p2

Spectra Energy’s Response to a Public Emergency

• It took three days for the company to officially notify residents of the incident and ask them not to eat their vegetables until the contaminant could be tested.
• Two days after the emergency, the company still had not contacted the Pennsylvania Department of Environmental Protection (DEP), or the Bedford Emergency Response. In fact, DEP contacted Spectra Energy first, after hearing from property owners.
• Spectra Energy had trouble finding the contaminant. First, they say they did not realize it had spread off site. Second, they told one property owner that she wasn’t hit, then later admitted her property had been hit by the contaminant and couldn’t explain why they didn’t identify it, according to a neighboring property owner.

None of this behavior is a reassuring benchmark for safety or operational excellence.

Finally, the reported air emissions for Spectra Energy in 2008 is measured in tons, according to DEP records. These emissions include: nitrogen oxides, volatile organic compounds, carbon monoxide and formaldehyde, among other pollutants. Here is the DEP link: http://www.ahs2.dep.state.pa.us/eFACTSWeb/searchResults_singleFacility.aspx?FacilityID=466924

Threat from Underground Gas Leaks in PA

As more folks are learning, gas migration can potentially cause serious problems to communities and property owners.

A recent article published in Environmental Science & Technology (© 2009 American Chemical Society), and written by Rebecca Renner, looks specifically at the issue in Pennsylvania. Following are two excerpts from that article which is dated Sept. 2, 2009 (Emphasis added):

“Natural-gas leaks are relatively common in Pennsylvania, which employs a full-time geologist to investigate such incidents. In recent years, some of these leaks have had devastating consequences, including home explosions and fatalities, according to an investigation by ProPublica, Inc., an independent nonprofit newsroom. Leaks are mainly a legacy of the state’s fossil fuel drilling and mining history; however, leaks from operating wells have caused explosions and even fatalities.

“Tracing the leaks is difficult, because sources include gas wells, natural-gas storage fields, pipelines, coal mines, and landfills – all of which can be either active or abandoned. Bacterial degradation of organic matter also produces methane. Stable-isotope analysis is an essential tool for identifying the source, according to Pennsylvania Department of Environmental Protection (PA DEP) geologist Fred Baldassare, who investigates stray gas leaks.”

Article pdf file: spate-of-gas-drilling-leaks-raises-marcellus-concerns-environmental-science-technology-acs-publications

 

The issue is serious enough to merit a two-day Stray Gas Workshop in Pittsburgh, November 4-6, 2009. Fred Baldassare, geologist for the Pennsylvania Department of Environmental Protection (PA DEP), will be a speaker.

The conference is co-sponsored by the U.S. Geological Survey and the Pittsburgh Geological Society, with the collaboration of the federal Office of Surface Mining Reclamation and Enforcement and the PA DEP.  Website: http://pa.water.usgs.gov/stray_gas/

In Summary

The presence of a huge underground natural gas storage field subtracts from property values because of limitations on property rights, as well as demonstrated public safety and environmental threats. This should be recognized in the assessment of properties that are impacted by the presence of this storage field.

In addition, companies engaged in such operations, such as Spectra Energy, should be closely monitored and held to the highest standards of safety. The threat of migrating gas underground also needs to be understood so it can be addressed.

Photos of Steckman Ridge Compressor Station Complex — “looks like a small city,” according to one Clearville, PA, property owner.  First photo shows a view of compressor station and nearby residence.  Welcome to the Neighborhood Watch Group, Spectra Energy.  [Click on photos to enlarge.]

Property Owners Contact PA Legislators:

New Budget Proposal Threatens More State Lands for Gas Drillers;

Raids Oil & Gas Lease Fund, Stripping DCNR of Funding;

Instead, Pass Severance Tax on Extraction of Gas

“Our voices will not be muffled by the loud ring of the moneyed natural gas companies,” is the battle cry of Eileen Juico, member of the Chester County Pipeline Task Force. Chester County, Pennsylvania, is the site of extensive natural gas pipeline activity.

Revolving Door Between Government & Energy Industry

Her battle cry is to the point as the Philadelphia Inquirer reports (October 7) that the deputy chief of staff for Governor Rendell is stepping down to join Range Resources Corporation as VP of government relations and regulatory affairs for the Texas-based company that has “a major drilling stake in Pennsylvania,” according to the Inquirer.

In the meantime, Ms. Juico and Task Force members are mobilizing property owners to contact key members of the Pennsylvania House and Senate to urge them to oppose a budget amendment that would permit leasing additional state forest lands for gas drilling.

At the same time, this proposal would raid Pennsylvania’s Oil & Gas Lease fund, effectively stripping the Department of Conservation and Natural Resources (DCNR) of funding to manage and upgrade Pennsylvania’s parks and forests.

Currently, more than 600,000 acres of state forest land are already available for leasing, according to Ms. Juico. This particular budget proposal would require the Department of Conservation and Natural Resources (DCNR) to lease an additional 200,000 acres for natural gas drilling. It is seen as one way to boost state revenue in order to help reduce Pennsylvania’s huge budget deficits.

Task Force Recommendations

Ms. Juico, however, notes both fiscal and environmental concerns. “The amount of revenue raised from additional leasing will not generate significant funding for the budget, but it runs the risk of exposing the Commonwealth and its citizens to substantial environmental costs,” she added.

In her view, such leasing is in direct conflict with the mission of DCNR “to conserve and sustain Pennsylvania’s natural resources.”

Even more troubling, this budget proposal would eliminate the Oil and Gas Lease Fund, stripping DCNR of funding to manage and sustain Pennsylvania’s parks and forests. Instead, lease revenues would go directly and permanently to the General Fund (where it could more easily be spent on all manner of government pork projects).

Legislators who oppose this proposal recall Pennsylvania’s history with coal.

For example, House Game and Fisheries Committee Chairman Ed Staback, D-Lackawanna/Wayne, said in a press release last month (emphasis added):

“Living in the Northeast, every day I see the remnants of the rush to get natural resources out of the ground. Without ironclad guarantees for reclaiming efforts and expenses coming from the gas companies, our state forests could be left with dangerous holes dotting the land, retaining ponds full of polluted water, and abandoned sheds, buildings and well structures.”

Ms. Juico advocates an alternative budget proposal she believes is more fiscally and environmentally responsible.

“We support a severance tax on natural gas drilling. In other words, tax the extraction of natural gas.”

“Pennsylvania Senate Bill 997 would institute a severance tax on natural gas drilling and earmark a portion of those revenues for local governments directly impacted by the Marcellus Shale gas drilling and the construction of natural gas pipelines,” she said.

Instead of leasing more state forest lands to gas drilling operations and stripping the DCNR of funding to do its job, she points out that a severance tax is a better alternative.

“A severance tax on the extraction of natural gas is a customary start-up cost for natural gas companies throughout this nation,” she said. “It will not deter these companies from seeking the lucrative profits that the Marcellus Shale offers.”

What Property Owners Know

In Pennsylvania, among other states, energy companies are becoming more active due to the potential of profitable recovery of natural gas from the Marcellus Shale.

Growing emphasis on natural gas means more underground storage fields, more pipelines and more eminent domain actions that involve the seizure of private property rights. Meanwhile, incidents of water pollution are surfacing across the state in connection with increased drilling and storage of gas in underground formations (through the use of injection wells).

Property owners who have experienced any of these issues know three things:

Gas migrates underground which can create unexpected problems.

Toxic chemicals are used in drilling or injection (storage) operations.

The revolving door between government and the energy industry (e.g., Governor Rendell’s deputy chief of staff joining Range Resources) underscores the fact that citizens and landowners must act as an industry/government watch group to ensure that the public interest is represented and protected.

Call to Action

To that purpose, Ms. Juico urges landowners to contact key legislators immediately and urge them to:

Oppose forcing the DCNR to lease additional state forest land for gas drilling (and raiding the Oil & Gas Lease Fund).

Instead, support a severance or extraction tax on the recovery of natural gas that would include revenues for local governments impacted by natural gas drilling and the construction of pipelines.

In addition to your own local state legislators, here are three critical contacts to make:

Senator Dominic Pileggi, Pennsylvania Senate Majority Leader

Harrisburg Office: 717-787-4712

Toll free: 888-984-3478.

E-mail: dpileggi@pasen.gov

Senator Jake Corman, Chair of Appropriations Committee

Harrisburg Office: 717-787-1377

Senator Joe Scarnati, Lieutenant Governor & President Pro Tempore of the Pennsylvania Senate

Harrisburg Office: 717-787-7084