Transparency Question
We are asked why we fight so hard. The answer is that what began as a business negotiation has now become a fight for principles: It is about property rights, value and making smart decisions about this nation’s energy independence. And because of one ethical blunder after another by Spectra Energy and the Federal Energy Regulatory Commission (FERC), it has become a fight for transparency.
For example, why are Spectra Energy and FERC now refusing to put meters on each of the planned 23 injection wells in this huge underground gas storage project? It is a simple fact that gas can migrate underground.
On the other hand, it is not well known that FERC permits storage field operators to seek and to capture what they call migrating gas — including “native” or new gas (not to be confused with “stored gas”).
Initially, Spectra Energy said that each of the 23 gas injection wells would be metered. This fact is in the pre-filing draft of June 29, 2007 (p. 13, paragraph 1.3.1 “Storage Wells,” pdf attached). Spectra also made this statement to several landowners. Then suddenly, 23 meters became one meter — more efficient we’re told. Efficient for what purpose, we ask?
In addition, Spectra Energy, a storage company, has hydraulic fracturing pre-approved in its FERC certificate. When a well or storage field is stimulated with the hydraulic fracturing technique, additional native gas is recovered. Hydraulic fracturing can be used to stimulate either a well or a storage field to recover additional native gas.
Horizontal hydraulic fracturing is also part of the recommended technique for recovering gas from the Marcellus Shale. The Marcellus Shale, in this case, is next to the proposed storage area (in the Oriskany Sands).
Metering each well is the only way to ensure that there will be no deceptive taking of new or “native” gas from these wells. Transparency builds credibility; and surely both FERC and Spectra Energy support transparency. Spectra Energy CEO Fred J. Fowler says it well in Spectra Energy’s website video where he states (emphasis added):
“We define success by building mutually beneficial relationships … and conducting our business with an unwavering sense of integrity, stewardship and accountability.”
After we drew attention to the CEO’s statement, the video was replaced late in 2008 with a 3-minute state-of-the-company video from Mr. Fowler. The timing of this replacement video is odd in that Mr. Fowler retires at the end of 2008. Why not wait for his successor’s video? Perhaps he and his executive team understand the difference between principles and platitudes — and it was time to bail on the platitude, before someone asked him to live up to it.
This case has attracted attention because it is the first such eminent domain case where a proposed storage area is next to a gas-rich recovery area – the Marcellus Shale. Eminent domain is becoming a lightning-rod issue; and many are watching FERC, Spectra Energy and the landowners. We need to produce more domestic gas and stop importing gas – and stop destroying the opportunity for property owners to recover the natural gas resources which are under their property not Spectra Energy’s property.
Our properties are shown to have the Marcellus Shale and other formations underneath. Since the property belongs to us, we prefer to use it to recover more gas rather than to store gas. That is the key issue on property rights and value. In a free market, that should be our choice. Instead, property owners are treated as obstacles to someone else’s entitlement