Sunday, October 20, 2013

Pretending to Forget What’s Right Under Our Feet Until the Ground Gives Way: EXCO’s Marcellus Gambit, the SAGO Mine Disaster, and the Price of Natural Gas

Why Philosophy Matters to Fracking: The Past is the Future

Long ago the foresightful German philosopher Friedrich Nietzsche argued that human beings were the sorts of creatures who, in the quest to advance their own self-aggrandizing interests, were compelled to forget acts of violence willingly committed to those ends. And not only acts of violence, but also deceptions, corruptions, swindles, exaggerations, extortions—in short all manner of iniquity for the sake of “progress” or “freedom” or “beauty” or “truth.” The trick, argued Nietzsche, is to insulate ourselves not merely from the notion that ends do not always justify means, but from having to remember the means at all.

Glory, after all, sounds a bit tinny heralded while walking over the bodies of the dead. Better that we should forget to look under our feet. Better that we should think of reason as an instrument of execution rather than a directive to conscience.

Such, Karl Marx argued, is the genius of capitalism: if each of us as workers and consumers can be convinced that what matters is the product—and not the process required to achieve it—we can be persuaded to participate in all manner of atrocity. What we have to believe is that the product is something we can’t live without, or that it makes us better, or that wanting it is our moral or religious or patriotic duty.

That such an extortion of consent requires the appropriation of reason to the task of “how” over “why” is certainly an enormous task—one that arguably epitomizes modern fascism as the corporatist domination of the state. Put in simpler terms, what effective marketing depends on is a kind of perverse social contract, one in which we collectively agree to forget just what sort of wounds we are willing to call mere “process” for the sake of a product upon which our dependence—however real—is made not of need but of created need.

And that is not the same thing at all—but, I’ll argue, it’s vital to the extraction industries that we should forget the difference.

Enter EXCO Resources, Inc, a natural gas corporation who, like all of its compatriots engaged in the Marcellus Shale Play, locates its raison d’être in the assumption that our need for fossil fuels is so great that we will sanction—forget—whatever EXCO does to get to the gas.

Like the addict who vanquishes all memory of the crimes they committed to get the heroin into their veins, so too EXCO counts on each of us—leased and un-leased, Shalers or non, gas field workers or ordinary consumers—to forego remembering the dirty lineage of that gas. The past, after all, portends the future; better to forget the past. The trouble is that when that future is climate change or war over access to the very water perversely fueled—literally—by the gas extraction process that destroyed it, the past will as surely return to haunt us as the name of the future is ecocide.

Forgetting, #1: EXCO at Fake Community Meeting,

DCNR State Forest Headquarters, January 2013.

The central cast of this first story of forgetting includes EXCO CEO Douglas Miller and Billionaire investor Wilbur Ross. It begins at a Sullivan County Energy Taskforce Meeting, DCNR (Department of Conservation and Natural Resources), January 8th, 2013 at the DCNR State Forest Headquarters in Laporte, Pennsylvania. Despite the fact that it was advertised as a “community meeting” aimed at providing information to its audience about EXCO’s drilling plans for Sullivan County, it became evident that the horizontal slickwater hydraulic fracturing corporation’s real motive was to sell audience members on the wonders of fracking sufficient to get them—mostly older folks—to sign leases before they left the building.

Indeed, we were informed at the door sign-in that landmen and EXCO lawyers would be available to negotiate leases. Nowhere, however, was what is arguably a misuse of a public building for purposes of marketing spelled out in the public announcement of the “community meeting”:

January 8, 2013 (Tue) 7:00 pm

DCNR State Forest HQ
Route 220, Laporte, PA


An opportunity will be available for EXCO Resource lessors and SC Energy Task Force attendees to hear a presentation from representatives of EXCO Resources. As you may know, EXCO has purchased much of Chief O&G LLC holdings in Sullivan County.

Presentation will include but not be limited to:

• How they do things

• Plans for 2013 for exploration in Sullivan County

• Price of Natural Gas

• Utilization of NG

• Pipeline construction

• Environmental and Safety and Traffic

• Water Well testing

• Questions and answers to follow

WHO: Adam Pope & other EXCO personnel.

The facilities are limited, so this is on a first respond basis and an RSVP is requested to confirm a seat. Rsvp to John Silla muncys [at]

Now I suppose that the reference to “lessors” and the disclaimer “but not be limited to” could be put to the service of “gonna get you to sign your land to a lease.” But “lessors,” of course, means “already leased” and “but not limited to” didn’t really cover the fact that the “other EXCO personnel” numbered as many as 20 landmen, a lease negotiations representative, and a lawyer who did her level best to keep me from taking photographs and fellow fracktivist Dean Marshall from filming—in a public building.

But let us set aside this potential impropriety (for more here see (4) Fake “Community” Meeting: EXCO Lookin’ for Some Love-Money ). What followed was the predictable dog and pony show about the wonders of fracking, the jobs, the cheap energy, the flag-waving patriotic appeal to national security, and the implicit but potent pitch to what “good Americans” (Why Fracking Epitomizes the Crisis in American Democracy: Profiteering and the “Good American” | Raging Chicken Press) do. When it was over, Adam Pope—folksy jeans-wearing PR guy for EXCO—asked for questions, and to the credit of members of the anti-fracking movement (and the evident consternation of the EXCO lawyer), he got some.

As I recounted in a piece for Shaleshock about why a number of audience members got up and left once EXCO’s record of environmental violations and fines was laid out:

Did they not want to hear about the DEP/EPA fines EXCO has paid within the last year of operations in Pennsylvania?
 (The Progress News: EPA enters into agreement with EXCO Resources) 
Were they disturbed when someone pointed out the fact that, once you do the basic math, the “.05″ EXCO claims is the amount of chemical solution (they called it “dish detergent”), amounts to hundreds of thousands of gallons of carcinogens, surfactants, and biocides for the millions and millions of gallons (they acknowledged five million as average) they use to frack a single well?

04/12/2012: EXCO Resources to Pay Penalty for Safe Drinking Water Act Violations in Clearfield County, Pa.

Were they taken aback by EXCO’s demonstrably false claim (see links in comments below) that they recycle “100%” os their waste water–when in fact they operate deep injection wells?

EXCO Resources pays DEP fine – | News, Sports, Jobs, Community Information – Williamsport-Sun Gazette

Burning Question: Where Are Pa.’s Deep Injection Wells? | StateImpact Pennsylvania

Did they wince at the point made that FracFocus reveals only those chemicals used in fracking that are not protected by EXCO’s proprietary property “rights”?

Hydraulic fracturing: FracFocus can’t replace full, public disclosure, groups say — 05/21/2012 —

Did they wince some more when ACT 13 was laid out as the complete industry-favoring sham that it is?

State-Codified Avoidance of Accountability and Genocidal Profiteering: Gag Orders, Compressor Station Explosions, Children’s Art Projects, and Fracking | Raging Chicken Press

Did the recoil at the revelation that EXCO will abandon its waste-water disposal wells once its bonds expire, and once any regulatory agency isn’t paying attention?

Wastewater Disposal Wells Under Scrutiny Following Irvin Leak – Pittsburgh Post-Gazette – 3 January 2012

I don’t know why these folks left. Perhaps they were lessors feeling a twinge of guilt they preferred to forget. Perhaps they were future lessors avoiding what they knew they’d have to pretend to forget. What I do know is that EXCO probably didn’t get what they came for, and that the reason this matters is because of what the EXCO CEO, Douglas Miller—who was at the “community meeting” would probably like to be able to forget.

Forgetting, #2: EXCO CEO, Douglas Miller, Tries to Leverage a Buy-Out Bid While Billionaire Investor, “Distressed Company Restructurer,” and SAGO Mine Owner, Wilbur Ross, Jr. Stands By Like the Wolf at the Door

Fact is, Douglas Miller needs his wells to produce. In January, 2011, the New York Times reported that

The board of Exco Resources, an oil and gas producer based in Dallas, said on Thursday that it was considering a buyout offer made by Douglas H. Miller, the company’s chief executive officer, which values Exco at $4.35 billion.

Mr. Miller told the board in October that he was interested in buying the company. He offered $20.50 cash for every share he did not already own, 38 percent above the share price before his bid was announced. The offer is yet another sign of the active management-led-buyout market.

The board said that it had “determined it is in the best interests of shareholders to commence a comprehensive and independent review of strategic alternatives to maximize shareholder value.”

(Exco Board Weighs Douglas Miller’s Buyout Offer –

It’s notable that Miller’s 38% premium ($20.58 per share) offer to take publicly traded (2006) EXCO private was even spicier than Exxon’s 2009 acquisition of XTO at a mere 25% (Betting on Exco Resources and Natural Gas – Indeed, despite the sharply falling price of natural gas, and even despite Exxon’s shareholder displeasure with the acquisition of XTO, Miller was apparently feeling pretty confident about his bid.

And why not? “Exco shares rose 26 cents, or 1.36 percent, to $19.34 on the news,” (Exco Board Weighs Douglas Miller’s Buyout Offer –, sufficient to gain the support of support of T. Boone Pickens who reportedly owns 9.2 million shares in the company. Plus, Miller was receiving good news from the frack fields:

The company also announced significant increases in its proved and unproved natural gas reserves, saying that they had grown 28 percent and 114 percent, respectively, from the previous year. Exco claimed 1.5 trillion cubic feet of proved natural gas reserves as of December 31, and said increases were coming from drilling in its Haynesville shale assets. (Exco Board Weighs Douglas Miller’s Buyout Offer –

The Haynesville “shale play,” however, is in Louisiana—not Sullivan County (or anywhere county), Pennsylvania (EXCO Resources).

Turns out that Miller’s confidence—and hence the money he needs to make good on this bid—may have been a wee bit premature. Almost exactly one year after the New York Times reports that “Mr. Miller is hardly going out on a limb with his offer” (Betting on Exco Resources and Natural Gas –, the Wall Street Journal informs its readers, November 2011, that he’s “licking his wounds from a botched effort to take his natural-gas company private” (Failure Has Its Rewards: Exco CEO Gets $3.3 Million – Deal Journal – WSJ). What happened?

Eight months go by, and no deal. Exco shareholders and employees start to get a little antsy and curious when and whether Miller was going to pull the trigger on a buyout. No other suitors seem interested in offering a rival takeover proposal. Then this summer, Miller made the unusual conclusion that his own company wasn’t worth nearly as much as he thought.

Or, rather, Miller realized he couldn’t borrow enough money to buy Exco on the terms he initially proposed. Instead, Miller tried to cobble together a deal to buy just a chunk of Exco, a deal that would have been cheaper but still leave Miller in charge. In July, Exco threw in the towel altogether on the idea of selling the company.

And where did that leave Exco shareholders? With a company whose market value has shriveled as much as $2 billion since Miller’s offer last fall.

(Failure Has Its Rewards: Exco CEO Gets $3.3 Million – Deal Journal – WSJ)

Key Phrase: “Miller realized he couldn’t borrow enough money to buy Exco,” not even a “chunk.” Incredibly, Miller is—true to the new American Way—rewarded for this spectacular failure:

And for his good work this year, Miller is being handed cash and stock awards with a current value of $3.26 million.

According to a regulatory filing today, the Exco board approved a $500,000 cash bonus to Miller based on the compensation committee’s “assessment of 2011 performance.” Miller also was awarded 266,317 shares of restricted stock. At Exco’s closing stock price Wednesday, those shares are valued at $2.76 million.

(Failure Has Its Rewards: Exco CEO Gets $3.3 Million – Deal Journal – WSJ)

Speaking of “chunks,” that’s quite a chunk-o-change—a fact which doubtless creates considerably more pressure on Miller to get those Sullivan County wells to come in.

Enter Billionaire Investor Wilbur Ross, Jr. who in the same week of July 2012, not only buys a Rene Magritte painting valued at 11.3 million but, according to Shane Sokol and Meena Krishnamsetty (who “owns a long position” in Chesapeake) of Market Watch, “purchased a very large number of shares of natural gas producer EXCO Resources, Inc. XCO +2.24%

(Billionaire Wilbur Ross’s latest energy pick – MarketWatch)

From June 18 through June 20, Ross purchased 700,000 shares at an average price of $6.78 per share. His total cost amounted to $4,746,751. Invesco’s WL Ross & Co. is a specialist in leading turnaround groups that invest in and restructure distressed companies. The fund is managed by Mr. Ross and has a sizable stake in the company. (Billionaire Wilbur Ross’s latest energy pick – MarketWatch)

To be specific 29.5 million shares compared to T. Boone Pickens’ paltry 9.2 million, purchased at $13.80 dollars less a share. The highest in fact that Ross ever paid for a share of EXCO was $14.00.


But that’s what you get for a company “whose market value has shriveled as much as $2 billion.” How did this happen? A familiar, all too familiar story—one the fracking corporations would surely prefer to forget:

Over the previous year (2010-11), a supply glut of natural gas drove the commodity to record low prices, prompting many investors to sell their shares of XCO without pause. The stock consequently fell off the proverbial cliff, tumbling from a 52-week high of $16.70 reached last July, to a 52-week low of $5.74 touched on both April 18 and 19 of this year. That is a drop of 65.6%, about two-thirds of the company’s market value wiped away in a few months. Since reaching those lows, shares have recovered slightly, trading near $6.92. However, that is still 58.5% off its peak. (Billionaire Wilbur Ross’s latest energy pick – MarketWatch)

More Ouch means more pressure.

The mystery, then, is why Miller has persisted. After all, he knows as well as anyone that “restructure distressed companies,” is corporate-speak for “vulture” and Wilbur is naught but the wolf at the door. Miller’s British—but the old chestnut about how the British character soldiers on hardly seems rational in this case. As Sokol and Krishnamsetty continues, however:

There does appear to be light at the end of the tunnel for XCO. Natural gas prices might be finding their footing as a recent report found that power generation plants used 40% more natural gas and 20% less coal this past March. As that trend may continue, the glut in natural gas supplies could be shrinking, helping to lift or at least stabilize prices.

Several analysts have recently become more positive on the stock as well. On May 8, KeyBanc upgraded XCO to a buy. Not only did analyst Jack Aydin see better gas prices coming, he sees opportunities others don’t and adjusted his 2012 earnings estimates from $0.04 to $0.16 per share, a 400% increase. Mr. Aydin stated this was an environment where “XCO has a number of potential transactions that are on the cusp of being consummated, which could provide significant catalysts for shares if executed to plan.” (Billionaire Wilbur Ross’s latest energy pick – MarketWatch)

That is, if the gas continues to roll in, if markets can be created at home and/or abroad to buy it in large enough quantities, and if Miller can hold out long enough, he may just be able to keep the Wilbur-Wolf at bay and make an even bigger bonus by 2014. No wonder he’s willing to get into some uncomfortable looking jeans and slum it with the good folks of rural Pennsylvania for an evening. Though he looked alternately bored and dismayed, I imagine him musing—or anguishing—over the latest Ross gambit. According to Michael Merced of the New York Times, by August of 2011, Ross, once dubbed “the King of Bankruptcy” by Fortune magazine, had raised his EXCO stake to 12% of the company, up from 9.8%, though his “purposes are unclear” (Wilbur Ross Raises His Exco Stake to 12% – Indeed,

Exco announced late last month [July, 2011] that it had reached a standstill agreement with WL Ross that prohibits the firm from owning more than 20 percent. The agreement extends to preventing the billionaire from offering to buy Exco or working with any other potential suitor.

That’s right after “Exco’s decision last month to call off efforts to sell itself. The company walked away from a $4 billion takeover bid led its chairman and chief executive, Douglas H. Miller” (Wilbur Ross Raises His Exco Stake to 12% –


And there’s this to consider: Ross is the big bad wolf. Via subsidiary corporations, Wolf Run Mining Corporation, itself a subsidiary of Hunter Ridge Mining Corporation, both subsidiaries of ICG, Inc, International Coal Group—formed in 2004 by Ross, Ross owns the Sago mine in Upshur County, West Virginia where a 2006 explosion was responsible for trapping thirteen miners—only one surviving.

“It was the worst mining disaster in the United States since the Jim Walter Resources Mine Disaster in Alabama on September 23, 2001,[1][2] and the worst disaster in West Virginia since the 1968 Farmington Mine Disaster” (Sago Mine disaster – Wikipedia, the free encyclopedia). The Sago mine had been sited 208 times by the Mine Safety and Health Administration (MSHA) in 2005, 96—nearly half—“serious and substantial (S&S).”

The Charleston Gazette said “Sago mine has history of roof falls“. MSHA found 52 violations from April to June, of which 31 were “serious and substantial” (S&S). From early July to late September, MSHA found 70 violations, 42 of which were S&S. MSHA inspections from early October to late December resulted in 46 citations and three orders, 18 of which were S&S. Violations include failure to follow the approved roof control and mine ventilation plans and problems concerning emergency escapeways and required pre-shift safety examinations. The Gazette article explained that “S&S” violations are those that MSHA believes are likely to cause an accident that would seriously injure a miner… Davitt McAteer, MSHA chief during the Clinton administration told The Gazette, “The numbers don’t sound good….[they are] sufficiently high that it should tip off management that there is something amiss here. For a small operation, that is a significant number of violations.” McAteer said the roof fall frequency “suggests that the roof is bad and that the support system is not meeting the needs of the roof.”

Sago Mine disaster – Wikipedia, the free encyclopedia

Yet when Ross was interviewed January 2006, by Brian Ross of ABC, here’s what he had to say about safety at SAGO other than “Oh, my God, it’s the worst week of my entire life.”


Would you call this a safe mine?


I believed that the mine was fundamentally safe.


You really do?


Yeah, I really do. (SCRIPT: Sago Mine Owner Speaks 1/5/06 – ABC News).

Apparently, Ross is very good at forgetting.

Brian Ross went on to ask Wilbur Ross what he thought of his Wall Street reputation as a vulture investor. The latter responded “[n]o, I think if we had a bird, it wouldn’t be the vulture. A vulture picks flesh off a dead carcass.” But the Sago mine “had been in bankruptcy for two years when Ross bought it and bought into a mine that for its size may have been the most dangerous coal mine in America” (SCRIPT: Sago Mine Owner Speaks 1/5/06 – ABC News). Moreover, Ross knew Sago’s violation history—twenty roof collapses and thirteen partial shutdowns just the previous year—and when Brian Ross asked how he could operate a mine like that, whether he was comfortable “sending men into that hole” the possible next CEO of EXCO responded that

We were comfortable based on the assurances from our management that they felt that it was a safe situation.

And that’s pretty much it. Wilbur Ross did establish a two million dollar fund for the surviving families, but as Brian Ross remarks “It seems, with all due respect, sir, sort of cheap.” And, it turns out not one dime of that was Ross’ own money—despite the fact that he controls ten billion dollars in company assets. Compare that to the original $4,746,751 he put into EXCO.

Were I Doug Miller, I’d be going to every “community meeting” I could get myself invited to, and I’d be bringing every one of my grubby landmen with me.

Wilbur Ross epitomizes the good American of America, INC. not despite his being the Big Bad Wolf, but precisely because he epitomizes the “entrepreneurial spirit” captured in the cynical and extortive use of extraction industry rhetoric like “Cheap! American! Abundant!”

No pitch more succinctly captures EXCO’s dog-n-pony show at the Sullivan County “community meeting” replete with slide show including flags, gorgeous vistas and distorted graphics of the fracking process.

Douglas Miller—jeans and all—plays not only at Marcellus extraction, but plays his audience in the hope of securing leases, getting frack pads constructed, getting the profits rolling in before his board of directors decides to lift its moratorium against how much of the company stock Ross can buy. As Miller certainly knows in his bones, Ross has plans for EXCO.

Reported by Reuters, September 24th, 2012: “Billionaire investor Wilbur Ross plans to take part in China’s first shale gas tender open to foreign investors by teaming up Exco Resources (XCO.N), a U.S. natural gas firm he holds a stake in, with a Chinese partner” (Investor Wilbur Ross eyes JV in China shale tender | Reuters). In other words, Ross is hedging his bets against Miller’s gambit in the Marcellus by committing EXCO to a “partnership” with the Chinese to frack China. That way, even if Miller’s Marcellus shale play goes belly up, Ross will make good on his 12% investment.

Ross, one of the world’s best-known distressed-asset investors, travelled to Beijing this week to find a joint venture partner for Exco, which has been struggling with a sharp decline in natural gas prices.

Ross, who owns at least 12 percent of the company through his investment arm WL Ross & Co, became an Exco board director in March.

“I think we will have a joint venture partner. Bids are due in (late) October and we hope to be organized by then,” the WL Ross CEO told Reuters at a conference in Singapore, though he declined to name the companies he was talking to.

Ross: “There have only been 63 wells drilled with that technology, whereas there have been over 1 million drills in the United States. So I think there will be quite a few joint ventures between Chinese companies and American companies that have the technology.”

Investor Wilbur Ross eyes JV in China shale tender | Reuters

And that is what fracking for natural gas production is all about: profiteering regardless life, environmental integrity, or human suffering. China has among the worst environmental records with respect to extraction of fossil fuels in the world (China’s out of control pollution – Le Monde diplomatique – English edition).

But Ross no more cares about that than he apparently cared about the Sago mine workers or their families. Wilbur Ross is not only the “King of Bankruptcy,” he’s Douglas Miller’s best friend and worst nightmare.That’s a lot to try to forget.

Forgetting #3: EXCO in Sullivan County, Pennsylvania, the Price of “Exceptional”

Were I Douglas Miller, I might be dreaming in the King’s English, but I’d be having nightmares in Chinese. Or—nearly, but not quite. As was reported in February 2013, if Miller could get those Marcellus wells producing, connected to pipeline, the gas ready for transport, he might yet be able to pull out some sort of deal.

Enter the one investor who controls more EXCO stock than Wilbur Ross, Howard Marks of the investment firm underwriting Miller’s buyout bid: Oaktree Capital Investments (Oaktree home page). “In addition to Wilbur Ross, Howard Marks has also built a position in XCO of 37 million shares, representing 5% of his portfolio according to Insider Monkey… In fact, put together Ross’ 32 million shares and Marks’ 37 million shares and that accounts for more than half of the float of 132 million shares.

In July 2011, XCO’s CEO put together a deal to take the company private at $18.50/share. Although the deal fell apart, Oaktree was one of the funds enlisted to facilitate the buyout.” (EXCO Resources – Wilbur Ross, Howard Marks All In On This Beaten-Up Stock – Seeking Alpha). Could Marks keep the Ross-Wolf outside the EXCO door? Perhaps. This seems clearly in the interests of Oaktree—but what it all depends on is not just the success of the shale play, but a rise in the price of natural gas, and this, of course, depends upon creating both domestic and global markets for it. Hence it’s no surprise that EXCO secured a recent 50% interest in TGGT, a midstream “gathering system” pipeline in North Louisiana and East Texas (EXCO Resources), partnered with Harbinger Group, Inc. to the tune of 597.5 million paid to EXCO, and whose aim is to create “a private oil and gas joint venture that will buy and operate Exco properties in Texas and Louisiana” (Harbinger, Exco form oil and gas joint venture – Yahoo! Finance).

It’s also no surprise that Wilbur Ross is romancing the Chinese.

With so much pressure to make his Marcellus Shale Play come to fruition, it’s no wonder that MIller might be willing to cut whatever corners he can to get production moving. Hell’s bells, he already has. Welcome to EXCO’s newest “play” on PA State Game Lands: The EXCO Elk Grove Hunting Club, Pad 1-9H. On January 12th, 2013 Dean Marshall and I drove out to this new site because I wanted to begin the process of photo-documenting a site whose suitability for fracking I consider particularly troubling.

Located on tax-payer supported state game lands, just up-hill from a village dependent almost entirely on outdoor recreation, adjacent to the West Branch of Fishing Creek—a major water source which feeds directly into the Susquehanna River, and thus ultimately into the Chesapeake Bay—and criss-crossed up to a mountain top pad by “exceptional value” trout streams with pretty names like Painter’s Run, it’s hard to imagine a more vulnerable location.

What our drive revealed was EXCO’s first stab at trading expediency for environmental protection. As the photographs I sent to a DEP agent (who will remain anonymous) show, EXCO had provided little or no Erosion and Sediment (E&S) prevention to keep mud—potentially contaminated with diesel—from washing into the West Branch of Fishing Creek. We called DEP, and I followed up January 15th with email to the agent. The agent responded with a request to send the photographs, which I did. What followed was an investigation by the agent, and an ensuing “notice of violation”:

Remarks: This inspection (beginning at approximately 13:00 on a warm sunny day follow a major thaw) was prompted by a complaint that E&S controls were lacking on the site (Complaint #294285). A previous inspection observed that the narrow Game Commission Rd (Forest Road) leading to the site crosses a number of headwater tributaries vulnerable to sediment discharges. EXCO site manager Pat Weaver has been adding rock to the road, and installing check damn and silt rock in roadside ditches in an attempt to protect Waters of the Commonwealth…I observed violations of PA environmental regulations on the impoundment site.

Currently the HWD11 Rig and associated equipment is being stored on the impoundment site. The impoundment site is still under construction. There are large soil piles that need to be moved and modified, the site is not at final grade, there is no surface rock or gravel in place. Since there has been snow, freezing rain and rain in this location, the surface of the impoundment area is very wet. Much of the rig equipment is on containment. However, during my inspection I identified a number of areas on the impoundment site where pollutional substances were released or spilled onto the ground.

These were spread across the Southwest quadrant of the impoundment where much of the equipment was stored. In particular, I observed a pollutional substance on the ground and downslope in puddles. There was also petroleum product traveling in a small flow of water from underneath containment. I could not tell if this was emanating from a leak in the containment or from underneath the containment. There were also several other small, strongly iridescent puddles…In particular the petroleum product sheens were thick, iridescent, reformed when split apart, and gave off a string chemical odor. The other pollutional substance was thick, white to cream or off-white in color, slippery to the touch, and also gave off a strong chemical odor.

During my inspection, staff called for a vac truck and crew began laying down absorbent pads…I was told that the rig is onsite awaiting completion of the pad so that drilling can begin.

It is also worth noting that this gas drilling is located in, and is surrounded by, Exceptional Value watersheds which contain a number of streams that support natural trout reproduction and include a Class A trout stream.

I have included almost all of the notice to insure its accurate representation with respect to its “exceptional” location, and in order to make the following observation as clearly as possible: EXCO had not yet even begun to drill, and had not Marshall and I taken the time to drive out to Elk Grove, had we not reported the absence of an E&S plan, had we not followed up by emailing the DEP agent, goading the agent to visit the site, these streams might have already been polluted.

They likely already have.

But given the pressure to “Frack, baby! Frack! which must surely govern Douglas Miller’s every waking minute, and given that EXCO was not fined in this incident, and given that DEP is governed by a profoundly corrupt Corbett administration whose head, Michael Krancer (Solicitor for Exelon) has made it his mission to insure the Susquehanna River is not listed as impaired, my bet is that a few “exceptional value” trout streams don’t even generate a ripple in Miller’s conscience, much less his wolfish-BFF, Wilbur Ross’.

I drove out again to the site on January 18th, and this time I hiked the two miles up to the frack pad. What’s clear is that the Game Commission road—Forest Road—is wholly unprepared to absorb the truck traffic pounding up and down this small mountain. Any accident along this road could prove disastrous, and as the photographs illustrate, the trout streams cross under the road over and over. The EXCO Elk Grove Hunting Club frack pad is an environmental and economic catastrophe waiting to happen.

Any accident that runs downhill, down stream, down creek is going to destroy the recreational economy of the village below as surely as the Spring thaw will arrive.

And this is just one of hundreds of well pads operated by EXCO who depends on there being virtually no oversight, no substantive fines, no meaningful regulation, and no meaningful will on the part of the state to decline permits for wells, compressor stations, dehydrators, water withdrawals, or pipelines.

We might be tempted to appeal to Act 13 on this score, and argue that the dollars the Village of Elk Grove will receive from its impact fee will off-set if not remediate any negative effects from the drilling. But this too would be short-sighted and economically mercenary at best since there will simply be no amount of money sufficient to restore these streams once they have been polluted—particularly if that pollution involves the well-documented highly carcinogenic chemicals utilized in the fracking process—many of which remain protected both in identification, quantity, and interactive effects by the G.W. Bush administration’s strengthening of proprietary rights laws in 2005.

Who, moreover, would risk eating fish from these streams given Act 13’s gag order which criminalizes physicians who reveal the potential amount or mix of the fracking chemicals to patients demonstrably made sick by those chemicals? Perhaps, the pro-gas advocate might argue, the possibility of damage to these exceptional streams is too abstract—it hasn’t happened yet. Such, of course, was Ross’ reasoning about the Sago mine—until the roof caved in and suffocated twelve human lives. Such is obviously Exco’s reasoning at the double-frack site one minute over a narrow bridge shared by school buses just outside of Lairdesville, PA—one minute from an elementary school.

Let’s imagine a second interview with Wilbur Ross, this time after, say, a Minuteman Residual Waste Tanker and a school bus filled with thirteen elementary school children collide on icy two lane Rt. 118 just before the bridge into Lairdesville and the school parking lot.

Let’s say that after hours of attempting to extract and revive the children, one survives.

ABC Reporter

Would you call this a safe route for residual waste tanker trucks to share with school buses?


I believed that the road was fundamentally safe.


You really do?


Yeah, I really do.

Perhaps Ross will offer the parents two million dollars as compensation. But why should this be any more the cold comfort than the paltry two million he offered to the families of Sago? Would two million make the residents of Elk Grove feel better once they’ve lost their livelihoods to an “inadvertent return to surface”?

That tanker accident, explosion, “return to surface” hasn’t happened yet. But if it does, there will be no impact fee to return the lives of dead children to their parents; no impact fee that can restore the communities divided and conquered by the landmen; no impact fee that can eradicate the breast cancer associated with exposure to Benzene—just one of at least 27 carcinogens in the fracking cocktail.

There is no impact fee that can return “exceptional” status to Pennsylvania’s waterways once they’re saturated by the carcinogens, biocides, surfactants, and potentially radioactive flowback seeping from fissures in cement casings estimated by the industry itself to leak 6% of the time—right from the start—and 100% of the time eventually.

But what EXCO asks us to forget is all of this for the sake of calculating the value of our communities, our environments, and our lives in terms of two things, jobs and an effective bribe that’s nothing more than a cheap imitation of a severance tax.

Forgetting #4: Mountains of Charlatans

The scale of charlatans deployed throughout the Marcellus shale play is impressive and plentiful. It includes those, like Douglas Miller and Wilbur Ross, whose power and influence can buy them cover behind the promise of things like jobs, sponsored community events, new school buildings, improved roads, donations to charitable organizations—all investments in our complicity, our indebtedness, and our silence. Organizations like the Marcellus Shale Coalition and the notorious anti-regulation hit squad Energy in Depth run interference for an industry seemingly intent on ripping the last fossil fuel dollar from under our feet even at the risk of converting the state into a future super fund site.

The ace of the Marcellus shale play, of course, lay in the promise of jobs. If we can be persuaded to simply forget the role Big Energy played in the 2007 banking crisis, the ensuing Great Recession, and the stock market plummet, we can be convinced that corporations like EXCO have our best interests at heart, and that the evidence is in the well-paying proliferation of employment in the enormous array of directly related—say, well-pad construction—or ancillary industries—say, motels and taverns—benefitting from fracking—at least during its boom.

The young Karl Marx argued that when the value of a human being becomes commodified as the exchange value of her or his labor—once that exchange value is internalized—workers can be counted on to identify their own interests with that of their bosses, well, their bosses’ profits. Such was brought home to me recently in a particularly crude attack on a photograph I had posted in an album some months ago on Facebook.

The photograph depicts a mobile home being removed after the end of the resistance at Riverdale Mobile Home Community when the land was sold to Aqua America for the construction of a water withdrawal site for frack operations near Williamsport. I had tagged the picture with a critical appraisal of Aqua America’s motives, and for reasons unknown to me a passel of fracking industry workers alighted on it, and began what became 204 comments worth of declamatory assault which included calling me a “scum-sucking bitch” and offering me salacious opportunities to join them in their frack water hot tubs, among other things.

Clearly threatened by anyone who’d dare to criticize the industry that paid for their RVs, their rifles, their cars and trucks, they splattered out industry talking points about “clean,” “American,” and “abundant” in between a blue streak of invectives, taunts, and slurs.

These men—reckless, misogynist, and arrogant—provided a picture of life on a drill pad that should leave all of us chastened and circumspect about a worldview common to the fracking industry. But—and this is the moral of my long story—we would be forgetful fools if we thought that there existed a morally relevant difference between these workers and the Douglas Millers (EXCO), the Howard Marks (Oaktree), the Aubrey McClendons (Chesapeake), the Dan O. Dinges (Cabot), the Jeffrey Venturas (Range Resources), the James T. Hacketts (Anadarko), the Jack Williams (XTO), the Nick DeBenedictis (Aqua America), the John Shermans (Inergy), or the Wilber Rosses of the world—all white, all male very much like the vast majority of shale field workers who identify with them—and haven’t a chance in the world of being them.

The difference is strictly economic. Corporations like EXCO can afford to buy all the government collusion, the department of environmental protection acquiescence, fake community meetings, and recession-weary workers they want. But when the price is the conversion of our state forests, game lands, neighborhoods—especially poor ones—our roads, and fields, and rural ways of life into, as geo-science professor and frack-industry consultant Terry Engelder puts it, sacrifice zones—it’s not just that the price is too high. It’s that while guys like RJ Mundrick can call us names, Wilbur Ross can effectively kill us. While reckless and exhausted frack field truck drivers might be guilty of illegally dumping flowback water onto forest roads, Douglas Miller can insure nothing is done about it. While a roughneck might harass a local waitress—even get away with it—Dan Dinges can preside over the operations that destroyed an entire community—Dimock—and be rewarded with millions in salary and stock options.

Calling me a “scum-sucking bitch” is at least an honest use of the first amendment, and it brings me back-round to Friedrich Nietzsche and forgetting. To be complicit in the face of ruin is, I think, to be complicit in the fact of ruin.

It is, in other words, not merely cowardice to do nothing when the facts arrayed before you spell destruction, it is something yet more loathsome. It is willful forgetting. Wilbur Ross counts on us to forget Sago. EXCO counts on us to forget its record of environmental violation in, for example, Clearfield and now Sullivan County. Cabot counts on us to forget Dimock. Range Resources counts on us to forget its record of illegal dumps of frack fluids, its contamination of drinking water wells with benzene, or the personal injury lawsuit in Washington County for exposure to “toxic leaks, spills, and air pollutants from Range’s fracking operations in Yeager Marcellus Shale, Pennsylvania” (Range Resources – SourceWatch). The only response I received from DEP concerning the 403 variations on “scum-sucking bitch” was

Hi Wendy,

I would ignore it. I think that it’s First Amendment flaming. They can say what they want about DEP.

Yes they can, and they can count on DEP to forget, right along with the citizens of the Commonwealth, that our water is being poisoned, our property values tanked, our air polluted, and our communities destroyed. This response was from the same DEP agent who promised to keep an eye on EXCO at Elk Run.

What the fracking industry counts on us to forget the most is that there exists at least one value higher than money, namely, life. Slickwater horizontal hydraulic fracturing threatens life.

And if we forget that we’ll end up with neither.

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