Daniel B. Markind, Esq.
Weir and Partners, LLP
Delivering energy to consumers is, despite the tremendous benefits to both our economy and our environment, a constant battle with energy NIMBYs and other special interests, but reason usually prevails.
Last week, a Dallas jury awarded Energy NIMBYs Bob and Lisa Parr $2,925,000 from Aruba Petroleum for “intentionally creating a private nuisance” through Aruba’s drilling operations at 21 gas wells near the Parrs’ home in Wise County, Texas. The Parrs claimed that Aruba’s actions had caused so much pollution that they had been forced to vacate their 40-acre property for weeks at a time between 2008 and 2011. By a 5-1 decision, the jury awarded the Parrs $2,000,000 for past physical pain and suffering, $400,000 for past mental anguish, $275,000 for lost market value to the Parrs’ property, and $250,000 for past pain and suffering.
Attorneys for the Parrs are calling this “the first fracking verdict in U.S. history,” [though it had nothing to do with hydraulic fracturing.] Aruba, stated that it will appeal.
Energy NIMBYs Exploit Press
Earlier this month, a study was published in the Proceeding for the National Academy of Sciences estimated that hydraulic fracturing drilling operations released methane into the atmosphere at 100 to 1,000 times the rate previously estimated by the United States Environmental Protection Agency. Not surprisingly, the study came from individuals well known for their opposition to hydraulic fracturing, and used some rather curious methods and extrapolations. Also, not surprisingly, the study received an enormous amount of coverage in the press. Energy NIMBYs always do.
While there are numerous reasons to be wary of the findings of this study, it does a service to the industry highlighting how beneficial actions are that trap methane in the drilling process. This will work for their bottom lines, the environment and the overall business climate as well. Indeed as I mentioned last time, Ohio, Colorado and Wyoming now limit the emissions of methane from oil and natural gas operations. Expect other states to follow soon.
A CSX train recently derailed and burst into flames in Lynchburg, Virginia. Three cars tumbled down an embankment into the James River. The train was carrying crude oil from the Bakken Shale, and the accident caused 30,000 gallons of crude oil to leak into the river, creating a sheen up to nine miles long. Add to this the fact that a few months ago the United States Department of Transportation warned that Bakken oil could be more flammable than other types of crude, and we can expect calls for tougher regulation of the transport of oil and gas by rail.
Energy NIMBY Challenges Must Be Met with Reason
This would seem to be an argument for better pipeline transmission of oil and natural gas, but pipeline projects also have run into problems. This week Sunoco Logistics withdrew a zoning application for special exceptions to permit a pumping station in a township thirty miles west of Philadelphia to facilitate completion of the “Mariner East” pipeline. The pipeline would deliver natural gas liquids from Marcellus Shale fields in Western Pennsylvania to Sunoco’s Marcus Hook refinery on the Delaware River south of Philadelphia. The application, which would have been heard last night, drew significant local opposition, despite the fact that a pump station already exists in that location and has been there since the 1930s.
Sunoco is now returning to its prior strategy of working with the Pennsylvania Public Utility Commission to try to bypass the zoning process. While Sunoco’s prior attempt to argue that it was already a public utility was turned down by the Courts, Sunoco is refining its methods and legal strategy based on saying that it already is an intrastate project, subject to PUC tariff review. As such, the appropriate place for its application is the PUC and not the local zoning board.
While many in the environmental movement continue to take an absolutist approach, there remain voices of reason. Among them is Fred Krupp, the President of the Environmental Defense Fund. On Tuesday he joined former New York City Mayor Michael Bloomberg in an op-ed in the New York Times that noted the legitimate environmental concerns but touted the continued development of shale energy production, so long as it is subject to proper regulation.
The danger Krupp and Bloomberg recognize is a vast energy NIMBY problem developing around the production, refining, transmission and delivery of natural gas and oil. Anyone driving our roads sees the result of over 30 years of disinvestment of our national infrastructure. The same goes for our production and delivery of energy. It is not surprising that many who clamor the loudest against transmission pipelines being developed and constructed will rail the loudest when there are energy shortages or power blackouts. As a society we can’t have it both ways. How and what we decide will determine our economic and political future for years to come.