Air Date: Week of October 22, 2004

Over the past few years, Halliburton has led the effort to exempt a specific drilling technique from environmental regulation. The technology called hydraulic fracturing, or fracking, forces oil out of the ground under enormous pressure. The vice president’s Energy Task Force included language that supports fracking in the energy bill, now under Senate consideration. The EPA has determined the technique poses no threat to drinking water supplies. And yet residents who live near fracking projects complain of carbonated and polluted drinking water. Host Steve Curwood talks with Wes Wilson, an engineer with EPA, who’s filed criticism against the agency for its lack of scientific review. Tom Hamburger, who’s covered the issue for the Los Angeles Times, also joins the conversation.

Transcript

CURWOOD: From the Jennifer and Ted Stanley Studios in Somerville, Massachusetts, this is Living on Earth. I’m Steve Curwood.

We’ve heard a lot in the past year about Halliburton, the corporation formerly headed by Vice President Dick Cheney, and its activities in Iraq. Now, two reporters at the Los Angeles Times have uncovered a series of measures the White House has taken here at home that would benefit a key oil and gas drilling technology developed by Halliburton. It’s called hydraulic fracturing, also known as fracking. And critics say, in certain cases, it can endanger drinking water supplies.

The national energy bill, which was overseen by the vice president’s Energy Task Force, includes language that encourages fracking. And Halliburton has lobbied extensively to exempt this practice from regulation under the Safe Drinking Water Act.

A recent study by the EPA stated that fracking does not pose a threat to drinking water supplies; Weston Wilson thinks otherwise. He’s an environmental engineer for the EPA in Denver, and has sought whistleblower protection in order to criticize the agency, claiming its review of fracking lacks scientific objectivity. He joins me now from the studios of KCFR in Denver. Also joining me is Tom Hamberger, one of the LA Times reporters who uncovered this story. Gentlemen, hello.

WILSON: Hello, Steve.

HAMBERGER: Good to be with you.

CURWOOD: Tom, I want to start with you. This is a pretty complex investigation you’ve done here for your paper. How did this story first get on your radar screen?

HAMBERGER: Steve, we were in the course of this year, like a lot of other reporters, taking a look at the Bush administration record broadly in the area of environmental and energy policy. And after writing one of our stories, we heard from an EPA employee – a former employee, not Mr. Wilson, who’s on the air with us now, but a EPA employee who worked with the White House Energy Task Force back in 2001. What he described to us was what he thought of as a kind of peculiar interest on the part of the vice president’s office with a portion of this White House Energy Task Force report that affected a drilling technique that was pioneered by Halliburton Corporation. As you might imagine, that got our attention, and that is really the genesis of this story that you have in front of you today.

CURWOOD: Now, Tom, you write that there was an EPA study to determine the environmental effects of this drilling technique. And before we get into that, I’d like to get an idea of what exactly fracking is, as those in the industry call it. And Wes Wilson, you’re an environmental engineer for the Environmental Protection Agency, perhaps you’re the best one to answer this for us.

WILSON: Yes, Steve. Well, hydraulic fracturing in coal beds is the process of pumping a thickened fluid into a well that exceeds the capacity of the coal bed to accept it. And they increase the pressure in the injected fluid, which results in cracks or fissures, allowing a path for those injected fluids to move along those newly formed fractures. And here’s the most important thing for your listeners: while the hydraulic fracturing process in oil and gas has been done in conventional geologic traps since the ‘50s, this is a relatively new practice in coal bed methane.

CURWOOD: So, how did politics get involved with this drilling technique? Tom?

HAMBERGER: One of the things that we learned, Steve, was that through the 1990s, largely as a result of a lawsuit brought by some residents of Alabama, there were environmental concerns about widespread use of the technique. In most cases it’s perfectly safe, but in Alabama some residents claim that their drinking water was fouled after fracturing companies, of which Halliburton is the world leader, injected chemicals underground. EPA was ordered to oversee the regulation of this technique under the Safe Drinking Water Act, and from that time in the mid-1990s it became a priority of the fracturing industry – of which Halliburton again is the leader – to seek exemption from federal regulation.

CURWOOD: Now, the EPA study concluded that fracking poses no threat to drinking water and, therefore, it doesn’t have to be regulated under federal drinking water laws. But, Wes Wilson, you filed a statement under the whistleblower protection that says that the study was scientifically unsound. This puts you in a somewhat vulnerable spot, I’d guess right now. Why did you decide to take this action?

WILSON: Well, I did this for three reasons. First, EPA did not follow its own science policy, which required EPA to obtain water quality data in each one of these basins to determine whether the water, the groundwater, remained safe for drinking. Second, EPA’s decisions are not consistent with the law, they’re not consistent with the Safe Drinking Water Act. And third, EPA relied upon a peer-review panel which itself had conflicts of interest.

CURWOOD: Let’s look at those one at a time. First, the peer-review panel. What was the problem there?

WILSON: Well, EPA didn’t follow its own science policy. This policy that EPA has is that reviewers should be free of real or even perceived conflicts of interest. Yet five of these seven-member panels appear to have a conflict of interest. They include an engineer who worked at Halliburton; a manager who worked at the Gas Technology Institute, an organization of the industry; an engineer of BP Amoco; and two professors who had worked for the oil and gas industry. The sixth member was a state regulator who worked for Amoco in the past, and the seventh member worked at the Department of Energy’s Sandia Lab. Well, in my view, this is not a peer-review. This is simply, I think, a thin veneer cover over what is a scientifically unsound study, while the scientific process of peer review was abandoned.

CURWOOD: Seems to me it would be simple enough just simply to test the water. Why did the EPA choose not to test the water?

WILSON: Well, that was one of my first reasons for objecting. EPA has no data on the amount of fluids injected, what remains in the ground, whether the groundwater will be unusable to drink, or what those health risks are. Yet EPA reached this unsupportable and scientifically unsound conclusion that hydraulic fracturing of coal bed methane poses little or no threat to drinking water supply.

CURWOOD: Tom Hamberger, you’ve been working on this case for a while. What’s your sense of what the risk might be to the public?

HAMBERGER: Well, fracturing generally occurs safely in most cases. It’s been widely used and is widely used without incident in most cases. However, we ran across in Alabama, and in numerous other states, accounts that fracturing may, in some cases, have inadvertently fouled drinking water supplies. We did talk with some of the Alabama plaintiffs who brought suit against EPA saying this must be regulated. And while their case was not proven because there wasn’t a timely investigation of their claims, what they described was quite dramatic. Which is, almost immediately after wells near their property were fractured, they turned on their taps at home and discovered literally carbonated water coming out. It was bubbling and it contained small specks that looked like maybe coal specks, and also a gelatinous fluid that appeared, one of them said--if you’ll forgive me for saying it on air – it seemed just like snot but it was running all through the water. Unfortunately, there were not scientific tests, lab results available to show exactly what was in this stuff. But I can tell you that the residents of Alabama that we talked with feel very strongly that it was fracturing that led to this strange results when they turned on their taps.

CURWOOD: And I guess the number one lesson in any investigative reporting is to follow the money. So I’m wondering, what kind of money trail did you find in this story?

HAMBERGER: Well, that’s the old investigative reporter’s moniker, you got it. And what we wanted to see, indeed, was this technique important to Halliburton? And we found the technique was pioneered by Halliburton. The first test of hydraulic fracturing commercially was done by Halliburton in about 1949. And we learned subsequently that three companies dominated the business worldwide, and that for Halliburton the hydraulic fracturing business brings in about $1.5 billion annually – about a fifth of its energy-related revenues.

Second, we found that the company had intervened in the lawsuit that I referred to earlier in Alabama. It notified the court that the technique, and regulation of it, could have a serious impact on Halliburton’s financial future. So that’s the money trail to the company, if you will. That’s why Halliburton, and the other two companies that dominate this technique worldwide, had a strong interest in whether or not the federal government chooses to regulate it.

And then there’s a controversy, ongoing, of Vice President Cheney’s ongoing financial interest in Halliburton.

CURWOOD: Well, what is the nature of the conflict of interest here possibly involving the vice president? I mean, he was at one point the chief executive officer of Halliburton and, I gather, during some of the time that the questions were being raised about this fracturing technique.

HAMBERGER: Well, one, the vice president does continue to receive deferred compensation from Halliburton; and second, he has several hundred thousand stock options to purchase Halliburton stock, which are unexercised. Under normal circumstances, the Congressional Research Service concluded, even with agreements to donate those profits to charity, or to have an insurance policy so that the payments occur whether the company survives or not – even so, the Congressional Research Service said, conflict of interest rules would apply to a typical federal employee. However, these rules do not apply to the vice president of the United States. And the vice president has said emphatically that he has severed his ties to Halliburton. His Democratic opponents and some in Congress disagree, and we just have to leave the facts out there, I guess, as I’ve described them. Let the readers decide.

CURWOOD: Tom Hamberger, as you have looked into this story, to what extent, at the end of the day, do you feel that Vice President Cheney’s connection to Halliburton, and his position as vice president, has been used really to forestall the implementation of regulations of this technique?

HAMBERGER: Steve, that was a good question, and it’s very much the one that editors posed to us at the outset of this project. And I have to tell you, it’s a little bit difficult to answer with great certainty because the vice president’s office, particularly under this vice president, is unusually secretive in its deliberations and its discussion in general and especially associated with this Energy Task Force report. What we were able to conclude was that the vice president’s office was directly involved in discussions with EPA over how to represent, how to discuss this technique in its energy policy report.

And the second thing we decided to do was to look at what, in effect, is the bottom line. What did the administration do with the regulatory questions in front of it regarding this practice? And what we found there was, I guess you would say, three for three; in all three cases, the administration came down on behalf of this technique against regulation, and in behalf of the position taken by the vice president’s former employer.

CURWOOD: Wes Wilson is an environmental engineer for the Environmental Protection Agency’s office in Denver, and Tom Hamberger is a staff writer for the Los Angeles Times based in Washington. Thank you both for speaking with me today.

HAMBERGER: Thank you, Steve.

WILSON: Thank you, Steve.

CURWOOD: In response to Weston Wilson’s accusations, EPA Press Secretary Cynthia Bergman says the EPA’s study was submitted to “a scientific peer review panel of experts from industry, academia and government agencies.” Ms. Bergman also said the EPA decided it would not look further into the matter because “the EPA was unable to identify confirmed cases where drinking water was contaminated in their study in Alabama.”

Wendy Hall, Director of Public Relations at Halliburton, says the company has ended its practice of using diesel fuel for hydraulic fracturing. As for the selection of one of its employees on the peer review panel for the EPA study, Ms. Hall says “we had no expectation of specific benefit from his participation, and, in fact, were not aware of it until after he was chosen.”

A spokesman for the vice president has told reporters deliberations of the Energy Task Force are confidential, a matter of principle Mr. Cheney is defending in federal court.

CURWOOD: Just ahead-- move over flavored vodka and single malt scotch, and make room at the bar for a new drink that’s also good for the environment: varietal mezcal. Coming up on Living on Earth.

[MUSIC: Buddy Emmons “Silver Bell” AMAZING STEEL GUITAR: THE BUDDY EMMONS COLLECTION (Razor & Tie – 1997)]

CURWOOD: In response to Weston Wilson’s accusations, EPA Press Secretary Cynthia Bergman says the EPA’s study was submitted to “a scientific peer review panel of experts from industry, academia and government agencies.” Ms. Bergman also said the EPA decided it would not look further into the matter because “the EPA was unable to identify confirmed cases where drinking water was contaminated in their study in Alabama.”

Wendy Hall, Director of Public Relations at Halliburton, says the company has ended its practice of using diesel fuel for hydraulic fracturing. As for the selection of one of its employees on the peer review panel for the EPA study, Ms. Hall says “we had no expectation of specific benefit from his participation, and, in fact, were not aware of it until after he was chosen.”

A spokesman for the vice president has told reporters deliberations of the Energy Task Force are confidential, a matter of principle Mr. Cheney is defending in federal court.

CURWOOD: Just ahead-- move over flavored vodka and single malt scotch, and make room at the bar for a new drink that’s also good for the environment: varietal mezcal. Coming up on Living on Earth.

[MUSIC: Buddy Emmons “Silver Bell” AMAZING STEEL GUITAR: THE BUDDY EMMONS COLLECTION (Razor & Tie – 1997)]

 

Links

EPA Study of Potential Impacts of Hydraulic Fracturing
– Hydraulic Fracturing: A Primer (Oklahoma State) [PDF]">