Fracking Colorado: Illusory Benefits, Hidden Costs

7/27/2019 Fracking Colorado: Illusory Benefits, Hidden Costs

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Coloradans are increasingly aware of the problems that accompany drilling andfracking for oil and natural gas. Communities are working to ban the practice

HUKVMJV\YZL[OLVPSHUKNHZPUK\Z[Y`PZÄNO[PUNIHJR)\[[OLPUK\Z[Y`»ZWYPTHY`argument—that fracking drives economic growth and prosperity in the state—justKVLZU»[HKK\W

Fracking is shor or hydraulic racuring. I requires drill-

ing down a mile or more o a argeed layer o rock, and hen

drilling sideways anoher mile or more hrough he argeed

rock ormaion, beore mixing millions o gallons o waer wih

sand and chemicals and inally injecing i all underground a

exreme pressure.1 This is all done o racure he rock orma-

ion so poenially proiable amouns o ighly held oil or

naural gas can be brough o he surace and mosly burned.

The local economic coss ha accompany drilling and rack-

ing include damage o public roads, declines in propery

values and increased demand on emergency and oher social

services. Healh problems rom local air polluion, as well

as rom he sress o consan ligh and noise polluion, also

accompany drilling and racking. The pracice creaes mas-

sive amouns o oxic wase wih no good disposal opions.

Spills are proving ineviable and conaminaing Colorado land

and waer. Drilling and racking also pose long-erm risks o

vial underground sources o drinking waer. Finally, massive

amouns o carbon dioxide–emited rom burning naural gas,

peroleum, and mehane emited a every sage o he drilling,

racking and producion process–are changing he climae on

which we all depend. Droughs are more prolonged, growing

seasons are less predicable and sorms are more severe.

Given such impacs, widespread drilling and racking or oiland naural gas are no in he public ineres o Coloradans.

This poses a hrea o he indusry. Unsurprisingly, o proec

is botom line in Colorado, he oil and gas indusry is pro-

ducing commercials ha claim racking is sae.2 The indusry

regularly unds and promoes sudies ha exaggerae how

much i conribues o local economies. I Coloradans look

closely a all he negleced risks and coss, hey will ind ha

he beneis are an illusion.

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FRACKING COLORADO:0SS\ZVY`)LULÄ[Z /PKKLU*VZ[Z



ΖOOXVRU\EHQHȴWVIURPIUDFNLQJ&RORUDGRTo creae he illusion o beneis rom racking, he indusry

and is advocaes sweep many imporan acs abou oil and

gas exracion under he rug. Speciically, Coloradans may be

surprised o learn ha: In 2010, he oil and gas indusry aciviy suppored only

abou 2.3 percen o Colorado’s gross domesic produc

(GDP) and less han one percen o he sae’s jobs.3

I akes approximaely one year o prepare, drill and rack

a new onshore oil or gas well, and abou 98 percen o he

employmen associaed wih each well occurs only during

his “pre-producion” sage.4 This means ha new wells

mus be drilled and racked each year o susain oil and gas

indusry jobs, akin o a readmill.

The irs wells drilled and racked are ypically he mos

producive ones, and hese wells decline rapidly. Wih ou-

pu ha alls anywhere rom 50 percen o 70 percen afer

he irs year, more and more wells need o be drilled and

racked jus o mainain producion.5 This means he indus-

ry will need o speed up he drilling and racking readmill

o saisy invesors , and already here are over 50,000 acive

oil and gas wells bored ino he sae.6

Drilling and racking jobs, along wih any associaed local

spending on goods and services, move rom own o own as

drilling swee-spos are exhaused, resuling in shor-erm

boom and bus cycles ha are ofen harmul o local com-

muniies over he long erm.6

Esimaes o he amoun o oil and gas rom shale and oher

rock ormaions, and esimaes abou he produciviy o

individual shale wells, are highly uncerain.8 The ineviable

bus afer he boom in drilling and racking in Colorado

may come sooner han promised.9

Beyond he uncerainy surrounding long-erm produc-

ion, public revenue generaed by severance axes is no

dependable, and relying on hem makes long-erm budge-

ing impossible. For example, alhough he recen recession

decreased Colorado’s sae revenue by 10 percen rom 2009

o 2010, severance ax revenue rom he oil and gas indusry

nosedived by over 75 percen, hen doubled in 2011.10 Worse,

severance axes may incenivize governmens o overlook

he negaive impacs o expanded oil and gas drilling in

order o ill budge needs.

A sudy o counies in he wesern Unied Saes ound

ha income inequaliy ypically grows aser in counies

wih heavy ossil uel exracion. The economies o hese

counies grow more slowly compared o hose ha are less

dependen on ossil uel exracion.11

The indusry’s job projecions come rom proprieary and

unveriiable economic orecasing models, no rom acual

employmen daa.12 They do no consider he negaive

economic impacs o he sae, such as jobs desroyed in

agriculure or ourism during and in he afermah o drill-

ing and racking.13

The oil and gas indusry’s sel-promoed economic sud-

ies projec economic impacs by surveying he indusry,

esimaing he indusry’s direc spending, and hen projec-

ing how ha spending spreads hrough an economy.14 When

he oil and gas indusry says i suppors over 107,000 jobs in

Colorado,15 i is aking credi or jobs in he as-ood indus-ry, healh care, real esae, ec. Bu spending on ruly clean

energy soluions likewise creaes such jobs.

When oil and gas companies move in o drill and rack oil

or gas in a new region, much o he associaed spending

happens ou-o-sae where companies are headquarered.16

Many o he beter-paying jobs a he well go o ransien,

ou-o-sae workers who have indusry experience, no o

residens o he areas argeed or exracion.17 Meanwhile,

he cos o living ofen increases or local residens, given he

inlux o ransien workers, pushing many o he margins.18

The push o drill and rack anywhere and everywhere hasnohing o do wih U.S. energy securiy, and everyhing o

do wih he oil and gas indusry’s botom line. The price o

oil is se on a global marke, so racking or oil will do noh-

ing o reduce prices a he pump. Prices acually need o

say high i companies are going o proi rom drilling and

racking or igh oil.19 As or naural gas, he oil and gas

indusry aims o expor as much as i can o China, Japan,

India and Europe, conrary o he rheoric abou racking o

U.S. energy securiy.20



+LGGHQFRVWVIURPIUDFNLQJ&RORUDGRHiding he many coss o racking is also essenial o main-

aining he illusion ha widespread drilling and racking

benei Colorado’s economy. Coloradans may be surprised o

learn jus how ar-reaching hese hidden coss are.

Real estateCurrenly, many banks are reusing o oer morgages o

properies near oil and gas wells, making hese properies

diicul o sell unless he buyer can pay he ull price in

cash.21 In 2012, Naionwide Muual clariied ha i would

deny insurance coverage or claims o damages due o

racking-relaed aciviies, ciing a lack o “comor level

wih he unique risks associaed wih he racking pro-

cess.”22 One amily in Texas saw heir home lose 75 percen

o is assessed value afer allowing drilling and racking on

heir land.23 Colorado’s oil and gas indusry has publicized

he exen o which i occupies prime oice space in Denver,

bu o course i neglecs he oher impacs on he real esaesecor, which happen o be negaive.24

Social services and public infrastructureA repor commissioned by local governmens in norhwesern

Colorado esimaes ha necessary spending on inrasrucure,

such as on roads, waer and sewer aciliies, will reach $2.1

billion i gas aciviies coninue unchecked.25 According o he

repor, communiies in Norhwesern Colorado would ace

“saggering expenses” or sree mainenance, high housing

coss, and srained local businesses, hospials, and schools.26

Colorado’s Deparmen o Local Aairs has warned ha a rapid

boom and bus cycle can grealy increase hese negaive impacs.27

Colorado public healthWidespread drilling and racking in Colorado amoun o

an ongoing public healh experimen.28 Numerous Colorado

residens are complaining o healh problems associaed

wih oil and gas indusry polluion.29 One sudy in wesern

Colorado esed air qualiy near racking operaions and

deeced harmul levels o oxic solvens, 30 o which aec

he endocrine sysem.30 Anoher has ound ha cancer risk

increased or residens living closer o drilling and racking

operaions, primarily due o poenial exposure o benzene.31

Fracking luids ypically conain chemicals ha are known o

cause cancer, harm he nervous sysem, or negaively aec

sensory organs and he respiraory and immune sysems.32

The oil and gas indusry is able o keep is racking chemicals

a secre, hanks o an exempion in he Sae Drinking Waer

Ac, so he ull exen o he public healh hrea rom rack-

ing wase remains unknown.33



Workforce impactsSickness caused by exposure o air and waer polluion—

wheher rom racking chemicals or oher oxic compounds

brough o he surace during drilling and racking—decreases

worker produciviy, harming local businesses.34 Oil and gas

indusry workers ace he highes risks. Inhaling silica dus

rom sand used in rack jobs can lead o silicosis and evenlung cancer.35 The Naional Insiue or Occupaional Saey

and Healh ound up o 10 imes he recommended levels o

silica in he air a 9 percen o he racking sies i surveyed.36

Accidents, spills and water contaminationWaer polluion likewise creaes cosly public healh risks and

occupaional hazards or irs responders. In one noorious

case, an emergency room nurse in Durango became ill afer

reaing a worker soaked in racking luid, bu he company

reused o disclose o her docors he chemicals in he luid.37

A leak rom a gas plan ino Parachue Creek, which eeds

ino he Colorado River, spilled over 65,000 gallons o oil and

hydrocarbon maerial, resuling in benzene levels above sae

drinking waer sandards and cosly clean-up eors, ye

monhs laer, he gas company had paid no ines.38 According

o The Denver Post , 2,078 indusry spills were repored o he

Colorado Oil and Gas Conservaion Commission over he las ive

years, wih 17 percen conaminaing groundwaer saewide.39

Competition for water Colorado’s armers can expec increased compeiion rom

he oil and gas indusry or he sae’s waer resources. O

he 64 counies in Colorado ha lie above poenial oil and

gas resources, 40 accoun or abou 85 percen o Colorado’s

agriculure value.40 I drilling and racking coninue o in-

crease, as Governor Hickenlooper envisions, hen compeiion

beween armers and he oil and gas indusry will increase

as well. Mos o hese 40 Colorado counies aced drough

condiions in Augus o 2012.41 A a 2012 aucion o Colorado

waer righs, oil and gas companies were he op bidders,

driving up waer prices or he sae’s armers during severe

drough condiions.42 In neighboring New Mexico, armers

have all bu given up in he ace o severe drough condiions,

and are selling waer o he oil and gas indusry wihou culi-

vaing anyhing.43

Farms, food and beer Consrucing new access roads, drilling pads, pipelines and

compressor saions o suppor widespread drilling and rack-

ing can also ake agriculural lands ou o producion, as can

accidens such as leaks and oxic wase spills. 44 Across he

counry, air and waer polluion has negaively impaced live-

sock and pes living near drilling and racking operaions.45

One recen acciden led o a mix o crude oil and hydrocarbongases being sprayed over 800 ee ono a armer’s land in Weld

Couny.46 I racking operaions coninue o accelerae, he

agriculural and culural heriage o Norhwes Colorado will

suer.47 Colorado’s craf beer indusry is among hose con-

cerned abou how waer polluion rom drilling and racking

will impac is brand.48

TourismFinally, Colorado has culivaed a lucraive ourism brand. The

sae is well known or is snow-covered peaks, clean whie-

waer rivers and ample opporuniies or oudoor recreaion.

Colorado ourism accouns or over $16.6 billion in direcravel spending and suppored 144,600 jobs in 2011.49 Drill-

ing and racking hreaen his brand along he Fron Range

and on he Wesern Slope. Towering, well-li and noisy drill-

ing rigs operae 24 hours a day, marring he wild and scenic

landscapes ha atrac ouriss and generae local ourism

receips.50 Drilling and racking operaions, along wih he new

roads buil o reach hem, mar scenic landscapes and rag-

men oress.51 These impacs, combined wih air and waer

polluion rom drilling and racking, can persis long afer he

oil and gas sops lowing, and long afer any o he economic

beneis rom drilling and racking end.52

PHOTO COURTESY OF USDA

Governor Hickenlooper has authorized the spending of taxpayer dollars to support two lawsuits against the City of Longmont,which acted to protect citizens from fracking within the city. His pro-fracking stance threatens the health, safety and property of ordinary Coloradans across the state.



&RORUDGDQVDWDFURVVURDGVRaher han allow he indusry o coninue urning our sae

ino a pincushion o aging and leaky racked oil and gas wells,

Coloradans should achieve long-erm energy securiy and

economic prosperiy by choosing a dieren pah.

We need o ac aggressively o deploy exising energy e-iciency and renewable energy soluions, and o inves in

uure echnological innovaions ha will improve and expand

on hese already exising soluions.53 This pah would pu a

sop o he hidden coss o burning ossil uels, resuling in

enormous environmenal and public healh beneis.54 Acing

aggressively now will ensure ha our sae would reap he

beneis o being a global leader in supplying clean energy

echnologies o he res o he world.55

This is an opporuniy o lead, and we need o ake i, bu he

oil and gas indusry is sanding in he way.

Is public relaions scheme o exaggeraing economic beneis

and hiding he coss o Colorado communiies hreaens o

delay he necessary remaking o our energy sysem, jus or

he sake o is botom line. And he indusry has a willing

ally in Governor Hickenlooper. He has already auhorized he

spending o axpayer dollars o suppor wo lawsuis agains

he Ciy o Longmon, which aced o proec ciizens rom

racking wihin he ciy. He has also hreaened o ake legal

acion agains any local governmen ha passes a ban on

racking wihin heir jurisdicion.56

These acions are shorsighed. In he ace o global climae

change, and in ligh o he many hidden coss ha accompany

drilling and racking, Coloradans need o igh o proec heir

healh, saey and propery rom racking.

(QGQRWHV1 U.S. Environmenal Proecion Agency, Oice o Research and Developmen. “Plan o

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26 Ibid a ES-11 and ES-12.

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Copyright © August 2013 by Food & Water Watch. All rights reserved. This issue brief can be viewed or downloaded at www.foodandwaterwatch.org.

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