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Fracking

By Rick Ackerman Posted on July 13, 2012, 12:01 am EDT Last Updated July 13, 2012, 8:27 pm EDT

[The stock market has been so miserably stupid and boring lately that it barely warrants a claim on our attention.   So let’s talk instead about something that truly does matter:  fracking.  I must confess that most of what I knew about this subject came from sources like the Wall Street Journal that are perhaps a little too friendly toward fracking.  Decidedly un-friendly is one Cliff Willmeng, author of the letter below to the editor of the Colorado Hometown Weekly. I am republishing it for two reasons: to alert those of you who were as ignorant as I was to the risks of fracking; and to elicit the usual, spirited discussion from readers. Also, for counterpoint, here’s a link to a strongly pro-fracking piece that I found online.  RA]

I would like to write in regard to the topic of hydraulic fracturing that is bearing a weight down on Boulder County, its neighbors to the north and east, and on Lafayette. The practice of fracking is an industrial activity that uses more than 600 chemicals, millions of gallons of water, and utilizes the air around wells as a dumping ground for volatile organic compounds such as benzene, a known cancer causing agent. The oil and gas companies are using the state government as a proxy to push this practice into communities across the front range. Boulder County, and particularly Lafayette and Louisville are the next towns slated for drilling as both lay above the Wattenberg Shale.

Fracking is exempt from all major environmental regulation and will pollute our community’s air and water to the point where raising families here will become questionable at best. It will lower property values, strain our infrastructure and dismantle the community as we know it, all to make gas companies wealthy.

This practice does not belong in Boulder County at all, and the political will needs to be found to stop it. Our community is too important to submit to this industrialization. The community needs to be alerted, educated about the details and our officials need to find the courage to protect our citizens, children included, from this process.

We need to come together and work against fracking. Our future quite literally depends on it.

***

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  • BDTR July 14, 2012, 3:53 pm

    Something objectionable in my post, Rick?
    Been some time since I’ve been ‘moderated’.

    &&&&&&

    Mulitple links such as you’ve used in your post trigger the filter, is all. RA

  • dizzy squirrel July 14, 2012, 4:14 am

    Nothing to see here. The sheep keep placing their bets, oblivious to what’s important. Big oil pouring pollutants into the ground water? Where’s the SPX going? Nuff said. In 5 years we’ll here these idiots saying, big oil ignored the regs and polluted the water, no biggie, just desalinate the ocean and pump/truck the water all over the country. Baahh, can’t teach an old sheep new tricks. Keep on making your bets, you’ve already lost the biggest one.

  • BDTR July 14, 2012, 12:44 am

    Here’s a few more info links from a variety of sources from Fox to Huffpo and the PA based Rodale Press of organic gardening fame. The 17 minute youtube docu was independently produced for the BBC and well worth the short view.

    I personally know folks in PA that have lost a 200 acre sheep farm that had 5 previously pristine water wells all now poisoned by carcinogenic chemicals and methane from nearby gas well sites.

    They sold their stock, but their beautiful land and restored 18th century farmhouse is essentially now worthless and have already spent over $150k and 18 months in legal efforts to recover some of the value lost from exemplary and productive lives.

    The Fox piece illustrates the corrupted control of essential information in Congressional hearings disregarding constitutional guarantees and a now lost tradition of transparency in hearings. The hearings in part regarded the shortcutting of permitting procedures.

    What I think is that there are many superfluous components to our existence. Water uncontaminated by deadly chemistry is not one of them. Wealth of any other sort is meaningless to displaced residents in areas already made unlivable, or to the tens of millions in downstream cities including NYC with threatened upstate drinking water from waste well dumping from neighboring states as well as instate fracking itself.

    Waste includes radioactive contamination singularly not required for testing by the state of New York.

    http://www.rodale.com/print/6232

    http://www.youtube.com/watch?v=dEB_Wwe-uBM&feature=related

    http://mediamatters.org/print/research/2012/05/01/how-oklahomas-largest-newspaper-distorts-the-fa/184493

    http://www.huffingtonpost.com/2012/02/01/house-republicans-order-j_n_1246971.html?view=print&comm_ref=false

  • Rich July 13, 2012, 10:57 pm

    For weekend contemplation:

    http://www.politicolnews.com/romney-son-investigated-for-8-billion-ponzi-scheme/

  • Rich July 13, 2012, 9:54 pm

    Rich Cash ‏@richcash8
    Perspective: http://www.youtube.com/watch?v=F-9PK1OC__w&feature=player_embedded 28:32
    View video
    Reply Delete Favorite

  • Rich July 13, 2012, 9:51 pm

    Rich Cash ‏@richcash8
    Just bought a second round of in-the-money DIA and SPY puts (at better prices) just before the close at the highs of the day…
    Collapse Reply Delete Favorite
    12:49 PM – 13 Jul 12 via web · Details

    • Jill July 13, 2012, 10:09 pm

      Good article on fracking, Rick. Thanks for publishing it.

      Rich, now you’re short. What happened to your 2024 point Dow rally?

      Congrats on your wins today.

    • Rich July 13, 2012, 10:35 pm

      Thanks Jill.
      Don’t believe 2024 Dow rally today was written, lol.
      Trade the options market for overnight profits, as long as a week, not LT predictions.
      We may well see lower prices before 1550 SPX Point and Figure Target and 14,570 Jeremy Siegel Dow.
      Rick still has the ABCD Pivoteer mojo workin’ well…
      Regards All*Rich

  • Rich July 13, 2012, 9:19 pm

    Just bought DIA and SPY puts…

    • Rich July 13, 2012, 10:24 pm

      Thanks Impaler.
      We’ll see how/if the overweekend or longer puts work out your way…

  • Rich July 13, 2012, 6:11 pm

    Just took 125% profits on SPY Jul 134 calls and already have sellers’ remorse…;

    • mario July 14, 2012, 2:14 am

      Stepped nicely out of the spx long at 1351 and went short corn very near the fresh top…enjoy the weekend all,

      Cheers, Mario

  • Cam Fitzgerald July 13, 2012, 5:25 pm

    Good call Rick. Your words were barely written and here we have already seen a 177 point rise in the Dow this morning. The day is not over. I still expect another pullback before the big launch though. Maybe next week. Too many charts telling me the current corrective process is not quite complete…..but it is damn close. I would not be putting too much effort into shorting precious metals anymore though (or the GDX) unless gambling with daily swings is your cup of tea. To me it suddenly looks very obvious where we are heading and it will pay better to watch the bigger picture……the down side though?…..get ready for another round of food inflation.

  • RichardB July 13, 2012, 3:18 pm

    I worked at a fracing company in the past. It always amazed me that the regulations were so lax.

    At one place the well water was so bad that the favorite past time was to offer visitors plenty of coffee and wait for them to figure out that the vague stink was coming from the water in the coffee.

    They were not the most reputable or clean fellow back in the 80s and I doubt they are much better now judging from the people I still know are in it.

    • Mark Uzick July 13, 2012, 4:23 pm

      They don’t worry about getting sued for damages?

    • Rich July 13, 2012, 10:20 pm

      Minor detail:

      The rules are there.
      They may not be enforced or observed…

    • Mark Uzick July 14, 2012, 9:36 am

      If they don’t observe the rules because the rules are stupid and no one is harmed, then they may very well go unenforced if they’re lucky or know the right officials.

      But that doesn’t sound like what RichardB has presented here: There would be victims; and some of those victims would be likely to sue for damages. Something about his story is amiss.

  • ExNav July 13, 2012, 8:39 am

    My family owns a small piece of property in Bradford county, PA that we’ve used as a hunting and fishing destination for years. In October of 2010, I received a notice from Chesapeake Energy that we were included in a “unit” and offered x amount to lease the land and receive a 18% royalty of what was produced. The largest landowner in the valley had already leased his land to Chesapeake and the first two wells were already drilled.
    As soon as the first landowner leases it will happen whether you like it or not. You will just get “unitized” We were fortunate in that Chesapeake was very careful when laying the pipeline across our property and creek and distrubed very little, but i always wonder in the back of my mind what will become of the frac fluids years down the road.

  • Benjamin July 13, 2012, 7:22 am

    I agree with Mario that the linked counter-point story wins the round. However, I fully support the people of local communities in whatever the decide, whatever their reasons. They don’t have to allow something to take place if they don’t want it to. That is one reason why the U.S. Constitution leaves so much up to the people and the respective States in which they reside. Speaking of which…

    Why are so many people who don’t live anywhere near a fracking site, anywhere, having an opinion about this? Whether a pro-fracker like John Stossel, a shockumentary film-maker, coporate interests, environmentalist groups, my next door neighbor… What business is it of ANY of them what those actually living there decide? Well, that’s easy. It isn’t!

    • mario cavolo July 13, 2012, 7:43 am

      Amen B…we can all see the good and bad results from different govt approaches, ie. the U.S. and China. In the past here, the locals simply suffered whatever ill effects came upon them from the govt and big biz executing projects, mostly factories, that unfortunately polluted the local area. The matter is improving substantially as China has developed, the news media opening up, the locals voicing more openly to able to object beforehand to an incoming project on the basis that they don’t want it there for whatever reasons…

      Another interesting related point; many large cities in China such as Shenyang (a gray 10 million pop. polluted hell hole of a city, my wife’s hometown ) , were built on the growth of manufacturing/factory based polluting businesses. Over the past five years, they’ve actually moved the factories outside of the city to reduce urban pollution while also generally improving compliance with upgraded pollution regulations, etc. But a long way to go, the environmental and waste management issues are massive here. Try stuffing an extra billion people into the U.S. …tough stuff.

      Long the SPY from 1324…

      Cheers, Mario

    • Cam Fitzgerald July 13, 2012, 8:06 am

      OK. Now you guys are freaking me out. We almost have a quorum here between us …….Gary ….Gary? …..come on in buddy. Lets get bullish.

    • redwilldanaher July 13, 2012, 1:30 pm

      Just leaving my calling card for Gary if he answer’s your call Cam…

      http://www.zerohedge.com/news/jpm-admits-cio-group-mismarked-hundreds-billions-cds-effort-artificially-boost-profits

      If the called for rally gets underway today I believe that Gary Pangloss will find it impossible to stay away…from this, the most legitimate of all possible worlds…

  • John Jay July 13, 2012, 5:00 am

    The pity is, we don’t even need crude oil based energy products. Methanol/alcohol is better, cleaner, less polluting by far. Lots of books have been written on the subject, here is one web site for starters: http://www.permaculture.com/
    When the Model T was first introduced, it could run on alcohol or gas. But Standard Oil came out on top.
    Big oil will never let methanol happen, even if the entire Gulf of Mexico becomes a toxic sludge pit, and all our ground water is poisoned. We never had to transfer trillions of our dollars to American hating OPEC nations for decades. It was just another stealth tax to bankrupt the middle class after Nixon took us off the gold standard.
    It allowed the KSA etc. to easily compensate for inflated US dollars by raising the price of oil. I also think when the Shah of Iran needed money for weapons to buy from us, and Congress would not fund it, (those were the days!) Nixon told him to raise the price of oil!
    What a guy!
    Oh well, this is just another section of our government/economy where all you can do is a post mortem. Ditto the housing/MBS fraud, MFG/PFG fraud, lobbyists writing legislation Congress passes without even reading, etc.
    Truth, Justice, and the American Way are strictly in the comic books, maybe they always were anyway.

    • mario cavolo July 13, 2012, 7:31 am

      In much of Asia, including Shanghai’s 60,000 taxi fleet, the VW taxis run on LPG…when we ask the question, “What’s the West waiting for?”, we know the answer as govt and industry collusion that simply translates as self-serving greed.

  • mario July 13, 2012, 4:26 am

    Read both….the link wins this round…

    • Rich July 13, 2012, 6:48 am

      ditto Mario…

  • mava July 13, 2012, 3:59 am

    You must believe that the fracking probably already is, and most definitively will be regulated, by whatever the “act” that might be.

    Why such a definite view?

    Well, answer this first: Is counterfeit printing currently regulated? Of course, we all know, it is! The point of the regulation is to prohibit the activity for the most inhabitants of the jurisdiction, while allowing it for the select few. OK? It is NOT to make “things better”.
    You and I can’t counterfeit, but Bennie can, with abandon, the consequences be damned!

    Do you understand me now? Let’s go back to fracking. Someone will be fracking, your and mine environment be damned, your and mine children be sick. But, to do that with abandon, that someone will need a good shield, and so that someone will be begging to be “regulated”. Being regulated, will put in your and mine minds this image of environmentally beautiful and responsible enterprise, that functions for “the good of the people”.

    We are trained, like Pavlov dogs, to respond positively to anything being “regulated”.

    And we are too stupid to solve our so-called “problems” that have to do with energy, in a proper way. We do not have enough working braincells to comprehend, that for as long as we won’t “allow” the true price of energy to be openly calculable, we will never see the solution, and what we will see, will necessarily be a scam, of one sort or another. Either it will have a hidden cost, or it will not work, or it will have an environmental cost beyond reasonable.

    So, stop worrying. Environmentally bad and regulated or pure bullshit, or Obama Solar Power, or Chevy Volt, or ethanol madness, or the nuclear radiation, we will still earn our comeuppance. This is because there are no miracles, and stupid people should not ever get it right. We refuse to pay the calculable price, it seems too expensive to us. Then we must pay the price in an unexpected way, and be sour when we finally calculate the cost of our deal.

  • Rich July 13, 2012, 1:39 am

    Rick, I applaud your courage during a time of major debt default deflation depression economic pessimism, for even bringing up the possibility of a 500 point Dow rally.

    In fact, I’ll see you and raise you:

    If the 9.4 Dow/SPX ratio holds, a 1550 SPX Point & Figure Target and Big4 CFTC COT SPX long positions suggest a 2024 point Dow rally.

    As Red Skelton used to say, “I just do ’em; I don’t explain ’em”:

    http://www.youtube.com/watch?v=TZBTyTWOZCM 4:20

  • Rich July 13, 2012, 1:26 am

    Funny fracking facts:

    NYT just ran back to back OpEds on the subject,
    pointing out Fracking is already regulated by the Clean Water Act, the Clean Air Act, the Safe Drinking Water Act and other federal regulations.

    States proved they are best positioned to regulate drilling operations, given differences in geology and hydrology of producing regions.

    That view is shared by Lisa Jackson, the Obama administrator of the Environmental Protection Agency, and other federal and state regulators.

    Sierra Club FRAC Tracker is all over this in 13 producing states and at the National Level.

    Fact is, the private sector already has a solution using propane gel, although I am not currently buying the company:

    http://www.gasfrac.com/investors-overview.html

    Why do we want to drive up energy prices any further with new layers of Federal regulation?

    • Cam Fitzgerald July 13, 2012, 6:28 am

      How odd. I just got the same vibe after looking over some charts. I don’t mean I see a 500 point rally (it could be even bigger) but I do see the setup for a pretty big thrust. As usual I am watching the USD/Euro pair and in particular some major resistance approaching for the Euro which I think is going to form a bottom almost anyday now. The dollar is therefore on the verge of ending its run and will be heading back into a decline which roughly translates into an impending commodity bull and rising markets. I think I am going to have to reverse myself on the whole “no stimulus” comment of the other day. In fact, I am now leaning towards the belief that the Fed will slingshot QE off an obvious technical pattern setup and may even significantly magnify the effect. What this might mean is some really bullish activity right through to election time despite a faltering economy. On that basis I am buying PM’s and going long Euros, short treasuries.

      Could it be……?

    • Rich July 13, 2012, 7:08 am

      Cam, EUD running overnight with Dow, Gold and NDX up on 7.6% China Q2 GDP as expected.
      World was braced for worse and sentiment seems to have bottomed, with the fiscal cliff at least temporarily forgotten.
      We shall know more on the morrow, the 13th, with JPM PPM, UMCS, WFC, SPX and more…

      Re Fracking, one vital footnote is that fracked wells tend to not last as long and be capital intensive with cleanup, one reason CHK got in trouble. Waterless GFS.TO seems to have solved some of these issues.

    • Cam Fitzgerald July 13, 2012, 8:00 am

      Great point Rich. A bottom in sentiment is a perfect analogy. And investor feelings towards both Gold and Silver could not be worse which tells me this is nearing the inflection point so I am encouraged to get back in the game (at the right moment). Seems most of the nuts have indeed been shaken out of the trees and a nice rise in metals now lies dead ahead.


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