DRBC Hearing On Stone Energy Draws Nearly Unanimous Opposition

I apologize for the delay in posting these notes on the February 24, 2010   Delaware River Basin Commission’s  (DRBC)  Public Hearing  at which two applications by Stone Energy were considered.  (Like most of you, we’ve been trying to find our driveway and a couple of  buried vehicles.)  For a better understanding of the comments reported here,  please  View Draft Dockets D-2009-013-1and D-2009-018-1.

All but five  speakers who addressed  Stone Energy’s  applications opposed  them.  Virtually all those opponents asked the Commission to impose a moratorium on gas drilling until the cumulative impacts of  the industry’s activities could be studied.

Small business owners testified that they were hesitant to build or expand enterprises in the Delaware River Basin for fear of  the adverse economic impacts of drilling and hydraulic fracturing.

Susan Blenkensap  stated,   “My neighbor is  a  lifelong  resident. She had  a real estate agency  for   30 years.  She closed her doors because she couldn’t, in conscience,  sell property  to   people   when the land is under threat of drilling.”

Ryan Wood-Beauchamp  was concerned about property values.  “What if we can’t sell our homes?  And what about the  FHA [Federal Housing Administration]?”  (It was an allusion to FHA rules which state,   “No existing home may be located closer than  300 feet from an active or planned drilling site.  If an operating well is located in a single family subdivision, no new or proposed house may be built within 75 feet of the operating well.”)

Jessica Corrigan owns an outdoor experience business.   “Our house burnt down,” she said.   “We don’t know what to do.   Should we rebuild  under this threat?

One landowner who has joined the Northern Wayne Property Owners’ Association  — an organization  that supports drilling and  claims to represent  80,000 leased acres — says he has not leased and lies awake at night hoping that drilling does not come to his area.

Al Benner is  contemplating developing an organic  farm but he’s “hesitant to do it. People aren’t thinking about the long term impact on our quality of  life.  We have  hundreds of summer camps.     That revenue will be wiped out  if reports surface about  benzene and toluene  in the  water up here. Drilling  could decimate this region for generations.”

Like many other speakers, Greg Schwartz, an organic vegetable farmer in the Upper Basin insisted the Commission  quantify  all  the  potential  drilling operations  in  the Basin.  “If  you don’t make a decision about the cumulative impacts,  you will abrogate your legal   responsibility  to the  Basin and that would be actionable.  I am an organic vegetable farmer.   I   rely on  biologically healthy soil.  I’m afraid  drilling will destroy  my business.  I urge  you to resist  today’s political pressure.”   (Breathing has presented information on  the  growth of organic farms nationally and in New York State.)

Bernard Handler  addressed Stone Energy’s documented  illegal activities in the Basin,  “Stone Energy has already violated the rules of the DRBC by drilling in The Basin without permission.  They were also non-responsive to the Commission’s requests to respond, ignoring letters, etc.  Now they come with hat in hand and we are  supposed to believe they are the good guys.  They have already set up a drill pad,  drilled 8350 feet,  transported toxic water out of  The Basin and buried drill cuttings underground without following the DRBC’s guidelines.”

A DRBC press release on 6/9/08 “announced that [the DRBC]  has informed Stone Energy Corporation that it will need to apply for and receive approval from the Commission before it can extract natural gas in Wayne County, Pennsylvania…”

The letter was an official statement from the DRBC that Stone Energy  had violated DRBC regulations by commencing drilling without  obtaining DRBC’s  approval.

DRBC’s own Docket No. D-D-2009-18-1 says  that Stone Energy drilled   the vertical well  on a date uncertain “between  May 9, 2008 and June 2, 2008.”   Because he DRBC’s knowledge of many of the well’s specifications is not first-hand, the Commission has been forced to rely  on  Stone Energy’s application which “indicates it  was constructed in accordance with PADEP  [Pennsylvania Department of Environmental Protection] Chapter  78 Subchapter D regulations.”  There is nothing in the Docket describing the diligence or  scope of  PADEP’s oversight of Stone Energy’s construction of the well,  the company’s  subsequent withdrawal and transport of   toxic water,  nor its burying of its drill cuttings.

Because drill cuttings are recognized as a source of toxins, The Pennsylvania Legal Code describes the  required  disposal procedure.

It is also important to note that as a matter of law,  the DRBC’s  rules supersede Pennsylvania’s Department of Environmental Protection.

According to the Docket,  on  June 6, 2008,  “the DRBC  requested that an Application for  the M1 Well Site be submitted to the Commission for review and approval.”

Four months later (December 2008) after  “Stone drilled and cased the M1 well without Commission approval,   a settlement agreement between Stone and the Commission required Stone to submit an application to the DRBC for  review and approval of the well and to  pay a fine as specified in the settlement agreement.”  According to The Upper Delaware Council’s meeting minutes from March 5, 2009,  Stone Energy paid a fine of $70,000. The well was capped before gas was extracted.  (See faulty well casings cited in Ohio house explosion.)

Finally, two months later (February 13, 2009)  “Stone submitted an application to the Commission for approval of the  existing M1 Well”  and this past Wednesday,  Mr. Handler’s outrage that the DRBC would consider granting two applications by Stone Energy was echoed over and over again by  Hearing attendees.  “After all,  how can the DRBC even consider approving  an application from a corporation which has already treated the Commission, its rules, The Basin and its environmental health with such disdain.  To even hold a hearing on the application makes the DRBC complicit in  rendering itself  ethically and, perhaps, legally irrelevant,”  said one speaker.

One man who lives within a few miles of the existing well  was overcome by emotion and was unable to complete his statement which began,   “It’s upsetting to me  how   our community’s being divided,  neighbors against neighbors.    It’s about the companies being  given leeway to run roughshod  over everybody.    I’m  not angry at my neighbors for leasing  their land. We’re all having a  tough time.  But if  you’re going to lease the land, at least accept there’s some dangers here.  I see people shaking their  heads  about proven   damage that’s happened.  At least  accept that if you lease  you’re  taking a  risk.  I’m pissed.  Taxpayers fund these corporations.”

Marian Schweighofer, founder of the Northern Wayne Property Owners’ Association and an  advocate of gas drilling and hydraulic fracturing,  supported approval of  Stone Energy’s applications.    Holding up a map of Wayne County,  she announced that her membership represents 80,000 leased acres.   She addressed  the issue of  “inverse condemnation”  which prevents  landholders from leasing their  mineral rights but does not provide them with compensation for the resultant loss of revenues and reduction in the value of their properties.   In fact, her  sentiments  have been echoed  by New York State Senator John Bonacic,  in response to New York City’s demand for a moratorium on drilling in the New York City Watershed, “Let them buy the development rights,” he says. “For those landowners who want to sell their gas rights, let the City pay the same market rate to keep the land undeveloped. We buy agricultural development rights for tracts of land we want to preserve. Let those who oppose the lawful exploration and extraction of gas in the Catskills (do the same).”

Opponents of  compensation believe Bonacic’s idea  is an open-ended scheme with a wide range of unintended consequences. For instance,  Cliff Westfall asks in a reply to Ms. Schweighofer, “What if I decided to burn down the woods on my land, claiming it was the cheapest way to clear a field, with no concern for preventing its spread to my neighbor’s house?  Of course the government could regulate that. The bottom line is this: the government may prevent you from doing things on your property when those actions would harm public welfare.”

Fracturing fluids injected underground may travel as much as 6,000 feet.  Their  direction is neither predictable nor controllable.

Although the Fifth Amendment  of the Constitution ensures against ” private property [being]  taken for public use, without just compensation,”  courts have generally supported the  common good over the pecuniary benefit of a few.  In  Penn Central Transportation Co. v. New York City,  The U.S. Supreme Court held, among other things, that  “In a wide variety of contexts, the government may execute laws or programs that adversely affect recognized economic values without its action constituting a ‘taking,’ and, in instances such as zoning laws where a state tribunal has reasonably concluded that ‘the health, safety, morals, or general welfare’ would be promoted by prohibiting particular contemplated uses of land, this Court has upheld land use regulations that destroyed or adversely affected real property interests.”  *
Sandra Folzer owns a 50 acre farm in  Tioga County and   was offered  250 thousand dollars to sign  a lease.  She refused.  “Water  is more important than gas.  I can’t drink  gas.   My neighbor  is  pushing me to sign  but fracking is not  tried  and true.  Fracking   the  shale has only been happening  since 2005.  New Mexico  has to tank in all its own water.  Aquifers are being depleted in Florida.   Mexico City is sinking because too much water is being taken from its aquifers.  Israel  buys its water from Turkey.    Remember  the Alamo?  It’s  dried up.”
One speaker said,  “Everyone talks about their rights.  They don’t talk about their responsibilities, though.”

A bus load of  residents  traveled  three hours to comment at the hearing and were adamant that the DRBC schedule additional hearings   in the Lower Delaware River Basin. “Philadelphia gets all its water from The Basin,”  was a common refrain.

Tanyette Colon  said she is a mother first and foremost.  “Norway  and  Italy are in  Pennsylvania  subsidizing  fracking efforts  but they won’t allow  it  in their own countries.  If this application is granted,  it  will  send a message to  gas companies  that it’s okay to  illegally   drill wells  because they’ll  get a slap on the hand  but ultimately get their way.   Residents  of Pennsylvania  don’t deserve it.”

Several speakers addressed  the environmental impacts of Stone Energy’s applications  on The Lackawaxen River  which  was named  “Pennsylvania’s River of the Year” by the Department of Conservation and Natural Resources.  Joe Zenes carried a picture of the proposed withdrawal site and, while waiting for the Hearing to begin,  worried what Stone Energy’s proposed minimum  5.9  cubic foot per second (cfs)  stream flow  would do to the stream.  “It’ll disappear,”  he grunted.  “It’ll be a trickle.”

David Jones who owns and operates Kittatinny Canoes,  supported Stone Energy’s  plans and suggested allowing  greater  withdrawals when the Lackawaxen is running higher. “Store it when there’s more volume.  This project is the start of something.  The world, the  country, our   area  needs this   industy.   This is our future.  It will save our area.  It’ll protect it from development.   Let’s not forget about  private property.  It’s  our right to harvest it.     Lengthy studies are a delay tactic.    Let’s  study  every single industry that takes  water from the basin.  Why just gas drilling?  I  depend on this water for my livelihood.  New York City  wastes  100  million  gallons  of water   regularly.    This withdrawal  represents   an olympic size   swimming  pool.   Dockets are approved all the time.  This   is discrimination.”

Bruce Ferguson responded to Mr. Jones’ claims  that  lengthy studies are the reason for delays.  “The [gas]  industry  is slowing down the process.  Let   studies go forward  so we can   move forward.   The  [Fracturing and Awareness of Chemicals Act]   would   restore  protections we lost in 2005.  It’s a very modest piece of legislation and it’s being fought tooth  and nail  by an  industry that simultaneously claims   fracking is  perfectly safe.”


*Practically speaking and considering New York State’s 8.8% unemployment rate (10.4% in New York City) should taxpayers be  forced to underwrite landholder compensation for mineral rights  just as Congress launches  an investigation into  gas drilling practices  and their  potential harm to the environment?

(Inverse Condemnation is not a simple issue and Breathing would very much appreciate Ms. Schweighofer amplifying her point of view in an article  that will be published  in its entirety.  Likewise,   Mr. David Jones  and I spoke for a quarter hour or more during a break in the Hearing  and I’ve asked him to submit an article which I will publish as  written.  I think we would all benefit from their contributions to this forum. I would also like to express my appreciation to Mr. Jones for his attendance at The Light Up The Delaware River Party.  Most attendees were decidedly against drilling in The Basin and  he should be congratulated for joining us.  Kudos,  Mr. Jones!)

18 thoughts on “DRBC Hearing On Stone Energy Draws Nearly Unanimous Opposition”

  1. I’m personally against anything and anyone who supports any form of gas exploration and/or drilling in my area. The financial benefit does not equate with the long term damage (fracturing & drilling)would cause to the ecological system,it’s wildlife, property value, and the most obvious of them all, the water.
    It’s effect would be enormous, and I thought all I had to worry about is eminent domain and now to find it is the very few who live amongst us. I realize everyone of us including (me)are having financial issues but I also realize that money isn’t the most important thing in life, living is…

    I have almost 40 acres, and would like build and start an Organic farm, but now?

    I’m located in the lower basin of the Catskill mountains near the Delaware River which I believe is in the heart or center of this fiasco. Until this email I thought this issue to be a dead one because I heard nothing since it’s coverage in the paper last year.
    I appreciate very much you guy’s sending this email informing me of this pending situation and chance to participate in this discussion. Thank you.



  2. Thank you to every person who shows up, speaks up and signs up. We are talking about the health and safety of the citizens of these areas. We cannot live without water and air, so please keep showing up, speaking up and signing up. We are up against the $$$$$ of the gas companies, who put profit their before our health. Gas drilling in watershed or well driven water sources is unaffordable, and we must make sure our collective voices are in greater amounts than their dollars…We cannot fail at this, the loss of our water, air and quality of life as we know it will be gone. So thank you again to everyone who cares about this critical challenge we face.

  3. Laurie Stuart, publisher of The River Reporter, very kindly pointed out to me that I wrote Sandra Folzer had been offered 250 million dollars. NOT correct. The sum was $250,000. Thank you Laurie! I’m beginning to think I’ve got a word salad affliction when it comes to thousands and millions. My apologies to everyone.

  4. Mr. Ramon, Thank you so much for your response. Anything you can do to get information to your contacts about the real and continuing rush to drill will be wonderful. Please forward Breathing, for instance, to anyone you think has an interest or who won’t mind receiving it. Also, to the right of the articles is a list of other “media voices” and a Blogroll of other folks who spend endless hours trying to keep us all informed. (Little Bang Theories is a lovely place with beautiful poetry and images generated right here in our Valley. Sometimes I visit Joy’s site to slow my breathing.

    When Leni Santoro and I made our Grannie-something tour of the Delaware River from Philly to Hancock this past summer in order to organize The Light Up The Delaware River Party, we found THREE people who’d heard of it and only one who knew what it was!

    We’ve come a long way since August and it’s one of the things that keeps me going. Once people hear about it — and it’s a pretty easy explanation — they’re appalled. I don’t know a single person with little or no land who supports it.

  5. You’re very welcome, John. We’d gotten some queries before the hearing from people who wanted to write to the DRBC and I was hoping comments by those who attended might clarify or spark their thinking. Otherwise, I might not have included so much. Or, knowing myself… Who am I kidding, right? Any excuse to write. lol

  6. Susan Blenkensap stated, “My neighbor is a lifelong resident. She had a real estate agency for 30 years. She closed her doors because she couldn’t, in conscience, sell property to people when the land is under threat of drilling.”

    My Response as a Sullivan County Resident and Realtor®:

    The Sullivan County, NY Catskills have long been a favorite recreational destination. Without going into our history here, one major reason for coming to our lovely land rests with our bounteous and beautiful landscape.

    The Delaware River, countless streams, ponds, creeks, estuaries, reservoirs, and so much more attract our primal instincts making us want to come home to nature. Somehow, we feel at home in this “hunter/gatherer” world indigenous populations knew so well.

    Why else would folks compete for the opportunity to spend quiet time by a lakeshore, in the woods, on a plateau? Who pulls on waders, picks up a rod, and casts for trout? That’s a lot of trouble just for the thrill of catching a small meal. There’s more to it, much more.

    Our collective spirit thrills to the experiences found here. Sitting by campfire, rowing the boat, spinning a reel, pulling a bow, flying down the mountain, gliding over Wurtsboro, flower picking in the Basha Kill, eagle watching, skinny dipping when no one is looking or caring.

    It’s a comfort level, a deep breath, a sense of not having to contend with modern day pressures, a get away, get out of the Metro and to the Catskills wish and attitude that makes our land here so very precious.

    And, as a Realtor®, I let people know all about this life style and how they may be able to achieve that laid back,” I’m in the country.” dream. It’s a soft sell for all the reasons and more described above. Nature just pulls you to the Catskills. You want to be here. I help you accomplish that.

    Now visualize gargantuan trucks, road and drilling noise, water depletion, aquifer and surface water degradation and contamination with many more potential environmental catastrophic events waiting in the wings.

    What you have, if the Natural Gas Industry prevails, is the destruction of the second home industry because our pristine nature vanishes. This is neither rocket science or brain surgery. When you soil your source of nourishment, you go hungry.

  7. Tears streaming, John. Thank you from the bottom of my heart. All week I’ve been hearing people complain about shoveling but not one of them will leave this haven unless they’re forced.

  8. Susan Blankensop!

    Liz wrote: “One landowner who has joined the Northern Wayne Property Owners’ Association — an organization that supports drilling and claims to represent 80,000 leased acres — says he has not leased and lies awake at night hoping that drilling does not come to his area.”

    If Liz is referring to the fellow from Susquehanna County who identified himself as a member of the Wayne/Susquehanna R.E.S.C.U.E. environmental group, I believe he stated that he had signed the NWPOA lease. He had purchased his land and house at the height of the market, and in a sense, felt that, since he was surrounded by NWPOA lessors, it was the only way to gain a measure of protection (where have we heard that before). He felt that the extraction industry, and PADEP, are not able to perform safely. He related a story in which he described asking Craig Lobins, of PADEP, how Lobins would rate the ability of PADEP to oversee, regulate and enforce, this drilling, on a scale of 1-10. Lobins answered “5”. As a result, this landowner/homeowner, strongly hopes that drilling does not occur.

    Thanks to Liz for a thorough report on a hearing that lasted almost six hours, and in which 77 people offered comments, of which, as Liz noted, only five were pro drilling.

  9. “He had purchased his land and house at the height of the market,”

    What I heard was that with the collapse of the real estate market, the only way he could hold onto his mortgage was to sign so that he could continue his payments with the revenue gained from the signing bonus.


    Michael Lebron
    Sierra Club – Atlantic Chapter, Energy Committee

  10. Michael & Jim, I’ll see if I can find contact information for him. I thought he said that “although he’d joined NWPOA and people thought he’d signed,” that he hadn’t. We’re definitely talking about the same person who bought high and then the market dropped. If anyone has contact information, I will reach out to him. Thanks for the feedback!

  11. The air polution involved in drilling is as bad as any other of its toxic effects as we learned from Mayor Tillman, from Dish, Texas, when he spoke in Callicoon on Feb. 20. Stone energy can’t rely on its past performance to do the job right. More research is needed on how one could get to the gas without ruining the environment.We are citizens living in close proximity to each other. It is most unfair to endanger our lives and health, not to mention our wildlife’s lives and our vegetation purity. Our health is of primary importance. without the protection of our lives we can no longer be true citizens of this country.

  12. PADEP inspection records indicate that Stone Energy had 5 violations from 4/15/08 when site clearing first started
    1) E&S Plan not adequate
    Resolution: Corrected/Abated
    PA Code Legal Citation: 25 Pa. Code 78.53, 102.4
    2) 05/07/2008 Failure to notify DEP, landowner, political subdivision, or coal owner 24 hrs prior to commencement of drilling
    Resolution: Not resolvable
    PA Code Legal Citation: 58 P.S. 201(f)
    3) 05/15/2008 Failure to maintain 2′ freeboard in an impoundment
    Resolution: Corrected/Abated
    PA Code Legal Citation: 25 Pa. Code 78.56(a);78.57(c);91.35(a)
    4) 05/22/2008 Failure to maintain 2′ freeboard in an impoundment
    Resolution: Corrected/Abated
    PA Code Legal Citation: 25 Pa. Code 78.56(a);78.57(c);91.35(a)
    5) 06/04/2008 Failure to minimize accelerated erosion, implement E&S plan, maintain E&S controls. Failure to stabilize site until total site restoration under OGA Sec 206(c)(d)
    Resolution: Corrected/Abated
    PA Code Legal Citation: 25 Pa. Code 102.4

    As I indicated during the public hearing I am appalled there were no penalties accessed against Stone Energy for violating the rules of the DRBC by drilling a gas well in the Basin without the authority of the DRBC and furthermore start drilling without giving proper notification to PADEP along with several other violations of the PA Code. This is a good indicator of the irresponsibility of the Gas Industry, this being the first of thousands of well permits coming before the DRBC, this shows they are not able to comply with the rules and regulations currently in place. I don’t believe the permit from PADEP itself is valid, Permit #37-127-20006-00 was granted for a vertical well and according to the Docket D-2009-18-1, filed 2/13/09 (8 months after the completion of the M1 well) Stone Energy appears to be requesting permission for a horizontal hydofracked well.

    All I can say is; this is setting a very dangerous precedent and poses a serious threat to the environment, our health and the waters of the Delaware River Basin if this is approved. This is the example the Industry is setting…can we really trust them to safely and responsibly develop natural gas in the watershed???

  13. Dear Joe,

    Thank you for providing this list of Stone Energy’s violations and PADEP’s involvement. It’s an excellent contribution to our contextual understanding of the company’s operating mentality and DRBC’s willingness to abdicate its legal mandate to prevent and defend against threats to the health of our Basin.

    As I understand it (and as I referenced in the article) a $70,000 fine was levied against Stone Energy by the DRBC for drilling without a permit. That is not to say I think it was sufficient. Nor is it to say the fine addressed all of Stone’s illegal acts as you’ve outlined in your comment and obviously, I agree that to award a permit now is to reward them for behaving illegally and to endorse such future actions by them and other companies.

    As one commenter at the Hearing asked, “Doesn’t this Commission know it’s being lied to by the industry about its history of accidents and contamination?” As our nation and the world learned when corporate financial interests took us over the cliff, such disasters can only occur with the help of credulous and/or complicit regulatory bodies (SEC).

    Increasingly, regulatory bodies seem quite comfortable in claiming, “We didn’t know….” And, increasingly, citizens (like you) must step up and say, “If I know this stuff, you have no excuses for NOT knowing it.”

    A perfect example of our worst concerns was brought to light by Pat Carullo and Damascus Citizens for Sustainability (DCS). Mr. Carullo chartered an airplane and took aerial photographs which showed evidence of contamination by Chesapeake-Appalachia at the Robson well site in Honesdale. This Times Tribune article (http://thetimes-tribune.com/news/gas-driller-cited-for-violation-after-environmentalist-takes-photos-1.517197) provides ample room for anxiety in terms of how long it took regulatory agents to respond and the lengths DCS had to go to occasion an investigation which resulted in eventual charges filed against C-A. Thank you Pat Carullo and DCS!

    The next question is, “What must residents do to ensure that those who abdicate their obligations are removed from positions of policy-making and enforcement and charged criminally?”

  14. Liz Bucar asked:

    “What must residents do to ensure that those who abdicate their obligations are removed from positions of policy-making and enforcement and charged criminally?”

    John Kavaller replies:

    If that is not the 64 Trillion Dollar Question of the decade, I don’t know what is. The money/power brokers have purchased the entrepreneurial soul of capitalism. The highest bidder controls the market place.

    Greed—plain and simple, will ultimately destroy our resources. The valiant fight must be fought, but I’m very sure that cash, liberally sprinkled, makes environmental realism vanish into thin air.

  15. A few illegal counts against Stone Energy:

    Stone Energy Corporation has faced several class-action lawsuits since 2001, on behalf of investors. Stone Energy Corporation is being formally investigated by the SEC Securities Exchange Commission (2001 – 2010)

    A $10,500,000 settlement has been proposed in the securities class action pending against Stone Energy Corp. A hearing will be held on March 23, 2010.

    The consolidated complaint alleges a putative class period to commence on May 2, 2001 and to end on March 10, 2006 and contends that, during the putative class period, defendants, among other things, misstated or failed to disclose (i) that Stone had materially overstated Stone’s financial results by overvaluing its oil reserves through improper and aggressive reserve methodologies; (ii) that the Company lacked adequate internal controls and was therefore unable to ascertain its true financial condition; and (iii) that as a result of the foregoing, the values of the Company’s proved reserves, assets and future net cash flows were materially overstated at all relevant times.

    Stone Energy Corporation and 29 other gas companies are the subject of Louisiana lawsuit, determining that Stone Energy and others failed to report in excess of $100 million in taxes owed to the State of Louisiana (2009)

    Stone Energy Corporation’s owned and operated well in the Gulf of Mexico released uncontrolled amounts of condensate and gas (2009) triggered by Hurricane Ike and exacerbated by human error. Has not been remediated (2010).

    Stone Energy Corporation’s owned and operated site in Louisiana in 2004 had a 435-barrel oil spill, resulting from a ruptured pipeline. It is still not remediated (2010).

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