'A Bad Signal': Fracking Opponents Have Policy Indicators in Their Corner

As fracking opponents descend upon Capitol Hill this weekend demanding an end to the shale drilling technique, they won't have a White House contingent there to pledge solidarity with the environmentalist crowd.

But a unilateral policy move this past spring, quickly dialed back after outcry from lawmakers and property owners, indicates that the silent support from the administration may be stronger than anti-frackers believe.

In March, the U.S. Department of Agriculture pursued, then quickly backtracked on, a plan to require extensive environmental reviews on property with oil and gas drilling leases before issuing mortgages. Tens of thousands of rural and low-income families rely on the loans, which reached $18 billion last year, and 15,000 rural businesses were aided by more than $1 billion in Rural Business and Cooperative funds.

The first notices that property owners with production on their land would have to go through the National Environmental Policy Act came from the USDA's New York office. “We will no longer be financing homes with gas leases,” Jennifer Jackson, program director for rural loans in the Agriculture Department’s New York office and career USDA employee, wrote in an internal e-mail in March.

New York has been a base of the anti-fracking movement, with celebrity property owners such as Mark Ruffalo, who's coming to Saturday's Stop the Frack Attack rally, complaining of drilling near their upstate homes.

"By this one state starting to do this on their own, that was a bad signal," Rep. Dan Boren (D-Okla.) told PJM.

"Oklahoma, we've been producing oil and gas for decades. I mean, going back even to when we were Indian territory we've had some kind of energy production," Boren continued. "So we're very used to having tank batteries or a pumpjack or something like that on property. The oil and gas industry is regulated by the state, by the Corporation Commission; we have this thing called Oklahoma Energy Resources Board so if there's an old abandoned site they go and clean it up."

"The industry works well with the landowners; everyone works well together," he said. "Now in these new areas where you're having all this shale production like New York, Pennsylvania, other places, it's still new to them and so I think the reason why you're seeing these types of things happening is because they just don't understand. They don't have the culture and the tradition of working with the oil and gas industry."

Boren was alarmed when he read the March story in the New York Times about the plan to dial back the categorical exclusion that exempted the rural loans from the environmental reviews. "Immediately a red flag went up," the congressman said, and he fired off a letter to Agriculture Secretary Tom Vilsack the next day.

"That could have a terrible impact on Oklahoma," he said. "I thought, we've got to stop this before it begins."

"I understand the need to protect our environment and our natural resources, however a change in procedure would greatly discriminate against families and businesses located in areas of our country that are rich in oil and gas," Boren wrote to Vilsack. "Many loan recipients are already struggling to make ends meet and taking away this loan option would only discourage economic development in rural communities like the many located in my eastern Oklahoma district."

Boren also stressed the detrimental effect that such a move would have on energy independence as owners are forced to choose between a house or maintaining mineral leases.

"Fracking is not new," he said in his conversation with PJM a month after Vilsack changed course, adding that it's "impossible" for contaminants from hydraulic fracturing to get into the water supply.

"Some people are using where a well may have been drilled improperly or something like that -- not the technique of fracking, but something may have happened, a hole or casing they're using; these are very isolated incidents -- and they're saying, 'Well, this is because of fracking,' but actually it has nothing to do with fracking," Boren added.

Other Democrats in Congress have protested otherwise. Rep. Ed Markey (D-Mass.) asked the White House Council on Environmental Quality to subject all federal lending programs to environmental review. Last fall, Markey asked Fannie Mae, Freddie Mac, the Department of Housing and Urban Development, and the Department of Veterans Affairs for information regarding the inclusion of risk from natural gas extraction on government-sponsored mortgages.

“The dangerous chemicals used by some drilling companies and the radioactive elements that are sometimes unearthed in natural gas extraction means some of these mortgages could become literal ‘toxic assets’ for owners, borrowers, and even taxpayers,” said Markey, ranking member of the Natural Resources Committee and a senior member of the Energy and Commerce Committee.

Josh Fox, director of Gasland and one of the speakers at Saturday's anti-fracking rally, said in the wake of Vilsack's decision to forego the NEPA reviews that "USDA staff experts in the NY office as well as in DC made clear in emails that the law and the science require that mortgages with drilling leases shouldn’t be exempt from NEPA."