About Air and Water

Tuesday, May 4, 2010

British Petroleum Spills Oil on the Gulf Coast and Coats Texas Politicians With Greenbacks

Faith Chatham - May 5, 2010
Thanks to Vince Leibowitz at Capitol Annex for following the money. Governor's Perry's confidence in BP may be connected to the faithfulness of their contributions to his campaign war chest. Here's a link to a spreadsheet showing the political contributions by British Petroleum to Texas Politicans.

Friday, April 30, 2010

DFWRCC Calls for Tighter Enforcement of O&G operations

By Faith Chatham - DFWRCC- April 30, 2010

April 30, 2010

Comments to TCEQ on Proposed Changes to Permit by Rule and Standard Permitting for Oil and Gas Production in Texas
About DFWRCC: DFW Regional Concerned Citizens is a network of citizens in the Dallas Fort Worth Metroplex who monitor governmental policy in the North Central Council of Governments region. We concentrate our resources on communication and activism in the areas of transportation, environment and ethics in government.

Reviewing the draft of proposed rule changes for PBR and MMS for Oil and Gas:
We believe that proper regulation of oil and gas drilling, exploration, production, storage and transmission is crucial to protect critical water reserves and vital air resources, and to protect public health and natural habitats and the economy. We support the need for TCEQ to better regulate oil and gas activities throughout Texas.

Rules should be uniform throughout the state for all wells/production, transmission, and storage sites. Uniform rules are equitable to all producers.

There should be no grandfathering of wells and /or no staggered timeframes for implementation of new rules.

While we understand the difficult legal issues of applying new rules retroactively, we believe that these rules should apply to all Oil and Gas Facilities in the State of Texas. Where there is question about the protection of health and safety, we believe that the earliest implementation date is the best. Waiting until 2011 or 2012 is not in the best interests of either the public or the producers.

We oppose multi-tier incentives to try to get producers to do what responsible corporate citizens should do anyway.

Air pollution and water pollution travel across legal jurisdictions; therefore, wells/sites/facilities in air-quality attainment areas and non-attainment areas should all be held to the same strict standards.

Applying different dates for rule implementation to different wells, or applying different tier rating to wells, creates too much confusion and produces higher administrative costs, complicating timely and effective inspection, oversight and enforcement. Applying different rules to different wells also complicates operations for the producers and escalates administrative and legal cost, to the operation.

New rules should apply to all wells/facilities 60 days after passage by the Commission and/or Legislature. Waiting two to four years to implement better rules is detrimental to the economic health and welfare of the communities, and to public health and safety of individuals.

Texas has a tragic history with un-odorized natural gas where leaks were not rapidly detected and corrected at New London School. Leaks should be corrected within 24 hours of detection. After 48 hours fines should escalate substantially every hour that the leak remains uncorrected, and should be substantial enough to cover costs of re-inspections, monitoring and corrective action by state agencies if required.

Operators should bear the full cost of regulatory/oversight and inspection by state and federal agencies. This cost should not be passed on to the taxpayer.
Operators should factor in these costs when performing cost/benefit analysis before deciding to invest. Those who profit from exploitation of the resources should bear the full cost of oversight and monitoring for health and safety of the community, but shall not have authority or over-sight of such monitoring. It is imperative that permitting fees and fines for non-compliance be high enough to cover administrative costs, frequent on-site inspection, and monitoring of air and water quality data.

Rules must be flexible enough to allow utilization of better technology as it becomes available for monitoring air and water quality and safe industry techniques.

We concur with the Sierra Club that proposed changes to the PBR and standard permit are long overdue. TCEQ began discussing some of these proposed (or similar rules) several years ago, but failed to enact them. Thus thousands of exploratory and production wells/ oil and gas facilities have been developed with minimal data and inadequate oversight by the TCEQ and the Texas Railroad Commission.

Oil and gas operators frequently take advantage of current Permit-by-Rule regulation to “stack” multiple wells and operations as separate facilities, avoiding the need for a standard permit or individual permit, despite large emissions. Stacking should be prohibited.
New rules should facilitate better access to reliable data for safe operation, maintenance, oversight and corporate decision making.

They should increase timely availability of verifiable information to TCEQ, Railroad Commission, EPA, local governmental authorities, the public and the media, and promote better communication between operators, regulators, and local planners and the public in solving joint challenges to the community. This is especially crucial in EPA non-attainment and near non-attainment areas, since data shows that emissions from gas production, storage and transmission in the DFW Metroplex equals or surpasses all non O&G industry achievements in attempting to reach acceptable clean air attainment levels.

The definition of “facility” should be clarified to help avoid the practice of stacking. Modifying the current Permit-by-Rule regulation to eliminate “stacking” multiple wells and operations as separate facilities for inspection and compliance activities, should promote implementation of Best Available or Maximum Available Control Technology while minimizing substandard operations.

Current site inventories should be mandatory and electronically recorded and reported by the operator to regulatory agencies for efficient oversight. Facility site plans should be certified by a professional engineer.

No well should go on-line before it has passed all TCEQ, Railroad Commission and EPA inspections/standards. Immediate reporting of changes in well/production status and or inspection/ monitoring data should be posted within 48 hours on the state agency’s website and be easily searchable by citizens, NGOs, media, law makers, lease holders and regulators.
Every production site should be referenced by the actual street address where the site is physically located and the reporting data should be searchable on the website by street address or geo address. Links to this data should be available to citizens on websites of the city or county where the facility is located.

The site inventory of equipment is especially important for assessment of fugitive emissions from evaporate tanks and emissions from non-fixed equipment. Utilization of non-stationary motorized equipment should accurately be reported. Current rules do not include regulation of non-fixed site equipment, yet excessive numbers of trucks, generators, and drills on one site contributes to air, noise and vibrations and creates problems to health and safety in neighborhoods. New TCEQ Rules should include oversight of non-stationary diesel equipment and place limits on the number of non-fixed equipment on any site in residential neighborhoods. Reliable site inventory records should be maintained and tabulated for utilization in inspections, rule application and effective decision making.

Every site should have clearly visible signs at the entrances stating name of owner, name of subcontractor/operator, safety officer, contact numbers and the number(s) of TCEQ/Railroad Commission/EPA where citizens can call to report possible violations or hazards to health and safety.

Operators should employ available technology to prevent and/or recapture emissions and hold ambient emission to levels which comply with state and federal standards. Operations failing to comply with these standards should incur fines high enough to cover frequent inspections and verification of continuous monitoring activities by the TCEQ, Railroad Commission, and EPA, and possible shut-down of facility and all related costs.
We oppose the proposal to create a two-tiered PBR because it will complicate effective regulation and cost-effective operation without adequately promoting necessary levels of verification and compliance.

No operator in or adjacent to urban areas or non-EPA Air Quality Attainment areas should be allowed to vent gases unless it is the last resort to prevent a larger blow-out.
We believe that TCEQ’s PBR rules should comply with EPA’s rules and standards. Therefore, we propose that TCEQ confer with EPA about acceptance of proposed PBR rules before they are enacted. TCEQ rules should be flexible enough to reflect any future changes in Federal Regulation, or to include adoption of better technologies.

If PBR’s are allowed they should be re-licensed at least every three years.
Accelerated rule implementation timeframes are imperative for adoption of these new TCEQ rules. It is mandatory that rules go into effect within 90 days from enactment since they apply to human health and safety standards and provide oversight for industrial sites in residential neighborhoods which are regulated only by TCEQ, the Railroad Commission, and EPA.

It is recommended that the definition of “receptors” should be modified to include not only homes, churches, and schools, but also businesses and other places frequented by people, especially by the “most vulnerable individuals.” It is especially unfortunate, in our estimation, that the rules do not protect children on playgrounds, in parks and day care centers, and does not protect health-impaired individuals in hospitals, nursing homes, and similar facilities. The rules should protect the health and safety of all residents (renters, surface owners without mineral rights and resident owners who sign mineral leases). All residences and places frequented by people within the agreed distances should be considered receptors.

Individuals should not be required to live within the immediate footprint of the facility in order to report health and safety concerns to the TCEQ, Railroad Commission or EPA.

Any complaint or report to TCEQ should trigger a report by TCEQ to the Railroad Commission, EPA, and to local governmental health and environmental authorities (city/county) and to School District and local water district(s).

Investigations should be completed within 14 days or less and report of findings published on the TCEQ website.TCEQ should notify local governmental entities of the link to the data so that it can be incorporated into the local governmental entities’ websites. It is recommended that the Local Government Code be modified to require that local governments post links to these reports on their websites to promote better communication with the community, and to better protect the health and welfare of vulnerable citizens. If the Local Government Code is not modified, it is recommended that TCEQ request that local governments post links to these reports on their websites.

Samples of air, water and soil should be taken prior to commencement of construction on O&G facilities to create a baseline. Air samples should be taken in the morning and afternoon and on both cold and hot days to account for variations in ozone. Air and water samples should be taken periodically, during fracking, and when any leak is detected. Soil samples should be taken at the pad site or storage site before construction commences for a baseline. Utilization of drilling mud and/or chemicals should be monitored. There is debate about what chemicals are added to drilling mud and fracking fluids. Many manufacturers claim that their content is proprietary and do not label or disclose additives. Drilling mud samples should be tested for heavy metals or additives which could pollute water and soil and/or endanger human health and safety, or endanger wildlife, or contaminate the food chain if fruits and vegetables are grown on reclaimed sites after end of production. When an operation goes into maintenance or goes out of production, soil and water samples should be taken to compare with the base samples taken prior to the commencement of construction. Operators are responsible for all expenses incurred in reclaiming the environment back to the baseline level.
Bonding levels for operators should reflect these possible costs.



Authored and submitted by co-founders:
Faith Chatham
Steve Blair
Harriet Irby


Wednesday, April 14, 2010

Arlington considers tigher rules for gas-drilling

ARLINGTON -- With natural-gas drilling on the rise, the Planning and Zoning Commission will look at higher road-damage fees, tighter time limits and other measures to buffer the industry's impact on the city.


The commission meets in a 4 p.m. work session today at City Hall, 101 W. Abram St., to consider what would be the third major revision of the 2003 gas well ordinance.


The commission plans to vote next week on final recommendations to the City Council.


"This is one of the main drilling hubs in the Barnett Shale," Mayor Robert Cluck said.


"There is more urban drilling now. We're closer to structures -- homes, churches -- than we ever have been."

The city has received 210 permit applications since 2006, when its first seven wells were drilled. The city so far has approved permits for 163 wells, of which about 130 have been drilled, said Darren Groth, Arlington's gas well inspector. The increase in drilling points to the need for further strengthening of the ordinance, he said.



Read more: http://www.star-telegram.com/2010/04/13/2112329/arlington-considers-tighter-rules.html#ixzz0l6AS5Kyz

Thursday, December 17, 2009

That Tap Water Is Legal but May Be Unhealthy

By CHARLES DUHIGG - The New York Times - December 16, 2009
The 35-year-old federal law regulating tap water is so out of date that the water Americans drink can pose what scientists say are serious health risks — and still be legal.

Only 91 contaminants are regulated by the Safe Drinking Water Act, yet more than 60,000 chemicals are used within the United States, according to Environmental Protection Agency estimates. Government and independent scientists have scrutinized thousands of those chemicals in recent decades, and identified hundreds associated with a risk of cancer and other diseases at small concentrations in drinking water, according to an analysis of government records by The New York Times.

But not one chemical has been added to the list of those regulated by the Safe Drinking Water Act since 2000.

Other recent studies have found that even some chemicals regulated by that law pose risks at much smaller concentrations than previously known. However, many of the act’s standards for those chemicals have not been updated since the 1980s, and some remain essentially unchanged since the law was passed in 1974.

All told, more than 62 million Americans have been exposed since 2004 to drinking water that did not meet at least one commonly used government health guideline intended to help protect people from cancer or serious disease, according to an analysis by The Times of more than 19 million drinking-water test results from the District of Columbia and the 45 states that made data available.

In some cases, people have been exposed for years to water that did not meet those guidelines.

But because such guidelines were never incorporated into the Safe Drinking Water Act, the vast majority of that water never violated the law.

Some officials overseeing local water systems have tried to go above and beyond what is legally required. But they have encountered resistance, sometimes from the very residents they are trying to protect, who say that if their water is legal it must be safe.

Dr. Pankaj Parekh, director of the water quality division for the City of Los Angeles, has faced such criticism. The water in some city reservoirs has contained contaminants that become likely cancer-causing compounds when exposed to sunlight.

To stop the carcinogens from forming, the city covered the surface of reservoirs, including one in the upscale neighborhood of Silver Lake, with a blanket of black plastic balls that blocked the sun.

Then complaints started from owners of expensive houses around the reservoir. “They supposedly discovered these chemicals, and then they ruined the reservoir by putting black pimples all over it,” said Laurie Pepper, whose home overlooks the manmade lake. “If the water is so dangerous, why can’t they tell us what laws it’s violated?”

Dr. Parekh has struggled to make his case. “People don’t understand that just because water is technically legal, it can still present health risks,” he said. “And so we encounter opposition that can become very personal.”

Some federal regulators have tried to help officials like Dr. Parekh by pushing to tighten drinking water standards for chemicals like industrial solvents, as well as a rocket fuel additive that has polluted drinking water sources in Southern California and elsewhere. But those efforts have often been blocked by industry lobbying.

Drinking water that does not meet a federal health guideline will not necessarily make someone ill. Many contaminants are hazardous only if consumed for years. And some researchers argue that even toxic chemicals, when consumed at extremely low doses over long periods, pose few risks. Others argue that the cost of removing minute concentrations of chemicals from drinking water does not equal the benefits.

Moreover, many of the thousands of chemicals that have not been analyzed may be harmless. And researchers caution that such science is complicated, often based on extrapolations from animal studies, and sometimes hard to apply nationwide, particularly given that more than 57,400 water systems in this country each deliver, essentially, a different glass of water every day.

Government scientists now generally agree, however, that many chemicals commonly found in drinking water pose serious risks at low concentrations.

And independent studies in such journals as Reviews of Environmental Contamination and Toxicology; Environmental Health Perspectives; American Journal of Public Health; and Archives of Environmental and Occupational Health, as well as reports published by the National Academy of Sciences, suggest that millions of Americans become sick each year from drinking contaminated water, with maladies from upset stomachs to cancer and birth defects.

Those studies have tracked hospital admissions and disease patterns after chemicals were detected in water supplies. They found that various contaminants were often associated with increased incidents of disease. That research — like all large-scale studies of human illnesses — sometimes cannot definitively say that chemicals in drinking water were the sole cause of disease.

.... READ MUCH MUCH MORE in the New York Times

Wednesday, October 7, 2009

Does the gas industry threaten your health?


Does the gas industry threaten your health?

Find out at the DISH, TX public meeting: 10/12 at 7pm

Public can discuss new study showing toxic air threats from gas compressor stations

Dear Sharon,

Come to DISH, TX
On Monday, October 12th at 7pm the Town of DISH will hold a public meeting to discuss the findings of recent air quality study commissioned by the Town.

Please attend and spread the word to your friends and neighbors. We need you to show your support for local government and citizens addressing toxic emissions in their community!

Town of DISH public meeting
October 12th at 7 pm
5413 Tim Donald Road
DISH, Texas 76247

Learn about the health risks of gas facilities in your community
The results of DISH's air study revealed high concentrations of carcinogenic and neurotoxin compounds near and on residential properties near the megaplex of compressors stations operating at the corner of Tim Donald and Strader Roads in DISH.

These compressors have multiple engines and support equipment, such as condensate tanks, that emit fugitive toxic emissions. The report also indicated that many of the compounds in the air exceeded the Short-term and Long-term Effects Screening Levels according to the Texas Commission on Environmental Quality regulations.

We need your help to support science, public health
Public health and safety may be best served by immediately shutting down these compressors until they can be operated safely with emission controls. However, The Town of DISH is taking tremendous heat from the oil and gas industry, who like Big Tobacco and other industries, are simply belittling valid concerns and studies as "bad science."

We need you to turn out to this meeting and support the efforts of local government and citizens to gather emissions data and hold companies accountable for health impacts!

Thanks,
Jennifer Goldman, EARTHWORKS' Oil & Gas Accountability Project

For More Information:


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Friday, September 25, 2009

Sunday, September 6, 2009

Secrets of Alleged Oil Price Manipulation Exposed

By Landon Thomas Jr. - The New York Times - Friday, 4 Sep 2009
Its superfast, supersecret oil trading software was called the Hammer.

And if the Commodity Futures Trading Commission is right, the name fit well with an intricate scheme that allowed commodity traders in Chicago working for Optiver, a little-known company based in Amsterdam, to put their orders first in line and subtly manipulate the price of oil to the company’s advantage.

Transcripts and taped conversations of actions that took place in 2007, included in the commission’s case, reveal the secretive workings of high-frequency trading, a fast-growing Wall Street business that is suddenly drawing scrutiny in Washington. Critics say this high-speed form of computerized trading, which is used in a wide range of financial markets, enables its practitioners to profit at other investors’ expense.

Traders in the Chicago office of Optiver openly talked among themselves of “whacking” and “bullying up” the price of oil. But when called to account by officials of the New York Mercantile Exchange, they described their actions as just “providing liquidity.”

In July 2008, the commission charged Optiver with manipulating the price of oil; negotiations over a settlement continue.

In the cutthroat world of high-frequency trading, success is a function of speed, secrecy and often a bit of intrigue. Few have been more adroit at these arts than Optiver.

Optiver describes itself as one of the world’s leading liquidity providers, a trading firm that uses its own capital to make markets. It seeks to profit on razor-thin price differences — which can be as small as half a penny — by buying and selling stocks, bonds, futures, options and derivatives. (Derivatives represent about 65 percent of its business, equities 25 percent, and commodities and others make up the remaining 10 percent.)

But the extent to which market making (providing liquidity to markets that need it) and proprietary trading (the pursuit of pure profit with a firm’s own money) can properly coexist has become a thorny question for regulators. They are grappling with an exploding business that makes up as much as half the overall trading in the United States and a growing share in Europe as well.

10 Hottest Commodities of 2009
Tanno Massar, a public relations executive working for the company, said that Optiver had no comment on the case. As for Optiver’s trading conduct, Mr. Massar said that the company was committed to transparent markets and that there was no inherent conflict between pursuing profits and making markets — a view that top Optiver officials had long been trying to convey to regulators when their oil trades were being investigated.

But their pleadings fell on deaf ears. During a tense conference call in 2007, Thomas Lasala, the chief regulator for Nymex, made his doubts clear about Optiver’s trading strategies. “The market seems to move in reaction to your orders,” he said, according to a transcript of the conversation. “And I don’t think that is a market-making strategy.”


RELATED LINKS
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It could well be that Optiver’s cowboy trading tactics are unique to the company. But as concern grows over the effect that high-octane computerized trading is having on markets worldwide, Optiver’s conduct in the oil futures market raises questions as to whether the relentless competition of this business is forcing companies to engage in similar practices. “These are proprietary trading shops that are masquerading as market makers,” said Tim Quast of Modern IR, a consulting firm that advises corporations on market structure issues.

The Securities and Exchange Commission has opened up an investigation into high-speed-trading practices, in particular the ability of some of the most powerful computers to jump to the head of the trading queue and — in a fraction of a millisecond — capture the evanescent trading spread before the rest of the market does.

The spread of high-frequency trading in Europe has lagged behind the United States. But it is now experiencing rapid growth, spurred by arbitrage opportunities that have attracted large American firms like Getco and Madison Tyler.


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Amsterdam, as much as if not more than London, has been the breeding ground for local firms seeking the same advantages. Companies like Optiver, All Options, Tibra and others have assumed influential positions in Europe, moving from their original expertise in trading options to the full gamut of stocks, bonds and derivatives as well.

Called low-latency trading, this blend of speed and opportunism is the essence of Optiver’s business model.

It deploys a sophisticated software system called F1 that can process information and make a trade in 0.5 milliseconds — using complex algorithms that let its computers think like a trader. And the company is so careful about preserving its secrets that when some traders and engineers left for a rival operation recently, Optiver hired private investigators and subsequently sued the former employees on charges of making off with intellectual property.

Founded in 1986 by an options trader named Johann Kaemingk, Optiver has grown far beyond its roots in Amsterdam to trade on exchanges all over the world. It employs 600 people and, judging from the many positions advertised on its Web site, it is still in a hiring mode.

Which Oil-Producing Nations Make Money

Given the vicious competition that exists in the industry, Optiver and other companies have become creative in attracting the smartest people in finance. The dress code is aggressively casual. The company provides free breakfasts, lunches and Friday afternoon drinks, as well as chair massages.

And in one recruiting Web video (no longer online), an Optiver trader sitting before four giant trading screens is seen ogling two skimpily clad women as they sit on his thighs.

To enjoy these professional fruits, applicants need to subject themselves to three math-based tests to test facility with numbers and the ability to think clearly under pressure. For one of the tests, 80 questions must be answered in under 8 minutes. Sample questions include 0.034 times 0.2, or, if you have a cube made of 10 by 10 smaller cubes, how many are facing the outside?

Few of the applicants even get an interview: 80 to 90 percent of people who take the test fail it. People who have worked at Optiver say the average age is young — under 30 — as the company has a policy of not hiring traders from rival institutions, preferring recent university graduates who can more easily embrace the firm’s culture.

According to the Commodity Futures Trading Commission, which would not comment on the case, Optiver made about $1 million on its oil trading gambit.

While $1 million may not seem like a lot, recorded conversations reveal the extent to which the firm’s trading practices broadly have enriched its employees.

In one exchange, Christopher Dowson, head of trading in Optiver’s Chicago office and the mastermind behind the oil strategy, bragged to another employee about how he had bought a new speed boat with his share of the returns. “With these profits, might have to get a bigger one,” he said.

And in another, Mr. Dowson acknowledges that Optiver was so aggressive in conducting its proprietary trades in some smaller stocks that their activities “were as big as the volume traded on the day.”

It is precisely this — high-powered computers and the swagger of those who operate them — that is causing worries over high-frequency trading’s increasing sway. “The markets used to be about capital formation,” said Mr. Quast, the consultant. “Now 80 percent of trading is driven by some form of statistical arbitrage. We are buying into a statistical house of cards that could unravel very quickly.”

This story originally appeared in the The New York Times

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