Methane Leak in California a 'Major Catastrophe' — Could Take 4 Months to Stop

Environmentalists estimate the effect is comparable to the tailpipes of up to seven million cars venting directly into the atmosphere every day.

Screen capture from YouTube video.

By Kim Brunhuber
About 42 kilometres from Los Angeles, above the houses nestled in the mountains of Porter Ranch, Calif., a plume of methane is shooting into the sky. The cloud is invisible but it stretches for kilometres, as though a forest fire has been continually burning for months. All of this is emanating from a tiny pipe about 20 centimetres wide, more than a kilometre underground.

"The amount of methane and natural gas that's coming out of the Aliso Canyon Facility really is probably one of the largest volumes of gas ever recorded from a single leak," says Tim O'Connor, an oil and gas specialist with the non-profit Environmental Defense Fund (EDF).

The Aliso Canyon Natural Gas Storage Facility, owned by SoCalGas, is the fifth biggest of its kind in U.S. But in late October, the company realized one of its wells was leaking. At first the company tried to close the leak using the conventional method of pouring fluids and mud down the well.

"We have tried that seven times and have been unsuccessful in trying to stop the leak," said SoCalGas spokesman Michael Mizrahi. "I have to say more than likely it's [because] the pressures that are coming up from the leaking well are so intense."

The company says it doesn't know exactly how much gas is escaping. But environmentalists estimate the effect is comparable to the tailpipes of up to seven million cars venting directly into the atmosphere every day.

"Methane is a very potent greenhouse gas; over the first 20 years it's released, it has a climate impact 84 times that of carbon dioxide," said O'Connor. "There's no telling what the far reaches of the overall end results are going to be. Air quality, public health, ecological — it's all on the table." The Federal Aviation Administration has imposed a no-fly zone because of the small risk that a plane could ignite a pocket of methane.

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Babies Are Dying in this Utah Town — When A Midwife Pointed At Fracking She Was Threatened With Death

Photo by danibabii08.

By Paul Solotaroff
Every night, Donna Young goes to bed with her pistol, a .45 Taurus Judge with laser attachment. Last fall, she says, someone stole onto her ranch to poison her livestock, or tried to; happily, her son found the d-CON wrapper and dumped all the feed from the troughs. Strangers phoned the house to wish her dead or run out of town on a rail. Local nurses and doctors went them one better, she says, warning pregnant women that Young's incompetence had killed babies and would surely kill theirs too, if given the chance.

"Before they started spreading their cheer about me, I usually had 18 to 25 clients a year, and a spotless reputation in the state," says Young, the primary midwife to service Vernal, Utah, a boom-and-bust town of 10,000 people in the heart of the fracked-gas gold rush of the Uintah Basin. A hundred and fifty miles of sparse blacktop east of Salt Lake City, Vernal has the feel of a slapdash suburb dropped randomly from outer space. Half of it is new and garishly built, the paint barely dry after a decade-long run of fresh-drilled wells and full employment. "Now, I'm down to four or five ladies, and don't know how I'll be able to feed my animals if things don't turn around quick."

Young, a fiftysomething, heart-faced woman with a story-time lilt of a voice, cuts a curious figure for a pariah. She's the mother of six, a grandmother of 14 and an object of reverence among the women she's helped, many of whom she's guided through three and four home births with blissfully short labors and zero pain meds. And the sin for which she's been punished with death threats and attacks on her reputation? Two years ago, she stumbled onto the truth that an alarming number of babies were dying in Vernal — at least 10 in 2013 alone, what seemed to her a shockingly high infant mortality rate for such a small town. That summer, she raised her hand and put the obvious question to Joe Shaffer, director of the TriCounty Health Department: Why are so many of our babies dying?

In most places, detecting a grave risk to children would inspire people to name a street for you. But in Vernal, a town literally built by oil, raising questions about the safety of fracking will brand you a traitor and a target. "Me and my kids are still cautious: If someone kicked in my front door tonight, it'd take an hour for the sheriff to get here," says Young, whose house on 60 acres is well out of town and a quarter-mile clear of her closest neighbor. "The first person they'd meet is me on the staircase, pointing that .45 dead at 'em. And I know how to use these things — I can nail a coyote in the pasture from 100 yards."

Prodded by Young and the concerns she pushed along, which made their way through channels to state officials, TriCounty Health announced a study in 2014 to assess Young's concerns over the infant mortality rate. But Young, backed up by experts in Salt Lake City, believed the study was designed to fail. She says that any serious inquiry would have started with Suspect One: the extraordinary levels of wintertime pollution plaguing the Basin since the vast new undertaking to frack the region's shale filled the air with toxins. The county merely counted up infant deaths and brushed aside the facts about Vernal air pollution: ozone readings that rivaled the worst days of summer in New York, Los Angeles or Salt Lake City; particulate matter as bad as Mexico City; and ground air fraught with carcinogenic gases like benzene, rogue emissions from oil and gas drilling. Indeed, pollution was so bad in this rural bowl that it broke new ground in climate science. For decades, experts believed that life-threatening smog occurred only in or near big cities. But the Basin, which is bound on all four sides by mountains, is a perfectly formed bowl for winter inversions, in which 20-below weather clamps down on the valley and is sealed there by warmer air above it. During those spells, when the haze is visible and the air in one's lungs is a cold chisel, the sun's rays reflect off the snow on the ground and cook the volatile gases into ozone. The worst such period in the Basin's recent history was the winter of 2012-13, when nearly all the Uintah mothers whose babies died were pregnant.

Other key information was available to TriCounty, including multiple recent studies that link mothers' exposure to toxic air with fetal disasters of all kinds, including stillbirths, birth defects and developmental syndromes. But four months after he announced the study, Shaffer retired as TriCounty's chief; six months later, the department's findings were released. The deaths were deemed "not statistically insignificant," Sam LeFevre, an epidemiologist with the Utah State Health Department who conducted the study for TriCounty, told an assembly of concerned Vernal citizens. When pressed on possible causes for the deaths, he suggested the health problems of mothers, citing smoking, diabetes and prenatal neglect among the Basin's residents. LeFevre made it clear he was sympathetic to the crowd's concerns. "I know what it's like to lose a pregnancy," he announced. "My wife's had eight, and only four live births."

Which raises a question you might ask in a state whose legislature is so rabid for oil and gas money that it set aside millions to sue the federal government for the right to drill near Moab and Desolation Canyon, some of the state's most sacrosanct places: How many dead infants does it take before you'll accept that there's a problem?

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Increased Infant Mortality in Pennsylvania Linked to Fracking in Alarming New Study

Pennsylvania has issued more than 10,000 drilling permits over the past decade. Infants and children may be paying a heavy price.

(Click Here to See Full Size)
The placement of fracking exhaust pipes right next to homes demonstrates how the fracking industry has a demonic approach to public health. (Illustration adapted from Salvatore Gerace and Earthworks)

By Reynard Loki
A new study has linked fracking to a higher incidence in infant mortality, perinatal mortality, low-weight births, premature births and cancer in infants and children.

Funded by the Pittsburgh Foundation and written by Joe Mangano, co-founder and president of the Radiation and Public Health Project, a nonprofit educational and scientific organization that studies the relationship between low-level, nuclear radiation and public health, the study used data from state agencies to examine eight heavily fracked counties in Pennsylvania — four in the northeast and four in the southwest region of the state, counties that account for the majority of the state's natural gas drill wells and gas production. In all categories but child cancer, increases were greater in the northeast counties than they were in the four southwest counties.

"The information presented in this report supports the hypothesis of a link between exposure to toxic chemicals released in fracking and increased risk of disease and death," writes Mangano, who also manages the citizen-based radiation monitoring programs near the nuclear plants at Indian Point, New York, and Oyster Creek, New Jersey. "While it is virtually impossible to estimate a 'dose' to a community from chemicals generated by fracking, it is clear that residents of the eight most-fracked counties received far greater exposures than those in the rest of Pennsylvania."


Analyzing publicly available data from the Pennsylvania Department of Health and the U.S. Centers for Disease Control and Prevention, Mangano found that, since the early 2000s and compared to the rest of the state, the heavily-fracked counties have seen a rise in infant mortality (13.9 percent), perinatal mortality (23.6 percent), low-weight births (3.4 percent), premature births/gestation less than 32 weeks (12.4 percent) and cancer incidence in age 0-4 (35.1 percent).

Mangano asserts that the advent of large-scale fracking "has added considerable amounts of toxic chemicals into the environment, including various greenhouse gases and radiation. While potential health consequences of fracking has been become a national issue, very little research on health trends among affected populations has been conducted."

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America's 'Oil Independence' Myth: 'Most Shale Oil and Gas Reserves Could Prove Too Deep, Too Expensive to Drill' — Economic Collapse Will Follow

Peak Oil is not a myth. The production of oil will eventually peak (likely sooner than later) and then it will drop dramatically from then on. Fracking and tar sand oil extraction will only delay the inevitable: World oil output will drop like a rock. Meanwhile, there will be a vast acceleration in demand, caused by China, India and the entry into the high-tech age of the underdeveloped nations. Think nuclear energy and uranium will save the day? Have you ever heard of Peak Uranium?
—Ronald David Jackson

PeakGraph provided by Joy King.

By Peter Moskowitz
In his 2012 State of the Union address, President Barack Obama said that the U.S. had a supply of natural gas “that can last America nearly 100 years.”

____________________

 Richard Heinberg on Peak Oil and the Globe's Limitations

____________________

But that unbridled optimism, shared by the natural gas industry as well as politicians who want to see the U.S. become more energy independent, is worrying a growing grout op of activists and analysts who say U.S. oil and gas production may start declining in a matter of years as drillers run out of sweet spots in U.S. shale reserves and are forced to explore less productive — and less lucrative — regions.

“Most of the wells right now are going into sweet spots,” said David Hughes, who authored a report released this week on the future of oil and gas production from the Post Carbon Institute, a green energy think tank. “You’re going to have to go into other parts of the reservoir eventually.”

He says more pessimistic observations have for years been swept under the rug, as the recent flood of untapped oil and gas made accessible by newly popularized technologies like hydraulic fracturing has buoyed the spirits of fossil fuel optimists. These optimists believe the U.S. oil and gas boom could create hundreds of thousands more jobs, cut dependence on foreign oil and even use U.S. energy sources to leverage power in diplomatic battles — as long as the country manages to keep producing gas and oil at the current rate for decades to come.

[...]

But the relentless upbeat nature of the U.S. government’s predictions may mask a more complicated truth about oil and gas development. No one knows exactly how much oil and gas will be accessible in the future, and some people say it’s a lot less than what the government and industry think.

The Post Carbon Institute report suggests that while the U.S. does have a lot of shale oil and gas, the majority of it may be too deep and too expensive to drill.

____________________

GO DEEPER:
A Crude Awakening: The Oil Crash

____________________

The report is based on an analysis of the productivity of thousands of wells in the most productive U.S. shale regions.

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ABC's 'Middle Ground' on Climate Change: Who Knows? — Plays Stupid While California Suffers Historic Draught and Southern States Flood

By Peter Hart
Yesterday ABC's This Week (10/26/14) profiled George P. Bush, a Texas land commissioner candidate who is a grandson and nephew of the more famous George Bushes. It was part of This Week's "Closer Look" series, which seems to be intended as a place for upbeat profiles of political heavyweights. But a brief exchange about climate change showed the limits of this kind of journalism.

Given its impact on land issues, correspondent Jonathan Karl had good reason to ask Bush about climate change.

KARL: As land commissioner, he'll oversee millions of acres of oil and natural gas reserves. But he also talks about the need for renewable energy and he attempts to stake out a middle ground on climate change. Well, sort of.

How big a threat is climate change to the Texas coastline?

BUSH: The Texas coastline is impacted by rising sea levels. And again, the question is whether or not that's man-made, and I'll leave that to the scientists. But, at least in Texas, the facts showed that on average, about 17 feet of wet beach is lost due to coastal erosion and so….

KARL: Which is a huge problem for Texas.

BUSH: It's a huge problem.

KARL: But you don't doubt that human activity contributes to climate change?

BUSH: Well, we'll see in terms of the science, there's a wide range that has been discussed. And, again, I'm not a scientist by any stretch. But everywhere from, you know, no impact at all to 100 percent.

So Bush's position is that coastal erosion is a problem linked to rising sea levels, but he's not sure that's linked to human activity. I suspect Karl's "sort of" quip is intended as a signal to viewers, but some clarity would be helpful. The position that Bush is taking–maybe humans are causing climate change, maybe they aren't–is not a "middle ground" in any sense. It's certainly a good position to take if you don't want there to be any action to stop climate change.

Are scientists right in saying human activity is causing ocean levels to
rise? "I dunno" is not a neutral position. (cc photo: Van Sutherland)

This isn't the first time Karl has been able to get a Republican politician on the record on climate change. In May of this year (FAIR Blog, 5/12/14), Karl interviewed Sen. Marco Rubio (R-Fla.), who gave him a nonsensical answer to a direct question about the scientific consensus on climate change. Rubio said that "natural disasters have always existed" and that scientists were taking "a handful of decades of research and say that this is now evidence of a longer-term trend." What was Karl's response to that?

It's talk like that that Rubio hopes will appeal to the conservatives he would need to win the Republican nomination.

In Karl's worldview, it would seem, Rubio's position is one that will appeal to the conservative base. And Bush, with his more rhetorically evasive version of scientific denial, is somewhere near the "middle." Both positions, of course, are outside the overwhelming scientific consensus–which should be the most important benchmark for journalists who are describing where a politician stands on the issue.

Climate change is rarely discussed on the Sunday talk shows. It'd be nice if when they did discuss it, the conversation was less about political positioning and more reality-based.

Reprinted with permission from Fairness & Accuracy In Reporting.

California Halts Injection of Fracking Waste, Warning it May Be Contaminating Water

Activists rally against fracking outside California
EPA office.

State’s drought has forced farmers to rely on groundwater, even as California aquifers have been intentionally polluted due to exemptions for oil industry.

By Abrahm Lustgarten ProPublica
California officials have ordered an emergency shut-down of 11 oil and gas waste injection sites and a review more than 100 others in the state's drought-wracked Central Valley out of fear that companies may have been pumping fracking fluids and other toxic waste into drinking water aquifers there.

The state's Division of Oil and Gas and Geothermal Resources on July 7 issued cease and desist orders to seven energy companies warning that they may be injecting their waste into aquifers that could be a source of drinking water, and stating that their waste disposal "poses danger to life, health, property, and natural resources." The orders were first reported by the Bakersfield Californian, and the state has confirmed with ProPublica that its investigation is expanding to look at additional wells.

The action comes as California's agriculture industry copes with a drought crisis that has emptied reservoirs and cost the state $2.2 billion this year alone. The lack of water has forced farmers across the state to supplement their water supply from underground aquifers, according to a study released this week by the University of California Davis.

The problem is that at least 100 of the state's aquifers were presumed to be useless for drinking and farming because the water was either of poor quality, or too deep underground to easily access. Years ago, the state exempted them from environmental protection and allowed the oil and gas industry to intentionally pollute them. But not all aquifers are exempted, and the system amounts to a patchwork of protected and unprotected water resources deep underground. Now, according to the cease and desist orders issued by the state, it appears that at least seven injection wells are likely pumping waste into fresh water aquifers protected by the law, and not other aquifers sacrificed by the state long ago.

"The aquifers in question with respect to the orders that have been issued are not exempt," said Ed Wilson, a spokesperson for the California Department of Conservation in an email.

A 2012 ProPublica investigation of more than 700,000 injection wells across the country found that wells were often poorly regulated and experienced high rates of failure, outcomes that were likely polluting underground water supplies that are supposed to be protected by federal law. That investigation also disclosed a little-known program overseen by the U.S. Environmental Protection Agency that exempted more than 1,000 other drinking water aquifers from any sort of pollution protection at all, many of them in California.

Those are the aquifers at issue today. The exempted aquifers, according to documents the state filed with the U.S. EPA in 1981 and obtained by ProPublica, were poorly defined and ambiguously outlined. They were often identified by hand-drawn lines on a map, making it difficult to know today exactly which bodies of water were supposed to be protected, and by which aspects of the governing laws. Those exemptions and documents were signed by California Gov. Jerry Brown, who also was governor in 1981.

State officials emphasized to ProPublica that they will now order water testing and monitoring at the injection well sites in question. To date, they said, they have not yet found any of the more regulated aquifers to have been contaminated.

"We do not have any direct evidence any drinking water has been affected," wrote Steve Bohlen, the state oil and gas supervisor, in a statement to ProPublica.

Bohlen said his office was acting "out of an abundance of caution," and a spokesperson said that the state became aware of the problems through a review of facilities it was conducting according to California's fracking law passed late last year, which required the state to study fracking impacts and adopt regulations to address its risks, presumably including underground disposal.

California officials have long been under fire for their injection well practices, a waste disposal program that the state runs according to federal law and under a sort of license 2014 called "primacy" 2014 given to it by the EPA.

For one, experts say that aquifers the states and the EPA once thought would never be needed may soon become important sources of water as the climate changes and technology reduces the cost of pumping it from deep underground and treating it for consumption. Indeed, towns in Wyoming and Texas 2014 two states also suffering long-term droughts 2014 are pumping, treating, then delivering drinking water to taps from aquifers which would be considered unusable under California state regulations governing the oil and gas industry.

In June 2011, the EPA conducted a review of other aspects of California's injection well program and found enforcement, testing and oversight problems so significant that the agency demanded California improve its regulations and warned that the state's authority could be revoked.

Among the issues, California and the federal government disagree about what type of water is worth protecting in the first place, with California law only protecting a fraction of the waters that the federal Safe Drinking Water Act requires.

The EPA's report, commissioned from outside consultants, also said that California regulators routinely failed to adequately examine the geology around an injection well to ensure that fluids pumped into it would not leak underground and contaminate drinking water aquifers. The report found that state inspectors often allowed injection at pressures that exceeded the capabilities of the wells and thus risked cracking the surrounding rock and spreading contaminants. Several accidents in recent years in California involved injected waste or injected steam leaking back out of abandoned wells, or blowing out of the ground and creating sinkholes, including one 2011 incident that killed an oil worker.

The exemptions and other failings, said Damon Nagami, a senior attorney with the Natural Resources Defense Council in an email, are "especially disturbing" in a state that has been keenly aware of severe water constraints for more than a century and is now suffering from a crippling drought. "Our drinking water sources must be protected and preserved for the precious resources they are, not sacrificed as a garbage dump for the oil and gas industry."

Still, three years after the EPA's report, California has not yet completed its review of its underground injection program, according to state officials. The scrutiny of the wells surrounding Bakersfield may be the start.

Reprinted with permission from ProPublica

Fracking Causes Water Contamination — Conclusive Proof Provided in Texas Via Water Samples

Parker County homeowner Steve Lipsky demonstrated for local TV news outlet WFAA how water coming from his underground well can be ignited. (Credit: WFAA)

Scientists say water samples from Texas man's well show identical chemical signatures from nearby gas drilling operations.

By Jon Queally
Independent scientists who have reviewed a water analysis conducted by state authorities of a Texas resident's drinking well say the chemical signatures found in the water may provide "the nation's first conclusive link" between fracking operations and aquifer contamination.

Though a state investigation—conducted by the Texas Railroad Commission in response to an official complaint filed by landowner and Parker County resident Steve Lipsky—said it found the chemical analysis of the water inconclusive, experts shown the results say the commission was simply wrong. "And not just by a little," reports local ABC-affiliate WFAA News who shared the results with several scientists, "but by a lot."

Lipsky said he has long believed that nearby hydraulic fracturing by the Range Resources company was to blame for the increasing amounts of methane and other chemicals in his drinking water. Since 2010, he says, growing amounts of methane have been seeping into the groundwater beneath his land - enough of it so that he can literally light the water coming out of his well on fire.

Range Resources says there is no connection between the methane in Lipsky's well and their drilling, but scientists shown the results from the water analysis—specifically one called an isotopic analysis—say the chemical composition shows they are an exact match to the gas being fracked at two nearby drilling sites—called Butler and the Teal—within the Barnett Shale deposit.

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Europe-US Secret Trade Pact Calls for Drastic Increase in Fracking & Offshore Drilling—US Environment Be Damned

Pollution from BP's Gulf Oil Spill. (Screen capture from YouTube
video)

By Zach Carter, Kate Sheppard
The European Union is pressing the Obama administration to expand U.S. fracking, offshore oil drilling and natural gas exploration under the terms of a secret negotiation text obtained by The Huffington Post.

The controversial document is an early draft of energy policies that EU negotiators hope to see adopted under the Transatlantic Trade and Investment Partnership (TTIP) trade deal, which is currently being negotiated. The text was shared with American officials in September. The Office of the U.S. Trade Representative declined to comment on the document.

Environmental groups fear the broad language proposed for the deal would eliminate key restrictions on the export of crude oil and natural gas, fossil fuels that contribute to climate change. The document marks the first major bone of contention in the EU deal, amid an outcry from environmentalists over leaked terms of the Trans-Pacific Partnership, a separate pact that the U.S. and 11 Pacific nations are also negotiating.

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Russia Swings Away From West Towards East With Half Trillion Dollar Gas Deal With China — West Could Eventually Become Irrelevant

Gazprom (Russia's mega energy corporation) workers attend to work at the construction site of the South Stream, a proposed gas pipeline to transport Russian natural gas through the Black Sea to Bulgaria, Greece, Italy and Austria  (December 7, 2012 in Anapa, Russia).

By Scott Neuman
In an agreement reminiscent of the early days of the Cold War, Russia has agreed to supply China with hundreds of billions of dollars worth of natural gas via a pipeline from Siberia pipeline to begin pumping in four years.

NPR's Frank Langfitt reports from Shanghai that in 2018, Russia will begin sending 38 billion cubic meters of natural gas to China each year through the pipeline. Over the life of the 30-year contract, 1 trillion cubic meters would be delivered.

Frank says that Alexey Miller, the chief executive of the Russian company, Gazprom, has said the exact price was a commercial secret, but that the deal is estimated at $400 billion total. Gazprom shares rose 2 percent on the news.

"This is the biggest contract in the history of the gas sector of the former USSR," said Russian President Vladimir Putin, after the agreement was signed in Shanghai between Gazprom and China National Petroleum Corp (CNPC).

"Our Chinese friends are difficult, hard negotiators," he said.

"Both sides were in the end pleased by the compromise reached on price and other terms," Putin said.

The move comes as Russia has been increasingly isolated by Europe and the United States as a result of its annexation of Crimea and continuing unrest in eastern Ukraine. China, too, has been at odds with Washington over confrontations with its maritime neighbors in the South China Sea.

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'Shock Doctrine' Comes to Ukraine — Cashing In On a Crisis: Vice President Joe Biden's Son Slated To Join Ukraine Gas Corp

R. Hunter Biden (Screen capture from YouTube video)

Biden son’s appointment to Ukraine gas company raises no conflict of interest, White House says

R. Hunter Biden, a lawyer and a partner in an investment firm, was recently named to the board of directors of Burisma Holdings, a private company that has drilled for natural gas in Ukraine since 2002.

By Reuters
The White House on Tuesday brushed aside questions about whether the involvement of Vice President Joe Biden's son in a Ukrainian natural gas company raised ethical issues at a time when the administration is promoting energy diversity in the country.

In a statement on Burisma's website, Hunter Biden said he would help the company with "transparency, corporate governance and responsibility, international expansion," and other issues.

Natural gas has been a central issue in recent tensions between Russia and Ukraine. Ukraine depends on Russia for most of its natural gas, and has accused Moscow of hiking natural gas prices as punishment for moving closer to the European Union.

In April, the vice president traveled to Kiev and discussed how the United States could help provide technical expertise for expanding domestic production of natural gas.

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Ukraine's Gas Politics: The Problem For Ukraine is Not Just Dependency on Russian Gas - But Dependency on Cheap Russian Gas

Photo by Shevchenko Alexander.

It is commonly assumed that the main economic challenge facing Ukraine is its dependence on energy supplies, especially natural gas, imported from Russia. But that is only half the story…

By Margarita Balmaceda and Peter Rutland
It is commonly assumed that the main economic challenge facing Ukraine is its dependence on energy supplies, especially natural gas, imported from Russia. Russia, it is true, has a powerful lever that it can use to extract political concessions from Kyiv‚ as it did when President Viktor Yanukovych was forced to renege on his pledge to sign the Association Agreement with the European Union last November.

Ukraine inherited from the Soviet Union an economy hooked on cheap hydrocarbons.

But Ukraine's dependency on Russian gas is only half the story. Equally troubling has been Ukraine's dependency on cheap gas; gas that just happens to be from Russia. Ukraine inherited from the Soviet Union an economy hooked on cheap hydrocarbons. Until last week's price increases, residential consumers only paid about 25% of what the gas is worth on the European market: industrial consumers pay about 75%. At the same time, coal produced in Ukraine's Donbas is sold to domestic customers at about half the extraction cost.

This cheap energy, together with the existence of parallel markets for energy, has generated a huge flow of economic rents, up to 5% of the country's GDP (approximately £3.5 billion) in peak years, which Ukraine's political and economic elites were able to capture for themselves. The rents have been turned into hard cash either through the re-export of Russian gas to European customers, or through the manufacture of energy-intensive products such as steel or fertilizers for export.

This flow of rents produced a political class, both in Ukraine and Russia, who were unified in their collective self-enrichment, and whose common interest lay in preserving the status quo.


The disputes with Russia that disrupted gas supplies in 2006 and 2009 were more about the division of these rents between groups in Moscow and Kyiv than about the price that Ukraine would be paying.

Over 20 years of independence, Ukraine's political class made no serious effort to reduce their dependence on Russian gas

Over the 20 years of Ukraine's independence, Ukraine's political class made no serious effort to reduce the country's dependency on Russian gas. The proportion of Ukraine's energy imported from Russia fell only slightly from 1991 to 2012, from 50% to 40%.

The first real attempt to correct the problem came after massive increases in the price of gas imports from Russia, resulting from a much-criticised March 2010 contract with Gazprom signed by then Prime Minister Yulia Tymoshenko. It was Yanukovych's subsequent efforts to seize more of the energy rents for himself that caused the oligarchs to withdraw their support for him during the Euromaidan crisis.

Adding to this failure to address Ukraine's gas problem, the political class has also done little to build functioning institutions, such as rule of law or honest political parties, which would attract the loyalty of Ukrainians.

Ukraine suffers from many of the features of the 'resource curse‚' even though it does not itself produce any oil or gas, but is merely able to exploit its position as a transit country. Neighbouring Belarus is in a similar situation, except that in Minsk a single individual, Aleksandr Lukashenka, has managed to establish control over the flow of rents, using them to consolidate his dictatorial regime, while in Ukraine they are fought over by a small group of oligarchs.

The Ukrainian people have received some modest benefits from this rent-based economy, in the form of cheap gas and electricity. But in the long run, ordinary Ukrainians are paying the price of being trapped in an economic model that depends on rent-extraction rather than investment in competitive industries. Ukraine is saddled with an economy whose carbon intensity is 0.89 kg CO2/GDP, twice the world average, while much of its rich arable land lies unused.

Essentially the same group of people has remained in power for the past 20 years. For all the talk of Euromaidan as a revolution, the leaders of the new provisional government are the very same figures who formed the government that emerged from the Orange Revolution a decade ago. Yulia Tymoshenko was Prime Minister, Oleksandr Turchynov was Tymoshenko's deputy, Petro Poroshenko was Secretary of the National Security Council, and Arseniy Yatsenyuk was Economics Minister.

Ukraine suffers from many of the features of the 'resource curse‚' even though it does not itself produce any oil or gas.

The main factor that caused the breakdown of the post-Orange reform government was disagreement over who would control the energy rents. How realistic is it to expect them to behave any differently this time around?

Why, then, does the IMF expect such a government to dismantle the energy rent regime – the one thing that holds the political class together? The provisional government in Kyiv is under pressure to rely on regional oligarchs to win back the loyalty of Eastern Ukraine, precisely the men whose fortunes depend on the preservation of the old energy rent regime.

Yet, the IMF has made liberalisation of energy prices a central condition for the release of its £10 billion rescue package. The provisional government has taken a first step in this direction by announcing a 50% increase in the price of gas from 1 May. It is unlikely that they will be able to enforce this price increase. Even if patriotism trumps profit, and the government sticks with the reform, popular dissatisfaction with the price increases will likely erode the legitimacy of the government.

This is not the only problem with the IMF programme, which the Financial Times described as 'egregiously optimistic' in its growth projections for this year and next, especially given the occupation of Crimea and the mayhem being sown by Moscow in Eastern Ukraine.

The crisis currently engulfing Ukraine is not just about a predatory Russia. It is also a question of how to ensure Ukraine emerges from the present crisis as a functioning state, capable of earning the loyalty of all its citizens. The question we should be asking is: why are we waiting for the IMF package to fail, before concerned countries come up with a realistic plan to rescue the Ukrainian economy, and stabilise the country?

Reprinted with permission from openDemocracy.

Stronger ‘Frackquakes’ Are On The Way, Scientists Warn: An Inevitable Result of Widespread Hydrolic Fracking

A Frack-Quake Future? - King Library, San José, CA -
San José Earthquake, 2007 (Photo by San José Lib)

By Emily Atkin
The man-made earthquakes that have been shaking up the southern United States only stand to get stronger and more dangerous as the controversial practice of hydraulic fracturing, or fracking, increases, scientists warned at a Thursday conference.

According to multiple reports, scientists attending the Seismological Society of America annual meeting agreed that fracking can change the state of stress on existing faults to the point of failure, causing earthquakes. That stress is generally not caused by fuel extraction itself, but by a process called “wastewater injection,” where companies take the leftover water used to frack wells and inject it deep into the ground.

Though it was previously believed that the man-made earthquakes could not exceed a 5.0 magnitude, many now say that larger quakes could become the norm as more and more water is stored underground.

“I think ultimately, as fluids propagate and cover a larger space, the likelihood that it could find a larger fault and generate larger seismic events goes up,” Western University earth sciences professor Gail Atkinson reportedly said at the meeting.

Because of this and other warnings, the U.S. government also announced on Thursday that it would begin to track the risks that these so-called “frackquakes” pose, and start including them on official maps that help influence building codes.

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$3 Million Must Be Paid To Family Sickened by Fracking - Jury Rules

A fracking operation in Texas. (Photo from AireIndustrial)

By Emily Atkin
A Texas family claiming they were sickened because of pollution from hydraulic fracturing operations near their home should be awarded $2.95 million for their troubles, a jury ruled on Tuesday.

The Parr family had sued Aruba Petroleum Inc. in 2011, alleging the oil and gas producer exposed them to hazardous gases, chemicals and industrial waste that seeped into the air from 22 wells drilled near the family’s 40-acre plot of land, which sits atop the Barnett Shale.

The jury returned a 5-1 verdict saying Aruba “intentionally created a private nuisance,” awarding $275,000 for losses on property value, $2 million for past physical pain and suffering, $250,000 for future physical pain and suffering, and $400,000 for mental anguish.

“They’re vindicated,” David Matthews, one of the Parr’s attorneys, wrote on his firm’s blog Tuesday. “I’m really proud of the family that went through what they went through … It’s not easy to go through a lawsuit and have your personal life uncovered and exposed to the extent this family went through.”

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Is Russia Being Lured Into a Trap?: The Obama Game — The Goal of the US in Ukraine is to Stop Further Economic Integration of Asia and Europe

(click to see larger image)

To Understand What's Really Happening in Ukraine, Follow the Gas Lines on This Map
(CNBC)

The overriding goal of US policy in Ukraine is to stop the further economic integration of Asia and Europe. That’s what the fracas is really all about. The United States wants to control the flow of energy from East to West, it wants to establish a de facto tollbooth between the continents, it wants to ensure that those deals are transacted in US dollars and recycled into US Treasuries, and it wants to situate itself between the two most prosperous markets of the next century.

By MIKE WHITNEY
Russia is not responsible for the crisis in Ukraine. The US State Department engineered the fascist-backed coup that toppled Ukraine’s democratically-elected president Viktor Yanukovych and replaced him with the American puppet Arseniy Yatsenyuk, a former banker. Hacked phone calls reveal the critical role that Washington played in orchestrating the putsch and selecting the coup’s leaders. Moscow was not involved in any of these activities. Vladimir Putin, whatever one may think of him, has not done anything to fuel the violence and chaos that has spread across the country.

Putin’s main interest in Ukraine is commercial. 66 percent of the natural gas that Russia exports to the EU transits Ukraine. The money that Russia makes from gas sales helps to strengthen the Russian economy and raise standards of living. It also helps to make Russian oligarchs richer, the same as it does in the West. The people in Europe like the arrangement because they are able to heat their homes and businesses market-based prices. In other words, it is a good deal for both parties, buyer and seller. This is how the free market is supposed to work. The reason it doesn’t work that way presently is because the United States threw a spanner in the gears when it deposed Yanukovych. Now no one knows when things will return to normal...

Retired German Air Force Lieutenant Colonel Jochen Scholz summed up US policy in an open letter which appeared on the Neue Rheinilche Zeitung news-site last week. Scholz said the Washington’s objective was “to deny Ukraine a role as a bridge between Eurasian Union and European Union….They want to bring Ukraine under the NATO control” and sabotage the prospects for “a common economic zone from Lisbon to Vladivostok.”

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Russia 'Cancels Out' the European Union's $15 Billion Bailout for Ukraine With $18 Billion Gas Bill

Photo by Shalom Tesciuba.

By AP
Dragging much of Europe into his fight with Ukraine, Russian President Vladimir Putin urged European leaders Thursday to quickly help Ukraine settle its gas debt to Russia to prevent an imminent shutdown of Russian natural gas supplies to the continent.

Putin's letter to 18 leaders, released Thursday by the Kremlin, is part of Russia's efforts to retain control over its struggling neighbor, which is teetering on the verge of financial ruin and is facing a pro-Russian separatist mutiny in the east.

Putin's move raises the specter of a new gas dispute between Russia and Ukraine that could affect much of Europe. In 2009, Moscow turned off supplies to Kiev, leading to the shutdown of Russian gas moving across Ukrainian pipelines to other European countries.

The amount that Putin claims Ukraine owes is growing by billions every day. In the letter, Putin said Ukraine owes Russia $17 billion in gas discounts and potentially another $18.4 billion incurred by Ukraine as a minimal take-or-pay fine under their 2009 gas contract.

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War and the Demise of the US Dollar: US Sanctions on Russia Accelerates Dumping of US Dollar as Currency of Exchange — Which Could Crash the US Economy

Russia's move to accept rubles instead of dollars for its trade in gas and
oil could lower the demand for dollars and thus smash the US economy.
(Photo by Images Money)

By Dr. Paul Craig Roberts
2014 is shaping up as a year of reckoning for the United States.

Two pressures are building on the US dollar. One pressure comes from the Federal Reserve’s declining ability to rig the price of gold as Western gold supplies shrivel and market knowledge of the Fed’s illegal price rigging spreads. The evidence of massive amounts of naked shorts being dumped into the paper gold futures market at times of day when trading is thin is unequivocal. It has become obvious that the price of gold is being rigged in the futures market in order to protect the dollar’s value from QE.

The other pressure arises from the Obama regime’s foolish threats of sanctions on Russia. Other countries are no longer willing to tolerate Washington’s abuse of the world dollar standard. Washington uses the dollar-based international payments system to inflict damage on the economies of countries that resist Washington’s political hegemony.

Russia and China have had enough. As I have reported and as Peter Koenig reports Russia and China are disconnecting their international trade from the dollar. Henceforth, Russia will conduct its trade, including the sale of oil and natural gas to Europe, in rubles and in the currencies of its BRICS partners.

This means a big drop in the demand for US dollars and a corresponding drop in the dollar’s exchange value.

As John Williams (shadowstats.com) has made clear, the US economy has not recovered from the downturn in 2008 and has weakened further. The vast majority of the US population is hard pressed from the lack of income growth for years. As the US is now an import-dependent economy, a drop in the dollar’s value will raise US prices and push living standards lower.

All evidence points to US economic failure in 2014, and that is the conclusion of John Williams’ April 9 report.

This year could also see the breakup of NATO and even the EU. Washington’s reckless coup in Ukraine and threat of sanctions against Russia have pushed its NATO puppet states onto dangerous ground. Washington misjudged the reaction in Ukraine to its overthrow of the elected democratic government and imposition of a stooge government. Crimea quickly departed Ukraine and rejoined Russia. Other former Russian territories in Ukraine might soon follow.

Protesters in Lugansk, Donetsk, and Kharkov are demanding their own referendums. Protesters have declared the Donetsk People’s Republic and Kharkov People’s Republic. Washington’s stooge government in Kiev has threatened to put the protests down with violence. http://rt.com/news/eastern-ukraine-violence-threats-405/

Washington claims that the protests are organized by Russia, but no one believes Washington, not even its Ukrainian stooges.

Russian news reports have identified US mercenaries among the Kiev force that has been sent to put down the separatists in eastern Ukraine. A member of the right-wing, neo-Nazi Fatherland Party in the Kiev parliament has called for shooting the protesters dead.

Violence against the protesters is likely to bring in the Russian Army and result in the return to Russia of its former territories in Eastern Ukraine that were attached to Ukraine by the Soviet Communist Party.

With Washington out on a limb issuing threats hand over fist, Washington is pushing Europe into two highly undesirable confrontations. Europeans do not want a war with Russia over Washington’s coup in Kiev, and Europeans understand that any real sanctions on Russia, if observed, would do far more damage to Europeans. Within the EU, growing economic inequality among the countries, high unemployment, and stringent economic austerity imposed on poorer members have produced enormous strains. Europeans are in no mood to bear the brunt of a Washington-orchestrated conflict with Russia. While Washington presents Europe with war and sacrifice, Russia and China offer trade and friendship. Washington will do its best to keep European politicians bought-and-paid-for and in line with Washington’s policies, but the downside for Europe of going along with Washington is now much larger.

Across many fronts, Washington is emerging in the world’s eye as duplicitous, untrustworthy, and totally corrupt. A Securities and Exchange Commission prosecuting attorney, James Kidney used the occasion of his retirement to reveal that higher ups had squelched his prosecutions of Goldman Sachs and other “banks too big to fail,”because his SEC bosses were not focused on justice but “on getting high-paying jobs after their government service” by protecting the banks from prosecution for their illegal actions. http://www.counterpunch.org/2014/04/09/65578/

The US Agency for International Development has been caught trying to use social media to overthrow the government of Cuba. http://rt.com/news/cuba-usaid-senate-zunzuneo-241/

This audacious recklessness comes on top of Washington’s overthrow of the Ukrainian government, the NSA spying scandal, Seymour Hersh’s investigative report that the Sarin gas attack in Syria was a false flag event arranged by NATO member Turkey in order to justify a US military attack on Syria, Washington’s forcing down Bolivian President Evo Morales’ presidential plane to be searched, Saddam Hussein’s “weapons of mass destruction,” the misuse of the Libyan no-fly resolution for military attack, and on and on. Essentially, Washington has so badly damaged other countries’ confidence in the judgment and integrity of the US government that the world has lost its belief in US leadership. Washington is reduced to threats and bribes and increasingly presents as a bully.

The self-inflicted hammer blows to Washington’s credibility have taken a toll. The most serious blow of all is the dawning realization everywhere that Washington’s crackpot conspiracy theory of 9/11 is false. Large numbers of independent experts as well as more than one hundred first responders have contradicted every aspect of Washington’s absurd conspiracy theory. No aware person believes that a few Saudi Arabians, who could not fly airplanes, operating without help from any intelligence agency, outwitted the entire National Security State, not only all 16 US intelligence agencies but also all intelligence agencies of NATO and Israel as well.

Nothing worked on 9/11. Airport security failed four times in one hour, more failures in one hour than have occurred during the other 116,232 hours of the 21st century combined. For the first time in history the US Air Force could not get interceptor fighters off the ground and into the sky. For the first time in history Air Traffic Control lost airliners for up to one hour and did not report it. For the first time in history low temperature, short-lived, fires on a few floors caused massive steel structures to weaken and collapse. For the first time in history 3 skyscrapers fell at essentially free fall acceleration without the benefit of controlled demolition removing resistance from below.

Two-thirds of Americans fell for this crackpot story. The left-wing fell for it, because they saw the story as the oppressed striking back at America’s evil empire. The right-wing fell for the story, because they saw it as the demonized Muslims striking out at American goodness. President George W. Bush expressed the right-wing view very well: “They hate us for our freedom and democracy.”

But no one else believed it, least of all the Italians. Italians had been informed some years previously about government false flag events when their President revealed the truth about secret Operation Gladio. Operation Gladio was an operation run by the CIA and Italian intelligence during the second half of the 20th century to set off bombs that would kill European women and children in order to blame communists and, thereby, erode support for European communist parties.

Italians were among the first to make video presentations challenging Washington’s crackpot story of 9/11. The ultimate of this challenge is the 1 hour and 45 minute film, “Zero.”

You can watch it here: http://www.youtube.com/watch?v=QU961SGps8g&feature=youtu.be

Zero was produced as a film investigating 9/ll by the Italian company Telemaco. Many prominent people appear in the film along with independent experts. Together, they disprove every assertion made by the US government regarding its explanation of 9/11.

The film was shown to the European parliament.

It is impossible for anyone who watches this film to believe one word of the official explanation of 9/11.

The conclusion is increasingly difficult to avoid that elements of the US government blew up three New York skyscrapers in order to destroy Iraq, Afghanistan, Libya, Somalia, Syria, Iran, and

Hezbollah and to launch the US on the neoconservatives agenda of US world hegemony.

China and Russia protested but accepted Libya’s destruction even though it was to their own detriment. But Iran became a red line. Washington was blocked, so Washington

decided to cause major problems for Russia in Ukraine in order to distract Russia from Washington’s agenda elsewhere.

China has been uncertain about the trade-offs between its trade surpluses with the US and Washington’s growing encirclement of China with naval and air bases. China has come to the conclusion that China and Russia have the same enemy–Washington.

One of two things is likely: Either the US dollar will be abandoned and collapse in value, thus ending Washington’s superpower status and Washington’s threat to world peace, or Washington will lead its puppets into military conflict with Russia and China. The outcome of such a war would be far more devastating than the collapse of the US dollar.

Reprinted with permission from Center for Research in Globalization.

It’s Not Just Keystone — Five Dirty Pipelines You’ve Never Heard Of

The Alberta tar sands. (Flickr/ Howl Arts Collective / CC)

It’s Not Just Keystone — Five Dirty Pipelines You’ve Never Heard Of (via Moyers & Company)

By now most people have heard of TransCanada’s Keystone XL pipeline and the fact that, after five years of deliberation and protest, its fate still hangs in the balance (the southern portion is already built, but the northern portion that crosses…

America's Russian 'Double Whammy': Will Try To Disrupt Russia's Oil & Gas Exports While Boosting Foreign Markets for US Natural Gas

Gas Wells - Mainesburg, Pennsylvania (Photo by Gerry Dincher)

The U.S., now number one in oil and gas, is preparing to destroy Russia’s economy. “Washington will move to crush, or at least seriously disrupt, Russia under its ‘sanctions as war by other means’ machine, by targeting its energy exports, while simultaneously boosting the foreign markets for U.S. natural gas.”

By Glenn Ford
“Washington’s strategy is to permanently ratchet up tensions to ‘new cold war’ levels to justify sanctions against Russian energy exports.”

The massive – and desperate – American offensive against world order is entering a new phase, as the U.S. prepares to resume its historical status as global energy superpower. The Obama administration’s brazen implantation of a rabidly anti-Russian, fascist-led regime in Ukraine places U.S. proxies astride pipelines that carry much of Siberia’s gas to Europe and beyond. Seventy-six percent of Russia’s natural gas exports are bound for Europe, the bulk of it to Germany, Italy, France and the United Kingdom. Russia’s weight in the world is largely derived, not from its economically burdensome nuclear arsenal, but as an energy giant. The U.S.-engineered coup in Kiev sets the stage for a protracted assault on Russia’s energy trade, which accounts for more than half of Moscow’s federal expenditures. Without its huge oil and gas exports, Russia deflates like a leaky dirigible.

Even the Americans were not so stupid as to believe that their neo-Nazi friends in Kiev could somehow pry Russia from its naval base in Crimea. Such was never the plan. Rather, Moscow’s response to the overthrow of Ukraine’s elected government was predictable, as was that of the Russian-speaking Crimean majority. Washington’s strategy is to permanently ratchet up tensions to “new cold war” levels to justify sanctions against Russian energy exports while exploiting America’s own natural gas “surplus” as an enhanced weapon of global hegemony.

“The U.S.-engineered coup in Kiev sets the stage for a protracted assault on Russia’s energy trade.”

Thanks to shale fracking, the United States recently surpassed Russia as the world’s number one exporter of natural gas, and will next year become the top oil producer. As the New York Times reported on March 5, “The administration’s strategy is to move aggressively to deploy the advantages of its new resources to undercut Russian natural gas sales to Ukraine and Europe.”
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Mainstream US Media Is Lost in Ukraine: New Professional Low Brazenly Touts Official Washington Propaganda Themes - Leading US Citizens Down Blind Alley

(click to see full size)
Dumbing Down Americans
Comparison between what CNN offers American and international audiences.
(Screencapture by Michael Verdi)

By Robert Parry
The U.S. mainstream news media is reaching a new professional low point as it covers the Ukraine crisis by brazenly touting Official Washington’s propaganda themes, blatantly ignoring contrary facts and leading the American public into another geopolitical blind alley.

As the Ukraine crisis continues to deepen, the mainstream U.S. news media is sinking to new lows of propaganda and incompetence. Somehow, a violent neo-Nazi-spearheaded putsch overthrowing a democratically elected president was refashioned into a “legitimate” regime, then the “interim” government and now simply “Ukraine.”

The Washington Post’s screaming headline on Sunday is “Ukraine decries Russian ‘invasion,’” treating the coup regime in Kiev as if it speaks for the entire country when it clearly speaks for only a subset of the population, mostly from western Ukraine. The regime’s “legitimacy” comes not from a democratic election but from a coup that was quickly embraced by the U.S. government and the European Union.

Objective U.S. journalists would insist on a truthful narrative that conveys these nuances to the American people, not simply behave as clumsy propagandists determined to glue “white hats” on the side favored by the State Department and “black hats” on everyone that the U.S. government disdains. But virtually the entire mainstream press corps has opted for the propaganda role, much as it has in the past. Think Iraq 2002-03.

You also might remember the mainstream media’s rush to judgment over the Sarin attack in Syria on Aug. 21, 2013. The State Department rashly blamed the incident on the Syrian government despite serious doubts inside the U.S. intelligence community.

To conceal those dissents, the State Department and the White House issued a four-page “Government Assessment,” rather than a National Intelligence Estimate from the 16 U.S. intelligence agencies. That would have had to include footnotes revealing disagreements over the evidence among the analysts.

RELATED STORY: The Syrian Sarin Gas Scam—the Threatened US Missile Attack On Syria
Was Based On Evidence Known To Be Flimsy

When the “Government Assessment” was posted online at the White House Web site on Aug. 30, it contained not a single piece of evidence that could be independently checked. That same day, Secretary of State John Kerry gave a nearly hysterical speech that sounded like a declaration of war. He insisted that the U.S. government had conclusive proof of the Syrian government’s guilt but he just couldn’t reveal any.

The U.S. press corps showed virtually no skepticism about the U.S. government’s case. Only a few Web sites, including Consortiumnews.com, noted the lack of verifiable proof and the absence of U.S. intelligence officials during the presentations, including none sitting behind Kerry when he made the rounds of congressional hearings.

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Russia—The World’s Largest Oil Producer—Wields A $160 Billion Stick in Crimea Sanctions Standoff

Gazprom (Russia's mega energy corporation) workers attend to work at the construction site of the South Stream, a proposed gas pipeline to transport Russian natural gas through the Black Sea to Bulgaria, Greece, Italy and Austria  (December 7, 2012 in Anapa, Russia).

By By Joe Carroll and Rebecca Penty
Vladimir Putin’s control over $160 billion in oil and natural gas exports may be his most potent weapon in Russia’s face-off with Europe and the U.S. over Ukraine.

As Crimea prepares to vote Sunday on whether to return to Russian control, the U.S. and its European allies have few levers to deter Putin’s Ukrainian venture. Threats of visa bans and asset freezes haven’t rattled the Kremlin thus far -- six hours of face-to-face talks between the top U.S. and Russian diplomats ended yesterday without a deal.

RELATED STORY: Russian Gas Corp Threatens To Cut Off Gas If Ukraine Doesn't Pay Bill Immediately —
EU Gears Up To Send Ukraine Gas

Russia, the world’s largest oil producer, exported $160 billion worth of crude, fuels and gas-based industrial feedstocks to Europe and the U.S. in 2012. While shutting the spigot on Russian energy exports would starve the Moscow government of essential flows of foreign cash, the price may be too high for European consumers and it may not alter Putin’s plans, said Jeff Sahadeo, director of Carleton University’s Institute of European, Russian and Eurasian Studies.

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