The "Cajun Express" oil rig, tapping the black gold deep beneath the Gulf of Mexico.The oil field known as "Jack" is located 175 miles off the coast of Louisiana, below 7,200 feet of water and another 30,000 feet of seabed, occupying a geological layer formed in the Cenozoic Era more than 60 million years ago. This layer -- the "lower tertiary" -- lies deeper under water than any other Gulf of Mexico oil discovery, which is one reason why many in the industry initially dismissed it as too remote to exploit. But in 2006, Chevron defied the odds when its engineers drilled a test well at Jack and discovered that oil could flow from this ancient sediment at profitable rates. Their success opened up a new drilling frontier -- a monster oil patch holding between 3 billion and 15 billion barrels of crude. It was hailed as the largest discovery in the United States since 1968 -- a discovery potentially big enough to boost national oil reserves up to 50 percent.

Since then, global oil companies have been pouring billions of dollars into these so-called ultradeep waters of the Gulf in pursuit of the region's buried treasure. Jack is among a cluster of nearly a dozen new fields there -- including "Blind Faith," "Great White," and "Cascade" -- that companies are now tapping in waters from 4,000 to 8,000 feet deep and in sedimentary rock extending between 1 and 6 miles below the seabed.

Coaxing oil from such great depths poses unprecedented risks for oil drilling -- and that's why I decided to visit the area. I wanted to witness firsthand the world's most extreme drilling territory, the Mount Everest of oil frontiers, where the industry has to tackle the tallest odds and gravest circumstances to eke out new discoveries.

Little, psyching up for the two-hour trip to the rig.

I set out at dawn on an April morning in a Sikorsky S-76 helicopter. The sky above the New Orleans heliport was a pea-soup green, thick with rain and pitchfork lightning. I was traveling with a Chevron executive and three of his staffers, all of us wearing regulation jumpsuits, hard hats, and steel-toed boots. The chopper lurched and shuddered in the squalls, but my travel companions nodded to the pilot to press on -- this was typical weather for the Louisiana coast, and routine flying conditions.

The Gulf yields 25 percent of all U.S. oil production, and is home to more than 3,700 production platforms, most of them located in relatively shallow waters of under 2,000 feet. Many geologists believe that the ultradeep regions of the Gulf -- those covered by waters greater than about 4,000 feet -- hold more untapped oil reserves than any other parts of the Western world. Today, offshore rigs are capable of operating in 10,000 feet of water and boring through 30,000 feet of seabed (twice the depth they could manage a decade ago). One rig sits atop each field, thrusting its tentacles into up to a dozen wells throughout the bed. The rig pulls up oil and then pumps it back to onshore refineries via underwater pipelines.

From my helicopter window, the offshore rig known as the "Cajun Express" looked like a child's toy -- a multicolored Erector Set floating on a buoy. But once we landed and I stepped out into the salty, sunny Gulf air, the rig gave an entirely different impression, awesomely vast and imposing.

It doesn't look so small now, does it?

We entered the boxy three-story cement building that houses the dorm rooms and offices. So austere were the surroundings -- and so far removed from civilization -- that I found myself heartened by the familiar details of a Snickers wrapper crumpled on the floor, a dust bunny underneath a desk, and a family snapshot tacked to an office wall -- evidence that people actually do live and work on this floating city.

Rising from the concrete floor and up through the bottoms of my boots was a strange vibration. "The thrusters," explained Paul Siegele, then director of Chevron's offshore drilling divisions. Thrusters, he told me, are gigantic engines at each corner of the platform relentlessly pushing and pulling against the ocean currents. Picture yourself standing in shallow waters at a beach and incessantly shifting your weight to stay balanced as the waves surge and the tides ebb and flow. Thrusters do an extreme version of this in order to keep the rig "on station," meaning within six inches in any direction of the drill's charted entry point into the seabed below. Anchors can't be used to moor drilling vessels at these depths -- the motion of the ocean would strain even the strongest of moorings, and rigs need to be able to motor to safety in the event of a hurricane.

The thruster solution is ingenious, but it carries an astonishing energy burden: these 9,500-horsepower engines use a combined total of 27 megawatts of power when running at full capacity -- enough to power about 21,000 homes. The generators that power the thrusters and keep the lights on, the electric drill turning, and the computers humming in this village at sea require about 40,000 gallons of diesel per day. It's roughly the amount of fuel that 13,300 Hummers consume in a typical day of driving.

You have to burn fossil fuels to harvest them -- that's a reality in any drilling scenario -- but the ratio of energy invested to energy gained gets slimmer as the drilling conditions get more extreme. (By "energy invested" I'm referring to all fossil fuels used to discover, drill, pump, and refine the oil and transport it to market.) During the glory days of U.S. oil production in the 1930s, an investment of 1 barrel of oil would yield a return of about 100 barrels. By 1970, when oil deposits had become scarcer and more difficult to extract and refine, the ratio had shrunk by more than half: 40 barrels of oil gained for every 1 barrel invested. By 2005, as the industry faced ever-greater limits, the ratio had diminished still further: about 14 to 1. Returns will continue to diminish, some experts argue, until we reach a 1:1 ratio -- and that would spell the end of the petroleum era.

During a tour of the rig, Little gets a look at sections of the drill shaft.

Three out of four exploration wells in the ultra-deep region of the Gulf come up dry -- nerve-wracking odds when the wells cost $100 million apiece, or as much as 20 times what they cost on land.  And even if you hit pay dirt, there's no guarantee of profit: In the past decade, Chevron has abandoned nearly a quarter of the successful wells it has drilled because they wouldn't flow at profitable rates. Add to that the risks of hurricanes, powerful undersea currents that can cripple well shafts, and even routine equipment failures that can stymie operations on rigs that cost more than $500,000 a day to operate.

Given the vertiginous risks that plague ultra-deep drilling, it's sobering to think that this frontier holds the oil industry's best hope for finding new petroleum reserves. "The odds are incredibly low that we're going to hit some fabulous new discovery on land," Matthew Simmons, a leading investor and industry analyst, told me. "Everybody's looking to the deep sea for big new finds." To an outsider, it's at once impressive and baffling to watch engineers burrow five miles into the earth for oil. "It has all the audacity and technological complexity of launching a space shuttle," as Simmons put it.

If Chevron is going to throw a billion dollars into wells in this high-risk, deep-sea region -- many of them doomed to failure -- wouldn't it make more sense to invest in the inexhaustible, greener technologies that will likely replace fossil fuels? Not anytime soon, according to Siegele: "Do you fly on planes? Do you drive a car? Do you use FedEx and eat imported food?" he challenged me. "What do you think delivers those products and moves those jets?" Siegele had a point: Even as innovators have been producing breakthroughs in clean cars, green buildings and renewable energy and efficiency, American oil demand on the whole has been holding steady in recent years, not declining. And even if America were to slash its oil consumption, industrial growth in China and India is pushing global petroleum demand ever higher. "So long as people need oil," Siegele told me, "we'll find a way to supply it."

Technological breakthroughs have, decade after decade, revived the perpetually doomed oil industry: petroleum reserves often seemed too remote or too expensive to exploit over the last century, yet engineers invariably managed to come up with better, cheaper drilling methods. "Predicting peak oil," Siegele told me, "is almost like predicting peak technology" -- an exercise that to him seems inherently small-minded, even absurd. As for global warming, he believes technology will triumph here, too: we'll find a way to scrub carbon from the atmosphere, rendering fossil fuels harmless to the climate.

I found the whole enterprise of deep-sea drilling doggedly ambitious, but also seemingly desperate -- like an addict forcing a syringe into the earth's innermost veins. How did it come to this -- to scenarios as remote and arduous as the five-mile undersea wells drilled by the Cajun Express? How did a resource that is now so hard to come by in America become the basis of our economic survival?

This piece was excerpted and adapted from Amanda Little's book Power Trip: From Oil Wells to Solar Cells-Our Ride to the Renewable Future, as well as from a feature published in Wired.

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Oil: enough energy to melt glaciers!

Cross-posted from Post Carbon Institute.

In his article in the New York Times Sept. 24, “Oil Industry Sets a Brisk Pace of New Discoveries,” staff reporter Jad Mouawad cites oil discoveries totaling 10 billion barrels for the first half of 2009. The Tiber field in the Gulf of Mexico alone accounts for four to six billion barrels of crude that may eventually find its way into the world oil system. Indeed, this year has seen discovery results that could end up being the best since 2000. But, the article notes, the new oil was expensive to find, it will be expensive to extract, and both exploration and production are only possible because of high levels of investment and sophisticated, expensive new technologies.

To justify the needed level of effort, the oil industry requires prices in excess of $60 per barrel, according to Mouawad; otherwise, the new projects will turn out to be money-losers. Some analysts believe the magic break-even number is closer to $70. In any case, the figure is much higher than was required only a few years ago, and still-higher prices may be necessary to make exploration and production profitable for future projects -- prices perhaps close to $80.

According to Mouawad, "While recent years have featured speculation about a coming peak and subsequent decline in oil production, people in the industry say there is still plenty of oil in the ground, especially beneath the ocean floor, even if finding and extracting it is becoming harder." So the new discoveries presumably indicate that peak oil has been delayed, and that our concerns about the event have been misplaced.

Yet this would be a strange conclusion to draw from the facts cited, for two reasons.

First: The 10 billion barrels of new discoveries reported so far do initially sound encouraging: if the second half of 2009 is as productive, that means a total of 20 billion barrels of new oil will eventually be available to consumers as a result of discoveries this year. But how much oil does the world use annually? In recent years, that amount has hovered within the range of 29-31 billion barrels. Therefore (assuming continued good results throughout 2009), in its most successful recent year of exploration efforts, the oil industry will have found only two-thirds of the amount it extracted from previously discovered oilfields.

When the "10 billion barrels" figure is framed this way, its "gee whiz" shimmer quickly fades. (Yes, the article discusses the phenomenon of "reserve growth," which is supposed to render the pace of new discoveries less important -- but that red herring has been exposed plenty of times.) The Times article hints that 2009's high discovery rate may be the beginning of a new trend, so that we may see even better rates in future years; but remember, that hypothetical outcome hinges on a crucial factor -- increasing investment in exploration and production -- which leads us to a second critical thought.

The staggering levels of investment that enabled drilling in miles of ocean water, so as to achieve the 2009 finds, were occasioned by historic petroleum price run-ups from 2004 to 2008 -- with prices eventually spiking high enough to cripple the auto industry, the airlines, and global trade. As petroleum prices climbed ever higher, oil companies saw sense in drilling test wells in risky, inhospitable places. But in recent decades oil price spikes have repeatedly triggered recessions. And clearly, as we all discovered rather forcibly last year, the global economy cannot sustain an oil price of $147 a barrel: as the economy crashed in the latter months of 2008, so did oil demand and oil prices (which hit a low in December-January near $30).

So, what is a sustainable price? A review of recent economic history yields the observation that when petroleum sells above about $80 a barrel (in inflation-adjusted terms) the economy begins to stall. Oil industry wags have begun to speak of a "Goldilocks" price range of $60 to $80 a barrel (not too high, not too low—just right!) as the prerequisite for economic recovery. If prices are higher, the economy sputters, reducing oil demand and subsequently seriously undermining prices; if they drift lower, not enough investment will go toward exploration and production, so that oil shortages and price spikes will become inevitable a few years hence (indeed, since the oil price crash of late 2008 over $150 billion of investments in new oil projects have been cancelled). If the market can keep prices reliably within that charmed $60 to $80 range, all will be well. Too bad that petroleum prices have grown extremely volatile in recent years: we must hope and pray that trend is over (though there's no apparent reason to assume that it is).

Let me summarize: the industry needs oil prices that are both stable and near economy-killing levels in order to justify investments necessary to possibly replace depleting reserves and overcome declining production in existing oilfields (I say “possibly” because we have insufficient evidence as yet to conclusively show that new discoveries enabled by expensive new exploration and production technologies can offset declines in the world's aging giant oilfields).

Should this picture lead the viewer to come away with reassured thoughts of "No worries, happy motoring?" Or does this look more like a portrait of peak oil?

Several commentators (including analysts with financial services company Raymond James Associates and Macquarie, the Australian-headquartered investment bank) have concluded from recent petroleum statistics that global oil production peaked in 2008. Macquarie is saying that world production capacity is peaking this year, which is a nuanced way of saying the same thing, since currently production is constrained more by depressed demand than by immediate shortfalls in supply; in effect both organizations assert that the world will never see higher rates of extraction than the so-far record level of July 2008.

I see nothing in the recent discovery data that should call that conclusion into doubt.

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Two new documentaries show the damaging effects of the world's addiction to oil, each film from its own unique angle. Crude, which opened in New York on Sept. 9, traces the story of a lawsuit brought by 30,000 rural Ecuadorians against Chevron, which denies responsibility for turning their traditional rainforest home into a dumping ground for crude oil waste, sickening and killing generations of people. And Fuel, which opened in New York, San Francisco, and Washington, D.C. on Sept. 18, follows director Josh Tickell on his quest to convert the world to biofuels, eliminating the need for oil and thus -- hopefully -- for lawsuits like the one in Ecuador.

Oil pollutes the water sources of the Ecuadorians in Crude.Both films succeed in engaging viewers with compelling characters and stories -- from the chipper Tickell driving his sunflower-painted, biodiesel-fueled Veggie Van across the country, to the earnest and dogged Ecuadorian lawyer Pablo Fajardo visiting the grave of his murdered brother. And both expose the utter stupidity and reality-denial of Big Oil, an industry unafraid to trample anything or anyone blocking its path to profit, even as the product still driving those profits grows ever more obviously obsolete.

"It's overly simplistic to say these are greedy companies who want to make money at all costs," Joe Berlinger, who directed Crude, told me on the phone the day after his film's New York release. (His previous work includes Metallica: Some Kind of Monster). "But there's an institutional blindness to the impact of their activities on other parts of the world."

In rural Ecuador, as in many other places off the radar of American consumers, that impact manifests itself in the form of communities that "have been systematically poisoned," as Trudie Styler (wife of Sting and co-founder of the Rainforest Foundation) put it in the film. Her involvement in and support of the case make up just one part of the starry journey that ultimately led to lawyer Fajardo being featured in Vanity Fair and giving a press conference at the Live Earth concert in New York in 2007.

"Pablo Fajardo walks into a room and just reeks of authenticity and heroism," Berlinger said of his film's central character. "This guy has this incredible story. [He] pulls himself up by the bootstraps, gets himself educated with the help of the Catholic church, because he's motivated to do something about the injustices that he saw as a young man working in those fields. I mean, you can't make this stuff up."

Fajardo's story infuses Crude with what Berlinger calls "the human element," something he thinks is often missing from the environmental movement. The passion and struggle of Fajardo and other characters -- like Maria Garofalo, whose 18-year-old daughter has to travel 18 hours to receive cancer treatments, which she can only afford by continuing to work in the fields -- embody the film's larger theme of environmental justice and oppression.

"It's kind of a wake-up call as to how we treat our indigenous people," Berlinger said. "We are eradicating the knowledge and the culture of people who have lived in harmony with nature for millennia, and we should be cherishing their view of consumption and interaction with nature as opposed to eliminating it."

Berlinger acknowledged that his film is a departure from the theme -- heard more loudly in environmental conversations -- of the effects of burning fossil fuels. "This is a film about the devastating effects of the procurement of those resources," he said. "Part of the debate about renewable energy should include, obviously, the impact of production on people and the environment."

Crude tells the story of those who suffer so we can get our oil fix. Fuel explores the ins and outs of that addiction, and promotes a solution that could kick the habit: biodiesel.

Fuel director Josh Tickell and his Veggie Van.Speaking through a sometimes-fuzzy cell phone as he crossed mountains in an algae-powered vehicle on his way to Reno, Fuel director Josh Tickell explained how, from its beginnings, "diesel was based in one concept, the nexus of efficiency and sustainability." Part of his film tells the story of Rudolf Diesel, inventor of the diesel engine, whose values of social and economic justice sometimes went hand-in-hand with his engineering. His engine was created to run on vegetable oil, with the hope that this would "put power back in the hands of everyday farmers."

"This is the kind of engine we'd all be driving today had Diesel's engines been realized," Tickell said of his car, the Algaeus. But Rudolf Diesel disappeared mysteriously from a ship crossing the English Channel in 1913. Some suggest foul play on the part of competing business interests may have been involved.

Tickell remains remarkably upbeat about biofuels, despite the recent media backlash against them, which, he said, "decimated the biodiesel industry." His current tour across the country in a fleet of algae-powered vehicles focuses on dispersing information about biofuels and engaging politicians with that information.

"We're dissolving the barrier between this movement, which is largely an individualistic movement of personal choice, and what should be, needs to be, and will be a political movement," Tickell said. "We've got to get the environmentalists to get that we have allies in our local political leaders."

Tickell planned to meet with Nevada Gov. Jim Gibbons in Reno, where Gibbons would pour a gallon of algae fuel into the Algaeus. A symbolic gesture, surely, but Fuel shows how it was an accumulation of such small steps that propelled biodiesel on its original path to popularity. Although he said he's "not going to hold [his] breath for Congress" to pass sweeping climate legislation, Tickell sees the tide turning toward renewable energy.

"We're in a time of tremendous sea change," he said. "The corporate concept of a triple bottom line -- incorporating sustainability and your ecological footprint into your product -- it's that triple bottom line that's guiding the next generation of energy companies."

Put together, Fuel and Crude offer a wide-ranging look at the vast, complex system of interests swirling in the orbit of one magnetically addictive resource. Rather than being disheartened by this intricacy, though, viewers can find inspiration in both films' stories of struggle and triumph. A goofy college graduate driving a van that smells like French fries can help spark a shift to a new kind of fuel -- and all of a sudden veteran truck drivers are filling their rigs with biodiesel and calling our dependence on foreign oil "a flat-ass shame." A man born into poverty in the Ecuadorian jungle can rise up as a leader for 30,000 of his people, who marvel at his picture in the pages of Vanity Fair. These struggles are far from over, but they're stories we need to hear. Both new films tell them with spirit and compassion.

Watch the trailer for Crude:

And for Fuel:

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Oil: enough energy to melt glaciers!

While Louisiana struggles to restore coastal wetlands ravaged in large part by decades of oil and gas drilling, its senior senator is leading the effort to lift the ban on drilling off Florida's Panhandle.

U.S. Sen. Mary Landrieu (D-La.) is the lone co-sponsor of legislation sponsored by Sen. Lisa Murkowski (R-Alaska) to open up new areas in the eastern Gulf of Mexico to oil and gas development. Introduced last month, Senate Bill 1517 would allow drilling in federal waters 45 miles off the Panhandle's coast. Current law bans drilling any closer than 125 miles off Panhandle beaches and 235 miles off Gulf Coast beaches from Tampa south.

Opposing the Murkowski-Landrieu plan is U.S. Sen. Bill Nelson (D-Fla.), a longtime foe of offshore drilling. He joins other Florida leaders worried about drilling's impact on the state's lucrative tourism industry, which in 2008 alone generated more than $65 billion for Florida's economy and $3.9 billion for the state in tax revenue. Nelson has criticized the drilling bill as giveaway to the oil industry, McClatchy reports:

"This isn't even thinly veiled," Nelson said. "It's an oil industry bailout plan. And it's Alaska and Louisiana's senators plan to boost their own revenues in tough economic times. But even in the toughest of times, there are some things states shouldn't sell out, like Florida's economy and environment."

Why is Landrieu pushing the plan? She says it's out of concern for rising oil prices -- though the U.S. Energy Information Administration says drilling in areas that are currently restricted would result in negligible savings to consumers. Meanwhile, Landrieu and and Murkowski are among the top congressional recipients of campaign contributions from the oil and gas industry.

According to the Center for Responsive Politics' OpenSecrets.org database, the industry is Landrieu's second-biggest contributor besides lawyers, investing more than $711,000 in her campaigns over the past 12 years. In the 2008 election cycle, she ranked first among all congressional recipients of oil and gas PAC contributions, receiving more than $171,600.  The oil and gas industry is Murkowski's third-biggest contributor after leadership PACs and electric utilities, donating more than $286,000 to her campaign over the past seven years; she's also the top recipient of oil and gas PAC contributions in the current election cycle.

Last year the League of Conservation Voters placed Landrieu on their "Dirty Dozen" list of lawmakers, noting that her lifetime score from the environmental advocacy group of 43 percent made her the worst Democratic senator on environmental issues among those running for re-election.

"For a Senator from Louisiana, which faces severe consequences from global warming, to fail to protect Louisiana is disappointing," LCV's Tony Massaro said at the time. "Senator Landrieu joins the [Dirty Dozen] because she acts more to protect Big Oil than the future for the people of Louisiana."

A football field lost every 38 minutes

Sen. Landrieu was among those who suffered personal losses from Hurricane Katrina four years ago, as the storm and the subsequent levee failures and flooding destroyed her lakeside home in New Orleans.

One reason the devastation to inland areas like New Orleans was so severe when the Category 3 storm hit Louisiana is because coastal wetlands that once served as storm breaks have been swallowed by the Gulf of Mexico. Over the past 75 years, Louisiana has lost more than 2,300 square miles of coastal wetlands -- an area equivalent in size to the entire state of Delaware.

Between 1990 and 2000, Louisiana lost about 24 square miles of land each year -- equivalent to about one football field lost to the sea every 38 minutes, according to the state's Department of Natural Resources.

While some of Louisiana's land loss can be blamed on natural processes, coastal experts say most of the destruction is due to human alteration of the landscape. One factor is the extensive levee system constructed along the Lower Mississippi River that prevents sediment from depositing naturally along the coast. Another key factor is the thousands of miles of oil and gas pipelines and canals cut through coastal wetlands, opening them up to saltwater intrusion that kills vegetation and leaves the land vulnerable to erosion.

In fact, between 40 and 60 percent of Louisiana's coastal wetlands loss can be traced to oil and gas activities, according to the Gulf Restoration Network. From 1983 to 2008, for example, Houston-based Shell Oil dredged 8.8 million cubic yards of coastal lands in Louisiana while laying its pipelines -- activity that GRN and other environmental advocates calculated as having caused the loss of 22,624 acres of wetlands.

Land loss is not the only environmental damage from oil and gas drilling. Last month alone, an oil spill in the Gulf of Mexico contaminated several beaches along the Texas coast, while a leak from a Shell pipeline 30 miles off the Louisiana coast created a nine-mile-long slick in the Gulf.

Storms increase the risk oil and gas drilling pose to the environment. Four years ago, Hurricane Katrina and Rita together caused 124 offshore spills that dumped more than 743,000 gallons of pollution into the ocean, according to the federal Minerals Management Service [PDF]. Onshore spills from pipelines, tanks and refineries added another 9 million gallons of pollution to the mess.

Pattern of delay

If no decisive action is taken to address coastal erosion, Louisiana is expected lose another 500 square miles of land by 2050 -- and that will have enormous consequences for communities throughout the state's coastal parishes, where almost 2 million people live. And unfortunately, the current processes for addressing the problem are anything but decisive.

This past June, Steven Peyronnin, executive director of the Coalition to Restore Coastal Louisiana, testified at the U.S. Senate Committee on Environment and Public Works' hearing on Louisiana's coastal restoration. Noting that scientists and engineers have the expertise to restore sustainability to the landscape and protect vulnerable communities, he said what is lacking is a sense of urgency.

Peyronnin pointed out that it's been more than four years now since the U.S. Army Corps of Engineers submitted a final report recognizing the severe wetland loss in coastal Louisiana and recommending five critical restoration projects for the near term. While Congress authorized these projects under the Louisiana Coastal Area (LCA) section of the Water Resources Development Act of 2007, only one is scheduled to begin construction before 2012. That meant none were eligible for funding under the recent economic stimulus package.

"Not only is the lack of progress a troubling obstacle to restoring a sustainable coast, but it has also negated the ability to leverage federal opportunities that could provide desperately needed funding streams and a strong sense of urgency," Peyronnin told the committee. "Without a single project ready for construction, LCA projects were not considered in the American Recovery and Reinvestment Act of 2009 because they fell far short of the shovel ready requirement intended to urgently move projects forward."

In authorizing the LCA, Congress also directed the Secretary of the Army to come up with a comprehensive long-term restoration plan, but this still has not been done. Instead, the Corps is relying on an older document -- the Louisiana Coastal Protection and Restoration Technical Report -- that has shortcomings. For example, it provides no framework for how restoration efforts work with navigation activities, which currently focus on dumping sediment too far offshore to maintain coastal wetlands.

Peyronnin testified that the delay of LCA projects and the Corps' failure to comply with congressional mandates show that the traditional model for carrying out coastal restoration projects is "ill-suited" to respond to the crisis.

"If this pattern of delay continues," he warned, "it will eliminate any chance of success."

Earlier this month, Louisiana officials released recommendations for speeding up Corps projects, which currently take an average of 40 years to complete. But the recommendations remain in the discussion stages.

A starker choice for Florida

Sen. Landrieu has long been an advocate for coastal restoration efforts. For example, the annual energy and water appropriations bill recently passed by the Senate contained hundreds of millions of dollars for Army Corps projects in Louisiana that she championed, including coastal restoration initiatives.

But her push to allow the oil and gas industry to expand its operations in the Gulf of Mexico while federal processes to address land loss remain in disarray would inevitably mean putting other areas of the Gulf Coast at risk of the same drilling-related wetlands destruction experienced by Louisiana.

Unlike Louisiana, Florida has long opposed drilling off its coast, seeing it as a threat to the state's $65 billion annual tourist economy. When Chevron discovered natural gas deposits in Florida waters in the late 1980s and early 1990s, for example, the state objected to plans to tap them, leading the Bush administration to buy back leases from Chevron, Conoco and Murphy Oil for $115 million.

This past April, amid concern about rising energy prices, the Florida House passed a bill allowing offshore drilling in state waters -- but the measure died in the Senate.

Then along came Murkowski's and Landrieu's bill, which resembles an amendment in a Senate energy bill written by Sen. Byron Dorgan (D-N.D.) that would also permit oil and gas rigs within 45 miles of Florida's Gulf coast, McClatchy reports. But unlike Dorgan's proposal, the Murkowski-Landrieu plan includes a revenue-sharing provision to sweeten the deal.

In 2006, another piece of legislation sponsored by Landrieu gave Alabama, Louisiana, Mississippi and Texas 37.5 percent of proceeds from fuel production in the Gulf -- returning to the states an estimated total of $6 billion a year that previously went to the federal government. The arrangement aimed to compensate them for the environmental cost of pipelines and other infrastructure.

Florida wanted no part of that earlier deal, but Landrieu hopes the revenue-sharing provision will hold appeal because of the state's fiscal crunch. As she wrote in a June op-ed that ran in the Capitol Hill newspaper Roll Call:

Had revenue sharing been a part of the bargain, Floridians would have faced a choice involving rewards and not just risks. Given Florida’s current $6 billion budget deficit, such a choice would be starker today.

But as Sen. Nelson has pointed out, the proposal is hardly a panacea for Florida's financial woes, since the money states raise from offshore drilling in federal waters can be used only to repair damages caused by drilling, such as coastal restoration and pollution cleanup.

The question facing the Senate is whether that makes drilling worth the environmental damage that Florida will inevitably suffer.

(This story originally appeared at Facing South)

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Louis Meeks' well water contains methane gas, hydrocarbons, lead and copper, according to the EPA's test results. When he drilled a new water well, it also showed contaminants. The drilling company Encana is supplying Meeks with drinking water.Abrahm Lustgarten / ProPublicaThis story was written by ProPublica reporter Abrahm Lustgarten.

Federal environment officials investigating drinking water contamination near the ranching town of Pavillion, Wyo., have found that at least three water wells contain a chemical used in the natural gas drilling process of hydraulic fracturing. Scientists also found traces of other contaminants, including oil, gas or metals, in 11 of 39 wells tested there since March.

The study, which is being conducted under the Environmental Protection Agency's Superfund program, is the first time the EPA has undertaken its own water analysis in response to complaints of contamination in drilling areas, and it could be pivotal in the national debate over the role of natural gas in America's energy policy.

Abundant gas reserves are being aggressively developed in 31 states, including New York and Pennsylvania. Congress is mulling a bill that aims to protect those water resources from hydraulic fracturing, the process in which fluids and sand are injected under high pressure to break up rock and release gas. But the industry says environmental regulation is unnecessary because it is impossible for fracturing fluids to reach underground water supplies and no such case has ever been proven.

Scientists in Wyoming will continue testing this fall to determine the level of chemicals in the water and exactly where they came from. If they find that the contamination did result from drilling, the placid plains arching up to the Wind River Range would become the first site where fracturing fluids have been scientifically linked to groundwater contamination.

In interviews with ProPublica and at a public meeting this month in Pavillion's community hall officials spoke cautiously about their preliminary findings. They were careful to say they're investigating a broad array of sources for the contamination, including agricultural activity. They said the contaminant causing the most concern -- a compound called 2-butoxyethanol, known as 2-BE  -- can be found in some common household cleaners, not just in fracturing fluids.

But those same EPA officials also said they had found no pesticides -- a signature of agricultural contamination -- and no indication that any industry or activity besides drilling could be to blame. Other than farming, there is no industry in the immediate area.

In Pavillion, a town of about 160 people in the heart of the Wind River Indian Reservation, the gas wells are crowded close together in an ecologically vivid area packed with large wetlands and home to 10 threatened or endangered species. Beneath the ground, according to the U.S. Geological Survey, the earth is a complex system of folded crusts containing at least 30 water-bearing aquifer layers.

EPA officials told residents that some of the substances found in their water may have been poured down a sink drain. But according to EPA investigation documents, most of the water wells were flushed three times before they were tested in order to rid them of anything that wasn't flowing through the aquifer itself. That means the contaminants found in Pavillion would have had to work their way from a sink not only into the well but deep into the aquifer at significant concentrations in order to be detected. An independent drinking water expert with decades of experience in central Wyoming, Doyle Ward, dismissed such an explanations as "less than a one in a million" chance.

Some of the EPA's most cautious scientists are beginning to agree.

"It starts to finger point stronger and stronger to the source being somehow related to the gas development, including, but not necessarily conclusively, hydraulic fracturing itself," said Nathan Wiser, an EPA scientist and hydraulic fracturing expert who oversees enforcement for the underground injection control program under the Safe Drinking Water Act in the Rocky Mountain region. The investigation "could certainly have a focusing effect on a lot of folks in the Pavillion area as a nexus between hydraulic fracturing and water contamination."

Tanks hold natural gas condensate and mark the spot of producing gas wells in the Pavillion field, in Fremont County, Wyo., in the heart of the Wind River Indian Reservation. The Environmental Protection Agency has found chemicals that are used in gas drilling in water wells near this site.Abrahm Lustgarten / ProPublicaThe Superfund investigation follows a series of complaints by residents in the Pavillion area, some stemming back 15 years, that their water wells turned sour and reeked of fuel vapors shortly after drilling took place nearby. Several of those residents shared their stories with ProPublica, while other information was found through court and local records. Several years ago a one resident's animals went blind and died after drinking from a well. In two current cases, a resident's well water shows small pooling oil slicks on the surface, and a woman is coping with a mysterious nervous system disorder: Her family blames arsenic and metals found in her water. In two of those cases the Canadian drilling company Encana, which bought most of the area's wells after they were drilled and assumed liability for them, is either supplying fresh drinking water to the residents or has purchased the land. In the third case a drilling company bought by Encana, Tom Brown Inc, had previously reached an out-of-court settlement to provide water filtering.

Though the drilling companies have repeatedly compensated residents with the worst cases of contamination, they have not acknowledged any fault in causing the pollution. An Encana spokesman, Doug Hock, told ProPublica the company wants "to better understand the science and the source of the compounds" found in the water near Pavillion before he would speculate on whether the company was responsible. 

Precise details about the nature and cause of the contamination, as well as the extent of the plume running in the aquifer beneath this region 150 miles east of Jackson Hole, have been difficult for scientists to collect. That's in part because the identity of the chemicals used by the gas industry for drilling and fracturing are protected as trade secrets, and because the EPA, based on an exemption passed under the 2005 Energy Policy Act, does not have authority to investigate the fracturing process under the Safe Drinking Water Act. Using the Superfund program gave the agency extra authority to investigate the Pavillion reports, including the right to subpoena the secret information if it needs to. It also unlocked funding to pay for the research.

EPA officials have repeatedly said that disclosure of the fluids used in fracking -- something that would be required if the bill being debated in Congress were passed -- would enable them to investigate contamination incidents faster, more conclusively and for less money. The current study, which is expected to end next spring, has already cost $130,000.

About 65 people, many in jeans, boots and 10-gallon hats, filled Pavillion's community hall on Aug. 11 to hear the EPA's findings. They were told that a range of contaminants, including arsenic, copper, vanadium and methane gas were found in the water. Many of these substances are found in various fluids used at drilling sites.

Of particular concern were compounds called adamantanes, a natural hydrocarbon found in gas that can be used to fingerprint its origin, and 2-BE, listed as a common fracturing fluid in the EPA's 2004 research report on hydraulic fracturing. That compound, which EPA scientists in Wyoming said they identified with 97 percent certainty, was suspected by some environmental groups in a 2004 drilling-related contamination case in Colorado, also involving Encana. 

EPA investigators explained that because they had no idea what to test for, they were relegated to an exhaustive process of scanning water samples for spikes in unidentified compounds and then running those compounds like fingerprints through a criminal database for matches against a vast library of unregulated and understudied substances. That is how they found the adamantanes and 2-BE.

An Encana representative told the crowd the company was as concerned as they were about the contamination and pledged to help the EPA in its investigation.

Some people seemed confounded by what they were hearing.

"How in god's name can the oil industry dump sh*t in our drinking water and not tell us what it is?" shouted Alan Hofer, who lives near the center of the sites being investigated by the EPA.

"If they'd tell us what they were using then you could go out and test for things and it would make it a lot easier right?" asked Jim Van Dorn, who represents Wyoming Rural Water, a non-profit that advises utilities and private well owners on water management.

"Exactly," said Luke Chavez, the EPA's chief Superfund investigator on the project. "That's our idea too."

Now that the EPA has found a chemical used in fracturing fluids in Pavillion's drinking water, Chavez said the next step in the research is to ask Encana for a list of the chemicals it uses and then do more sampling using that list. (An Encana spokesman told ProPublica the company will supply any information that the EPA requires.) The EPA is also working with area health departments, a toxicologist and a representative from the Centers for Disease Control's Agency for Toxic Substances and Disease Registry to assess health risks, he said. 

Depending on what they find, the investigation in Wyoming could have broad implications. Before hydraulic fracturing was exempted from the Safe Drinking Water Act in 2005, the EPA assessed the process and concluded it did not pose a threat to drinking water. That study, however, did not involve field research or water testing and has been criticized as incomplete. This spring, EPA administrator Lisa Jackson called some of the contamination reports "startling" and told members of Congress that it is time to take another look. The Pavillion investigation, according to Chavez, is just that.

"If there is a problem, maybe we don't have the tools, or the laws, to deal with it," Chavez said. "That's one of the things that could come out of this process."

Reprint courtesy ProPublica.org.

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The cap-and-trade climate and energy bill passed by the House last month is not a perfect piece of legislation. Critics on the right and left have leveled tough criticisms at it, questioning whether it will do much to accomplish its stated goal of cutting carbon emissions or if it will overburden average consumers with high energy prices.

Palin takes to the pages of The Washington Post to blast away at President Obama's cap-and-trade plan. Too bad she's firing away with blanks. Above, Palin on the campaign trail last year.Courtesy sskennel via FlickrThese criticisms, typically, come backed by well-reasoned arguments. The liberal critique of Waxman-Markey focuses on the questionable decision to give away emissions credits to polluters and concerns that the Agriculture Department, not the EPA, will review and regulate carbon offsets in the farming sector. Many conservatives, meanwhile, have argued that the best way to curb emissions and spur a clean-energy revolution is with a carbon tax, not a complicated cap-and-trade scheme.

So when the person John McCain once said knows more about energy policy than anyone else in America pens an op-ed for one of the nation's highest-regarded newspapers, it's time to pay attention and learn something.

Sarah Palin, the soon-to-be-ex-governor of Alaska, has an opinion piece (a screed, really) in Tuesday's Washington Post in which she shrilly blasts away at "President Obama's cap-and-trade energy plan," calling it "an enormous threat" to the U.S. economy.

Juicy stuff. Ordinarily, we'd let David Roberts out of his cage to respond, but he's happily away on vacation. Joe Romm will surely be along in the morning with a strong piece tearing apart Palin's piece. [Yep, here's his piece.] But for now, here are some first thoughts from me:

Palin's thesis comes loaded with plenty of rhetoric and zero facts. It offers nothing more than assertions about the emissions reduction part of the bill, ignores the energy investment and green jobs provisions, blames "Washington bureaucrats" for hampering oil development in the Arctic National Wildlife Refuge (not Congress, where elected lawmakers have repeatedly expressed the American public's desire to keep ANWR off limits), and fails to even take note of the underlying issue -- catastrophic climate change.

Couldn't Palin's ghostwriters have cribbed from any of the well-researched, highly technical criticisms produced by just about every conservative think tank in the land?

Grist's David Roberts and other contributors have answered every one of Palin's "points" in the past:

Palin says the bill would result in skyrocketing energy prices. Higher prices are surely likely, David noted last month, but not on the order of what Palin thinks.

Palin: "Many states have abundant coal, whose technology is continuously making it into a cleaner energy source."

See David's debate with clean-coal flack Joe Lucas. There's no such thing as clean coal, and even if the technology appears in 10-15 years as predicted, it will be so costly as to effectively raise energy prices substantially on the regular folk Palin claims to be defending.

Palin: "Westerners literally sit on mountains of oil and gas, and every state can consider the possibility of nuclear energy."

See Kate Sheppard's piece from last summer. The oil shale pipe dream has been around since the 1970s. The fact is, the technology doesn't exist yet to extract it cost-effectively, and won't for many years (if ever). And extraction comes with a host of environmental problems.

As for the nuclear energy canard, the fact remains that most Americans don't want to live anywhere near a nuclear power plant or a storage facility for highly radioactive nuclear waste. France is a place where bureaucrats truly hold enormous power, and that explains in part why the central government was able to push nuclear so effectively. Thankfully, our American system is more democratic.

Palin: "We have an important choice to make. Do we want to control our energy supply and its environmental impact? Or, do we want to outsource it to China, Russia and Saudi Arabia? Make no mistake: President Obama's plan will result in the latter."

Governor, listen closely: oil is a commodity. Even if we increase domestic production, we'll still be held prisoner to Russia's and Saudi Arabia's ability to meet global demand -- demand being driven by China, India and many other developing nations.

Ironically, Palin concludes her piece by asking, "Can America produce more of its own energy through strategic investments that protect the environment, revive our economy and secure our nation? Yes, we can."

Yes, governor, we can accomplish that goal. And there are probably several ways of doing it. But each path requires thoughtful policymaking, not just hot air for hot air's sake.

--

UPDATE: Media Matters now has a quick debunking of Palin's op-ed. And so does The Atlantic and Huffington Post.

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This story was written by ProPublica's Adam Lustgarten.

The two key arguments that the oil and gas industry is using to fight federal regulation of the natural gas drilling process called hydraulic fracturing -- that the costs would cripple their business and that state regulations are already strong -- are challenged by the same data and reports the industry is using to bolster its position.

One widely-referenced study (PDF) estimated that complying with regulations would cost the oil and gas industry more than $100,000 per gas well. But the figures are based on 10-year-old estimates and list expensive procedures that aren't mentioned in the proposed regulations.

Another report (PDF) concluded that state regulations for drilling, including fracturing, "are adequately designed to directly protect water." But the report reveals that only four states require regulatory approval before hydraulic fracturing begins. It also outlines how requirements for encasing wells in cement -- a practice the author has said is critical to containing hydraulic fracturing fluids and protecting water -- varies from state to state.

One recommendation in that report flies in face of industry's assertion that its processes are safe: hydraulic fracturing needs more study and should be banned in certain cases near sensitive water supplies.

Hydraulic fracturing -- where water and sand laced with chemicals is injected underground to break up rock -- is considered essential to harvesting deeply buried gas reserves that some predict could meet U.S. demand for 116 years.

In 2005 hydraulic fracturing was exempted from the Safe Drinking Water Act, based on assurances that the process was safe. But a series of ProPublica reports has identified a number of cases in which water has been contaminated in drilling areas across the country, and EPA scientists say they can't fully investigate them because of the exemption.

Now, Congress is considering legislation to restore the Environmental Protection Agency's oversight of the process. And industry -- leveraging its money and political connections -- is using the recent reports to fight back.

Since January at least five studies have been published making the case that state laws (PDF) are adequate and that new regulations could hamper exploration (PDF), raise fuel prices and eliminate jobs. Three of the studies were paid for by the Department of Energy and produced by consulting firms that also work with the industry. One of the DOE reports (PDF) was written by the same person who authored a study for the Independent Petroleum Association of America (PDF)

The industry argues (PDF) that federal oversight would amount to a redundant layer of bureaucracy that is not needed because states already require the same environmental safeguards that might be required by the EPA, and that those safeguards are effective.

"We don't think the system is broke, so we question the value of trying to fix it with a federal solution," Richard Ranger, a senior policy analyst at the American Petroleum Institute, told ProPublica in May. "So proceed with caution if you are going to proceed with regulating this business because it could make a very significant difference in delivering a fuel that is fundamental to economic health."

How Many Natural Gas Wells Does Your State Have?ProPublicaIndustry reports say that if federal regulations are applied to hydraulic fracturing, more than a third of onshore gas wells would be closed and oil and gas companies would spend $10 billion complying with the law in its first year. The federal government would lose some $1.2 billion in revenue.

But advocates for the federal legislation say the industry is misleading the public into a false choice between the economy and the environment.

"We are all for using science-based information," said Amy Mall, a senior policy analyst for the Natural Resources Defense Council. "But the underlying information doesn't really tell the story they claim it does."

Nonetheless, the arguments have gained traction in Congress and have eroded support for new regulation.

Rep. Dan Boren, D-Okla., told his fellow members in a recent hearing that "these folks are laying people off -- people are hurting in my district." Rep. John Salazar, D-Colo., who sponsored legislation to regulate fracturing in 2008, but declined to add his name to this year's bill, told ProPublica that "developers may have legitimate concerns about the impact that removing the exemption may have on their ability to find and extract oil and gas."

To keep the legislation alive, Diana DeGette, D-Colo., its main sponsor, has shifted gears to seek environmental studies and hearings rather than a quick passage into law.

"The opposition has been throwing out scare tactics and mischaracterizations of what she is trying to do," said DeGette's spokesman, Kristofer Eisenla. "Unfortunately the oil and gas guys came out of the barn storming."

Fuzzy Numbers

The study that has received the most publicity (PDF) is also among the most misleading.

The report, which evaluates the costs of regulations for the oil and gas industry, was written for the Department of Energy by a consulting company also used by the energy industry, Advanced Resources International, or ARI. It contains a table (PDF) listing seven specific processes it says would be mandated under the proposed federal regulations, and what those processes would cost -- a total of $100,505 per well. Among the listed items is "state of the art" fracture imaging, at a per-well average cost of $37,500, and three-dimensional fracture simulation, at a cost of $7,500.

But a footnote reveals that these figures are based on memo sent to a DOE official by another consulting firm in 1999. The report's author said they haven't been updated to reflect technological advances or substantial shifts in the drilling business over the last decade.

Furthermore, none of the tests listed in the table are mentioned in the text of Safe Drinking Water Act, the federal law that would apply to hydraulic fracturing, according to an EPA spokesperson in Washington. And they aren't mentioned in the bill being floated in Congress either.

"It's a sense of magnitude of the impacts, not a sense of absolute accuracy," said Michael Godec, Vice President of ARI and author of the report. The regulatory requirements were interpolated on a "bad-case" scenario, he explained, because the federal laws are not specific. "We took some liberties. You have to make some assumptions about what might be required."

One of the industry reports raises serious questions about the construction of the pits used to store toxic drilling waste and what happens when dangerous fluids are spilled.ProPublicaGodec believes that many of the processes listed in the report are already being practiced to a greater degree than they were in 1999, meaning that even if they were required they may not be additional burdens at all. But he said that anecdotal conversations with drilling companies confirm that the report's conclusions are still "about right."

Godec said he did not obtain recent cost figures from drilling companies, which are closely guarded. Halliburton -- one of the largest hydraulic fracturing service providers -- did not return calls from ProPublica for comment about the expense of the procedures listed.

Asked whether the age of the data was a concern, Godec said it had been discussed with Nancy Johnson, the DOE official who commissioned the report. He said he was instructed that the report was needed quickly, that the budget was limited and that he should move forward because "this is a hot topic and people are testifying."

Nancy Johnson did not return calls for comment and the Department of Energy's office of fossil energy did not make its officials available for an interview after repeated requests. It said, through a spokesperson, that the Department did not author the report.

Godec also produced a similar report on costs and state gas regulations for the Independent Petroleum Association of America that was published in late April. Titled "Bringing Real Information on Energy Forward," (PDF) that report also makes the case that state regulations of drilling practices are effective. Godec says his company's work is impartial and his conclusions would have been the same whether he was contracted by the oil and gas industry, or the federal government.

Even if the costs Godec laid out in the DOE report were up-to-date and accurate, it's doubtful they would have the devastating financial impact the industry claims.

The estimated expense of regulating hydraulic fracturing amounts to between one and three percent of the total cost of drilling a new well when factored into operating costs estimated by financial analysts at Deutsche Bank. If all the testing that Godec includes is factored out, the regulations would cost the industry just $4,500 per well, according to his report, or just six hundredths of a percent of the cost of establishing a typical new well.

"I think at the end of the day it's unlikely to have a real huge impact,"says John Freeman, a senior vice president for energy equity research at the investment bank Raymond James. "It's a lot of fuzzy stuff that I can't get my hands around. This just seems to be more of a soft number that I frankly have more of a hard time connecting the dots on."

State Regulations Leave Gaps

In May the Ground Water Protection Council, a group made up mostly of industry representatives and state oil and gas regulators, released the first comprehensive review (PDF) of oil and gas regulations across 27 of 31 drilling states it surveyed. The report, paid for by the DOE, concluded that most states have requirements to encase wells in cement and protect groundwater, and that a majority also require they be notified after hydraulic fracturing takes place.

"The study confirms what the industry has been saying (PDF): that regulation of oil and gas field activities, including hydraulic fracturing, is best accomplished at the state level," the American Petroleum Institute said a press release about the study.

But the GWPC report -- which focuses on what regulations are in place, rather than what may be missing -- raises important points that are downplayed in its summary. It reveals that regulatory oversight is inconsistent from state to state and has substantial gaps. It also says hydraulic fracturing requires "comprehensive" further study "to determine the relative risk" and to determine best practices.

In fact, the report calls for some of same measures found in the congressional bill the industry is so hotly contesting.

See Where States Fall on Oil and Gas RegulationProPublicaRegarding fracturing in areas close to the surface or near shallow aquifers, the report reads: "States should consider requiring companies to submit a list of additives used in formation fracturing and their concentration." It also says that shallow fracturing very close to certain drinking water aquifers "should either be stopped, or restricted to the use of materials that do not pose a risk of endangering ground water and do not have the potential to cause human health effects."

A close examination of the appendices (PDF) attached to the research also showed that 21 of the 31 states listed do not have any specific regulation addressing hydraulic fracturing; 17 states do not require companies to list the chemicals they put in the ground; and no state requires companies to track how much drilling fluid they pump into or remove from the earth -- crucial data for determining what portion of chemicals has been discarded underground.

"The tone is that in general states do an adequate job of protecting water," said Michael Nickolaus, the report's author, special projects director for the GWPC and former director of Indiana's state Oil and Gas Division. "There are certain gaps in certain states ... it's not a hundred percent world."

The GWPC report does not name the states that lack more stringent regulations, a detail that is important because one or two states can account for a large proportion of the drilling in the United States. To extract that information from the report would require analyzing all the state regulations included in the appendices (PDF) and repeating much of the GWPC's original research. Nickolaus also declined to name the states in an interview with ProPublica, saying that the GWPC was obliged to protect its members.

Nickolaus says well construction -- especially the cementing process that keeps drilling fluids and gas from seeping into groundwater -- is more important than the fracturing issue. But according to the report, state regulations about cementing are sometimes vague and often don't specify standards that makes the protection fool-proof.

While most states have regulations that protect drinking water near the surface, a third don't require that the cement casing extends far enough to completely isolate wells from geologic layers and the deepest aquifers, according to the report. Twenty-two percent don't require the cement to harden before the well is used for fracturing, and don't test cement quality and consistency -- one of the surest ways to protect against contamination.

Reprinted courtesy ProPublica.org.

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George Voinovich (R-Ohio) [UPDATED]

In a disappointing move, the U.S. Senate Energy and Natural Resources Committee gave its blessing for offshore drilling in Florida last week, potentially opening Florida’s coasts to oil and gas development.

This is a major reversal that reneges on the Gulf of Mexico Energy Security Act of 2006, which offered the oil and gas industry rights to 8.2 million acres in the eastern Gulf in exchange for the protection of coastal eastern Gulf waters. It also precluded drilling in the remainder of the Gulf Coast and the Florida Panhandle from 125 to 150 miles from shore.

This agreement was supposed to remain in place until 2022, but would be undone if this bill becomes law.

You should expect to hear the argument, again, that we need offshore drilling to keep gas prices down – that the state of the economy requires it. I wonder, then, how drilling hawks will respond if a spill devastates Florida’s beaches or reefs. According to a federal study, tourism contributes $40 billion to Florida’s economy each year and supports half a million jobs.

The U.S. Energy Information Agency has predicted that offshore drilling, even at peak production, will save consumers just pennies at the gas pump. And that’s assuming the gas even gets sold to Americans rather than China, India or any of the other increasingly energy-hungry countries in the world. Not to mention that it will take years for peak production to be realized and for any economic changes to be felt.

To open Florida’s shores to drilling sets us up to accept all the risks of oil and gas development without any of the promised benefits. Lower gas prices and energy security from offshore drilling are mirages at a time when fossil fuels are increasingly outdated – and with this news from Florida, your favorite beach could be the next one threatened by offshore drilling.

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The Senate Energy and Natural Resources Committee approved an energy bill on Wednesday that has the environmental community up in arms. The plan, enviros say, relies too heavily on fossil fuels and doesn't do enough to advance renewable energy.

The American Clean Energy Leadership Act was approved by a vote of 15-8. The bill passed with bipartisan support, but also had bipartisan opposition.

A major concern for enviros and for some senators is that the bill would allow oil and gas drilling up to 10 miles off parts of the Florida coast, lifting a ban on drilling in the eastern Gulf of Mexico that Congress instated two and a half years ago.

Friends of the Earth blasted the whole bill as a "flashback to Bush energy policy."

The Sierra Club was also quick to announce its opposition. "Numerous changes to this bill during consideration by the committee have significantly undermined its integrity and ability to build the clean energy economy," said Sierra Club Executive Director Carl Pope. "While it makes positive strides in setting new energy-efficiency standards for our buildings and appliances, it falls far short of what President Obama has called for in order to repower America with renewable energy, create millions of new clean energy jobs, and fight global warming."

The bill includes a renewable electricity standard (RES) that's weaker than the one being considered in the House as part of the Waxman-Markey climate and energy bill. The version in the Senate bill would require utilities to draw 15 percent of their electricity from renewable sources or energy-efficiency measures by 2021. Renewable-energy advocates have said that even the House version -- which requires 20 percent of power to come from renewables and efficiency by 2020 -- is far too weak to make much a difference.

American Wind Energy Association CEO Denise Bode kept a positive tone in her official statement today, thanking committee chairman Jeff Bingaman (D-N.M.) for including an RES, but asserting that it should be improved. "We look forward to working with Sen. Bingaman and other supporters to strengthen the RES so that it will get new jobs created," said Bode. "A meaningful national standard is urgently needed to encourage investment in renewable energy, create new jobs for Americans, diversify and secure our nation's energy supply, and avoid carbon emissions."

You call that clean?

The bill would also establish a Clean Energy Deployment Administration (CEDA), an independent body within the Department of Energy that would give out loans for research and development of energy technologies. Enviros criticize the CEDA provision for not adequately taking into account the greenhouse-gas emissions of technologies it would fund, and for not limiting funding for a particular technology. They worry this could mean large amounts of public money going to nuclear power and other technologies that are neither new nor particularly clean.

Seventeen environmental and anti–nuclear power groups issued a joint statement on Wednesday objecting to CEDA as it stands in the Senate bill, including the Sierra Club, Greenpeace, the League of Conservation Voters, and the Union of Concerned Scientists. They argue that the CEDA provision would "pose unnecessary and potentially enormous risks to our environment and to the U.S. taxpayer."

Other provisions in the bill would expand use of renewable energy on public lands; improve energy efficiency in appliances, buildings, and manufacturing; require more study of water use in energy production; and expand federal authority for siting electricity transmission lines.

Two Democrats on the committee, Mary Landrieu of Louisiana and Bob Menendez of New Jersey, voted against the bill. Landrieu said she wants more support for nuclear power and wants coastal states to get a larger share of the revenue from offshore drilling.

Menendez is concerned that the bill doesn't do enough to build a clean-energy economy. "In the last election, the prevailing message coming from both political parties and ultimately the voters was a simple one: change," he said. "But to me, this bill has too many of the same old tired solutions that will not point us in a direction that creates enough jobs, lowers energy costs enough, or produces enough clean energy."

Other progressive members of the committee, including Bernie Sanders (I-Vt.), expressed concerns about some provisions but voted in favor of the bill anyway.

Four Republicans also voted in favor, including Sam Brownback (Kan.), Bob Corker (Tenn.), Jeff Sessions (Ala.), and the committee's ranking Republican, Lisa Murkowski (Alaska).

Murkowski said it had been a "long and sometimes bumpy road" to consensus on the bill. "Despite an uphill fight against Democrats' three-vote majority, we were able to include a number of provisions that will lead to more domestic production of the conventional energy we need to drive this country," she said. "While I support this bill in its present form, we simply must do more to increase our domestic production and use of nuclear energy. I will continue to press for those provisions on the Senate floor."

Bingaman stressed that the bill is the product of compromise. "None of us approve of every provision, none of us got everything that we wanted," he said. "The end product, I believe, is a solid piece of work. It is one which will help not only to enable us to produce new sources of energy, but to use our energy sources wisely and more efficiently."

Senate Majority Leader Harry Reid (D-Nev.) has said he hopes the full Senate can consider the bill sometime after the August recess. Meanwhile, Sen. Barbara Boxer (D-Calif.), chair of the Environment and Public Works Committee, has said she intends to have a climate bill ready for consideration by early August. In the House, the energy and climate components are combined into a single bill -- Waxman-Markey -- but it's not yet clear whether Senate leaders will use that same strategy.

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Reps. Darrell Issa (left), John Boehner, and Mike Pence introduce the American Energy Act.Photo: Republican ConferenceHouse Republicans have rolled out their own energy plan, the American Energy Act, intended to compete with the American Clean Energy and Security Act put forward by Democrats.

Like the energy bill they released last year, Republicans are calling this one an "all of the above" plan -- but it's a lot heavier on nuclear power, coal, and oil than it is on renewables or efficiency, and it doesn't try to rein in greenhouse gases at all.

"This is an alternative that takes us in the direction of energy independence and a clean environment without the national energy tax being offered by the Democrats," said Rep. Mike Pence (R-Ind.), who heads the House Republicans' American Energy Solutions Group. The group has been hosting events around the country to drum up support for fossil fuels and opposition to the Dems' ACES bill.

Pence, a climate-change skeptic, told reporters last month that "while some may like to bog this debate down in the science over the man-made origins of global warming," he and other Republicans in the House prefer to focus on moving "toward a horizon of cleaner air, and we believe we can do that without costing American jobs and putting an extraordinary energy tax on the American people."

The Dems' ACES bill may head to the House floor as soon as the week of June 22. Republicans are almost unanimously opposed to it, but they're seriously outnumbered, so the best they can hope for is to inject their ideas into the public debate -- and maybe cause Democrats some headaches along the way.

The GOP energy bill would:

Republican leaders provided a handy list of talking points for members to use in touting the bill, including:

The Republicans are likely to offer the bill as a substitute during floor debate over ACES. Then maybe they'll stage another sit-in.

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Vinod Khosla Nonesense

What are the U.S. House and Senate doing about climate change and energy?  Here's a rundown on legislation proposed in Congress this year.

• American Clean Energy and Security Act of 2009
A comprehensive climate and energy bill sponsored by Henry Waxman (D-Calif.) and Ed Markey (D-Mass.), this has more momentum than any other legislation on these issues. It passed in the Energy and Commerce Committee on May 21, and has won praise from President Obama. The bill would use a cap-and-trade program to cut planet-warming emissions 17 percent below 2005 levels by 2020 and 83 percent by 2050. It would also require as much as 20 percent of electricity to be produced from renewable sources, and would set tougher energy-efficiency standards. For more on ACES, check out our handy guide.

• Cap and Dividend Act of 2009
Rep. Chris Van Hollen (D-Md.) introduced this cap-and-dividend bill in the House in April 2009. It would put a cap on carbon emissions in 2012, and aim to reduce emissions at least 80 percent by 2050. All pollution permits under the cap would be auctioned, and proceeds would be returned in the form of a flat rebate to "every American with a Social Security number" to help offset rising energy costs.

• Clean Environment and Stable Energy Market Act of 2009
Introduced by Rep. Jim McDermott (D-Wash.), this bill aims to cut greenhouse-gas emissions 80 percent by 2050. Under the plan, polluters would buy emission permits but would not be able to trade them. The Treasury Department would set the price, and that price would rise as the number of available permits declined. Revenues from sale of the permits would go into a trust fund, which could be used to compensate citizens for increased energy costs or support clean energy projects, though the bill doesn’t specify how the funds would be spent. Some have dubbed this "cap-and-no-trade."

• America's Energy Security Trust Fund Act of 2009
This carbon-tax bill, sponsored by Rep. John Larson (D-Conn.), would impose a tax of $15 per metric ton of carbon emissions at the source, and that price would increase by $10 every year. If, after five years, that isn’t enough to get the country on the path to cut emissions 80 percent from 2005 levels by 2050, then the tax rate could rise $15 per year. In the first 10 years, 96 percent of revenue generated would be refunded to taxpayers via payroll-tax rebates, with the remainder going to clean-energy tax breaks and transition assistance for workers in carbon-intensive industries.

• Safe Markets Development Act of 2009
Introduced by Reps. Lloyd Doggett (D-Texas) and Jim Cooper (D-Tenn.), this bill would guide the auction of pollution permits. This isn’t a complete cap-and-trade bill, but it addresses the distribution of permits within a cap-and-trade program and could be attached to a broader climate bill. The measure would create an independent board -- made up of climate experts, the EPA administrator, and the secretaries of energy and treasury -- that would set the price of pollution permits in order to meet emission-reduction goals between 2012 and 2020.

• Green Bank Act of 2009
This bill, another from Van Hollen, would create a national Green Bank to fund clean-energy and efficiency projects. The bank would be an independent, tax-exempt corporation of the federal government, and would issue $10 billion in "green bonds" through the Department of Treasury each year.

• 21st Century Energy Technology Deployment Act of 2009
Introduced by Jay Inslee (D-Wash.) and Steve Israel (D-N.Y.), this bill would provide financing for renewable energy technologies. It would create a Clean Energy Deployment Administration to offer a broad range of direct and indirect financial support mechanisms for low-carbon and net-zero-carbon technologies. John Dingell (D-Mich.) introduced a version of this bill as an amendment to the Waxman-Markey bill, and it was approved by the Energy and Commerce Committee with wide bipartisan support.

Not a single climate bill has been formally introduced this year in the Senate, though several senators have said they are working on legislation. The real action so far has been on energy legislation, and the Energy and Natural Resources is at work on one big energy bill that packages a number of measures together. The committee has marked up many components, and expects to make a decision on the entire package in June. Here are the more important components of the package, some of which are still in draft form.

• Federal Renewable Electricity Standard
This draft bill from Democrats on the Energy and Natural Resources Committee would require utilities to generate 15 percent of their electricity from renewable sources by 2021. A little more than a quarter of that goal could be met with efficiency measures.

• 21st Century Energy Technology and Deployment Act
Much like its companion bill in the House (see above), this bill would create a Clean Energy Deployment Administration within the Department of Energy to provide financial support for low-carbon and net-zero-carbon technologies.

• Restoring America’s Manufacturing Leadership Through Energy Efficiency Act
This bill, from Sen. Jeff Bingaman (D-N.M.), would provide loans to help manufacturers start using more energy-efficient equipment and processes, and create government partnerships with industry to develop and deploy new efficient technologies.

• Appliance Standards Improvement Act
Bingaman and Sen. Lisa Murkowski (R-Alaska) introduced this bill, which would update the Department of Energy’s appliance standards program and the federal Energy Star program.

• Energy and Water Integration Act
Also from Bingaman and Murkowski, this bill calls for more study into the water use involved in transportation fuels and electricity generation.

• Department of Energy Carbon Capture and Sequestration Program
Introduced by Bingaman and a bipartisan group of seven other senators, this legislation would provide long-term liability protection and funding for up to 10 large-scale carbon-capture-and-storage projects, with the Department of Energy determining which projects should receive funding.

Find out more about climate change and what you can do about it in our Climate Citizens section.

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Picture in your mind the Niger River Delta. What do you think of? Water, mangrove trees, fishing boats?

Wrong.

Try brown sludge-filled waterways flanked by constantly flaring gas stacks. Welcome to Oporoza, Nigeria -- the place where 10 percent of U.S. oil imports originates.

When filmmaker Sandy Cioffi traveled to Oporoza in 2006 to make a documentary about a community library, she did not expect to return with Sweet Crude, a film that mentions AK-47s more than books. But at the library's opening ceremony, a student group (read: political activist group) protested, objecting to Chevron's role in funding the library and calling for local resource control. At that point, Cioffi started to see a larger story about the oil industry's exploitation of Nigeria.

In Sweet Crude, we see the polluted rivers, the smoggy skies, the assassinated political leaders, the depressed villagers, the corrupt government leaders, the corrupt oil executives, the violent resistance fighters, the non-violent activists, the academic experts, the inept Western reporters, and even the arrested (yes, arrested) filmmaker herself. And if you're starting to feel like that's a lot of drama for a 100-minute movie, you're right.

Sweet Crude is long. And it's unwieldy. Cioffi starts with a discussion with local political leaders on the environmental devastation of the delta region, follows with a primer on Nigerian history, then debates violent vs. non-violent resistance, and ends with an indictment of the Western media's neglect of the Niger River Delta story. In each instance, she presents an elegant case, but she could have made four documentaries here, not one. Jamming all that material into one long film does a disservice to the bigger story.

However, it's hard to criticize Cioffi because her work provides an excellent expose of the downside of being a petro-state. The narrative of oil production causing misery for developing nations is not new, but watching someone in his mid-20s -- who, by the way, speaks perfect English and is dressed in Western clothes just like yours -- tell you that the life expectancy of his region has fallen from 60 to 40 years in just the last decade -- that's chilling.

What Cioffi does in Sweet Crude that's so memorable is simply to bring the human element of oil exploitation to the big screen. Westerners may be familiar with stories of gas price spikes caused by Nigerian rebel attacks, but rarely do we see the faces of the people behind the attacks or consider their rationale for engaging in such warfare. Considering the U.S. alone purchases 48 percent of the oil that Nigeria produces, it's time we start to face, and see the faces of, the consequences of our oil habit.

Watch it: Sweet Crude is showing at the Seattle International Film Festival on June 13. Check the SIFF schedule for details.

For readers outside of Seattle, check the Sweet Crude website for details on other screenings.

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Abrahm Lustgarten / ProPublica

ProPublica's Abrahm Lustgarten reports:

In a packed and sometimes contentious hearing on Capitol Hill Thursday, representatives of the oil and gas industry and their state regulators vigorously defended the practice of injecting toxic fluids underground without federal regulatory oversight.

The House Energy and Minerals subcommittee called the hearing to explore the economic and environmental risks associated with the practice, called hydraulic fracturing, after a string of reports of water contamination related to drilling across the country were reported by ProPublica. Hydraulic fracturing is currently exempted from the Safe Drinking Water Act, but both the House and Senate are drawing up legislation that would close the Bush-era loophole and reinstate the Environmental Protection Agency’s authority over the fracturing process.

The House version of the bill, which would also require drilling companies to disclose the names and amounts of the chemicals they inject underground, is expected to be introduced Tuesday.

In the hearing, industry-affiliated groups and an executive of Chesapeake Energy told the committee (PDF) that state regulations of hydraulic fracturing are sufficient and effective and insisted that the fracturing process and the chemicals it uses are safe. They said regulating the process under the Safe Drinking Water Act would add a needless layer of regulation that would cost billions of dollars and thousands of jobs.

But a close reading of the law shows that the Safe Drinking Water Act already defers regulatory authority over oil and gas drilling to the states and that reversing the exemption in question would mainly provide a baseline for best practices and give the federal government authority to investigate contamination cases or disastrous accidents.

“I frankly think the oil and gas companies have been running a scare campaign,” Colo. Representative Diana DeGette, a co-sponsor of the bill along with Maurice Hinchey (D-NY) and Jared Polis (D-Co) , said after the hearing. “I don’t know if the oil and gas industry doesn’t understand the bill or if they are intentionally misrepresenting the bill.”

Much of the debate centered on issues unearthed in a series of articles by ProPublica, which has been investigating natural gas drilling for the past year. The articles focused on numerous cases of drilling-related water contamination that have been documented across the country. In most of those cases, scientists at the Environmental Protection Agency have said that their investigations were hampered because the drilling fluids are largely kept secret and because the agency does not have authority to investigate whether hydraulic fracturing was indeed the cause. In one case, in Ohio, hydraulic fracturing was listed as one of the main causes leading to contamination and an explosion that ruined a house.

Among those who testified at the hearing was Scott Kell (PDF), the oil and gas regulator for the state Ohio and president of the Ground Water Protection Council, whose members include both industry officials and state regulators.

Kell personally conducted the Ohio investigation that named hydraulic fracturing as a contributing factor in water contamination there, yet Kell repeated the industry position that there has never been a single case of contamination in which hydraulic fracturing was proven to be the cause. Kell also introduced letters from state regulators in Ohio, Pennsylvania, New Mexico, Alabama and Texas refuting ProPublica's findings.

“The states have become aware of press reports and websites alleging that six states have documented over one thousand incidents of ground water contamination resulting from the practice of hydraulic fracturing,” Kell said. “Such reports are not accurate.”

In fact, ProPublica’s stories documented more than 1000 cases in which water was contaminated in the same places where fracturing takes place. In most of those cases the EPA said it was impossible to prove a link to fracturing because researchers don’t have access to the complete list of chemicals industry uses – without that list they say they can’t trace the contaminants to their source with certainty.

Officials in Colorado, where ProPublica reported that much of the contamination has occurred, did not issue such a statement refuting the articles.

When New Mexico Congressman Martin Heinrich spoke in the hearing, he sought to clarify New Mexico’s position and keep the hearing on course.

“We are trying to get at this from a standpoint of more science and less ideology; I know that’s difficult sometimes,” he said. “I would mention that while we had zero cases of usable ground water contaminated, we have a number of cases of surface water contaminated from products.”

When asked about the record of Chesapeake Energy, the nation’s largest independent gas producer, Mike John, a vice president of government relations for Chesapeake, told the committee that “I would emphasize that in my experience we have not seen any problems with hydraulic fracturing in my career.” John did not mention the recent Louisiana case in which 16 cattle died after allegedly drinking spilled fracturing fluids at a Chesapeake well site – a case that is still under investigation.

The hearing descended to rancor at several points, with proponents of regulation berating the industry for fighting regulation even as it insists that clean water is a priority, and with opponents expressing frustration over what more federal oversight might mean for their state’s economy, a signal that even in a Democrat-controlled Congress, legislation to regulate hydraulic fracturing may face a tough road.

"I am proud that I am supported by the oil and gas industry because they employ a lot of people in my state and I am going to stick up for them," said Rep. Dan Boren (D-OK). "I am sick and tired of a lot of folks in my own caucus coming after the largest employer in my state."

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This story was written by ProPublica's Abrahm Lustgarten.

From left, former Vice President Dick Cheney, Rep. John Salazar, Rep. Dianna DeGette and Sen. Bob Casey are all trying to leave their mark on how natural gas is drilled in the U.S. Abrahm Lustgarten / ProPublicaFour years after Vice President Dick Cheney spearheaded a massive energy bill that exempted natural gas drilling from federal clean water laws, Congress is having second thoughts about the environmental dangers posed by the burgeoning industry.

With growing evidence that the drilling can damage water supplies, Democratic leaders in Congress are circulating legislation that would repeal the extraordinary exemption and for the first time require companies to disclose all chemicals used in the key drilling process, called hydraulic fracturing.

The proposed legislation has already stirred sharp debate.

The energy industry has launched a broad effort in Washington to fend off this proposed tightening of federal oversight, lobbying members of Congress and publishing studies that highlight what it says are the dangers of regulation. In mid-May, the industry released a detailed report asserting that the changes in current law would cost jobs and slash tax revenues. A key advocate of past efforts to regulate gas drilling, Rep. John Salazar (D-CO), has declined to support the legislation, expressing concern about how it would affect the energy companies.

However, with a strengthened Democratic majority in Congress and the party's capture of the White House in last year's election, the fracturing legislation is viewed as having its best chance at passage in years. Its House sponsor, Rep. Diana DeGette (D-CO), aims to attach a bill to a larger piece of legislation with broad support -- possibly a bill on climate change or a new energy policy measure – where it would be shielded from industry resistance. On the Senate side, according to congressional staff close to the effort, Sen. Bob Casey (D-PA) has a companion bill ready to follow.

The drilling process involves injecting millions of gallons of water and sand mixed with tens of thousands of gallons of chemicals -- some that are known to cause cancer -- deep into the ground, where as much as a third of those fluids typically remain after the gas is removed.

Global companies including Halliburton and Schlumberger have fought hard to shield from public view the chemical recipes they use to drill, saying that the formulas are valuable trade secrets. Scientists say that is precisely the information they need to determine if drilling caused the water pollution that has been reported in Colorado and elsewhere.

"The regulatory loophole for hydraulic fracturing puts public health at risk and isn't justified," said Henry Waxman (D-CA), chair of the House Energy and Commerce Committee that will offer the bill, in an e-mail. "The current exemption for the oil and gas industry means that we can't even get the information necessary to evaluate the health threats from these practices."

The industry argues that state laws and regulators are doing an adequate job of regulating the hydraulic fracturing process, and that more layers of regulation would be burdensome and expensive.

"We don't think the system is broke, so we question the value of trying to fix it with a federal solution," said Richard Ranger, a senior policy analyst at the American Petroleum Institute. "So proceed with caution if you are going to proceed with regulating this business because it could make a very significant difference in delivering a fuel that is fundamental to economic health."

Proponents of regulation, including DeGette, the author of the bill, say protecting water resources is worth the slightly higher gas costs that might come with regulation, but that the industry's assessment of those costs is dubious. The exemption, they say, has artificially lowered drilling costs because it means the companies don't always have to follow the safest practices.

"I find it kind of a novel argument that it will be burdensome to comply with one federal law when they could potentially have to comply with 50 state laws," she said. "I just think that they don't want to have to do it."

A key question for proponents and opponents alike is how strong a stance President Barack Obama's administration will strike on this legislation. A White House spokesman said that the administration hasn't yet taken a position.

The Safe Drinking Water Act, enacted in 1974, governs what chemicals can be injected underground and applies to essentially every industrial activity in the United States. It limits what levels of pollution are allowed, but then permits states to create more detailed regulations if they choose. The law also sets minimum standards for well design and other protections of health and safety.

"We are not aware of any other industries that have an exemption," said Stephen Heare, director of the Drinking Water Protection Division at the Environmental Protection Agency.

As the law currently stands, the EPA is not allowed to set conditions for hydraulic fracturing or even require states to have regulations of their own.

States often look to the federal agencies for guidance on how to craft environmental rules. And hydraulic fracturing is an especially complicated process that scientists say warrants more study. The current regime leaves state agencies -- which are often understaffed and underfunded -- to do their own research and develop their own best practices, according to EPA scientists.

Natural gas, used for heating, electricity and manufacturing, supplies a fifth of the energy used in the United States and is an increasingly valued resource. According to the Energy Information Administration, domestic gas reserves, including those held in vast shale deposits that underlie the Appalachian states, could meet the country's natural gas needs for more than 100 years. Without hydraulic fracturing, which is now used in almost all new gas wells, much of this supply would remain beyond reach, according to the American Petroleum Institute.

Natural gas is also widely viewed as an important transitional fuel in American climate and energy policy -- emitting 23 percent less carbon dioxide per unit of energy than oil. Its development has spurred jobs and economic activity in some of the poorest and most rural parts of the U.S.

But as gas drilling has expanded, a wave of reports have emerged that the drilling is affecting water. In Colorado and Wyoming, state and federal officials have concluded that benzene and other contaminants have made their way into aquifers, streams and well water as a result of drilling accidents or spills of drilling fluids. Officials have linked methane gas in groundwater to drilling in Colorado (PDF), Ohio (PDF) and Pennsylvania. Fracturing may or may not be to blame, EPA officials say; it's hard to tell because they don't oversee the process and can't trace chemicals that are unidentified.

"We're not talking about banning fracking here. What we're for is regulating it," said Rep. Jared Polis (D-CO), a co-sponsor of the House bill, emphasizing that his hope is to give scientists the tools to measure, and to control, its impact on the environment. "Other than oil and gas companies, I am not aware of anyone that supports allowing that to continue in an unregulated way."

Even so, DeGette will need to gather support from some representatives in states that stand to reap substantial economic benefits from drilling. The retreat of Salazar, a prominent moderate whose co-sponsorship helped draw support for a similar measure in the House last year, is a warning sign that the passage is not preordained.

"I think Salazar is a very strategic target on all of this," said Sarah Tucker, an analyst for Trout Unlimited, a sportsman's group that is lobbying for more oversight of drilling. "He is from an oil and gas district ... that gives him a lot more credibility when working on these issues ... Those moderate Democrats are always the sticking point as to whether or not a bill actually moves."

In an e-mailed response, Salazar said he would still consider voting for the bill, but that he may pursue an alternative compromise.

"I believe that developers may have legitimate concerns about the impact that removing the exemption may have on their ability to find and extract oil and gas," he said. "But ... the current regulatory approach is probably not sustainable and will probably need to be revised in some way."

Passing such legislation has proved difficult in the past. This year's efforts to reverse the exemptions will constitute at least the fourth effort by Democrats to shore up protections against hydraulic fracturing since it became a focus of the White House's Energy Task Force in 2001. According to records of committee debates from 2003, the exemptions were forced through against objections, without hearings by a Republican majority and eventually tucked into the 2005 Energy Policy Act (PDF). Ever since, in the face of intense lobbying, any efforts to address the topic have stalled in committee.

Last year the bill's authors, including Salazar, received a flurry of letters and phone calls urging them not to pursue the legislation. One, addressed to DeGette from Jerry McHugh, president of Denver-based San Juan Resources, said "Now is not the time to impede development of any domestic resources. Please pull your sponsorship."

The industry has spent millions of dollars lobbying Congress on issues including fracturing since 2008, according to disclosure forms filed with Congress. Now, it's circulating new research to bolster its arguments.

The industry -- which has long argued that fracturing has never been proven to have contaminated water -- points to a study published in April by the Department of Energy, which asserts that state laws adequately regulate hydraulic fracturing. But that report, titled "Modern Shale Gas Development in the United States: A Primer" (PDF), and written by the Ground Water Protection Council, a broad consortium that includes industry groups, contains several questionable statements. One passage notes that "the Safe Drinking Water Act regulates the injection of fluids from shale gas activities," without mentioning that the exemptions have created significant exceptions, and that on the whole the act does not regulate all injections.

"You have very substantial economic elements that are concerned about their abilities to do whatever they want to for their own economic advantages," said Rep. Maurice Hinchey (D-NY), who is also sponsoring the bill. "They are going to do whatever they can to ensure that there is not a majority of the members here voting for something like this bill."

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Obama going to Copenhagen

Reported by Suzanne Goldenberg, The Guardian's U.S. environment correspondent

America's oil, gas and coal industry has increased its lobbying budget by 50%, with key players spending $44.5m in the first three months of this year in an intense effort to cut off support for Barack Obama's plan to build a clean energy economy.

The spoiler campaign runs to hundreds of millions of dollars and involves industry front groups, lobbying firms, television, print and radio advertising, and donations to pivotal members of Congress. Its intention is to water down or kill off plans by the Democratic leadership to pass "cap and trade" legislation this year, which would place limits on greenhouse gas emissions.

A defeat for the bill would have global consequences. The international community is depending on America, as the world's biggest per capita polluter, to set out a firm plan for getting off dirty fuels in the months before crucial UN negotiations in Copenhagen in December.

Without such action, the chances of getting a deal that scientists say is vital to limiting dangerous climate change are much reduced.

Those high stakes have intensified the fight for control over America's energy future. "There are an awful lot of people who have an awful lot to gain and lose and they have been acting accordingly," said Evan Tracey, founder of the Campaign Media Analysis Group (CMAG), who has tracked the proliferation of climate change ads.

But it is an unequal contest. Liberal and environmental organisations, as well as the major corporations that support climate change legislation, say they are being vastly outspent by fossil fuel interests.

"These guys are spending a billion dollars this year convincing Americans that they are clean, green, cuddly and warm," said Bob Perkowitz, founder of the eco- America PR firm. Perkowitz is to brief the White House yesterday on a new environmental messaging strategy. "The enviros are getting their message out, but they are being outspent by 10 to one." he said.On advertising, the ratio is about three to one. The oil and coal industry spent $76.1m on ads from 1 January to 27 April, according to CMAG data seen by the Guardian. Environmental groups, led by Al Gore's Alliance for Climate Protection, the Environmental Defence Fund and the Sierra Club, spent $28.6m on ads in the same period, Tracey said.

Despite its global significance, the fate of the draft "cap and trade" bill now lies in the hands of just a dozen Democrats, who have yet to back Obama's energy transformation. The Democratic leadership cannot take their support for granted. Seven of those pivotal Democrats received campaign donations in excess of $100,000 from the oil and gas industry, coal producers, and electricity firms during last year's elections, according to an analysis provided to the Guardian by the Centre for Responsive Politics.  Another two received more than $90,000 last year.

Environmentalists say those Democrats, who hold the balance of power on the committee, pose a far greater threat to the chances of passing climate change legislation than a full vote in the House of Representatives. "If they can get that bill through the subcommittee what is going to emerge is a piece of legislation," said Tony Kreindler of the Environmental Defence Fund. "So this is ground zero for the vote."

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Approaching Copenhagen with a Portfolio of Domestic Commitments

House leaders have reportedly reached a tentative deal on a climate and energy bill -- and in the absence of details, speculation is rampant about how the bill has been weakened or otherwise changed.

Energy and Commerce Committee Chair Henry Waxman (D-Calif.) and Ed Markey (D-Mass.), the bill's coauthors, had wanted to start markup of the legislation two weeks ago, with the aim of passing it out of committee by Memorial Day. But it's taken longer than expected to reach agreement with moderate Democrats, who requested a lot of changes to the bill.

Democrats on the Energy and Commerce Committee are scheduled to meet Tuesday night to hammer out the final details; then text of the revised bill is expected to be unveiled on Wednesday, and debate is to begin on Thursday.

While the bill's authors have been mum about the negotiations, their moderate counterparts have made a number of claims about what will be in the bill.

Rep. Mike Doyle (D-Pa.) told Reuters late last week that the bill would give away the majority of carbon permits for "the first 10 to 15 years," rather than requiring emitters to pay for the right to pollute. Doyle and others have indicated that local electricity distribution companies would be given 35 to 40 percent of the permits, while roughly 15 percent would go to trade-exposed, energy-intensive industries like steel, paper, and cement, and up to 5 percent would go to refineries.

Informed sources on the Hill tell Grist that Doyle may be jumping the gun in claiming those decisions are final. But there is a lot of pressure from utilities, energy-intensive industries, and their sympathetic representatives to hand out a majority of the permits free of charge in the early years of the program. Waxman has acknowledged that to get the bill passed, some free permit allocations may be necessary, and would be reduced over time.

The near-term target for cutting emissions may be lowered in the new version of the bill, to 14 percent below 2005 levels by 2020. The original proposal called for a 20 percent cut, but some were lobbying to go as low as 6 percent. Waxman balked at the 6 percent suggestion: "I think it is very low," he told reporters several weeks ago.

The 14 percent cut is at the low end of what the U.S. Climate Action Partnership proposed in its blueprint, which served as a model for the Waxman-Markey bill.

The target for cutting emissions by 2050 is likely to remain as it was in the original draft: 83 percent below 2005 levels.

The bill's renewable electricity standard is another component that may be weakened. The draft called for 25 percent of each state's electricity to come from renewable sources by 2025. Southeastern Democrats were unhappy with that, so committee leaders are reportedly considering lowering the mandate to 17.5 percent, and could allow a portion of that to be met by efficiency measures.

Drill, maybe, drill?

Another bargaining chip with moderate Democrats might be offshore oil and gas drilling.

The Democratic-controlled Congress let the moratorium on offshore drilling expire last October, responding to public outrage over $4-a-gallon gasoline and the Republicans' "drill, baby, drill" chant. (Never mind that experts agree that more domestic drilling wouldn't do anything to lower oil costs in the near term.) Obama changed his tune on the issue while campaigning last year, saying he'd be open to more offshore drilling if it were part of a comprehensive energy plan.

Now the White House is floating the possibility of a "grand bargain" that would lump some expanded domestic oil and gas drilling in with broader climate and energy policy. A senior White House official told The New Yorker that the administration was exploring a deal that would include a cap-and-trade system and "serious" and "short-term" increases in domestic oil production in places like the California coastal region. House Democrats who met with Obama in the White House last week said the subject came up.

It's a plan that many enviros -- and many Californians -- wouldn't be too fond of, but it could bring moderate Democrats on board. It would also defuse the Republican talking point that Democrats are opposed to all drilling.

Such a deal could also help put in place new protections for the coasts. Now, in the absence of an offshore-drilling moratorium, the federal government could technically offer drilling leases for areas as near as three miles to shore. Interior Secretary Ken Salazar scrapped the Bush administration's lease plan in January, but said the Obama administration is open to drilling in some areas and would work with Congress to craft "a plan that makes sense."

The offshore-drilling issue would be handled by the House Natural Resources Committee, however, not the Energy and Commerce Committee, which is working on the climate bill, so additional deal-making would be needed to get everything into a single package.

Through all this, Waxman is sticking to his self-imposed deadline for passing the climate and energy bill out of committee before Congress leaves for its Memorial Day recess, but that's looking less and less likely as the holiday approaches.

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Approaching Copenhagen with a Portfolio of Domestic Commitments

House Republicans are ramping up their campaign against the Democratic leadership's climate and energy bill -- and telling business leaders to get with the program or get out of the way.

On Tuesday, a group of key Republicans hosted a summit on Capitol Hill to bash the Waxman-Markey bill as an "energy tax" that would cost average Americans $3,100 a year (though that figure has been thoroughly debunked). "This legislation represents, and is tantamount to, an economic declaration of war on the Midwest by liberals in Washington, D.C.," said Rep. Mike Pence (R-Ind.), who spearheaded the event.

Representatives from industry groups that oppose the climate bill, like the National Association of Manufacturers, spoke at the summit, but there were no panelists from companies and business groups calling for a carbon cap. The number of businesses advocating climate action is growing, and they're becoming more vocal -- witness Johnson & Johnson and Nike's recent demand that the U.S. Chamber of Commerce stop opposing the House climate bill.

Grist asked Pence during a press conference after the summit what he would say to business leaders who argue that a climate bill is needed. "I don't want to confirm that business leaders are asking for a cap or not asking for a cap," he replied.

Reminded that the U.S. Climate Action Partnership is asking for a cap -- its members include the leaders of Duke Energy, ConocoPhillips, and DuPont, who told the House on April 22 that climate action is needed -- Pence was dismissive.

"Well, I am aware that some are," said Pence. "I just would say to any American who is prepared to endorse a national energy tax, that there's a better solution, and that they should keep their powder dry, and take their case to the American people that they don't need, particularly during this very difficult time in the economic life of our nation, to raise the energy cost on our businesses and on American families."

Watch the exchange on video (and then keep on reading below):

Believe it or not?

Another reporter asked Pence whether he and other House Republicans believe climate change is a problem that needs to be addressed.

"I think you would find among House Republicans varying opinions on the man-made origins of global warming," Pence said.

"But let me assure you, whatever Republicans may think about the science and the arguments over global warming, Republicans are all committed to a cleaner environment," he continued. "We're all committed to encouraging the development of clean-coal technologies, and cleaner air. And so while some may like to bog this debate down in the science over the man-made origins of global warming, we prefer rather to focus on let's all move toward a horizon of cleaner air, and we believe we can do that without costing American jobs and putting an extraordinary energy tax on the American people."

Asked about his personal beliefs on the subject, Pence said, "There's no question there have been [climatic] changes ... I am a skeptic whether or not man-made actions are responsible for that."

The party of "no"

The summit also served as the kick-off event for a new coalition of Republicans calling themselves the "American Energy Solutions Group." Chaired by Pence, the group includes familiar House climate skeptics like Joe Barton (R-Texas), John Shimkus (R-Ill.), and Michele Bachmann (R-Minn.).

They plan to introduce an energy plan of their own that's heavy on oil, gas, "clean coal," and nuclear -- much like the bill they introduced last summer and touted during an unsuccessful sit-in at the Capitol. Pence said they would have a new bill written by the end of the summer.

For now, though, the group's focus will be saying "no" to the Democratic climate and energy bill. "Our first objective is to really expose the profound error of a national energy tax," said Pence.

The Republicans also hope to foment disagreement among House Democrats, who are having a tough enough time on their own coming to agreement about the climate bill. "We call upon our fellow Democrats to say, let us reject this now," said Fred Upton (R-Mich.). "Let us not proceed with this issue."

Tuesday's summit is just the first of a series of similar events to be held around the country. The next one is scheduled for May 27 in Indiana -- Pence's home state -- to be followed by more in Pennsylvania and California.

The House Republicans are betting that this road show and the larger strategy of attacking a Democratic climate bill will give them a leg up in the 2010 elections. "The American people have a year and a half to decide whether to change management around here," Pence said.

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Prologue to Copenhagen

Vinod Khosla Nonesense

The authors of the House climate and energy bill will be courting undecideds over the next couple of weeks as they try to get their legislation passed by the House Energy and Environment Subcommittee.

Reps. Henry Waxman (D-Calif.) and Ed Markey (D-Mass.) want to make these potential swing voters happy while preserving the integrity of their bill. Meanwhile, industry is pushing the undecideds to help severely weaken or even kill the bill.

Of the 35 members of the House Energy and Environment Subcommittee, a dozen -- 11 Democrats and one Republican -- have expressed support for climate legislation, but have concerns about the Waxman-Markey bill in its current form. These swing votes are the prime targets of advertising campaigns by both industry groups and progressive organizations.

A complete version of the Waxman-Markey bill is expected over the next few days, with debate on amendments to begin sometime the week of May 4. After passing out of subcommittee, the bill will go on to the full Energy and Commerce Committee, where Democratic leaders hope to get it passed by Memorial Day.

Here's a rundown on the wild-card members of the subcommittee, what they've said about the bill, and how they want to change it.

Rick Boucher (D-Va.)

Boucher, a coal-state moderate who last year introduced his own draft climate bill with Rep. John Dingell (D-Mich.), has been leading the cadre of subcommittee members looking to make the bill more business-friendly. He and his allies have circulated a list of changes they'd like to see.

While the bill currently mandates a 20 percent reduction in greenhouse-gas emissions by 2020, Boucher is pushing to lower that goal to 6 percent.

He wants to give out many emission permits free to energy-intensive industries and to the local distribution companies (LDCs) that funnel electricity to users, rather than auctioning the permits off, and he wants permit giveaways to the industrial sector to continue throughout the whole length of the cap-and-trade program, rather than be phased out. He wants to increase the amount of emissions reductions that can be met through offsets, and make the use of offsets more flexible. And he's asking for the banking, borrowing, and strategic-reserve provisions -- all mechanisms to help contain costs for businesses -- to be made more flexible.

As a way to make the bill easier on the coal industry, Boucher is also pushing to ease performance standards for new coal-fired power plants, and grant "bonus allowances" to the first companies that install carbon-capture-and-sequestration technology.

"And at the end of the process, I hope I'll be able to support the bill," Boucher said last week. "In its current form, I cannot."

Electric utilities have been the top campaign contributors to Boucher, giving him $753,960 over the past 20 years. He's also received $264,106 from mining interests, $262,467 from oil and gas, and $203,696 from chemical and related manufacturing industries.

John Dingell (D-Mich.)

Dingell, who chaired the Energy and Commerce Committee before Waxman unseated him in a November coup, has also been a vocal critic of some of the bill's provisions. His concerns largely mirror Boucher's, though he's been more public with his opinions.

"Nobody in this country realizes that cap-and-trade is a tax, and a great big one," Dingell said during hearings on the bill last week, essentially repeating the Republican talking point that the bill amounts to a massive tax.

Also at the hearings, Dingell expressed concern about the "aggressive nature" of the bill's renewable energy standard (RES). "I worry that 25 percent [renewable energy] in 15 years might be more than states can handle." He has suggested allowing nuclear power to count toward a state's baseline renewable levels.

In a nod to his home state's major industry, Dingell has advocated for more funding within the bill for advanced automotive technologies. He's also called for more funds for wildlife adaptation.

Dingell has received $1,183,547 over his career from electric utilities, making them his biggest contributor. He's also received $953,465 from the automotive sector, and $409,091 from oil and gas interests.

G.K. Butterfield (D-N.C.)

Butterfield has questioned whether the bill has enough votes to make it out of committee -- and his own vote is likely to be one of the deciding factors.

He's particularly concerned about rising energy costs for average Americans and how that might affect the economy as a whole. He has called for 35 percent of revenue from the auctioning of pollution permits to go toward tax rebates to Americans in the lowest income brackets.

"For a low-income family, it's absolutely impossible for them to absorb the costs," Butterfield said last week.

He's also criticized the RES in the bill: "We cannot achieve a 25 percent mandate by 2025. Not only is it impractical, but it is impossible." He has suggested including nuclear, biomass, and efficiency in the options that states would have to meet their renewable-power requirements. He argues that Southern states, which are heavily coal-dependent and have been slower to adopt renewable power, will have particular trouble with an RES, so he's requesting "special consideration for my state and several other states in the Southeast in our situation." (Recent reports have found that the South has big potential for renewable-energy development and could in fact meet an ambitious RES.)

Electric utilities have been Butterfield's fifth-largest donor, at $50,000 over his career so far.

Gene Green (D-Texas)

Green has requested that 5 percent of carbon allowances be given free of cost to the refinery industry, which is obviously large in his state.

"I can't vote for a bill unless my refineries [are protected]; because of the nature of my district, it's a job base and a tax base," Green told Dow Jones. "Frankly, it's a national-security issue. I don't want to transfer production offshore for refined products, relying on imports from the Middle East and Venezuela."

But Green is also worried about what would happen if regulation is left to the Environmental Protection Agency. "If Congress does not act, greenhouse gases could be regulated without the input of legislators who represent the diverse interests of this country," he said.

The oil and gas sector is among Green's biggest donors, at $330,613 over his career, as are electric utilities, at $271,800.

Mike Doyle (D-Pa.)

Doyle, who with Jay Inslee (D-Wash.) co-authored the portion of the Waxman-Markey bill that aims to help energy-intensive industries transition under carbon regulations, is another moderate leading negotiations with the bill's authors.

As Pennsylvania is an industrial state, he's concerned about the amount of pollution permits that will be given to industrial sectors like steel, aluminum, iron, paper, cement, glass, and chemicals and paper. He has also asked the bill's authors to shave the RES from 25 percent renewables by 2025 down to 15 percent.

Doyle's biggest donors have been industrial unions, which have contributed $359,450 to his campaigns. Electric utilities are also among his top donors, giving $257,427 over his career.

Charlie Gonzalez (D-Texas)

Gonzalez wants to make sure that the bill protects citizens from high energy costs. "It’s all about the consumer," he told reporters last week. "Any increase in the price in energy looms large."

Gonzalez is also worried about how the bill will impact oil refineries. His district houses the headquarters of Valero, one of the largest refiners in the country.

Industrial unions, the oil and gas sector, and electric utilities have all been among Gonzalez's biggest contributors over the years.

Mary Bono Mack (R-Calif.)

Perhaps the lone swing Republican on the subcommittee, Bono Mack has said repeatedly that she is concerned about climate change, but also about the price tag of a climate bill. "I have big concerns about the costs and what it will do to our constituents," she said during last week's hearings.

But unlike the rest of her Republican colleagues, she's said she is willing to work on a climate bill rather than try to torpedo it. As for whether she can support this bill in particular, she said, "Truly, I am in the undecided category ... I'd love to see us do all we can on renewables. I'd love to see us move forward on energy independence."

Other key swing votes on the panel include John Barrow (D-Ga.), Baron Hill (D-Ind.), Jim Matheson (D-Utah), Charlie Melancon (D-La.), and Mike Ross (D-Ark.).

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This article was written by ProPublica's Abrahm Lustgarten.

Pat Farnelli, top left, Ronald Carter, bottom left, Richard Seymour, top right, and Norma Fiorentino, bottom right, live in Dimock, Pa. A year after Cabot Oil & Gas landmen knocked on their doors to sign drilling leases, they are finding that their drinking water now contains methane, the largest component of natural gas. Abrahm Lustgarten / ProPublicaNorma Fiorentino's drinking water well was a time bomb. For weeks, workers in her small northeastern Pennsylvania town had been plumbing natural gas deposits from a drilling rig a few hundred yards away. They cracked the earth and pumped in fluids to force the gas out. Somehow, stray gas worked into tiny crevasses in the rock, leaking upward into the aquifer and slipping quietly into Fiorentino's well. Then, according to the state's working theory, a motorized pump turned on in her well house, flicked a spark and caused a New Year's morning blast that tossed aside a concrete slab weighing several thousand-pounds.

Fiorentino wasn't home at the time, so it's difficult to know exactly what happened. But afterward state officials found methane, the largest component of natural gas, in her drinking water. If the fumes that built up in her well house had collected in her basement, the explosion could have killed her.

Dimock, the poverty-stricken enclave where Fiorentino lives, is ground zero for drilling the Marcellus Shale, a prized deposit of natural gas that is increasingly touted as one of the country's most abundant and cleanest alternatives to oil. The drilling here -- as in other parts of the nation -- is supposed to be a boon, bringing much-needed jobs and millions of dollars in royalties to cash-strapped homeowners.

But a string of documented cases of gas escaping into drinking water -- not just in Pennsylvania but across North America -- is raising new concerns about the hidden costs of this economic tide and strengthening arguments across the country that drilling can put drinking water at risk.

Near Cleveland, Ohio, an entire house exploded in late 2007 after gas seeped into its water well. The Ohio Department of Natural Resources later issued a 153-page report (PDF) that blamed a nearby gas well's faulty concrete casing and hydraulic fracturing -- a deep-drilling process that shoots millions of gallons of water, sand and chemicals into the ground under explosive pressure -- for pushing methane into an aquifer and causing the explosion.

In Dimock several drinking water wells have exploded and nine others were found with so much gas that one homeowner was told to open a window if he planned to take a bath. Dishes showed metallic streaks that couldn't be washed off and tests also showed high amounts of aluminum and iron, prompting fears that drilling fluids might be contaminating the water along with the gas. In February the Pennsylvania Department of Environmental Protection charged Cabot Oil & Gas with two violations that it says caused the contamination, theorizing that gas leaked from the well casing into fractures underground.

An underground gas line in Dimock, Pa. (Abrahm Lustgarten/ProPublica)Industry representatives say methane contamination incidents are statistically insignificant, considering that 452,000 wells produced gas in the United States last year. They also point out that methane doesn't necessarily come from gas wells -- it's common in nature and can leak into water from biological processes near the surface, like rotting plants.

The industry also defends its construction technology, saying it keeps gas and drilling fluids -- including any chemicals used for hydraulic fracturing -- safely trapped in layers of steel and concrete. Even if some escapes, they say, thousands of feet of rock make it almost impossible for it to migrate into drinking water aquifers. When an accident happens, the blame can usually be traced to a lone bad apple -- some contractor who didn't follow regulations, they say. Those arguments helped the gas drilling industry win rare exemptions from the Safe Drinking Water Act and the Clean Water Act when Congress enacted the 2005 Energy Policy Act.

But now an exhaustive examination of the methane problem in western Colorado is offering a strong scientific repudiation of that argument. Released in December by Garfield County, one of the most intensely drilled areas in the nation, the report concludes that gas drilling has degraded water in dozens of water wells (PDF).

The three-year study used sophisticated scientific techniques to match methane from water to the same rock layer where gas companies are drilling -- a mile and a half underground. The scientists didn't determine which gas wells caused the problem or say exactly how the gas reached the water, but they indicated with more clarity than ever before that a system of interconnected natural fractures and faults could stretch from deep underground gas layers to the surface. They called for more research into how the industry's practice of forcefully fracturing those deep layers might increase the risk of contaminants making their way up into an aquifer.

"It challenges the view that natural gas, and the suite of hydrocarbons that exist around it, is isolated from water supplies by its extreme depth," said Judith Jordan, the oil and gas liaison for Garfield County who has worked as a hydrogeologist with DuPont and as a lawyer with Pennsylvania's Department of Environmental Protection. "It is highly unlikely that methane would have migrated through natural faults and fractures and coincidentally arrived in domestic wells at the same time oil and gas development started, after having been down there ...for over 65 million years."

The Garfield County analysis comes as Congress considers legislation that would toughen environmental oversight of drilling and reverse the exemptions enjoyed by the gas companies. Colorado has already overhauled its own oil and gas regulations, despite stiff resistance from the energy industry. The new rules, which went into effect earlier this month, strengthen protections against, among other things, methane contamination.

Drinking water with methane, the largest component of natural gas, isn't necessarily harmful. The gas itself isn't toxic -- the Environmental Protection Agency doesn't even regulate it -- and it escapes from water quickly, like bubbles in a soda.

But the gas becomes dangerous when it evaporates out of the water and into peoples' homes, where it can become flammable. It can also suffocate those who breathe it. According to the Agency for Toxic Substances and Disease Registry, a part of the U.S. Department of Health and Human Services, as the concentration of gas increases it can cause headaches, then nausea, brain damage and eventually death.

Under Pressure

The carefully documented accident in Ohio in December 2007 offers a step-by-step example of what can happen when drilling goes wrong.

A spark ignited the natural gas that had collected in the basement of Richard and Thelma Payne's suburban Cleveland home, shattering windows, blowing doors 20 feet from their hinges and igniting a small fire in a violent flash. The Paynes were jolted out of bed, and their house lifted clear off the ground.

Fearing another explosion, firefighters evacuated 19 homes in the small town of Bainbridge. Somehow, gas had seeped into the drinking water aquifer and then migrated up through the plumbing.

Gas had shown up in water in this part of Ohio in the past. In 2003 the U.S. Department of Health and Human Services investigated nearby residents' complaints of "dizziness," "blacking out," "rashes," "swelling of legs" and "elevated blood pressure" related to exposure to methane through bathing, dishwashing and drinking. That study concluded that gas in the area could migrate through underground fractures and said that "combustible gases, including methane, in private well water present an urgent public health hazard."

According to Scott Kell, deputy chief of Ohio's Division of Natural Resources, those earlier instances were determined to have had nothing to do with drilling activity. But by the time the Paynes' house exploded four years later, the Natural Resources Department had begun to aggressively monitor for gas and this time it suspected a clearer link to drilling: It all had to do with how a well is constructed.

Called GEsford 3, this well is adjacent to Dimock resident Pat Farnelli's house. There have been complications in drilling that well, including a drill bit that clogged the well for weeks, forcing them to have to drill a new hole. That is one of the possible causes being considered for the contamination in Farnell's drinking water. (Abrahm Lustgarten/ProPublica)To reach natural gas, a well bore is drilled into the earth through dozens of geologic formations stacked like layers in a cake, until the bore reaches the layer holding gas. In Ohio, gas is produced from almost 3,700 feet, or three-quarters of a mile, below. In Colorado or Pennsylvania, wells can be a mile or two deep -- far below drinking water aquifers.

In many geologic regions, the deeper gas-bearing layers are under extraordinary pressure from the weight of earth and water above, but that pressure normally is contained by thousands of feet of leak proof rock that separate the gas from the surface. When a drill bit sinks down, though, the tight seal of each geologic layer is broken and the pressure is released, forcing water, gas or oil into the newly opened pathway. That’s how an oil well can become a gushing geyser.

To keep the gas and drilling fluids from leaking into the natural environment, drilling companies insert as many as three concentric rings of steel pipes inside the well bore to isolate what flows through them. When the bore passes through areas where extra protection is needed -- such as drinking water aquifers -- concrete is pumped into the gap between the rings of pipe to ensure an impenetrable seal. Most states, including Ohio, require these measures in part to protect drinking water.

"That's pretty much the holy grail, good and proper cementing and casing," said Michael Nickolaus, former director of Indiana's Department of Natural Resources, Oil and Gas Division and special projects director for the Ground Water Protection Council, a group of scientists and state regulators that studies industries' impacts on water. Nickolaus added that if these zones are properly isolated from one another, the issue of groundwater contamination, whether from gas or hydraulic fracturing, goes away.

The investigation into the explosion at the Paynes' home found that a drilling company working nearby had failed to properly build that protective concrete casing and had continued to process the well despite warning signs that should have alerted it to stop. Six weeks before the explosion, the company, Ohio Valley Energy Systems, pumped concrete into the well casing. But it couldn't fill the gap, evidence that somewhere a crack was allowing the concrete to seep into the space between the pipes, and probably out into the surrounding earth.

If the concrete could leak, then so could drilling fluids -- or the gas itself.

A week later, "despite the fact that the cement behind the casing was insufficient by standard industry practice," according to the state's report (PDF), the company began hydraulic fracturing. More than 46,000 gallons of water, sand and chemicals were pumped into the well bore with enough force to crack the rock and release the gas.

Again, the drillers saw signs of a leak in the well. The company tried to recover as much of the leaking fluid as possible, but the state report said at least 1,000 gallons of fracturing fluid, including about 150 gallons of oil, disappeared into the space between the well pipes and possibly out into the ground.

Finally, the company shut down the well. But the underlying pressurized gas formation had already been punctured, and its contents were trying to escape. The gas collected inside the well for the next 31 days, until 360 pounds of pressure built against the valve at the top. It was enough, state investigators wrote, to force the gas out of the well bore by any means it could find.

"This overpressurized condition resulted in invasion of natural gas from the annulus of the well into natural fractures in the bedrock below the base of the cemented surface casing," the report states, adding that it was the first time anything like this had been confirmed in Ohio.

Ohio Valley Energy Systems did not return calls for comment on the state's findings.

On Dec. 12, three days before the Paynes' house exploded, methane was detected in the Bainbridge Police Department's water well, 4,700 feet from the gas well in question. Two days later nearby residents reported sediment in their water and artesian conditions in their wells, meaning the water was spurting out under pressure. By the next morning the gas -- still seeking an outlet -- had forced its way into Richard Payne's basement, where it reached a flammable concentration. All it needed was a spark.

Science Blames Drilling

Dimock resident Norma Fiorentino's drinking water well was a time bomb. On New Year's morning, her well exploded. After the blast, state officials found methane in her drinking water. (Abrahm Lustgarten/ProPublica)As regulators in Ohio struggled to reconcile what was happening there, officials in Garfield County, Colo., were waiting for the results of the three-part, three-year study examining the connections between methane leaks and drilling there.

The report is significant because it is among the first to broadly analyze the ability of contaminants to migrate underground in drilling areas, and to find that such contamination was in fact occurring. It examined over 700 methane samples from 292 locations and found that methane, as well as wastewater from the drilling, was making its way into drinking water not as a result of a single accident but on a broader basis.

As the number of gas wells in the area increased from 200 to 1,300 in this decade, the methane levels in nearby water wells increased too. The study found that natural faults and fractures exist in underground formations in Colorado, and that it may be possible for contaminants to travel through them.

Conditions that could be responsible include "vertical upward flow" "along natural open-fracture pathways or pathways such as well-bores or hydraulically-opened fractures," states the section of the report done by S.S. Papadopulos and Associates (PDF), a Maryland-based environmental engineering firm specializing in groundwater hydrology.

The researchers did not conclude that gas and fluids were migrating directly from the deep pockets of gas the industry was extracting. In fact, they said it was more likely that the gas originated from a weakness somewhere along the well's structure. But the discovery of so much natural fracturing, combined with fractures made by the drilling process, raises questions about how all those cracks interact with the well bore and whether they could be exacerbating the groundwater contamination.

"One thing that is most striking is in the area where there are large vertical faults you see a much higher instance of water wells being affected," said Geoffrey Thyne, the hydrogeologist who wrote the report's summary and conclusion (PDF). He is a senior research scientist at the University of Wyoming's Enhanced Oil Recovery Institute, a pro-extraction group dedicated to tapping into hard-to-reach energy reserves.

The report, referred to as the Garfield County Hydrogeologic Study, has been met with cautious silence by the industry and by its regulators.

The Colorado Oil and Gas Conservation Commission, the state's regulatory body, would not respond to questions from ProPublica because it hasn't thoroughly analyzed the data behind the December report, said its director, David Neslin.

Neither the Colorado Oil and Gas Association nor Encana, the Canadian energy company that drills in the study area, would comment on the Garfield County report. Both referred questions to Anthony Gorody, a Houston-based geochemist who specializes in oil and gas issues and frequently is employed by the energy industry.

Gorody dismissed the report's conclusions as "junk science."

"This is so out of whack. There are a handful of wells that have problems. These are rare events," said Gorody, president of Universal Geosciences Consulting. "They are like plane crashes -- the extent tends to be fairly limited. I do not see any pervasive impact."

Most of the methane in the study area, Gorody said, came from decaying matter near the surface -- not from the deep gas produced by the energy industry. He criticized the report's methodology, saying the way that researchers linked the stray gas with the deep gas formations was speculative at best.

To Dimock resident Pat Farnelli, seen here pointing to the drilling rig in her backyard, the promise of making money off her family's land came at just the right time. But perhaps not at the right price. Now she spends more than $100 of her monthly food stamp allotment to buy plastic jugs of drinking water. (Abrahm Lustgarten/ProPublica) Thyne, standing by his report, said researchers had traced the origin of the gas by conducting the equivalent of a forensic investigation, analyzing its isotopic signature, or molecular fingerprint. The molecular structure showed that most of it was thermogenic, meaning it matched the deeply buried deposit where gas was being drilled, called the Williams Fork Formation. A minority of the samples were difficult to identify by this method, so Thyne used another scientific process to study them. He is confident they, too, were thermogenic in origin.

In most cases, the study couldn't pinpoint the exact pathway the contaminants had used to travel a mile and a half up into the drinking water aquifer. So Thyne could only reason the possibilities.

The methane could be seeping into water wells through natural fractures, he said, or through leaks in the well casings or concrete, or from the well heads.

When a pipe extends 8,000 feet below the earth's surface, he said, "there are numerous potential leak points along the way. So is it leaking at 8,000 feet and coming up a well bore, a natural fault or fracture? Or is it leaking 500 feet from the surface? We don’t know."

The most plausible explanation, Thyne said, is that the same type of well casing and cementing issues that had proved problematic in Ohio were presenting problems in Colorado too.

"The thesis is that because of the way the wells are designed they could be a conduit," said Garfield County's Jordan, who commissioned the report.

Jordan worries that the methane leaks could be a sign of worse to come.

"We suspect the methane would be the most mobile constituent that would come out of the gas fields. Our concern is that it's a sort of sentinel, and there are going to be worse contaminants behind it," she said. "It's not just sitting down there as pure CH4 (methane). It's in a whole bath of hydrocarbons," she said, and some of those "can be problematic."

'You Can't Buy a Good Well'

When landmen from Cabot Oil & Gas came knocking on doors along the rutted dirt grade of Carter Road in Dimock, Pa., last year they sold a promise many residents in the farming community were eager to hear: Sign a gas lease and the land might finally pay for itself.

Many of Dimock's 1,300 residents had fallen on hard times. Approximately one in seven were out of work, and more than a few homes were perched on the precipice of foreclosure.

Cabot offered $25 an acre for the right to drill for five years, plus royalties when the gas started flowing. To outsiders it might seem a small amount, but it would make an immediate difference to people who owned fields but few other assets.

"It seemed like God's provenance," said Pat Farnelli, whose husband, a farmer, had taken a job as a night chef at a diner on the Interstate to pay one more month's mortgage. The day Cabot's man showed up -- with a wide-brim hat and a Houston drawl -- the Farnellis mistook him for a debt collector. "We really were having a rough time right then -- that day. We thought it was salvation. Any ray of hope here is a big deal."

Richard Seymour, seen here with his wife Wendy, runs a certified natural farm that ships produce across the state. His well is now running red and turbid and bubbles with so much gas that he fears he'll lose his agricultural certification. (Abrahm Lustgarten/ProPublica)That was more than a year ago, and since then Cabot -- which earned close to a billion dollars in revenue last year -- has drilled 20 wells and is producing $58 million worth of gas there annually. In its annual report Cabot bullishly called the Dimock field a once-in-a-lifetime "game changing event" (PDF) for the company and announced it would drill 63 more wells there next year.

The wealth has begun trickling down to the residents of Dimock. A few will earn more than a half-million dollars this year, and bimonthly checks for $6,000 are not uncommon. Cabot and its contractors also support the local economy by hiring local labor and patronizing hotels and restaurants in nearby towns.

But the water contamination is forcing the people who live there to accept a difficult compromise.

"You have to evaluate which is more important, the money or the water," said a Dimock resident who declined to be named because he doesn't want to antagonize Cabot, which he says will pay him more than $600,000 this year for the wells on his property. "The economy is so tough. Suppose you could stop drilling -- no one wants Cabot to go away."

For some, though, the benefits can be easily erased.

Norma Fiorentino, whose well exploded on New Year's morning, got just $97 in royalties in February. Now a part of her monthly $646 Social Security check goes to buy water. "You can't buy a good well," she said.

Down the road, Pat Farnelli spends more than $100 of her monthly food stamp allotment to buy plastic jugs of drinking water. Next door, Ronald Carter paid $7,000 to install two water treatment systems for his family, then learned they won't remove the gas.

Cabot has begun voluntarily supplying water to at least five homes in Dimock, a gesture the company says does not mean it has acknowledged fault. "For now Cabot is simply trying to do the right thing while studies are being performed and data is being obtained," said Kenneth Komoroski, Cabot's spokesman.

Others have yet to get any aid.

"This isn't something that people should be living with," said Craig Lobins, the regional oil and gas manager for Pennsylvania's Department of Environmental Protection. "It's serious."

Pennsylvania's DEP places responsibility for the contamination squarely on Cabot.

In January the DEP blamed the company for polluting one water well. Then in late February it sent Cabot a list of violations (PDF) it said led to methane seepage in other area wells. Investigators think the seepage was caused by a weakness in the well casing or an improper cementing job, much like what had been reported in Colorado and Ohio. The good news was that they found no evidence that any of the hydraulic fracturing fluids had leaked into well water.

Komoroski, the Cabot spokesman, said it's too early to conclude the company is responsible for contaminating Dimock's wells.

He said Cabot has hired an expert who is still investigating exactly what happened in the case.

"The DEP's letter was premature," Komoroski said, "It is possible that Cabot is responsible. It's possible it is not. That's what we hired a hydrogeologist to help us determine."

Cabot has since cemented the entire length of its well casings in Dimock -- a safeguard similar to what has been prescribed in Ohio and Colorado -- and believes that measure, which is more extensive than state regulations require, will solve the problem.

Yet the DEP sees no need to require such precautions at all the state's wells, because what is happening in Dimock is "an anomaly."

"Last year we permitted 8,000 wells, and this may be the only incident that occurred," said the DEP's Lobins. "You can't cover every possible scenario that you could encounter out there, so when the regulations are crafted it addresses the ones that will be most protective of 99.9 percent of the wells."

Industry spokesmen also oppose making the precautionary cementing practices mandatory.

"For one thing it is very costly," said Lee Fuller, vice president of government relations at the Independent Petroleum Association of America. "At the same time if you try to put in too much cement you can risk collapsing the well. So it's drawing a balance between protecting the groundwater" and "protecting the well that you are constructing."

At the bottom of the hill on Carter Road, Richard Seymour runs a certified natural farm that ships produce across the state. His well is running red and turbid and bubbles with so much gas that he fears he'll lose that agricultural certification. If there's a technology, like cementing, that can protect his water, then shouldn't it be required in every case, he asks?

"We feel pretty alone on this, pretty frustrated," Seymour said. "I assumed the DEP, EPA, the state -- the government -- would protect our land. We didn't know that as a landowner the burden was on us."

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Sen. John Ensign (R-Nev.) was on Ed Morrissey's internet radio show, Hot Air, earlier this week, where he said Republicans plan to revive the "drill here, drill now" call this summer. He said they need to be "on guard" against "liberalism" on issues like energy. Here's the quote, via ThinkProgress:

Here's the whole interview:

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