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  • The shale revolution has turned the energy world upside down.

  • Finally, the United States may be nearing the long term goal of every

  • president since Richard Nixon becoming energy independent.

  • Net exporter of energy

  • According to the U.S. Energy Information Administration, the U.S.

  • will become a net energy exporter by 2020.

  • What's gone on the last few years has been nothing short of a miracle.

  • Western Pennsylvania, the new Saudi Arabia, of the United States.

  • But it's not at no cost.

  • Because you own the mineral rights, you essentially get very well paid to

  • take that environmental and personal risk.

  • While many have benefited,

  • There's hope for a long time that there wasn't.

  • Some say they have lost a great deal.

  • I've been hospitalized for drinking this water.

  • It took one sip.

  • My kidney fell, my spleen fell and was left with a 2mm ulcer in my

  • duodenum and then spent four days in the hospital.

  • With so much at stake in the fight for energy independence and protecting

  • our environment, should the U.S.

  • ban fracking?

  • In what became known as a shale revolution, hydraulic fracturing became

  • widely used across the U.S.,

  • both natural gas and oil can be extracted using this process.

  • About half the natural gas in the United States comes out of the same

  • wells that produce crude oil.

  • So in other words, you produce crude oil and natural gas comes along with

  • it. As of 2017, the U.S.

  • Energy Information Administration estimated there were about 2459 trillion

  • cubic feet of dry natural gas in the U.S.

  • Assuming the rate of production stays the same, that means the U.S.

  • has enough dry natural gas to last about 80 years.

  • The Marcellus Shale holds the largest natural gas reserve in North

  • America. In 2018, 6.2

  • trillion cubic feet of gas was produced in Pennsylvania alone.

  • That's nearly a third of total U.S.

  • consumption. What's gone on the last few years has been nothing short of a

  • miracle in terms of companies being able to reduce their cost and produce

  • crude gas, NGLs or whatever it is.

  • Far, far below what anybody thought they could do.

  • The real revolution, which was first in natural gas but then moved to oil,

  • was to combine horizontal drilling with fracking, and that then totally

  • revolutionized U.S.

  • oil production. The revolutionary breakthrough combined two existing

  • technologies. First is horizontal drilling.

  • Essentially drilling straight down and then turning at an angle to target

  • part of the shale formation.

  • The second is hydraulic fracturing or fracking.

  • This involves pumping water, sand and chemicals at high pressure into

  • shale formations to fracture the rock, allowing oil and gas trapped inside

  • to flow. From 2007 to 2018, natural gas production increased by nearly 60

  • percent. Prices dropped from almost $9 to $2.5

  • per BTU. Crude oil production grew from 5 to over 10 million barrels a

  • day, which led to a drop in imports by 40 percent.

  • That meant big energy savings for the everyday consumer.

  • In October 2019, the Council of Economic Advisers estimated the shale

  • revolution saves American families of four about $2,500 annually.

  • They claim nearly 80 percent of the total savings comes from a lower price

  • for natural gas.

  • Today, natural gas mining and extraction employs more than 162,000 workers

  • in the U.S. From 2004 to 2018, over 350,000 jobs were created nationwide.

  • And many of those jobs were based in places above the Marcellus Shale in

  • states like Pennsylvania.

  • In PA, the first unconventional well was drilled in Washington County in

  • 2004. By 2009, there were 821 active wells in 2011,

  • 1956.

  • There's a lot of hope in this area because people are doing well when you

  • can provide... This is Diana Irey Vaughn.

  • She's been the Washington County Commissioner for 24 years and a staunch

  • supporter of the gas industry.

  • We've heard from so many individuals who are leaseholders in the industry

  • how this has changed their financial future for generations to come.

  • There have been a number of farmers that have told us that if it had not

  • been for the leases, they probably would have been out of business.

  • With the downturn in the steel industry and the coal industry, there was

  • like this vacuum. And a lot of the people that I went to school with, they

  • have since moved away.

  • But now there's something filling that void there.

  • There are jobs. There's hope where for a long time, there wasn't.

  • This is Richard and Bonnie Moore.

  • They are farmers in Washington County in southwestern Pennsylvania.

  • This farm has been in Bonnie's family since the 1860s.

  • It's 185 acres just a mile and a half up the road.

  • Rich has a 90-acre farm that he inherited from his family.

  • In 2005, the oil and gas industry came knocking on the door.

  • Both farms, at least two range resources.

  • Everybody was excited.

  • About oh boy, we're going to have gas wells. And when Range came here and

  • drilled the wells, they told us everything that they would do.

  • And they did what they said.

  • It was really exciting for a lot of the people around here that owned

  • their mineral rights.

  • Bonnie and Rich didn't feel comfortable sharing how much they've made from

  • their gas leases.

  • But according to documents CNBC has analyzed, it's significant.

  • They've since bought two farms worth nearly 2 million dollars.

  • You have the ability to essentially pay someone for the environmental

  • risk, which is as much about the problems under the surface as about on

  • the surface, such as, for example, from all the trucks and all the guys

  • working on the oil that you don't really want those people around if you

  • have the choice or unless you're paid.

  • In the U.S., because you own the mineral rights, you essentially get very

  • well paid to take that environmental and personal risk.

  • Bryan Lakonich is also a Washington County resident with a gas lease.

  • They sold it as the new Saudi Arabia of the United States, western

  • Pennsylvania. Your kids aren't going to have to go to the Middle East to

  • fight wars again.

  • For having two boys of age, now 18 and 19.

  • It felt wonderful that we could be energy self-sufficient.

  • So when the company came to me with four people in my living room here and

  • said, hey, you're looking at 8 to 13 million dollars in the first three

  • years. I said, where do I sign?

  • Would you like to put it on my front porch?

  • Bryan's lessee is Chevron.

  • His contract included a $25,000 signing bonus and a royalty payment that

  • was $12,000 at its peak to now between $500 to $800 a month.

  • I used a nice few acre orchard here and I used to plant tomatoes, peppers

  • and vegetables here.

  • Every week or so, I'd go up on the pad and talk to them and hang out.

  • I was the cheerleader, you know, I wore my boots and my helmet.

  • That particular day I carried a camera.

  • Accurate date is 12/17/12.

  • And what you can see here is the frack ponds.

  • They pulled the liners out of them and left the polluted material right on

  • the ground. They pumped the other one out, pulled the liner, left the wet

  • soil, and they were in a rush to fill this in.

  • But what I found was a trash pump in that pit pumping water out of there

  • onto my own property.

  • This wasn't trucked out.

  • Here's your liners right there on the ground.

  • That's not permitted.

  • That's toxic.

  • They never restored to site, never so much water runoff that it came down

  • against my house and fractured the foundation and actually pushed this

  • house about three inches.

  • Bryan made these allegations in dozens of complaints he filed with the

  • Pennsylvania Department of Environmental Protection, or DEP.

  • I've had six years of water testing already.

  • Still, DEP and Chevron stand firm that the issue with Bryan's drinking

  • water is not a consequence of gas drilling on his property.

  • Chevron told CNBC that Bryan's water quality is about the same now as

  • before the wells were drilled and that the chemical composition of his

  • water is distinctly different than the water from their operations.

  • It also appears that DEP was aware of Chevron's alleged lack of oversight.

  • According to documents CNBC has reviewed, they issued Chevron at least two

  • violations three days prior to Bryan's photos.

  • One for discharge of pollutional material to waters of Commonwealth and

  • the other for improperly discharging topol water.

  • Chevron corrected these violations.

  • According to an appraisal ordered by Bryan's insurance company, the damage

  • to the house was partly due to the runoff from the drill site.

  • However, Chevron's own report, done by another company, did not find a

  • link. This is a sample from Bryan's house and showing that it's...

  • John Stolz is a professor of environmental microbiology at Duquesne

  • University. He's an outspoken supporter of renewable energy and ran for

  • Congress in 2017.

  • This is a summary of all his, with the exception of the two samples that

  • my group took, it just shows you the pre-drill sample and then the DEP

  • water samples. Clearly as the months go on, you can see that bromide is

  • consistently there.

  • Bromide is one of those things that you don't typically expect to find in

  • freshwater aquifer or a water source, groundwater source.

  • When we ran Bryan's samples in this analysis, it was clear to me at least

  • that they did share some of the characteristics that you see that are

  • characteristic of oil and gas brines.

  • So that's important to me because this is what Bryan is talking about,

  • that, you know, these wells on his property affected his source of water.

  • That's a responsibility of our Department of Environmental Protection.

  • When they look at pre-drill testing and testing is done afterwards, if

  • there's been an alteration in the quality of that water, then replacement

  • is required. Good morning your honors may please the court.

  • My name is John Smith.

  • This man is John Smith.

  • He's considered somewhat of a legend in Washington County.

  • He's been before the Pennsylvania Supreme Court three times.

  • The DEP has a limited set of parameters and what they're testing for.

  • So they're not going to the site and asking the company, the drilling

  • company, what did you use?

  • What did you release? They're coming with a preconceived set of parameters

  • that they're testing for.

  • Bryan says his nine year old son, Ryan, has struggled with his health

  • since he was three.

  • A toxicology report shows that his asthma, headaches, coughing, tinnitus

  • and leg pain could be linked to the water contamination.

  • They haven't figured out why he's incontinent.

  • The acute medical therapy is indicated in the exposure.

  • Certainly we agree with more DEP and EPA involvement to address this

  • exposure. Our main recommendation from a toxic, logical and exposure

  • perspective is to stay away from the exposure source and in parentheses

  • the house slight air and water as much as possible.

  • How do you stay away from your home?

  • I'd like to know.

  • Bryan, what are you doing about all of this?

  • What can you do about this?

  • The level of documentation that somebody is going to need to bring, for

  • instance, water contamination case there again, should be, should start

  • with the DEP that the DEP does itss job successfully, then they will

  • provide the necessary documentation.

  • Why the numbers are, in my opinion, relatively low is the way the DEP

  • deals with these issues, is that if your water is contaminated and you can

  • work out a deal with the will and gas industry, the DEP will not issue a

  • citation or will not issue a notice of violation for that water

  • contamination. Ultimately, at this point, I just want to get a buyout and

  • move my son away from here and myself so we can try to get better and have

  • a normal life.

  • What's the amount that you ask for?

  • 100,000 a year for 6 years for the lack of use of my property and 70,000

  • to fix the house. What was their reaction when you said 670?

  • They reacted like that was fine.

  • They were going to take it back and give me an answer.

  • When folks see dollar signs behind stuff, they'll try and chase it all day

  • long. I would share with you that our industry is highly compliant, or

  • highly focused, and I think when it's all said and done with, you'll find

  • that most folks have been vindicated of any wrongdoing.

  • Clearly, the shale revolution's contributions are nuanced.

  • Abolishing the practice of fracking would have protected people like

  • Bryan, but also would have barred families like the Moores from profiting

  • off of their mineral rights.

  • Since renewables are not yet able to sustain American energy consumption,

  • banning fracking would take the U.S.

  • off the path to energy independence, and we would also return to importing

  • more energy. Consumers would likely pay a premium for importing oil and

  • natural gas, but would be protected from the potential environmental harm

  • caused by fracking.

  • We're really stuck right here and we've got to see it through.

  • Hopefully it doesn't kill us while we're doing it.

  • One state senator proposed a constitutional amendment to ban the

  • procedure, while others proposed adding a tax on the citizens to help

  • build out new infrastructure.

  • The Pennsylvania attorney general's office is pursuing a criminal

  • investigation of environmental crimes in Washington County, Pennsylvania,

  • as it relates to the oil and gas industry.

  • In an e-mail to CNBC, the AG's office did not confirm and declined to

  • comment. On the national level, in 2019, the Trump administration

  • announced plans to allow fracking on over a million additional acres of

  • public and private lands in California.

  • Presidential candidates Senators Elizabeth Warren and Bernie Sanders have

  • both publicly called for a nationwide ban on fracking.

  • However, former Vice President Joe Biden has said he would not ban

  • fracking and does not oppose new drilling on federal lands.

  • In a CNN town hall on climate change, Biden said he would examine existing

  • fracking sites to see if they are safe, but that states have control of

  • their lands. We could pass national legislation, but I don't think we

  • would get it done. The development of fracking has changed the debate on