Fracking leaves property values tapped out

The oil and gas extraction process can be lucrative for homeowners, but it can also jeopardize their mortgages and ability to sell their homes.

By Jason Notte Wed 7:13 AM

Depending on where you stand and what's beneath the ground you're standing on, fracking is either paving the way toward American energy independence or dooming it to methane-addled water and man-made tremors.

The one certainty about fracking, however, is that it doesn't exactly do wonders for property values.

As reported by The Atlantic, mortgage lenders are becoming more cautious about approving loans for properties near fracking sites. Lawyers, real estate agents, public officials and environmentalists have noted that banks and federal agencies are revisiting their lending policies to account for the potential impact of drilling on property values. In some cases they are refusing to finance property with or even near drilling activity.Depending on where you stand and what's beneath the ground you're standing on, fracking is either paving the way toward American energy independence or dooming it to methane-addled water and man-made tremors.

The one certainty about fracking, however, is that it doesn't exactly do wonders for property values.

As reported by The Atlantic, mortgage lenders are becoming more cautious about approving loans for properties near fracking sites. Lawyers, real estate agents, public officials and environmentalists have noted that banks and federal agencies are revisiting their lending policies to account for the potential impact of drilling on property values. In some cases they are refusing to finance property with or even near drilling activity.

That's particularly problematic, considering that many home insurance policies do not cover residential properties with a gas lease or gas well, though all mortgage companies require home insurance from their borrowers. Part of the problem stems from uncertainty over the effects of the process itself.
The article goes on to say: 

The Federal Housing Administration's lending guidelines prohibit the financing of homes within 300 feet of a property with an active or planned drilling site. Mortgage lenders Fannie Mae and Freddie Mac also prohibit property owners from signing a gas lease or keeping hazardous materials on their property. Doing so puts their mortgages in "technical default."

While drilling companies tend to pay well for drilling rights, that's of little use to homeowners if  the property they're sitting on can't be sold or isn't eligible for a mortgage if it does.
Read the entire article: http://money.msn.com/now/post--fracking-leaves-property-values-tapped-out

A Texan tragedy: ample oil, no water

Fracking boom sucks away precious water from beneath the ground, leaving cattle dead, farms bone-dry and people thirsty                                                        

Suzanne Goldenberg in Barnhart, Texas  theguardian.com,                       Sunday 11 August 2013 

Beverly McGuire saw the warning signs before the town well went dry: sand in the toilet bowl, the sputter of air in the tap, a pump working overtime to no effect. But it still did not prepare her for the night last month when she turned on the tap and discovered the tiny town where she had made her home for 35 years was out of water.

"The day that we ran out of water I turned on my faucet and nothing was there and at that moment I knew the whole of Barnhart was down the tubes," she said, blinking back tears. "I went: 'dear God help us. That was the first thought that came to mind."

Across the south-west, residents of small communities like Barnhart are confronting the reality that something as basic as running water, as unthinking as turning on a tap, can no longer be taken for granted.

Three years of drought, decades of overuse and now the oil industry's outsize demands on water for fracking are running down reservoirs and underground aquifers. And climate change is making things worse.

In Texas alone, about 30 communities could run out of water by the end of the year, according to the Texas Commission on Environmental Quality.

Nearly 15 million people are living under some form of water rationing, barred from freely sprinkling their lawns or refilling their swimming pools. In Barnhart's case, the well appears to have run dry because the water was being extracted for shale gas fracking.

The town — a gas station, a community hall and a taco truck – sits in the midst of the great Texan oil rush, on the eastern edge of the Permian basin.

A few years ago, it seemed like a place on the way out. Now McGuire said she can see nine oil wells from her back porch, and there are dozens of RVs parked outside town, full of oil workers.

But soon after the first frack trucks pulled up two years ago, the well on McGuire's property ran dry.

No-one in Barnhart paid much attention at the time, and McGuire hooked up to the town's central water supply. "Everyone just said: 'too bad'. Well now it's all going dry," McGuire said.

Ranchers dumped most of their herds. Cotton farmers lost up to half their crops. The extra draw down, coupled with drought, made it impossible for local ranchers to feed and water their herds, said Buck Owens. In a good year, Owens used to run 500 cattle and up to 8,000 goats on his 7,689 leased hectares (19,000 acres). Now he's down to a few hundred goats.

The drought undoubtedly took its toll but Owens reserved his anger for the contractors who drilled 104 water wells on his leased land, to supply the oil companies.

Water levels were dropping in his wells because of the vast amounts of water being pumped out of the Edwards-Trinity-Plateau Aquifer, a 34,000 sq mile water bearing formation.

"They are sucking all of the water out of the ground, and there are just hundreds and hundreds of water trucks here every day bringing fresh water out of the wells," Owens said.

Read More: http://www.theguardian.com/environment/2013/aug/11/texas-tragedy-ample-oil-no-water

Feds approve third project to export US natural gas

Fuel Fix.com
  Posted on  August 7, 2013 at 6:10 pm  

 By  Jennifer A. Dlouhy

A ship sits at the Golden Pass import terminal, which is awaiting federal                                                                                                     approval to add an LNG export facility . (Golden Pass Products)

The Obama administration licensed a third company to broadly sell U.S. natural gas overseas on Wednesday, renewing fears that widespread exports of America’s bounty could spike domestic prices for the fossil fuel.

In conditionally approving exports from a $2 billion facility in Lake Charles, La., the Energy Department has now put U.S. companies on track to eventually export as much as 5.6 billion cubic feet of gas per day to Japan and other countries that aren’t free-trade partners with the U.S.

And 19 other export applications are still pending at the Energy Department, propelled by U.S. natural gas producers’ zeal to capitalize on growing demand in Europe and Asia.

Critics say the rush to export domestically harvested natural gas could cause U.S. prices to climb, hiking household energy bills and thwarting a resurgence of U.S. manufacturing.

“Each permit approval brings us closer to the point that would begin to harm the manufacturing renaissance,” warnedAmerica’s Energy Advantage, a group of industrial natural gas users, including Dow Chemical, that is fighting unfettered exports.

Study: Exports will have significant impact on US natural gas price

Sen. Ron Wyden, D-Ore., who heads the Energy and Natural Resources Committee, suggested the government should be more skeptical as it weighs future export proposals.

“With each new permit to send natural gas overseas, the Energy Department has a higher bar to prove these exports are in the best interests of American consumers and employers,” Wyden said.

READ MORE: http://fuelfix.com/blog/2013/08/07/feds-approve-lake-charles-lng-export-project/

Published on Friday, August 2, 2013 by Common Dreams

Tens of Thousands of Pipeline Miles at Risk of Pegasus-Style Rupture That Spewed Tar Sands Into Arkansas Town

Review of Pegasus pipeline found known 'manufacturing defects' likely cause of Mayflower oil spill

- Lauren McCauley, staff writer

Workers remove the ruptured portion of Exxon's Pegasus pipeline. (Screenshot: ABC Channel 7 News)The March 29 rupture of Exxon Mobil's Pegasus pipeline—which flooded a Mayflower, Arkansas neighborhood with over 200,000 gallons of tar sands oil—was likely caused by known "manufacturing defects," with grave implications for the tens of thousands of similarly built pipelines still in the ground and operating, according to a review released Thursday.

An examination of the 70-year-old Pegasus pipeline and its 22-foot-gash found that the pipeline failure "resulted from an original manufacturing defect of the electronic resistance welded (ERW) pipe," according to a spokesman from the Hurst Metallurgical Research Laboratory.

Citing an ongoing investigation, both Exxon and the Pipeline and Hazardous Materials Safety Administration (PHMSA) waited nearly a month after receiving the report before releasing the details to Arkansas newspaper Log Cabin Democrat Thursday.

Implications of the report are significant as it shows that pipelines "similarly manufactured, and in the same era as the ruptured line in Mayflower, are inferior and susceptible to failure," the Democrat reports.

A pipeline industry insider who declined to be named told Common Dreams that there are "tens of thousands of miles of pipeline in the ground and operating from the approximate vintage" as the Pegasus pipeline.

READ MORE: http://www.commondreams.org/headline/2013/08/02-7