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Reporter: Documents Show Years of BP Neglect.

ProPublica reporter Abrahm Lustgarten uncovered internal documents from BP that he says point to the company's repeated disregard for safety and environmental rules. Lustgarten says the documents indicate BP was aware of problems as early as 2001.

21:37

Other segments from the episode on June 10, 2010

Fresh Air with Terry Gross, June 10, 2010: Interview with Abrahm Lustgarten; Interview with Josh Fox.

Transcript

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Investigating BP's Years Of Neglect

TERRY GROSS, host:

This is FRESH AIR. I'm Terry Gross.

Important news about BP was broken this week by my guest, Abrahm Lustgarten, an
investigative reporter for ProPublica. He got access to three confidential BP
documents about internal BP investigations over the past decade warning senior
managers that the company had created a culture of disregard for safety and
environmental rules and risked a serious accident if it did not change its
ways.

These reports, from 2001, 2004 and 2007, were the product of an internal panel
of consultants and lawyers hired by BP to assess its HR problems and
accusations of safety and mechanical problems. The reports were given to
ProPublica by a person close to BP who believes the company hasn't done enough
to address safety problems.

Lustgarten's article about this was published Tuesday in the Washington Post. A
longer version is on the ProPublica website. Lustgarten reports on the oil and
gas industries for ProPublica.

Abrahm Lustgarten, welcome to FRESH AIR. So looking at some of the safety and
mechanical problems discussed in these internal documents, are there any
patterns that emerged?

Mr. ABRAHM LUSTGARTEN (ProPublica): There are. They're actually strikingly
consistent, and that was the first thing that jumped out to us. And those were
internal criticisms for a lack of accountability in the company; lack of
support for workers at BP and at BP's contractors, a lack of support for
workers to complain about safety failures that they were witnessing or for
inspectors to report problems that they were noticing in BP equipment; a
consistent emphasis of production over safety and maintenance and environmental
compliance, meaning they were putting profits ahead of safety; and finally, a
systematic disregard for maintenance of their equipment, a process called -
that they called run to failure, where they would use the equipment for as long
as possible while investing as little effort and money in maintaining it as
possible.

GROSS: Give us an example of how these documents show that there were times
when BP put profits over safety.

Mr. LUSTGARTEN: A 2001 report from BP mentions that the company had not been
maintaining its as-built design documents, and these are essentially final
engineering documents and drawings to make sure that equipment was built to
specifications, that it was actually constructed to work the way that it was
originally intended to and functions properly.

You ask just about anybody in the oil and gas industry or in industry outside
of oil and gas, and they will describe these as-built documents as absolutely
crucial to proper functioning of equipment and thus to safety.

We found that just a slight mention of this as a problem in 2001 in Alaska, and
then it was repeated by a whistleblower, Kenneth Abbott(ph), who actually works
in the Gulf of Mexico on a - or worked on a rig called the Atlantis, another BP
rig.

And he is also complaining that BP has not maintained as-built drawings for
thousands of pieces of equipment on that Atlantis rig, and thus the rig is not
equipped to operate safely.

GROSS: Aren't there also suggestions in the documents that you got access to,
the BP documents, that show that BP or its contractors falsified safety and
inspection reports?

Mr. LUSTGARTEN: There's a number of accusations throughout the reports. The
reports themselves were very careful to diplomatically approach this topic.
They start with a disclaimer that says they did not thoroughly investigate
those claims and they could not reach a final conclusion.

However, they go to great lengths to repeat the accusations that were made by a
number of workers, and the authors of the reports tell me that the inclusion of
that information in the reports themselves, given the internal culture of BP
and the seriousness of that information, was a great recognition of that as an
internal problem.

Now, what we heard from whistleblowers and what's mentioned in several parts in
the reports ranges from what workers call pencil-whipping, which is essentially
going out into the field and quickly filling out inspection forms with a great
deal of information faster than you could actually do if you were carefully
doing the inspections themselves.

One whistleblower told me that he found a colleague had conducted 2,500
inspections on a piece of pipeline over the period of a weekend, and this is in
a remote area where each inspection point entails, you know, driving a pickup
truck for a couple rough miles from point to point, and the volume of
inspections that he reported back was simply improbable.

Others have consistently reported both the false - accusations of falsification
of inspection reports, or skipping them entirely.

GROSS: And so the documents that you got were gotten from a whistleblower.
You've gotten other information from whistleblowers within BP. How are
whistleblowers within the company treated? What did you learn about that?

Mr. LUSTGARTEN: The one person that we discuss in our story, his name is
Stewart Sneed, and he had consistent problems over a number of years that
culminated in 2006, when he found a fault on the pipeline.

He actually found a several-inch-long crack in an oil transit line, and nearby
workers were shaving and buffing that line and creating a whole flurry of
sparks and doing some pretty aggressive construction work on the pipeline. And
he ordered the work to stop.

The next morning, in a staff interview, by several accounts of colleagues and
investigators, Mr. Sneed was harassed by his supervisor, was kind of made fun
of for being the overly diligent one or the super- cautious one that nobody
wants to work with because it might just slow things down.

And a couple weeks later he was in the field and jumped over a puddle, jumped
over a little stream on the Alaskan tundra to get back to his truck, and that's
something that, you know, the BP safety guidelines, employee handbook, says not
to do. That was grounds for firing this person.

BP investigators who looked into the case later determined that Mr. Sneed was
one of the best, one of the most diligent and attentive of the safety
inspectors that were on staff at that time.

GROSS: Now, you write that over the past 10 years BP has paid tens of millions
of dollars in fines and has been implicated in four separate instances of
criminal misconduct. And until now BP has fended off such a penalty by
promising to change. What kind of penalties might BP be facing this time
around?

Mr. LUSTGARTEN: The greatest piece of leverage that the federal government
seems to have against BP is the option of debarment, and that is to cut off BP
from its federal contracts, and that means not only its fuel sales to the U.S.
military, which are quite substantial, worth several billion dollars, but
potentially its gas leases, its oil and gas leases on federal lands, both
onshore and offshore.

And those leases are a form of federal benefit, and they also could be
jeopardized by the process of debarment. In the case of a criminal conviction,
especially under the Clean Air Act and under the Clean Water Act, two of the
key environmental laws at play here. Debarment is an automatic process, but it
happens in a localized manner.

So for example, after the 2006 bill on the Alaska pipeline, that facility was
debarred. BP then went into a process of negotiating with the federal
government to find some mutually agreeable solution or settlement agreement
whereby they would continue to operate on a probationary level.

What's at stake now is that the company's operations as a whole, not just its
single facility in Alaska or its single facility in Texas, could face
debarment. There's been very little indication yet from the Environmental
Protection Agency, which is the lead government agency on making that decision,
on whether they will actually take this step. But we hear that all signs point
to very serious consideration within the Obama administration and the
Environmental Protection Agency of debarment of BP.

GROSS: So debarment of BP is one possibility. Another possibility is that BP
will face criminal charges. What would that mean?

Mr. LUSTGARTEN: A criminal conviction in the Gulf of Mexico would be
particularly important because BP has a track record of convictions already. It
received a criminal, a felony conviction after an illegal hazardous waste
dumping incident in 2000 in Alaska. There were criminal convictions after its
2005 Texas City refinery blast that killed 15 workers, and also after the 2006
Prudhoe Bay pipeline spill.

There's also a deferred settlement, which for the purposes of debarment counts
as a criminal conviction after BP's gas price fixing scandal in the late 2000s,
in 2007. So another conviction in the Gulf would be quite a rap sheet for BP at
this point.

GROSS: Meanwhile, BP has used dispersants, chemicals, to try to try to dissolve
the crude oil in the Gulf, and the purpose of this is, I guess, to - in part to
make oil more soluble in water. You say that BP has bought up about one-third
of the world's supply of dispersants.

There's been a lot of environmental concerns about what the dispersants are
going to do to life in the Gulf, and I'm wondering what you have learned about
the environmental impact of the dispersants that have been used.

Mr. LUSTGARTEN: We took a quick early look at the use of dispersants a couple
of weeks ago when the spill had just begun. Even at that point, before the
controversy had exploded, if you will, around the use of dispersants, no one
that we spoke with, whether in industry or in the environmental community,
represented the use of dispersants as anything other than a choice between two
evils.

It is essentially a decision to keep the oil from running on the surface and
running ashore, where it's both visible and impacts tourism and kills seabirds,
in exchange for keeping it in the water column.

Nobody claims that it makes the oil go away, and nobody claims that it makes it
less dangerous. What it does by staying in the water column, it, according to a
National Academy of Sciences report that we relied on, it can affect early
development of marine species like shellfish, mussels and oysters, for example,
and even the smaller microorganisms that eventually serve as food for those
shellfish. It can damage coral reefs and essentially poison the bottom end of
the food chain and the lower end of the seafood food chain as well.

There's a whole lot of questions, and what we're seeing now is - now that
several more weeks have passed - is that the use of dispersants in the Gulf is
unprecedented. It's the most that's ever been used in the United States,
perhaps anywhere in the world. It's the deepest that it has ever been applied,
and every day we're hearing more about these large, invisible, undersea plumes
that would be carrying not only the original contaminants of the oil but also
whatever chemicals are added to it in the dispersants themselves underwater,
wherever they may go or end up.

GROSS: So can you explain a little bit more what the dispersants are supposed
to do?

Mr. LUSTGARTEN: The dispersants essentially take the oil from something that
tends to glob together and stick on the surface, where it can travel in two
directions, and separate it into much, much smaller rivulets of oil and
separate into three directions, where it can essentially move laterally on the
surface, as well as down into the water column itself.

It's like taking a large bubble and blasting it into the tiny carbonated
bubbles of a glass of soda. The intention is not only to make the oil less
visible but to aerate it, to make it more dilutable and actually to bring it to
the surface in a form where it can also evaporate more readily and lose some of
its most potent contaminants.

What we're actually seeing now is that because the dispersants are holding the
oil and the contaminants so far below the Gulf surface, that that evaporation
isn't happening at all. So one of the key functions, intended functions of the
use of dispersants, seems to not be working.

GROSS: The Bush-Cheney administration had a reputation as being a very oil-
friendly administration. Both President Bush and Vice President Cheney had
worked in the oil industry. And that was also a very deregulation-oriented
administration. So I'm wondering if either of those two things comes into play
in your analysis of what happened with BP in general and with BP in the gulf in
particular.

Mr. LUSTGARTEN: The cultural problems that we have identified with BP
undoubtedly go back far longer than the Bush years. BP has had difficulty
maintaining its operations and has had problems throughout the years before
Bush came into office.

However, those years were notorious for relaxed oversight of the oil and gas
industry and a presumption that the most efficient form of regulation was to
allow the industry, to allow BP to - essentially to regulate itself.

So the government culture at the time was to take a step back and trust BP's
expertise and trust BP's own profit motives to essentially safeguard their own
operations.

But what we see on a much broader scale is an industry that is completely
intertwined with the agencies that regulate it, an industry that keeps its
technological information, its guidelines, and the deep technical understanding
of what it does very close to chest and which government regulators can't
always keep up with and don’t always have the laws to keep up with, and thus
consistently maintains the upper hand.

And you have regulating agencies like the Minerals Management Service, and in
some other cases the Bureau of Land Management, who tend to defer to the
companies, encourage them to use best practices and hope that they are using
them.

GROSS: My guest is Abrahm Lustgarten. He reports on the oil and gas industries
for ProPublica. More after a break. This is FRESH AIR.

(Soundbite of music)

GROSS: If you're just joining us, my guest is Abrahm Lustgarten, and he's an
investigative reporter for ProPublica. He's been investigating oil and gas.

On Friday, June 4, there were three natural gas wells in northwestern
Pennsylvania that exploded, and there was a 75-foot plume in the air. I think
this might be a wakeup call to problems in the gas industry. People have been
very focused on the oil industry right now. But there's a lot of issues in the
gas industry.

So let's start with this explosion. Do you know what was in that 75-foot plume?

Mr. LUSTGARTEN: It was a mixture of what the industry calls produced water,
which is essentially naturally occurring water from deep below in the geologic
formations where the gas exists mixed with chemicals that the drilling
companies inject as part of the drilling process, as well as hydraulic
fracturing fluids, which is another suite or mixture of chemicals and water and
sand that the companies use in the drilling process.

GROSS: So there were - was like a million gallons or something of this stuff
that went down the side of a mountain?

Mr. LUSTGARTEN: Yeah, each well that is fractured - that's the process that the
drilling companies use to break apart the rock deep underground and release the
gas - can use as much as five, seven million gallons of this fracturing fluid.
In the blowouts in northern Pennsylvania last week, I read that a million
gallons of this fracture fluid was sprayed into the air, wound up in a local
spring and flowed into some local creeks there.

The state department of environmental protection said that it was not a water
contamination concern, but mostly because that area was so rural that the
pollutants were going to be diluted sufficiently before they reached any place
where they could actually threaten people. It doesn't necessarily mean that
that the chemicals themselves aren't dangerous.

GROSS: Tell us about the process of hydraulic fracturing, known as fracking(ph)
for short, a relatively new process that's used to extract the gas from rock
formations.

Mr. LUSTGARTEN: What you have are large deposits of gas dispersed in tiny
bubbles locked in the rock. It could be two, eight, twelve thousand feet
beneath the surface.

And in hydraulic fracturing, they drill a well, and they then inject under
enormous pressure a mixture of water, sand and hydraulic fracturing chemicals.
The pressure breaks apart the rock. It creates a series of faults and fractures
that lets these trapped little bubbles of gas come out and then - and flow back
up to the surface.

The chemicals are used to essentially lubricate the well and control the
viscosity of the fluid. It's a highly engineered technical process, but the
chemicals would, for example, allow a very thick, gel-like fluid to be injected
but then on the turn of a dime be turned into a very viscous, thin fluid so
that the gas can move out readily past it.

GROSS: So give us a sense of how much water is actually - how much, like,
chemical water is actually used in this process and what happens to the water
after it's used to create cracks in the rock formation.

Mr. LUSTGARTEN: Yeah, well, the industry tends to portray this fluid, this
mixture, as almost entirely water, and they say that less than one percent of
the mixture consists of these chemicals.

However, the volume of water is so great, is so large, that when you look at a
net volume of chemicals, in many of these wells it could be 10,000 gallons,
20,000 gallons of toxic chemicals that are being injected down into the earth.

In many cases, the vast majority of those fluids are left underground. For
years the industry said that they were almost entirely removed and properly
disposed of.

What we learned, especially as drilling has spread across New York and
Pennsylvania in the Marcellus Shale, is that as much as 85 percent of those
fluids can be left underground.

And that raises questions about where they ultimately go, how effective the
geology is in locking them in or whether they can migrate through underground
fractures and faults and into drinking water supplies.

GROSS: Well, you know, there's this new documentary called "Gasland," and in
that documentary the filmmaker Josh Fox shows somebody setting their tap water
on fire. The water comes out, and this guy holds a cigarette lighter to it, and
the tap water just kind of explodes. And then the filmmaker does it himself,
and the same thing happens.

Is that something that you've witnessed in your travels, investigating the
impact on - of this fracking water on communities that rely on wells and local
oil, where the water, it seems, has been infected by the fracking water?

Mr. LUSTGARTEN: It is. I believe that footage comes from a home in Fort Lupton,
Colorado, a small town just outside of Denver, where natural gas is being
drilled.

One of the most common problems that you find in gas drilling areas is the
seepage of methane. Methane is the natural gas that is being extracted. But
depending on how the well is constructed, and maybe defects in the geology,
that gas can escape and seep through the ground and wind up in private wells or
private drinking water supplies or in aquifers or in some case can bubble right
up to the surface.

When you see in "Gasland" tap water being able to be lit on fire, that's the
methane in that water, and it is a sign of contamination. It's not exactly the
same as the fracturing chemicals, but it's very significant because one of the
arguments that the industry makes concerning the use of the fracturing
chemicals is that it cannot migrate underground.

Now, if the gas can be released and travel through these underground faults and
fissures, in some cases for many thousands of feet, then scientists believe
that the fracturing fluids will be able to migrate as well.

GROSS: Abrahm Lustgarten reports on the oil and gas industries for ProPublica.
We'll talk with the director of the documentary "Gasland" in the second half of
the show. I'm Terry Gross, and this is FRESH AIR.
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Josh Fox: Living In The Middle Of A 'Gasland'

TERRY GROSS, host:

This is FRESH AIR. I'm Terry Gross.

What would you do if you were offered a lot of money by a gas company in return
for leasing the right to drill on your land? That was the position my guest
Josh Fox was in. His family's land is on the Delaware River Basin, on the
border of New York and Pennsylvania.

When the offer was made, he didn't know anything about the drilling process
known as hydraulic fracturing, or fracking, a process which was just described
in our show by reporter Abrahm Lustgarten. It involves high pressure injections
of millions of gallons of water, chemicals and sand into underground wells.
This causes the rock layers deep underground to crack so that natural gas flows
up the well.

Fox decided to investigate what happens to those toxins and how they affect
communities that said yes to the gas companies. So he took his camera to over
20 states, where gas companies have been fracking. His new documentary, called
"Gasland," won the Special Jury Prize for Documentary at the 2010 Sundance Film
Festival. It will be shown on HBO Monday, June 21st.

Josh Fox, welcome to FRESH AIR. What was the offer the gas company made to you?

Mr. JOSH FOX (Director, "Gasland"): We were offered about $100,000 to lease
19.5 acres of my family's house and land in the Upper Delaware River Basin of
Pennsylvania.

GROSS: And what did the gas company tell you about what impact this would have
on your land and on your life?

Mr. FOX: They say very little about the actual impacts. They talk to you about
how much money you're going to make. They say, listen, we might not even drill.
We don't know if there's actually gas here. It's going to be a fire hydrant in
the middle of a field, very, very little impact to your land. You know, you
won't hardly know we're here.

Within my family, there was a little bit of debate about this. I think at
first, my father was interested in leasing because he was interested in the
money. And I said look, I think I have to look into this. Give me some time to
go ahead and get the facts.

GROSS: So you traveled around to see how this process hydraulic fracturing to
get out the gas affected other communities and other homeowners. What were some
of the most alarming things that you saw?

Mr. FOX: Well, you know, the first place I went was a town called Dimmick,
Pennsylvania, which was about 50 miles from me, and I'm right near the New
York, Pennsylvania border. What I found there was absolutely astounding. I
found people who had leased for very little money - $25 an acre. And when I got
to that town, the first thing that I heard about was a woman name Norma
Fiorentino. Her water well exploded on New Years Day of 2009, and it sent a
concrete casing soaring up into the air and scattered debris all over her yard.
And then other people started to notice that their water was bubbling and
fizzing, some of their water had been discolored.

By the time I got there just a month later, there were children who were
complaining of getting sick, animals who were getting sick, and the whole place
was pretty much laid to waste. I mean, there was like gas well pads everywhere,
incredibly heavy truck traffic. It seemed like normal life had just been turned
completely upside down. And I heard all these reports of people who could light
their water on fire.

And I saw water tests which indicated lots of natural gas in the water, heavy
metals in the water, which are - I've later found out to be associated with the
drilling muds, which are the lubricants for the drill bit that punctures down
through the aquifer. When you're subsisting off of well water for your whole
life, your water is a point of pride. And I think everybody was shocked that
their water, which had been great, would - had turned into something that they
couldn't rely on and that they were afraid of.

GROSS: Now, you did find places where the tap water could be set on fire. Where
did you go to find that?

Mr. FOX: Well, that was in Colorado. Reports of water being flammable right
after a hydraulic fracturing process were, actually, I found out fairly common
across the country, and also in Canada. And I'd seen pictures of it from a
woman in Alberta. I'd heard about it in Louisiana and Wyoming, Texas, Colorado.
But generally, what happens is those people's water wells are disconnected, and
then the gas company trades a non-disclosure agreement for a water supply. So
it says you can't tell anybody what happened, but we're going to give you
replacement water for however long as you want.

So we had to kind of scramble to catch a place that was - that that had just
happened, and that was in Wells County, Colorado, where there had been a lot of
fracturing. There's a lot of gas wells. It's just northeast of Denver, and
there were five or six different families that we saw lighting their water on
fire right out of the tap. In fact, I did it myself, and it just turns your
whole world upside down when you can turn the faucet on and then stick a
cigarette lighter under it and just - you get this explosion of flame.

GROSS: Yeah. It's like the flames spread through the whole sink. I was
surprised that the guy's arm didn't burn up. But he knew to get it out really
quick, I guess.

Mr. FOX: Yeah. Well, it's a kind of hilarious scene because the first thing -
you know, the first thing that happens when you see somebody lighting their
water on fire is just like your brain just kind of goes crazy. And then you
start to think, well, what happens if they had a fire in their house? How would
they put it out? And then the thoughts of - some of these people were showering
with the lights off because they were afraid if they turned on the light bulb,
if there was a spark from the light bulb, they would blow up their shower. It
was really intense.

But at the same time, there's a kind of gallows humor that takes over, because
I think they'd had so little ability to appeal to any government agency about
this problem. You know, they were continually not being able to find a
government agency, whether that was the State Department of Environmental
Protection, or the - in Colorado, the Colorado Oil and Gas Conservation
Commission - generally, were telling them what was happening to them was not
happening to them.

GROSS: In one of the scenes in your documentary "Gasland," there's a woman who
has been finding small, dead animals and toads, you know, in her area. And
she's alarmed and thinks that it might be a result of contaminated water from
the fracking process. So she decides to take some of these dead creatures,
freeze them in her freezer until she can get them autopsied, and she seems so
totally creeped out by this, but she feels like she has to do it. Can you talk
a little bit about her?

Mr. FOX: You're talking about Lisa Bracken in Colorado and Divide Creek.
Basically, the gas industry came in, took over large sections of her property.
What happened was she discovered that the creek - Divide Creek - was bubbling
and fizzing. And her father went down there, and they discovered that they
could light the creek on fire. And that was known as the Divide Creek seep. The
fracture hit some other natural fizzers in the ground after the fracking, and
that exploded plumes of benzene, toluene, methane into the creek.

They complained. There was a settlement. But, basically, dead animals kept
showing up around the creek. The seep occurred again in 2008 because the
companies were allowed to go back in and continue to do the fracking. And so
she was so frustrated that she started to collect these animals, freeze them to
try to deal with how to prove that this was happening because of the gas. She
wanted to find out what chemicals were killing these animals.

The burden of proof in this situation is on the citizen. Even though the
chemicals could never be in the environment any other way, it's still up to the
citizen to prove that the gas company got the chemicals in their water, which
is virtually impossible to do because you need a hydro geologist. You need
chain of custody. You need things that citizens don't have access to.

But in a sort of desperation, she's picking up these animals, freezing them in
her freezer, trying to send them off to get autopsied. She couldn't figure out
where to get them autopsied or how to identify the things that had killed them.
But, you know, she said she had them in her freezer, you know, and you see that
in the film. And it's very eerie - it's almost like the David Lynch section of
(unintelligible). You know?

GROSS: That's right.

Mr. FOX: She comes out, and she's like, all right. Well, here you go. And she
unfolds all these dead birds and a rabbit. And apparently, they were just in
her freezer. And I ask her, you know, Lisa, did you ever think you were going
to be freezing animals, dead birds and this kind of stuff, in your freezer? She
says no. This is the creepiest thing I've ever seen, you know. And, again, it's
that strange sense of we're living a nightmare. We've got dead rabbits and
birds and dead crawfish in the back of our freezer behind the hamburger meat
wrapped in Wal-Mart bags because simply, we're at the end of our rope. We don't
know what to do.

GROSS: My guest is Josh Fox. His new documentary is called "Gasland." We'll
talk more after a break.

This is FRESH AIR.

(Soundbite of music)

GROSS: My guest is Josh Fox. He made his new documentary "Gasland" after his
family was offered a lot of money by gas companies that wanted to lease the
family's land to drill for gas.

You have decided not to lease you land to a gas company for hydraulic
fracturing.

Mr. FOX: Mm-hmm.

GROSS: What about your neighbors? Do you have a lot of neighbors who are saying
yes to the deal?

Mr. FOX: Oh, yeah. We're completely surrounded by people who have leased. The
difficult thing about this is that it's a decision for a whole community that's
left up to certain individuals to decide what they want to do. Because if the
neighboring property next to me is leased and I want to sell my house, I'm in a
very difficult situation. It's very hard for me to get financing from a bank
because I'm now adjacent to an industrial zone. There also is, in many states,
what's called compulsory integration, or forced pooling. So if 60 percent of
landowners in one 1,200-acre parcel lease, you're leased, which means they can
take the gas from out - from under you. You're forced, basically, to sign the
lease. You know...

GROSS: Wait. Wait. Wait. You're forced to sign a lease?

Mr. FOX: Yeah, in many parts of the country. It's true in New York. In
Pennsylvania - they're contemplating implementing forced pooling in
Pennsylvania. But, you know, in Dee Hofmeister's case in Colorado, where a
person I interviewed in Garfield County, Colorado, who was made very sick by
this cloud of gas that was in her house when she came home from her vacation in
Minnesota and she ended up going down and in the hospital for quite a long time
and has neuropathies and other kinds of brain damage, very big problems, she
was forced pooled.

Basically, the gas company came and said look, you have no choice. You can
either sign this lease right now and take some money from us, because we're
taking the gas, or you can not sign this and we won't give you anything. And
there's a lot of intimidation tactics like that that we've been hearing as we
go around the country.

Just last night in Dimmick, we were showing the film at a small movie theater,
and people said the first time the land men came, they were very sweet, and
they asked us to sign and we said no. The second time they came, they offered
us more money. The third time they said well, you know, what? We're going to
take your property, anyway. You might as well get some money and some other
things which I can't repeat. So, you know, there is this kind of being forced,
whether that's from the land men pushing you, or there is actually this law
that says if 60 percent of landowners in 1,200 acre parcel - in many states,
and this is state- to-state - lease, then you're leased. Period.

GROSS: One of the things you were trying to figure out is does the fracking
fluid that can seep into the ground and into groundwater and do the gases that
are released during the process, are these things affecting the health of
people who live near the gas wells? So what did you find about health problems
that people thought were likely caused by the fracking process, although they
probably couldn't necessarily prove it?

Mr. FOX: Health complaints are happening all over these unconventional gas
drilling areas. We know what the chemicals do to you, and we know what symptoms
we're seeing. We're seeing neuropathies. There are forms of cancer. We're
asking for a health study to be done and a moratorium so that people can - so
that they can be investigated what exactly is happening with people's health.

Right now, all we have is this is what's happening to people. We don't know if
it's a result of the air, if it's a result of the water. But we do know what
those kinds of chemicals do to you. And we're seeing those affects.

GROSS: You traveled to some key states around the country where hydraulic
fracturing is already happening. You've told us about some of the problems that
you've witnessed. Were there any communities where things seemed to be going
well and the landowners who had agreed to lease to the gas companies were happy
with their decision?

Mr. FOX: You know, it's a great question. I've been doing a lot of public
appearances with the film, and I've actually asked the gas companies: Listen,
if you've got an ideal town where you've got 100-plus wells and everything is
going swimmingly well, nobody's upset and you don't have these problems with
air pollution and water contamination and health problems, I want you to take
me to that town. I want a guided tour. So far, no responses to that. I don't
think such a town exists. I think what we're doing is going from place to place
and contaminating those water supplies. I haven't found that town, and, you
know, we were looking for it.

GROSS: Josh Fox, thank you so much.

Mr. FOX: Okay. Thank you, Terry.

GROSS: By the way, I think I used to go to summer camp near where you are.

(Soundbite of laughter)

Mr. FOX: Oh, where did you go?

GROSS: It was in Wayne County, I'm pretty sure.

Mr. FOX: Oh, yeah. Well, there's so many camps in that area.

GROSS: Are there? Yeah.

Mr. FOX: Yeah. I mean, it's a lot of summer camps, and you'd be surprised at
how many of those summer camps are leasing.

(Soundbite of laughter)

GROSS: No. Wow. Really?

Mr. FOX: Oh, yeah. Well, listen, we're talking about...

GROSS: Wow.

Mr. FOX: ...65 percent...

GROSS: Wow. I never thought of that.

Mr. FOX: We're talking about 65 percent of Pennsylvania, 50 percent of New
York.

GROSS: Wow. So in...

Mr. FOX: We're talking about - even if the summer camps aren't leased, their
neighbors are leasing.

GROSS: So, you know, I never thought of that. So that means that, like, some of
the summer camps might actually become oil wells?

Mr. FOX: Well, no. Listen, what the gas company is saying is that you can live
where this is happening. You can go to camp where this is happening. If
watersheds are not off the table, schools are not off the table, summer camps
are not off the table, near hospitals is not off the table. You have close to
15,000 wells in the downtown and in the Fort Worth area, in the urban area, in
the country. This is everywhere. So it stands to reason if you could put it
next to somebody house and the gas company says that that's okay, you can put
it in the middle of a summer camp. You could put it in the middle of a lake.
This is - you can put it right on the banks of the Colorado River, which supply
all the water to Los Angeles. This is what we're seeing.

GROSS: Well, Josh Fox, I want to thank you very much for talking with us.

Mr. FOX: Okay, thank you.

GROSS: Josh Fox's new documentary, "Gasland," will be shown on HBO, Monday,
June 21st. He's currently touring with the film, showing it to audiences in
areas affected by gas drilling. You can watch clips from the documentary
"Gasland," as well as a map showing natural gas drilling areas in the U.S., on
our website, freshair.npr.org.
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Reporter: Documents Show Years of BP Neglect

TERRY GROSS, host:

We just heard about some of the damaging effects of the toxins used in and
created by the process of gas drilling called hydraulic fracturing, or
fracking. Let's bring back journalist Abrahm Lustgarten, who investigates the
oil and gas industries for ProPublica. This year he won a George Polk Award for
environmental reporting.

So one of the amazing things about the story of the use of hydraulic fracturing
to extract gas from rock formations is that any contaminants released by this
process are exempted from EPA regulation and from the Safe Drinking Water Act.
How did that happen?

Mr. LUSTGARTEN: In 2005, Congress passed the Energy Policy Act. This was the
culmination of the Bush administration's energy policy and the meetings that
Vice President Richard Cheney had under the Energy Task Force in early 2000 and
2001. The Energy Policy Act essentially created a loophole that exempted the
process of hydraulic fracturing from regulation under the Safe Water Drinking
Act. In some ways it was a clarification. The Safe Drinking Water Act is
intended to regulate any fluids that are injected underground.

The Safe Drinking Water Act stipulated that the fluids injected for hydraulic
fracturing are used in the production of a resource and are then removed and
therefore don’t constitute the disposal of fluids and therefore shouldn’t be
regulated under the Safe Drinking Water Act.

However you reason it, the net effect was that the exemption was created and
the EPA's authority to regulate the specific process of hydraulic fracturing
was removed. Ever since 2005, the EPA has not been able to invoke federal
regulations that govern what tests are done before the hydraulic fracturing
process is conducted, how the process itself is conducted, or examining what
impacts it has after it's been done.

GROSS: There was 2004 EPA study that said that fracking posed no risk to
drinking water, and that study helped lead to the EPA exemption in the 2005
energy bill. But you say in that 2004 EPA study, that there was some almost
collusion between the gas industry and the EPA on that.

Mr. LUSTGARTEN: Well, we filed for - under Freedom of Information Act, we filed
for papers and documents that led to the writing and publishing of that report.
And some of what we saw were emails and meeting notes that showed a direct
negotiation, in this case between Halliburton, which is one of companies that
conducts hydraulic fracturing in the United States, and the Environmental
Protection Agency.

As the EPA was deciding to represent its conclusions, was deciding how to word
its report, Halliburton had essentially asked that they not receive as much
intense scrutiny, as much inspection scrutiny from the EPA, in exchange for an
agreement to stop using diesel fuel in their hydraulic fracturing solutions.

Diesel fuel was one of the chemicals of greatest concern because it contains
benzene, which is a known carcinogen and was one of the most important
chemicals being used at the time for hydraulic fracturing and probably
presented some of the greatest threat to drinking water supplies. So there was
a little bit of a back and forth that was illuminated in the EPA's internal
documents before it reached that conclusion.

GROSS: So it was like a negotiation - a bargain.

Mr. LUSTGARTEN: It was a negotiation. The EPA signed a memorandum of
understanding. It was a voluntary agreement with Halliburton and Schlumberger
and BJ Services, which are two other companies that do a lot of the hydraulic
fracturing in the United States. It got their verbal and written promise not to
use diesel fuel, presumably in exchange for lighter regulatory scrutiny. But
the EPA in turn didn’t take away any hard and fast ability to enforce that
agreement. It's really a handshake agreement.

GROSS: So did the oil industry follow through on its agreement with the EPA and
stop using benzene?

Mr. LUSTGARTEN: We heard for years that that agreement had been voluntarily
complied with. I did a great deal of reporting with those companies, with BJ
Services and Halliburton, looking at what chemicals they were using in a
variety of situations and was consistently told that diesel fuel in particular
was not being used. Then we learned just a couple of months ago, in response to
some documents that had been submitted to Henry Waxman for one of his
inquiries, that in fact BJ Services and Halliburton had both continued to use
diesel fuel in large volumes at some of their wells.

It's not clear yet. That committee has not made all of its information public
or followed up on the issue, but at the time, Halliburton and BJ said that it
was an oversight, that it was not being regularly practiced across many of
their well sites but had apparently been used at a few. But I think that that
shows the lack of ability of the EPA, because it doesn’t have authority to come
and check to make sure that diesel fuel is not used for hydraulic fracturing.

GROSS: Gas companies are trying to buy leases to drill on as much land as
possible, that the companies think might have gas. And so, they're going to
landowners in many states, now, saying give us access to your land so that we
can drill. It won't affect you, be no problem. What are the implications of
that, because a lot of landowners are saying yes and that means that the gas
companies are getting access to a lot of land in, you say, about 32 states?

Mr. LUSTGARTEN: Yes, in 32 states. It's a very interesting impact on these
local communities. And one of the things that is dramatically different about
natural gas exploration, as opposed to the ways that we’ve become familiar with
oil exploration, is that gas can happen, spread across a landscape in numerous
locations in small scale facilities. It happens closer to inhabited areas,
rural and urban, than any other energy extraction process has in the past. And
it tends to infiltrate the communities in which it happens, because it is
barely noticed at first and it seems to be low impact until it is large and up
and running.

Leasing of lands, what's happening now across Pennsylvania and New York, is an
extremely attractive prospect for these communities. These are places,
typically, with very low incomes who need an economic stimulus; Love the idea
of being paid perhaps millions of dollars for the equivalent of a gold rush on
their property. These are people who tend to readily believe the promises from
the oil and gas companies, that the impact will be low, that their water will
be safe and that they will make a lot of money and have been signing away
permission forms that allow the companies to come in and drill.

GROSS: But what are some of the damage that you’ve actually seen going to
communities where the drilling is already taking place?

Mr. LUSTGARTEN: Well, it's a broad range of impacts and it starts with
extension truck traffic on the roads. Typically, either new roads are built
into extremely rural or wilderness areas or existing roads are expanded. Trucks
represent constant traffic through some of these smaller towns, then the well
pads are cleared - five to seven acre pads - and then the drilling begins.

As the drilling happens, and through the hydraulic fracturing process, you have
150-foot tall derrick with bright spotlights on it running a large diesel
compressor engines that can be heard many, many miles away. It really turns a
pastoral landscape into an industrial landscape. You may have to peek around
the corner or through the woods to see, you know, a drilling derrick in rural
Pennsylvania. You will be able to hear it tens of miles away. And when there
are dozens of them operating at the same time it becomes sort of a background
din that permeates the landscape and the community.

At the same time, there is consistently underground impacts to water supplies
in these area and degradation of air quality as the result of both the
emissions from the drilling equipment itself, from the gas compressor stations
and also from evaporants(ph) from the waste fluids and the hydraulic fracturing
fluids.

GROSS: So what are some of your concerns about the larger impact that hydraulic
fracturing is having?

Mr. LUSTGARTEN: Well, they're several folds, but one of the most interesting
things that I found is that there is essentially no scientific understanding of
what happens to both the fractured rock and the chemicals that are left
underground after the rock is fractured. And look at a water constrained
future, a future in which reservoirs and underground aquifers are becoming
increasingly valuable, not just in the west but in the east and here we have a
process where extraordinarily large volumes of chemically contaminated water,
water that nobody would represent as being safe to drink or even necessarily
treatable to turn into drinking water and we're injecting it without a lot of
forethought, without a lot of study and with very little understanding of where
it goes and what its long-term ramifications might be.

When you couple those concerns with hundreds of reports of well contamination
across the United States, of both methane bubbling up into water and making tap
water flammable and other levels of heavy metals and in some cases, chemicals
in drinking water supplies, it points to questions that I think that regulators
need to answer before the drilling is allowed to proceed at the pace in which
it's been happening.

GROSS: Are regulators paying attention? We’ve talked about how fracking is
basically exempt from federal regulation now, you know, that the byproducts of
it are exempt. Is there an attempt to change that?

Mr. LUSTGARTEN: There is. There was a bill introduced last year in Congress by
three congressmen: Congresswoman Diana DeGett from Colorado and Jared Polis of
Colorado and Maurice Hinchey of New York. It's called the FRAC Act and it would
restore the EPA's authority to regulate fracturing if it chose to do so. It
wouldn’t mandate the agency to regulate fracturing. And it would also require
disclosure of the chemicals. The naming of chemicals that have either to been
kept mostly secret.

GROSS: Right. And is considered a proprietary brew, so that they don’t have to
disclose what the chemicals are that they're using in the process.

Mr. LUSTGARTEN: Exactly.

GROSS: Abrahm Lustgarten thank you very much for talking with us.

Mr. LUSTGARTEN: Thank you so much for having me.

GROSS: Abrahm Lustgarten reports on the oil and gas industries for ProPublica.
You'll find links to all of the articles mentioned on today's show on our
website, freshair.npr.org.

(Soundbite of music)

GROSS: I'm Terry Gross.

(Soundbite of music)

GROSS: Sean Hayes hosts the Tony Awards this Sunday and he's up for a Tony for
his performance in "Promises, Promises."

On the next FRESH AIR, we hear from Sean Hayes and from Burt Bacharach and Hal
David, who wrote the music for "Promises, Promises."

Join us.

(Soundbite of music)
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Transcripts are created on a rush deadline, and accuracy and availability may vary. This text may not be in its final form and may be updated or revised in the future. Please be aware that the authoritative record of Fresh Air interviews and reviews are the audio recordings of each segment.

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