Last week, Los Angeles joined the growing list of cities and towns banning, at least temporarily, gas and oil fracking within their borders. The main concerns are over public health and water resource preservation, but economic impacts and property values also come into play. The news comes on the heels of yet another article in the mainstream press that paints a picture of the fracking industry as a swelling bubble that will make a loud and messy noise when it pops.
Part of the reason why the fracking industry is so bloated right now is something that our friends over at Fuel Fix have dubbed the “Red Queen” effect, after the fictional Lewis Carroll character, so let’s take a look at the Los Angeles decision in that context.
The “Red Queen” effect
Fracking is short for hydrofracturing, a formerly unusual but now routine way to shake gas and oil deposits loose from shale formations by pumping a chemical brine underground.
The “Red Queen” effect refers to the relatively short lifespan of fracking wells, which tend to reach peak production earlier than conventional wells. The industry is forced to drill thousands of new wells annually to compensate for the dropoff (Fuel Fix estimates about 6,000), and that’s not even accounting for new production incentives that could arise if the Obama administration approves more export licenses.
The result of all this activity is more pressure on the industry to seek new drilling sites or re-explore disused sites, including those in heavily populated urban areas.
The Los Angeles fracking moratorium
That brings us straight to Los Angeles. As reported last Friday by Al Jazeera America, the Los Angeles City Council voted to establish a moratorium on fracking as well as other “well stimulation” activity within Los Angeles County.
The next step will be to have the city’s legal team craft an ordinance and set a date for the moratorium to go into effect.
The pressure is on to act quickly because, while LA might not appear to be a hotbed of drilling activity, there are in fact a number of active drilling sites within the city, and it is dotted with thousands of inactive sites that could be reactivated.
According to the Al Jazeera report, local activists have already taken note of fracking activity within Los Angeles, as well as an oil well treatment involving acid injection.
Hopping on the fracking ban bandwagon
If and when the Los Angeles moratorium goes into effect, it will be the largest city in the U.S. to take that action.
Meanwhile, in the East Coast, the Delaware Watershed organization Keep Tap Water Safe has been keeping a running tab on activity on local fracking bans, as well as moratoriums and organized movements to ban fracking.
As of last month, the group’s list included the City of Dallas in Texas, Hawaii Island in Hawaii, New Mexico County in New Mexico, and scores of local governments in New York State.
Significant movement is also afoot in Pennsylvania. Late last year, the Pennsylvania Supreme Court affirmed a lower court decision striking down a new statewide zoning plan that would have prevented local governments from restricting fracking within their borders.
The fracking bubble swells…
Mainstream media has been warning about the fracking bubble for at least two years. In May 2012 we took note of the financial travails of the major fracking industry player Chesapeake Energy Corp. as reported by the New York Times, Reuters, and National Public Radio.
Last year Rolling Stone and The Wall Street Journal also chimed in on Chesapeake, as the focus of persistent weaknesses in the natural gas industry.
Also last August, Bloomberg added to the pile with an in-depth article on the negative impact of fracking operations on local property values. That includes properties that host fracking operations as well as their neighbors.
The latter point was underscored with darkly hilarious irony just last week, when it was revealed that ExxonMobil chairman and CEO Rex Tillerson–ExxonMobil is among the largest players in the fracking industry, if not the largest–sued to stop construction on a fracking-related water tower adjacent to his property. Part of the concern was truck traffic related to water transportation for fracking operations, in addition to the unsightliness of the 160-foot tower itself.
Just last week, Bloomberg chipped in again a real bombshell report on the rising cost of oil fracking wells, reiterating the point that fracking wells peak more quickly than their conventional counterparts, leading to pressure on the industry to drill thousands of new wells every year.
Image (cropped): by theilr