Follow Ups: Fracking and Taxes

Fracking does not, repeat, does not harm underground water. But it can pollute surface water.

Frack me a river. A week ago, I noted how American Rivers had designated the Rappahannock River the fifth “most endangered” river in the United States on the grounds that the gas industry was showing interest in drilling in the Taylorsville shale basin beneath the river. Environmentalists claim that fracking is a hazard to drinking water, while industry groups say it is not. My take at the time: Who knows?

Now a Duke University study using sophisticated chemical tracing techniques has demonstrated that fracking has not contaminated groundwater in sample of 112 drinking wells in West Virginia, although accidental spills of fracking wastewater have polluted surface water. Fracking, or hydraulic fracturing, is a technique in which drillers inject pressurized sand, water and chemicals deep underground to fracture shale in order to release the oil and gas it contains. Environmentalists have long claimed that the procedure can contaminate water in underground aquifers.

“Based on consistent evidence from comprehensive testing, we found no indication of groundwater contamination over the three-year course of our study,” said Avner Vengosh, professor of geochemistry and water quality at Duke, co-author of a peer-reviewed study. States the press release:

Samples were tested for an extensive list of contaminants, including salts, trace metals and hydrocarbons such as methane, propane and ethane. Each sample was systematically analyzed using a broad suite of geochemical and isotopic forensic tracers that allowed the researchers to determine if contaminants and salts in the water stemmed from nearby shale gas operations, from other human sources, or were naturally occurring.

The tests showed that methane and saline groundwater were present in both the pre-drilling and post-drilling well water samples, but that they had a chemistry that was subtly but distinctly different from the isotopic fingerprints of methane and salts contained in fracking fluids and shale gas. This indicated that they occurred naturally in the region’s shallow aquifers and were not the result of the recent shale gas operations.

What’s true of West Virginia is not necessarily true of Virginia — geologies differ. And the Duke study warned that impact of fracking on groundwater might take longer than the three years of the study period to take place. Still, with its sophisticated science, the study undermines the endlessly repeated claim that fracking is a threat to underground water.

Solar farms: no longer a money-loser for local government.

Fixing a tax quirk. Three weeks ago, I blogged that a quirk in the way the state treats the value of solar energy projects for tax purposes could throttle Virginia’s solar industry in its infancy.

Under state law, solar farms qualify for an 80% tax exemption on projects exceeding 25 megawatts — an inducement for developers to build large solar facilities in Virginia. The exemption significantly reduces local government revenue from the project. At the same time, the Secretariat of Treasury has not taken the exemption into account when calculating the local tax base for purposes of distributing state aid for education. The perverse result is that local governments could lose tax dollars from a big solar investment, creating disincentives for them to provide needed permits.

Reston-based solar developer SolUnesco brought the discrepancy to the attention of state officials. After reviewing the matter, the Tax Commissioner issued a ruling to eliminate the discrepancy: “The actual assessed value will be reported by the Department to the Department of Education (DOE) as the true value of property to be used by DOE to calculate the amount of state educational funding.

“The So What,” says Francis Hodnall, CEO of SolUnesco, is that “projects over 25 mw … will provide a net revenue to counties.”

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