The Battle Of Lazy Dog Hill

Ken Ely beside a Cabot Oil & Gas well on his land in Pennsylvania. Portrait courtesy of Scranton Times Tribune

Ken Ely’s jury-rigged backhoe grunted and wheezed, and it took every ounce of skill the old guy had to coax it up the slippery gravel-and-mud slope. But at last he made it, putting him right in front of the new gate that Cabot Oil & Gas had erected at the top of his hill to keep the curious—and maybe Ken as well—away from its yet-to-be-completed multimillion-dollar natural- gas well. Reaching down to the pressed-steel floor of the cockpit, he grabbed the plastic water bottle he kept there, held it under his bushy white mustache, and let out a quick spurt of tobacco juice. He leaned hard once more on the controls, and with a final shriek the old steel beast let the pallet of stones teetering on its forks drop to the ground. Ken nudged the machine forward, making sure that the ton of bluestone completely blocked the gate. Then he cut the engine. There was nothing but the sound of frigid March wind when Ken climbed out of the cockpit as fast as his 62-year-old body, battered by diabetes and three bouts of cancer, would let him. He walked around to the back of the machine, grabbed a red gas can, and placed it conspicuously in front of the backhoe. He chuckled to himself. He’d never come right out and threaten the gas company. Christ, he’d never even dream of actually torching a bunch of equipment he couldn’t replace. But then again, he wouldn’t mind a bit if they thought that he might. This was war—even if it was only psychological. Any advantage he could get, he would take. In the air was a sound Ken had become all too familiar with over the past year: the dull rumble of truck tires on the old two-lane that ran past the bottom of his 183 acres of bluestone and timber in this remote corner of northern Pennsylvania. Up until recently, Ken had heard that sound as the unalloyed song of progress. Cabot’s trucks had brought all kinds of promise when they first started rolling through the area. The deeply buried gas they were here to extract was going to make a lot of people rich, Ken included. In fact, thanks to those trucks, the old man was now richer than he’d ever imagined. One well on his property alone had netted him $30,000 in royalties just a month earlier, and this new one that Cabot was about to start drilling promised to earn him even more than that. But it had come at a cost. The land was scarred, the air was filled with the incessant shriek of drills boring a mile or more into the earth, and, in a singularly grievous affront to Ken and his neighbors, the clean mountain water locals pulled from their wells was now tainted by methane. No one knew how long that contamination would last. And what pissed Ken off most was the idea that had Cabot taken a few more precautions, or had the state’s Department of Environmental Protection or even the feds been a little more vigilant, both business and residents might have made a mint without ravaging the land. But instead, Ken watched as Cabot and other drillers pushed on without regard. And then his coonhound, Crybaby, was killed. The old dog had been accidentally run over a few months earlier by one of the driller’s trucks, and while Ken could have forgiven Cabot for the accident, he couldn’t forgive the company for not telling him about it until three days after the dog’s death, and then only reluctantly. After they’d buried its body. More than anything, that incident was to Ken a declaration of war. So he braced for a fight. He had no intention of shutting down the drilling operations, not on his property or anywhere else, he would explain to me later—at least not for long. There was too much good that could come of it, both in terms of money for the locals who had gone without for too long and in terms of the overall environmental benefit of burning natural gas, which has the potential to reduce the United States’ crater-size carbon footprint and wean the nation off the perpetually lactating teat that is foreign oil. But Ken was willing to shut them down temporarily—at a cost to the driller of $6,000 an hour, by Cabot’s own estimates—to make the point that it was possible for Cabot to work the land without obliterating it in the process. Here on this hill, not far from the spot where the Cabot men had secretly buried his dog, Ken was ready to make his stand. For 400 million years, this rocky and daunting land about 150 miles west of New York City has been a battleground of one sort or another. Eons ago, the forces of nature converged here to bury a vast sea under mountains of rubble, and later those very same forces carved the land in such a way that it preserved the rich organic matter below ground as natural gas. In the centuries that followed, the area’s inhabitants paid little mind to the occasional eruptions of vapors from the ground. They were too busy battling with the rocky soil and the trees in an attempt to carve out a living from land that was reluctant to give them anything. But now, once again, this sliver of glacial scree and thin soil is at the heart of what is now known as the Marcellus Shale gas play, which is thought to be the third-largest deposit of natural gas in the world. It stretches from New York State to the border of Kentucky and, according to some estimates, could yield up to 500 trillion cubic feet of natural gas. For the unversed, that is enough to fuel every gas-burning device in the United States for a generation. In fact, there is anecdotal evidence that the Marcellus may be so large and so rich that it can change the gas industry altogether. Just as the inland sea that formed the Marcellus, by dint of its size, was big enough to create its own weather, the Marcellus may spawn its own economic conditions. If mined correctly, it could defy downturns in the national and world economy such as the one we began experiencing in the fall and winter of 2008. It may be so big and so rich that it can shrug off the effects of plummeting energy prices in a way that no gas play before it ever has.

Small signs on Ken’s land note the dangers of smoking near a natural-gas mine. Photo by Kren McGraw

Until recently, the massive deposits of gas contained in the Marcellus were thought to be impossible to mine. But developments in both horizontal drilling techniques and hydro-fracking technology (a process that involves forcing a million-plus gallons of chemically treated water into wells at a rate of more than 9,000 gallons per minute to fracture the rock and release the trapped gas) have put the stuff within a massive mechanical arm’s reach. And so, the outrage: Critics have warned that the gas drillers, who were demanding hundreds of millions of gallons of water to frack their wells, would siphon out the last dregs of already overtaxed drinking-water supplies. What’s more, there have been cases where natural gas, often from higher deposits disturbed by the drilling, has itself contaminated drinking water. Congress didn’t do much to allay those fears when in 2005, at the urging of the industry and with the support of Vice President Cheney, it voted to exempt natural-gas drillers from reporting requirements under the federal Safe Drinking Water Act. There were also fears that the chemicals and compounds used to make the frack water slick and effective in wells could, as a result of a spill aboveground or a mechanical failure belowground, seep into the water supply or be released into the atmosphere. Studies had indicated that prolonged exposure to some of those chemicals could cause serious health problems, ranging from aplastic anemia and leukemia to liver disease, birth defects, and cancer. And while the industry, led by spook firms like Halliburton, has dismissed those fears (arguing that the materials that people fretted about composed about 1 percent of the slick water and are essentially harmless in such low concentrations), it didn’t ease anyone’s concerns when the company teamed up with others in the industry and refused to release the precise chemical compositions, holding that information as tightly as if it were the combination to former Halliburton CEO Cheney’s man-size safe and claiming the same trademark protection that allows KFC to keep its blend of chicken spices secret. There have been concerns as well that radiation—so prominent in deep shales that one of the ways prospectors identify potential gas sources is to look for a spike in underground gamma-ray emissions—could be carried to the surface with the rock shards churned up by the drilling, by the frack water flowing back up the wellbore, or up with the gas itself. And then there are the fears that accompany drilling of any sort: fears of diesel spills from the massive pieces of equipment and worries of air and noise pollution from those same pieces of equipment. It’s one of the great ironies of the business that gas drillers, who tout methane’s virtues as a cleaner-burning fuel, rely almost entirely on dirtier fossil fuels to extract it. And then, of course, there are the dangers posed by the volatile nature of the fuel itself and the risks raised by large quantities of gas. Those risks were underscored in 2000 in Carlsbad, New Mexico, when a corroded pipeline exploded and incinerated 12 people who were camping hundreds of yards away from the point of the blast. So seriously do the critics take those concerns that just last month the New York City Council introduced a measure calling on the state to bar any drilling in the New York City watershed in the Catskills. The state’s governor, David A. Paterson, recently placed a moratorium on drilling until further conservation-agency studies are completed. But across the Delaware River, in Pennsylvania, the drilling has proceeded. In the past year alone, the number of drilling rigs headed toward Pennsylvania has increased spectacularly. By this past spring, there were 325 wells drilled in the Marcellus in Pennsylvania and another 864 permits had been issued. More than 30 of those were issued for the five square miles surrounding Ken Ely’s hill. Like most of the people who live in this part of Pennsylvania, Ken had been just scraping by for decades, earning what money he could by prying bluestones out of the ground, supplementing his income by harvesting some of the hardwood timber on his place, and regularly supplementing his diet with venison he hunted in his woods and fish he pulled from the pond outside his two-room cabin. Through the years as a quarryman, he had stumbled across the occasional pocket of natural gas in some of the rocks that lay closer to the surface of his land, but he never thought much about it. So, by his own admission, he was skeptical when he was first approached three years ago by representatives of Cabot who thought that there might be a larger and far richer deposit buried deeper in the ground. At first he dismissed the gas men, but eventually, after a few of his neighbors agreed to sign leases, he got in on the gas rush, receiving $25 an acre to allow them to drill and about 12.5 percent in royalties on any gas they retrieved. Two years later, by the time those few wells came on line, the real riches of the Marcellus were evident. Lease prices skyrocketed, eventually reaching more than $5,000 an acre and 20 percent in royalties. But Ken and his neighbors were locked in. Some of his neighbors grumbled about that. Ken did not. The way he saw it, there would soon be plenty of money to go around. The bucks that would come flowing into the cash-strapped region were a great enough good that it was worth the temporary disruption the drilling would cause. The land was strong enough to recover from the ravages of drilling, and Ken told more than one of his worried friends that once the drillers had packed up and gone home, the grass and trees would return and all that would be left behind would be a few “Christmas trees”—unobtrusive fire-hydrant-size pipes that rise up out of the ground where a well hooks into a pipeline. “When they’re done, we’ll throw down some seed corn around that thing and have a hunting party,” Ken told his neighbors. But by January 2008, Ken’s faith in the good intentions of the gas company had flagged. One winter morning, he had caught a young truck driver, who was hauling water to a drill site on his land, stealing some of his bluestones to build a makeshift road. Ken warned the young man not to, but the kid ignored him. After a third warning, Ken stormed into his cabin, grabbed his squirrel gun, and waited until a rodent perched on a branch right above the stone thief’s head. Ken squeezed off a shot from 50 paces that killed the squirrel and sent the stone thief running for cover. “You’re shooting at me!” the kid had shrieked. “Naw,” Ken responded. “But if you thought that, maybe you shouldn’t have been stealing my stone.” There were other incidents as well. By midsummer, there had already been at least two significant spills of diesel oil at local wells, and in late summer Ken had noticed that one of the water tanks that was going to be used to frack a well on his property was leaking. The gas company had yet to add the fracking chemicals to the water, but that was cold comfort. The water, which had been drawn from the nearby Susquehanna River, contained a number of contaminants, presumably from various industrial sites upriver. And now it was threatening to pollute his pristine groundwater. As Ken put it to me later, “My fish told me they weren’t feeling very well.” And then one of Cabot’s drivers accidentally killed Crybaby. But not even that sent Ken over the edge. The last straw came on New Year’s Day 2009, when enough methane collected in a neighbor’s water well that an errant spark set off an explosion that sent a concrete well cover hurtling a dozen yards or so across the neighbor’s yard. No one was injured in the accident, but within days, the gas, which the state DEP eventually determined was from a higher deposit that had most likely been disturbed by the drilling, migrated into water wells serving nine other homes. It was then that Ken and several of his neighbors decided to mount a full-court press on the driller and local and state officials through protests and the media. Within weeks of the explosion, the state had ordered the driller to come up with a plan to prevent similar migrations of gas and to provide water to a handful of residents until the methane dissipated, regardless of how long that took. Though the driller agreed to comply, it continued to insist that it was still not clear that the company was to blame for the methane migration. But prior to that, at the time of the first explosion, the state was satisfied. So was the driller. Ken, however, was not.

In late November of last year, 15 pissed-off families in Pennsylvania filed lawsuits against Cabot Oil & Gas. Protesters made scary signs. Photo courtesy Ap

The way he saw it, they both needed a lesson, and he had decided that he was going to be the one to teach it to them. And so on March 10, more than two months after the explosion, Ken Ely maneuvered his backhoe to the top of what he now called Lazy Dog Hill in memory of Crybaby, to the gate Cabot had installed to protect its latest natural-gas money machine, and dumped a large pile of bluestone on the site’s doorstep. It was, he later admitted, a clear violation of his $25-an-acre contract with Cabot, and even as he did it, he knew that there wasn’t a court in the nation that would side with him when the company inevitably dragged him before a judge to force him to clear it. But Ken didn’t care. Thanks to Cabot, he was now a rich man, and he was more than willing to spend whatever it cost to make the point that Cabot and the DEP needed to take him and his neighbors seriously. Besides, he later said, he needed to avenge Crybaby. Cabot took Ken to court. They insisted he had threatened to firebomb their equipment, the only allegation that Ken denied, and demanded that he move the stones out of their way and give them access to their well. It took weeks before the court finally issued the order, and when it did, Ken immediately and cheerfully complied. Ken’s standoff at Lazy Dog Hill had suddenly ended as anticlimactically as he’d expected. But he had made his point. By Cabot’s own estimation, the temporary closure of the well had cost them some $6,000 an hour. Ken’s expense was only a few thousand dollars. As far as he was concerned, he had won. It would take another few months and another disaster before the full impact of Ken’s victory would be clear. In September, Halliburton, which had been contracted to handle the fracking operation at one of Cabot’s wells in Ken’s neighborhood, spilled nearly 8,000 gallons of fracking fluid, some of which leached into a nearby stream. This time the DEP immediately sprang into action, summarily suspending Cabot’s operation in the area until the company came up with a plan to prevent similar accidents. The following month, the DEP fined Cabot more than $120,000 and effectively put the company’s operation on probation. Cabot was also ordered to abide by stricter standards, was placed under closer supervision than the other drillers in the state, and was forced to submit detailed plans prior to drilling. Not that this has satisfied the residents. In November, resident-group lawsuits against oil companies began to mount. Media coverage grew as protests increased. In December, a Pennsylvania group called the Pine Creek Headwaters Protection Group began offering training courses in how citizens might become “environmental vigilantes” and help to police drilling in the area, according to the Scranton Times-Tribune, a regional newspaper. Their not-subtle point: Mining operations at the Marcellus are just too big for DEP regulators to regulate effectively, and this is something oil companies understand. Politically, the state is at an impasse, unable to reconcile the environmental concerns with economic realities. In October, Pennsylvania governor Ed Rendell balked at including a tax on drilling in the state’s budget. In November the DEP was forced to lay off about 5 percent of its workforce—a situation that might have been avoided had the tax passed. Punctuating the weight gas drilling has in the state, the agency made note in the press that the teams that monitor fracking operations would not be affected by the layoffs. It is true that the DEP would have taken action against Cabot even if Ken had not made his stand on Lazy Dog Hill. It is also probably true, as Cabot’s spokesman has insisted, that the company would have taken steps to identify the problems and tried to correct them. But the efforts of Ken and his neighbors ensured it. Even DEP officials privately admit that pressure from the locals helped spur the agency and the company into quick action. Ken had at least made sure oil companies were aware they were being watched. But not only by state agencies and angry locals: As this article went to press, some market analysts, spurred by Cabot’s increased prospects in the Pennsylvania region and by exceeded expectations in the second half of the year, upgraded the company’s outlook to “Outperform.” Ken’s allies and neighbors—the very people who will benefit from Cabot’s upgrade—agree that as a result of his stand, Cabot and other drillers working elsewhere in the state have now been forced to take greater precautions, and that a repeat of the problems that initially beset the operation in their neighborhood, while still a possibility, are at least a little less likely. Unfortunately, Ken Ely did not get a chance to savor the victory. One morning this past summer, he died of a heart attack in his cabin. A few days after his death, his funeral was held at the Springville Baptist Church, a few miles from Ken’s home. It was a rollicking testimonial to a man who had lived life hard and loved it. His grandchildren told stories about the cutthroat way he played Scrabble, and his widow and childhood sweetheart, Emmagene, told the 100-person congregation the astounding story of how they had met and fallen in love, fallen apart, and ultimately found each other again. But the most telling eulogy to Ken that day was the silence that greeted the mourners as they arrived. Yards from the back of the church a massive rig had been set up. For the duration of the service, which lasted a little over an hour—for more than 60 of those $100 minutes, to use Cabot’s own calculations—the rig was silent. Just before his death, Ken summed up his role: “I’m just one guy,” he said. “How much can I do? But you wanna know what this whole thing is all about? It’s about Crybaby. It’s about the fact that they killed my dog and didn’t tell me for three days.”