Dave Gahary, a former submariner in the U.S. Navy, is the host of AFP’s ‘Underground Interview’ series.
Be sure to check out all of AFP’s free podcasts. You’ll find them on the HOME PAGE, ARCHIVES & PODCAST section.
AFP Subscriber’s Plight Reveals Government-Corporate Greed Nexus
• Pennsylvania farmer in public/private battle to stay on land
By Dave Gahary
A modest cattle ranch in southwestern Pennsylvania is the scene of a bitter battle for land and mineral rights that is pitting a hard-working American family against not just the second-largest coal producer in the United States, but against the state taxpayer-funded entity set up to regulate the corporate behemoth and local politicians bent on increasing employment in the region. The case illustrates the tensions arising across the country as the energy exploration boom U.S. is now experiencing has the potential to turn average Americans into overnight millionaires.
Longtime AMERICAN FREE PRESS subscriber Chris Paluti contacted AFP’s newsroom to explain his story, in the hopes that a national newspaper would publish and help expose the sordid side of this 21st Century ‘Beverly Hillbillies’ tale, taking part in the Keystone State, where the oil and gas boom of the early 20th Century all began.
This reporter conducted an exclusive one-hour telephone interview with Mr. Paluti, a construction engineer, on Friday, March 21, to hear his story.
“I’m a landowner in southwestern Pennsylvania and I own a small beef farm,” Mr. Paluti began. “I’ve owned the property for over 20 years and it’s pretty much my side livelihood and a large investment for my future retirement.”
Along with his wife Amber, Chris signed a five-year oil and gas lease transfer agreement that is soon set to expire. The agreement provides the Palutis with “either free gas or a combination of free gas and or royalty payments.”
“Essentially, I own the oil and gas rights and they’re leasing it,” explained Paluti.
“There’s no guarantee [that we’ll receive anything],” he explained, “but they’re willing to spend that money to sign a lease in order to control that interest, because some of this stuff could be worth, literally, hundreds of millions of dollars, depending on how many acres you have and what’s underneath there.”
As Mr. Paluti said, “They’re finding more and more black gold in a lot of areas. What’s happening up in this part of the country is somewhat similar to what happened in Texas years ago. There are farmers around here who literally become millionaires in a matter of a few months.”
The Palutis recent troubles began last summer when their lease was sold.
“I had a lease with Chesapeake Energy and they sold it just last summer to another company,” he said. “I had some language in there that they were supposed to notify me in writing and get my permission, but they just sold it out and didn’t tell anybody.”
The companies they sold it to on the sly are affiliates of Alpha Natural Resources, the giant energy company headquartered in Bristol, Va. Alpha, a one-time Wall Street high-flyer, saw its stock price soar to $104.44 on August 1, 2008, only to begin its decent the following month. On the day of the interview with Mr. Paluti, Alpha closed at $4.37.
Alpha made the headlines a few weeks back, when it was reported by Bloomberg L.P. on March 5, that the company “agreed to pay a $27.5 million fine and spend about $200 million to implement wastewater treatment systems under a proposed settlement with the U.S. government over toxic discharges from its mines in five states.” “It’s the largest fine for such violations in the history of the Environmental Protection Agency [EPA],” reported the Pittsburgh Post-Gazette on March 6.
According to court papers, from 2006 to 2013 the EPA “documented at least 6,289 Alpha violations of permit limits for pollutants including iron, aluminum, selenium and manganese.”
Last summer, the Alpha affiliates, Emerald and Cumberland Resources, began tearing up the land across the street from the Palutis’ farm.
“Since July of 2013,” wrote Mr. Paluti in his summary of events for this reporter, “Alpha has tried to con us into selling our property without telling us what they were up to or why they wanted it. They rammed permits [through] the [Pennsylvania Department of Environmental Protection] to try and scare us into selling by building roads and cutting into a hillside and drilling core holes, etc. At the same time they were burning trees and generating smoke and ashes. They kept running large trucks and equipment onto a very narrow and dangerous township road, which the township should not [have] granted a permit for. The townships are either afraid or controlled by the coal company.”
“They burned up one of their own pieces of equipment [an excavator] probably worth a couple hundred thousand dollars,” said Paluti.
Frustrated with their inability to get straight answers from Alpha on permits and other issues, the Palutis on January 14 visited the DEP’s California District Mining Office in Coal Center, Pa. to check on their progress on the many letters they mailed, faxed and emailed to the regulator.
“We found none of our correspondence, whether it be emails, even the letter that was sent from my attorney to their manager of the district, none of it was in the files,” explained Mr. Paluti.
The files were filled, however, with positive information on the mining enterprises.
“One of the local representatives sent a letter and said, ‘We need these jobs, and we have to have coal mining,” said Paluti.
The Palutis scheduled another appointment for January 31 at the DEP to meet with the district mining manager, and they were completely unprepared for what followed.
The manager “refused to answer any questions and he started to smirk and laugh at Amber,” explained Mr. Paluti.
The Palutis’ attorney was on speakerphone during this meeting. “He had nothing to say, he just sat there like a bump on the phone,” said Paluti. “He wasn’t working for me, he was working for somebody else; I’m not sure who.”
“You are screwing with our life, wipe that smirk off your face,” Paluti demanded of the manager, who “continued to smirk and then got up from his chair.”
“He was hollering for somebody,” said Paluti. “I thought they might try to do something, this guy might grab me, but that didn’t happen. He just brushed past me as he hurriedly left the room.”
“When he called for that other guy, Amber’s impression was, are they gonna jump me? It crossed my mind, I’m thinking, hey look guy, we can take this outside if you need to. Man on man, one on one.”
“We left the building because the guy ran away; we didn’t know where he went. He left us in a meeting room, didn’t even tell us where he was going,” explained Paluti.
“About two weeks later I got some papers that said that I was having charges files against me because I beat [the manager] up. I physically struck him, punched him, kicked him, assaulted him and knocked him down. And the police report said all this. Now I had to hire an attorney. This is how the state treats me?”
The Palutis are dumbfounded as they claim no altercation occurred.
“The guy’s perjuring himself, falsifying police reports. As far as I’m concerned, the whole thing’s a total scam. What does this guy gain out of this? Is that what they’re trying to do, get rid of me?”
“There’s gonna be a hearing shortly,” said Paluti.
On February 19, 2014, the Palutis’ new attorney sent a cease and desist letter to Alpha.
Since then, “they have had someone parked in a vehicle on the road they cut across the street from my property staring straight at our house and the neighbor’s house, 24 hours a day, seven days a week.”
“Here’s a company that has financial difficulties, who would rather pay somebody to sit there and antagonize us and stare at our houses 24 hours a day,” said Paluti. “Sometimes the lights shine near the house, so we have to close our drapes. It’s pretty creepy.”
“It’s an intimidation tactic,” he believes.
“The last thing we have left in this country is your so-called property,” said Paluti. “If they take that away, America’s just gonna be like the rest of the rogue Third World countries and thugs and dictatorships. There’ll be nothing left. We’ll fall apart so fast it’ll be mind boggling.”
Fracking with Disaster
By Keith Johnson
More Americans are lashing out against the practice of fracking, a highly controversial method for extracting oil and natural gas from beneath the surface of the earth. While its proponents cite job growth and independence from foreign energy sources as key benefits, critics insist that fracking is only generating profits for a privileged few while the vast majority of Americans are left to clean up the mess and deal with the long term health and environmental consequences.
In an effort to learn more about fracking and the growing movement against it, this AMERICAN FREE PRESS reporter spoke with Dr. Walter M. Brasch, author of the book Fracking Pennsylvania: Flirting with Disaster.
“The energy industry claims that fracking has been historically proven to be safe,” said Dr. Brasch. “But they’re only referring to vertical fracking, which dates back to the 1940s. Horizontal fracking is a more recent development where as much as 10 million gallons of water is shoved into the earth along with up to 100,000 gallons of various chemicals, most of which are dangerous toxins and carcinogens.”
Dr. Brasch went on to say that this volatile mix of chemicals, coupled with the sheer exertion of force needed to break up sedimentary rocks, not only frees the gas trapped within tight layers of shale but also tends to disrupt potentially harmful radioactive elements buried deep within the earth’s crust.
“These fluids are then brought to the surface and stored in large pits,” said Dr. Brasch. “Sometimes these pits leak and have been found to contaminate the local water supply. Often they’re exposed to air, leading to even more pollution and the health risks associated with that.”
And the problems don’t end there.
“Several peer-reviewed scientific journals have reported an increase in earthquake activity near the injection wells where this gas is being shoved back into the ground,” said Dr. Brasch. “We’ve also seen more train derailments in the last nine months than we have in the past 40 years because of the amount of drilling that’s going on. Trains are now carrying up to 100 tanker cars at a time and about 90% of them were built before the federal government found them to be structurally unsafe in 2011.”
The high volume of oil being transported through aging pipelines is also raising serious concerns.
“About half of these pipes are at least 50 years and are in dire need of being repaired or replaced,” Dr. Brasch explained. “Leaks are quite common and can lead to major explosions like the one that just recently occurred in Harlem [New York], where eight people lost their lives.”
Safety hazards and health risks aren’t the only troubling byproducts of fracking.
As Dr. Brasch explained, “Many property owners are being driven off their land to make way for new pipelines being built throughout the country,” he said. “For instance, TransCanada, a foreign corporation, is using eminent domain rules in Texas and Oklahoma to force people to either lease them their property or risk losing it altogether.”
Dr. Brasch’s claims are well documented. In fact, just last year, 78-year-old grandmother Eleanor Fairchild refused to negotiate with TransCanada for the lease of her 320-acre ranch in Winnsboro, Texas. A judge ultimately ruled against her and the oil company proceeded to dig up her land. When she tried to block the approaching bulldozers, TransCanada had Mrs. Fairchild arrested for trespassing on her own property.
The most troubling aspect of this is that state and federal governments are going over the heads of local communities to make sure these dangerous projects are built.
Although the U.S. government claims that these land seizures are being done for the so-called “greater good” of the public, Brasch says that nothing could be further from the truth.
“TransCanada is in the process of building the Keystone XL pipeline to deliver their extremely toxic tar sands oil from Alberta [Canada] to the Gulf of Mexico,” he explained. “Although it’s shipped through the U.S., most of that oil will be exported to foreign countries. The American people certainly aren’t getting any benefit from this and the only one who stands to profit is the company bringing this fuel to port.”
“This is all being done with the full approval of state governments,” he said. “They claim that natural gas drilling is beneficial because of the many employment opportunities it provides. But the numbers they use are exaggerated. Here in Pennsylvania, for instance, Governor Corbett predicted [that fracking] would create 240,000 jobs. Independent economists, however, estimate that only 20,000 jobs have been created and most of them are temporary. What’s happening is that people who are familiar with this line of work are being brought in from out of state. But once the site dries up and the job ends, they move on and leave the locals to clean up the mess they’ve left behind.”