440: Game Changer

Ira Glass

Back in December of 2007, Terry Engelder, who's a geologist at Penn State University, put a piece of scrap paper from the recycling bin under his desk and made a calculation.

Ira Glass

Ah, porosity. Engelder was trying to figure out the answer to a very, very basic question, something somebody had asked him just in passing.

Ira Glass

Exactly how much natural gas was trapped in the Marcellus, which is a giant rock formation, a kind of rock called shale that runs underneath Pennsylvania where Engelder was actually sitting, and New York, and into Ohio, and New Jersey, and West Virginia, and Maryland. Which now we know, thanks to Engelder, is the second largest natural gas field in the world. Largest outside the Mideast.

Ira Glass

His result? 50 trillion cubic feet of natural gas. It sounded impossible. Engelder went online to see what the US Geological Survey was estimating for the Marcellus. Their number was less than 2 trillion cubic feet. Engelder's was 50, 50 trillion cubic feet, conservatively. So he crumbled up his scrap paper.

Ira Glass

Engelder wanted a second opinion, so he sent the problem to a colleague at another university. Didn't tell him what he'd come up with, just let him have at it over the evening.

Ira Glass

What 50 trillion cubic feet of natural gas means, he says, is that America was about to have a revolution in how it powers itself. Right now, natural gas makes up about 25% of our nation's energy supply. It's used for heating over half the nation's homes, for making electricity, for all kinds of stuff, and we import lots of it. But the country was suddenly getting access to all sorts of domestic shale deposits full of gas, the Marcellus chief among them, that could make it so that we do not have to import natural gas for decades.

This would make energy cheaper, create jobs in America, conceivably natural gas could replace some of the coal and oil we use. It could change everything. This realization, and the fact that he alone knew it, and the entire country would soon know it, Engelder says that as he was driving home that day, it was like an out of body experience. It was like falling in love.

Ira Glass

It was late December, right before Christmas, and the thought came to him.

Ira Glass

It's a line Engelder has used elsewhere. It's been published in National Geographic and in Time magazine. By the time our show had talked to him, Engelder had talked to 208 reporters. Yes, he counted. He gets multiple messages every week asking for interviews.

Ira Glass

He's been offered jobs by oil and gas companies. He's constantly flying around giving speeches. He was up to 198. And yes, he counted that, too. He started a consulting company and a research group. He's testified before Congress. In May, the president of Penn State University called Engelder a rock star-- get it, rock star-- at a trustees meeting.

The message of his work? That there are huge gas reserves in Pennsylvania, and that a lot of people can make a lot of money, from homeowners leasing their land for drilling to all the jobs and side businesses that support the industry, that Pennsylvania could become Texas. That message squared perfectly with what the oil and gas industry and what politicians in the state of Pennsylvania wanted to hear. But, travel with me now across the state, another university, the University of Pittsburgh. Another professor did an entirely different calculation. He came up with numbers that pretty much nobody-- at least nobody with any real power-- wanted to hear. Now, he's unemployed.

Ira Glass

Dan Volz is director of the Center for Healthy Environments and Communities of the University of Pittsburgh's Graduate School of Public Health. Or he was, until about a month ago.

Ira Glass

Today on our radio program, what happened when the big institutions of a state, the universities, industry, government, all joined forces to push for natural gas. That's what happened in Pennsylvania. Other states have been far more cautious.

The people involved called the discovery of all this gas in the United States a game changer. But the only reason that any of this matters at all is that in the last decade, technology was developed that can extract the gas from these rocks. The process is called, the full name-- get ready-- horizontal high-volume slick water hydraulic fracturing, or fracking. You may have heard of fracking, which basically means they drill a hole into the earth, they pump a huge volume of water, millions of gallons, mixed with sand and chemicals down into that well into the rock. It pushes out the gas that is trapped in the shale, which then surges back up the well, and lots of that chemically treated water comes back up too, now mixed with other stuff that's been a mile underground for eons, like huge amounts of salt. How to handle that waste water is actually one of the tricky things about all this. From WBEZ Chicago, it's This American Life distributed by Public Radio International. I'm Ira Glass.

Today on our program, what happens to a state when it is hit with a game changer, like natural gas has hit Pennsylvania. One of our producers, Sarah Koenig, lives in Pennsylvania and has been looking into this for months.

Our show in two acts, the first in the state universities, the second in a small town. Let's begin at the universities, which people, of course, turn to for objective, neutral, unbiased analysis. That's Act One of our show, You've Got Shale. Here's Sarah.

Sarah Koenig

The story of that second guy's calculation, Dan Volz's calculation, at first sounds an awful lot like Terry Engelder's. A couple of years after drilling had started in Pennsylvania, he also figured out something no one else had bothered to calculate, how much toxic crap-- chemicals, and other pollution from gas drilling-- was getting into water supplies.

Treatment plants were taking in the waste, supposedly cleaning it up, and then releasing it into bodies of water, like the Monongahela River in Pittsburgh, which actually runs right in back of Volz's office building.

Sarah Koenig

High levels of strontium and bromide can cause cancer and birth defects. Barium is a heavy metal, which can be poisonous if you ingest enough of it.

Sarah Koenig

So Volz told the outside world about his calculation, the 800,000 pounds, talked to community groups, gave seminars on it, told the Pennsylvania Department of Environmental Protection, put it on his center's website. And of course, he told his boss.

Sarah Koenig

OK, so we'll come back to Volz in a bit, but compare this reaction that Dan Volz gets from the higher ups at Pitt to the one that the first guy, Terry Engelder, gets back at Penn State when he tells his dean about his calculation. Here's Engelder.

Sarah Koenig

So the dean tells the provost and the president, and within 24 hours, word comes down from the president's office that they'd like Engelder to sit on this discovery, not tell anyone for about a month. The president wants to announce it at the next trustees meeting. A discovery like this helps Penn State's president with one of the most important parts of his job, which is to be constantly reminding lawmakers and donors why they should keep supporting the university. They can say, see, your investment in us does pay off. For every dollar you invest, you'll get back $10, or $100, whatever the number is.

Sarah Koenig

So that same day, the 17th of January, 2008, Penn State issued a press release on the Marcellus. He quoted Engelder as saying, "the discovery could be worth $1 trillion." With that, Penn State positioned itself as an early booster of gas drilling in the state.

Now, I want to be clear here that Penn State isn't monolithic, and that there are other people at the university who are doing Marcellus work, on its effects on well water and songbirds, on the chemicals in frack water, on how industry money is being spread around, on how communities are being affected. But in the early days of this gas boom in Pennsylvania, it's fair to say the university quickly got a reputation of not really questioning whether this whole venture was necessarily a good idea.

Myron Arnowitt runs an environmental group in Pennsylvania called Clean Water Action, and he's gone to dozens of panels around the state talking to residents about gas drilling. He said the panels usually had someone representing the gas industry, someone from government, and often, someone from Penn State.

Sarah Koenig

I heard this over and over again from all kinds of people, that they don't trust Penn State on this issue. A researcher doing field surveys in rural towns about the gas industry told me it was sometimes hard to get people to talk or answer questions once they found out the research was being conducted by Penn State.

Another scientist looking at water quality told me when he does public presentations around the state, he sometimes gets booed and heckled and yelled at. He's had a finger poked at his chest by people who assume that, because he's from Penn State, he's in industry's pocket.

Besides Engelder's announcement, the other piece of Penn State research that got a lot of attention was an economics report put out by the College of Earth and Mineral Sciences in 2009. It concluded that gas production could be generating $13.5 billion in value added, and almost 175,000 jobs by 2020. Later that was revised upward to 212,000 jobs, vastly higher than what the State Department of Labor and Industry was estimating.

Furthermore, the study said, taxing natural gas production would be a bad idea. Keep in mind, whether to impose a tax was and is a big debate in Pennsylvania. It's the only state that doesn't tax gas production, and companies would like to keep it that way. So, no, don't tax it, the Penn State report said. And not only that, don't regulate it either. Quote, "proposals to regulate hydraulic fracturing under the federal Safe Drinking Water Act pose yet another serious threat to the development of the Marcellus shale.

Industry couldn't have paid for better advertising. And it turned out when an activist made a stink about this, industry had paid for it. A group of gas and energy companies had sponsored the thing, had asked Penn State to create it using data the industry provided. But the numbers did as numbers do, they took on a life of their own, as evidence in the case for drilling.

Sarah Koenig

That's former Pennsylvania Governor Tom Ridge, who's now working for the industry's Marcellus Shale Coalition, talking to small business owners in April. And here's Senator James Inhofe of Oklahoma at a committee hearing, citing Penn State, to support the idea that there should be no federal regulation of fracking.

Sarah Koenig

People critical of gas drilling have called Terry Engelder an industry shill. And while it is true that his Marcellus talking points line up exactly with those of industry, I got the impression that Engelder sincerely believes these talking points. He believes industry wants to do shale drilling right, that it's figuring out how to minimize the environmental and health hazards. And his job, his responsibility, in fact, is to help. He believes he's had an opportunity only a handful of scientists get, to influence the course of history. He compared himself to Louis Pasteur and Jonas Salk.

And so, back in 2007, for instance, when he was invited by a major investment bank to participate in a conference call for about 130 investors looking to put money into drilling in the Marcellus Shale, Engelder felt it was almost his duty to do so.

Sarah Koenig

I couldn't get tape from the call, but I did get a transcript. During the presentation, Engelder doesn't just talk up the Marcellus Shale. "I have to make a bit of a sales pitch for Penn State," he says. He repeatedly points out the quote, "symbiosis between the gas industry and Penn State," and asked them to invest in research at Penn State, quote, "The type of research that's necessary to answer some of these questions that are going to be so critical to the future of Marcellus development," the type of research that he, himself, will be doing.

Since that call, Engelder has started a research project. 10 oil and gas companies are paying about $40,000 each so students can map the Appalachian Basin, showing companies where best to drill. Engelder also has a multimillion dollar project to help engineers figure out, among other things, how much pressure they need to frack wells.

Penn State depends hugely on industry money, and not just on the oil and gas industry, on pharmaceutical companies, and on weapons manufacturers, and on the government. All major research universities do, not just Penn State. But Penn State's got one of the oldest and best gas and petroleum engineering schools in the country. Without industry money, the school might not survive. Flip through this year's awards banquet program for the Energy and Mineral Engineering students, and it's an industry roster. They're getting money from Chesapeake Energy, Consol Energy, Chevron, BP, ConocoPhillips, Marathon Oil.

Some of these students will go on to work for these companies, and make lots of money, and give it back to Penn State, which is great for the university. But if you take a close look at how some of these donations work, you can see how entwined the university is, not just with the gas industry, but also with state government, and how all three of them are united on the topic of drilling.

Take the biggest private donation in Penn State's history. In September, an oil and gas engineering alum named Terry Pegula gave $88 million to create a Division I ice hockey program. Pegula and his oil and gas company, East Resources, which, by the way, had the third highest number of gas well violations in the state between 2008 and 2010, were top donors to Pennsylvania's new republican Governor, Tom Corbett, who's a great friend to the gas industry. Corbett has said repeatedly he doesn't think gas production should be taxed.

Sarah Koenig

That was Corbett's first budget address in March, when he also announced his new Marcellus Shale Commission, which will advise him on all matters of Marcellus development and regulation. Who sits on the commission? Terry Pegula, the ice hockey guy, plus 12 other business and industry representatives, four representatives from environmental groups, and one academic, Terry Engelder.

And I was surprised how frank Engelder was with me about his role in the commission, how baldly political. He says he's there to push for one or two controversial topics, one of which is forced pooling. It's a policy that lets drillers extract gas from under your property, whether you like it or not. Engelder thinks it's a good idea, industry wants it. But Governor Corbett has opposed it.

Sarah Koenig

There's nothing necessarily sinister about Penn State being friendly with industry, or taking industry money, unless that money skews research or tamps down dissent. The problem is, it can.

A retired mining engineer from Penn State told me that faculty in his department knew very well that publicly criticizing the mining industry would be a risky career move. He knew of instances when companies got upset about something a faculty member said. And quote, "In some cases, their discomfort was expressed as, we're not going to support you any longer if this goes on." He said mining faculty at Penn State generally won't act as expert witnesses in lawsuits against mining companies for the same reason.

Likewise, for petroleum and natural gas engineering faculty, he said, it would really take an earth-shattering event for them to feel free to take an active role in questioning industry motives, or any aspect of industry behavior.

I have tape of this interview, but I agreed not to use it, because two days after we spoke, this professor, a nice man who's been retired for a decade, told me he had an anxiety attack, his first ever. He said he felt like a whistleblower and he couldn't go public.

At the University of Pittsburgh, Dan Volz did go public. He works in public health; he felt it was his duty to go public. A couple of years ago, people started calling in to the Center for Healthy Environments & Communities where Volz worked. At first, three or four people a week, then as many as 25 a week. The callers lived near gas wells or compressor stations and they had health complaints.

Sarah Koenig

Volz was pretty new to academia. He came to Pitt in 2004. But before that, he had his own successful consulting firm. He also worked for the government at OSHA and for industry and National Steel. What he was hearing in the phone calls reminded him of solvent exposures he'd investigated before in factories. It was worrisome.

Also around this time, in late 2009, people started noticing that fish were dying in Dunkard Creek, which runs for 35 miles along the Pennsylvania-West Virginia border. Not just fish, but salamanders and shellfish. In fact, all the aquatic life had turned belly up. The cause was said to be golden algae.

Sarah Koenig

So Volz and his students decided the next thing to do was physically test the water themselves. The lab results from one brine treatment facility, known as the Josephine Plant, were so alarming that Volz testified at a US Senate hearing about them.

Sarah Koenig

Meanwhile, people at Pitt were getting annoyed with Volz. He's not your typical academic. He doesn't soften things so industry can save face. And he wasn't just critical of the gas industry. At Pitt he had taken on coal mining pollution and toxic dumping by a plate glass manufacturer.

Sarah Koenig

I can see why they might want him to do that. He can be a loud mouth when he's riled up. Like, when I asked him about methane leaks from gas operations, which some people, like Terry Engelder, say can just be plugged.

Sarah Koenig

Volz was also warning community groups about all the compressor stations and refineries that would inevitably follow the drilling in Pennsylvania, and about evidence of cancer clusters among people who live near these operations in Texas and Louisiana. He says he was specifically told not to talk about that, to cool it.

Sarah Koenig

The team includes 18 people on Pitt's board of trustees connected to the oil and gas industry, including the chairman of Marathon Oil, the CEO of Consol Energy, a director of Dominion Resources.

When Volz got his results about pollution coming out of the Josephine Brine Treatment Plant, he was told not to release them until they were published in a peer reviewed journal, which can take months, or even years sometimes. He refused and handed the results over to the EPA. All this came to a head in April.

Sarah Koenig

I spoke to Volz's dean, Dr. Donald Burke. He and Dan Volz like and respect each other. He told me the school's differences with Volz weren't political or financial, they were philosophical. They fundamentally disagreed about when it's OK to be an advocate and when it's not.

Sarah Koenig

For Dr. Burke, lab results from the Josephine Plant isn't strong enough evidence, not like a peer reviewed study. Dr. Burke also said the research that Dan Volz and his students were doing would continue at Penn.

Interestingly, just after Volz quit, the Pennsylvania DEP asked all drilling companies to stop bringing their waste to treatment facilities that couldn't handle them. Volz's work wasn't mentioned, but most people following this topic in Pennsylvania credit him in large part for making that happen.

Sarah Koenig

New York's politics surrounding gas are different from Pennsylvania's. For starters, there's been a moratorium on drilling there. And so the politics within a university like Cornell at least, are different enough that a professor named Tony Ingraffea has been speaking out without any repercussions.

Ingraffea's one of the people who helped invent fracking. He's a structural engineer and he's taken gas industry money in the past. He's friendly with both Dan Volz and Terry Engelder. He even wrote a paper with Engelder. But when he started seeing op-eds and industry spokesman saying how fracking was no big deal, how the chemicals it released into the environment were perfectly safe, he started giving talks about how that wasn't true.

In May, he came to Penn State, Terry Engelder's turf, to deliver a talk that threw into question everything that Terry Engelder believes to be true about natural gas development. Penn States also the home of the Nittany Lions, and the first slide Ingraffea showed was a picture of an open-mouthed lion with a guy's head stuck inside.

Sarah Koenig

Ingraffea recently co-authored a study that said all the hype about natural gas from shale being a clear alternative to coal or oil isn't really true. He questions the very idea that extracting natural gas from shale formations is good energy policy. Ingraffea says it's not. It's a sop, a temporary band-aid for our energy problems that's going to make some people very rich, but that will ultimately make global climate change worse, and put off, for decades, development of better sustainable energy solutions.

Ingraffea and Engelder and Volz all believe that they're practicing good science, and that that good science has led them to advocate for very different policies. Each of them sees what he's doing as a moral obligation. The difference is, there's plenty of money around to do the science Engelder wants to do. It's harder to find the money to do the kind of science that Volz and Ingraffea want to do, to answer huge questions about what shale gas extraction can mean for human health and the environment. Here's Ingraffea.

Sarah Koenig

That research is harder to find, not just in Pennsylvania, but everywhere.

Ira Glass

Sarah Koenig. Coming up, there will be crud. That's in a minute, from Chicago Public Radio and Public Radio International, when our program continues.

Ira Glass

It's This American Life, I'm Ira Glass. Today on our program we're devoting the entire hour to Sarah Koenig's stories of what happens in a state when a huge game-changing economic boom arrives, in this case, trillions of cubic feet of natural gas being discovered underneath Pennsylvania. We've arrived at Act Two of our show. Act Two, Ground War.

One of the biggest drilling operators in Pennsylvania is called Range Resources, which has 80% of its capital budget, over $1 billion, invested in the southwestern part of the state. And one of the places that they're most active is a little township south of Pittsburgh called Mount Pleasant. Because Mount Pleasant, with it's hilly old farms, and windy main streets and a handful of restaurants is, according to Credit Suisse and Morgan Stanley, smack in the middle of the, quote, "highest rate of return spot for gas exploration in the United States." That's why Range has leased 95% of Mount Pleasant's land for mineral rights. 95%, which means pretty much everything but the tiny downtown. They've already drilled 100 wells there. They've got plans for hundreds more.

Imagine for a second, what a billion dollars worth of investment looks like for a drilling company. Parking lot size concrete well pads, giant drill rigs, pumps, condensers, miles of pipelines, hundreds of trucks bringing in special equipment and chemicals and workers, all this stuff rolled into Mount Pleasant. And in Mount Pleasant, like you'd expect in most small towns, there were no laws on the books governing any of that.

So a couple of years ago, in 2009, when the Pennsylvania Supreme Court gave towns around the state the right to pass their own laws for this kind of thing, Mount Pleasant officially decided to update their local ordinances so they could have some control over where exactly companies like Range could drill. And Range fought back with big league, hardball tactics.

Again, here's Sarah Koenig to tell what happened.

Sarah Koenig

The standoff between Range and Mount Pleasant started with one of the least gripping topics in all of government: zoning. It ended in a full-scale PR war, in which Mount Pleasant and its three citizen supervisors were ridiculously outmanned. And I'm so sorry to have to do this, but to understand this story you need a really quick primer on two types of zoning: conditional use and permitted use.

Conditional use means that if a company wants to drill a well, say 200 feet from your kids' preschool, and you're worried it might be dangerous, there'd be a hearing. For every new well there'd be a hearing. And you could lay out your concerns, and then the town could set conditions, like the company has to move the well 1,000 feet back or put up a special fence. But this, according to Matt Pitzarella, the communications director for Range Resources, just leads to heartache.

Sarah Koenig

Range prefers the other kind of zoning, permitted use zoning, where you set general standards up front for all wells saying, here's what's permitted. And that's it. No hearings, no dithering, no special conditions. Obviously, if you're a drilling company, that's what you want, permitted use. It's easier and cheaper and faster.

But here's how Mount Pleasant saw it. They're a quiet agricultural township, population 3,500. Suddenly, an industry arrived, and people started complaining that gas production polluted their water, ruined their farms, that toxins gave them headaches. They couldn't let their kids out to play when the wind was blowing the wrong way. Plus, the town felt overrun. The noise, the dust, the trucks, too many strange out-of-town men living on work sites. The township, as a whole, wasn't anti-drilling, far from it. It just needed to figure out how to live alongside the drilling without ceding total control to the drillers.

So a Mount Pleasant Citizens' Committee spent months looking at how other towns were zoning the oil and gas industry in Texas, and Colorado, and Wyoming, other towns in Pennsylvania. And they came up with a proposal for Mount Pleasant: make it conditional use. It was the only way residents could have any control over where drilling happened in their town. Here's Mary Ann Stevenson, township manager for Mount Pleasant.

Sarah Koenig

They wanted input from Range because they wanted an ordinance that Range could live with.

Sarah Koenig

This, by the way, is the entire fight in a nutshell. Both sides insisting that the other is refusing to communicate or just outright lying.

Sarah Koenig

Matt offered several times to show me the 36 correspondences he says Range had with the town over the past 18 months, but he never produced them. In any case, Range communicated just enough to make it clear it did not want the conditional use ordinance. The fight was on.

Range took it to the people, tried to get townspeople to put pressure on Mount Pleasant's three supervisors. Range's chief weapon was its chief asset, money. In the past few years, the company has spread a lot of it around the struggling township, and that's made people like them. Evidence of the spending is everywhere. They've given a few hundred thousand dollars to 4H and Boy Scouts and other local charities. Their matching grants have kept the local library open for the past two years. One of those oversized checks hangs over the front desk for $10,000.

There's a bronze statue next to the fire department honoring the farmers of Mount Pleasant Township. It's of a farmer in a hat and boots holding a calf. The plaque below it lists about 20 donors, all farmers, and then at the bottom: "Special thanks to Range Resources," which gave about $40,000 towards the statue.

Sarah Koenig

Frank Hnat is an artist and he designed the statue, and raised money for it, along with a failed downtown revitalization plan that Range also helped fund.

Sarah Koenig

Frank has got a lease with Range. There's a well pad about a mile behind his house that's taking the gas from under his property. He got a signing bonus of $1,000. He says his neighbor who's hosting the actual well got $600,000 as a signing bonus, which is on par with other deals Range has made.

The biggest money though, is promised in royalties. Matt told me the average well yields about $4 million in royalties over the life of the well. And he says Range has paid out about $25 million so far in lease and royalty payments in Mount Pleasant. They've also spent $5 million on roads and infrastructure in the town. The thousands of heavy trucks they've brought in destroy local roads. Here's what it sounds like midday on a main street.

There aren't many businesses in Mount Pleasant, but the ones that are there-- a gas station, restaurants-- are all making more money than they used to. Most told me at least 30% more, which is a big deal in a bad economy.

Range made it plain. If Mount Pleasant supervisors didn't enact zoning that was pleasing to the company, all this new money flowing into town could be jeopardized. It was like your rich aunt threatening to cut you out of the will. To drive this point home, the company mass mailed a letter. The first of a bunch of letters you'll hear about. And it's not clear when they sent it, because as a matter of strategy I don't fully understand, Range doesn't date these letters or sign them with anyone's name. But anyway, the letter's heading was fake addressed to Mr. and Mrs. Joe Schmo, 10 Cash Strapped Lane. The letter urged residents to contact your supervisors and town officials about the zoning. "The more restrictions placed on our activities, the more difficult it is for us to move forward," the letter says. In short, if we don't drill the wells, no gas is produced. And no gas means no royalties.

Meanwhile, Mary Ann, the township manager, was still trying to get Range to let her know what they thought of the proposed zoning ordinance to suggest changes if it wanted them.

Sarah Koenig

Mary Ann says it was exhausting. And then, just before Christmas, just before her deadline to advertise the new ordinance in the newspaper, which she's required to do by law, a Range attorney called and offered to get Mary Ann comments from the company by Christmas Eve.

Sarah Koenig

Mary Ann isn't a lawyer or a politician. She's just a normal person with a busy job. As township manager, she's in charge of Mount Pleasant's operating budget. She's pension and health care administrator for 15 employees. She's treasurer. She's secretary and researcher for the township's board of supervisors, who, again, are just normal people like her: a retired coal miner, a road maintenance manager, and a truck driver.

The week I was there, Mary Ann's office manager was out of town, so she was doing that too.

Sarah Koenig

In March, things got precipitously worse with Range. The company asked for a meeting with Mount Pleasant supervisors. According to Mary Ann, at the meeting, Range presented the supervisors with the company's own model ordinance. It wasn't bad, but it was based on permitted use. And then, again, according to Mary Ann, Range gave the township two options. First, they could adopt Range's model ordinance. And if they did, Range would write a letter to Mount Pleasant residents. I'll let Mary Ann explain. This is from a letter she wrote to Range's attorney, recapping what had happened at the meeting.

Sarah Koenig

Option two was the town's proposed conditional use ordinance.

Sarah Koenig

Matt says this threat to sue was never uttered.

Sarah Koenig

What Range's lawyer might have mentioned, Matt said, is that other townships were being sued by other companies over their new zoning. Mary Ann also said that, at the meeting, a Range official told them, "Range Resources has to take a stand somewhere, and that is going to be in Mount Pleasant Township."

Sarah Koenig

This is also why Range is so annoyed. Range was the very first company to figure out you could even get gas from the Marcellus by drilling test wells years ago in Mount Pleasant Township. It's their epicenter. They're proud of it. It's part of their corporate story now.

Plus, it's their backyard. Range's president is from the area. So is Matt. So are a lot of people who work for the company. Their plan is to drill in Mount Pleasant for decades.

Sarah Koenig

There are thousands of municipalities in Pennsylvania, and a good number of them are in the midst of changing their zoning regulations, too. You can see why Range would want to nip this in the bud. Already, the struggle in Mount Pleasant has spooked the neighboring township of Cross Creek. The manager there told me her supervisors were one step away from approving a conditional use ordinance when a big group of residents came in and made a fuss, pointing to the strife in Mount Pleasant. The supervisors changed their minds and approved permitted use instead.

The next thing Range did-- surprise, surprise-- was send out not one letter, but two. The first was mass mailed to everyone in Mount Pleasant. It was cheerful. It laid out the advantages of Range's model permitted use ordinance, and talked about how Range was confident the township and company would continue to happily coexist. The second letter was mailed out at almost the same time, but it went only to residents who had leases with Range. The tone was completely different.

"We've tried to work with your township officials," it said, "but our attempts continue to be rejected. As a result," the letter went on, "we may be forced to shift activity to other, more cooperative townships." The letter also noted that Range would be, quote, "evaluating legal action." In other words, people without leases were told not to worry, everything was going great. People with leases were told that things were very bad indeed. Some residents dubbed it divide and conquer strategy.

Matt says Range wasn't trying to pit residents against one another, that the timing of these two letters was regrettable and really a mistake. They weren't supposed to coincide. Somebody screwed up. Him maybe.

In any case, lease holders who got the second letter were told that they should come to a meeting on April 6 that Range was hosting at the Hickory Fire Hall. The people who got the cheerful letter weren't told about the meeting.

Sarah Koenig

Range's PR specialist, Jim Cannon, did the talking at the Fire Hall meeting. Hundreds of people showed up. It was standing room only. Cannon reiterated what Range said in its letters, that a lawsuit against the town was just one option Range was considering.

Sarah Koenig

This scared lease holders. At the Fire Hall meeting, people called for the supervisors' heads. The supervisors, you don't need them, one old lady says.

Sarah Koenig

This is Mary Dalbo. She doesn't actually live in Mount Pleasant or have a say in its zoning, but she showed up to this meeting shouting and talking smack constantly. You can find her on Range's website, where she's featured in one of their folksy PR testimonials.

Sarah Koenig

Oddly, at the meeting, Jim Cannon said Range could live with conditional use, as long as the process wasn't too drawn out. They just needed to be able to plan. Mary Ann says that was the first she'd heard of it.

Mount Pleasant isn't a town that's accustomed to being mad at itself. But by this point, divisions in town were pretty deep. The gas money had made things weird between lease holders and non-lease holders, even between close friends. Anyone questioning Range's activities felt marginalized. People started insulting each other on the town's Facebook page.

A creeping censorship has slipped into town. People told me they'd been asked not to discuss drilling at PTA meetings, or at the local library, which, again, is funded by Range.

Sarah Koenig

That's Dencil Backus, from the citizens group that suggested conditional use zoning for the town.

Sarah Koenig

This is Frank Hnat again, the artist. Dencil Backus lives on Walnut.

Sarah Koenig

The underbelly of this argument is about class, that the people without leases don't have leases because they don't own their mineral rights. And they don't own the mineral rights because they're newcomers. The earlier owners retain the rights. And newcomers, in a lot of cases, is code for city folk who have moved in and who have more money than the farmers who have lived there forever. In other words, the people without leases are either just bitter because they can't cash in, or they've already got money, so they've got the luxury of questioning this whole endeavor.

After the Fire Hall meeting, Range stopped any new drilling in Mount Pleasant. It announced it would continue to develop three well pads that were already underway. But Matt says they've taken 30 other locations off their two-year drilling plan. That's hundreds of wells and millions in royalties on hold.

And here's the rub. Another company couldn't just come in and drill once Range left, in part, because no one else could lay a pipe to move the gas out. All the surrounding land is spoken for. Matt says they had no choice. The town supervisors had made the landscape too unpredictable for Range to do business. Prediction in all its forms has been Range's mantra during this fight. Matt used the words "predict," "predictability" and "unpredictable" 28 times during our interview.

Sarah Koenig

That's where Range has bested the township at every step, spinning this fight their way, stoking the notion that the supervisors were the ones causing people to lose money, because they refused to negotiate with the company, rather than the other way around. The mass mailed letters, the meetings, the spending all over town, and all this on top of their normal media campaign. Like many gas companies, Range has ads on TV, they underwrite radio stations, they sponsored the State Association of Township Supervisors' Conference this year. For a township like Mount Pleasant, they just can't compete with all that.

Sarah Koenig

It seems Range's strategy so far has kind of worked. A lot of people do blame the supervisors for what's happened. I got to Mount Pleasant the day after the primary, when the lone supervisor up for reelection was defeated.

Sarah Koenig

Again, that's Frank Hnat, the artist. Here's [? Mary Toward, ?] who owns the Old Hickory Inn.

Sarah Koenig

Finally, Mary Ann wrote one last letter to Range. "To be blunt," she wrote, "we simply cannot continue down this path of conflict." She and the township offered one last solution: mediation. And so, in May, Range and Mount Pleasant supervisors presented their cases to a neutral arbiter, a retired federal judge. And they came to an agreement that was about as good as anyone could hope for. The township got the conditional zoning it wanted, but it would streamline the process so the company would avoid the kinds of delays that it feared. And Mount Pleasant would allow Range to have its managers live in trailers on the drilling sites, which is a whole other fight they were having. Matt told me Range was hopeful about the compromise.

At the end of this mediation process, Mount Pleasant supervisors took that agreement they'd hashed out and voted to turn it into law. It seemed like the year and a half long dispute was over.

What happened next surprised me more than anything I'd heard so far. Matt Pitzarella claimed Range never got to sign off on the final language of the ordinance, and was blindsided by the vote, that they'd only found out about it the day before it happened. Incidentally, it was public information. I'd known about it for more than a month. And he also wrote me this in an email, "It's disheartening that the township could not respect the mediation process, and that makes us very reluctant to make two-year-out operation plans based on a permitting process that we can't predict from a township who just went back on their word." So Range is still pulling out of the town, agreement or no agreement.

Regardless, Range and other gas companies have a potential trump card in all of this, a trump card that could bypass Mount Pleasant's new rules, and all the other zoning rules that towns have enacted all over Pennsylvania, by putting the state in charge of zoning for gas production instead of local officials. That's what gas companies had been lobbying for this year.

Sarah Koenig

That perfect world might come. A bill before the Pennsylvania legislature, sponsored by the Senate president pro tem, would impose an impact fee on the gas industry, sort of like a tax. The money would go to municipalities affected by drilling. But as part of that bill, the state would enact the kind of zoning that industry wants and that Mount Pleasant rejected, permitted use zoning in all municipalities in Pennsylvania.

Tucked into the second to last page of the bill it says, "If any town chooses to zone more strictly than the new state standard, that town will not get any impact fee money." In other words, Mount Pleasant will either have to do it Range's way or be cut out of the will.

Ira Glass

Sarah Koenig, who's one of the producers of our show.

[MUSIC - "LET'S MAKE A DEAL" BY THE NEW KINGS]

Ira Glass

Well, our program was produced today by Alex Blumberg, Ben Calhoun, Jane Feltes, Sarah Koenig, Jonathan Menjivar, Lisa Pollak, Robyn Semien, Alissa Shipp, Nancy Updike and me. Our senior producer is Julie Snyder. Production help from Eric Mennel. Music help from Damien [UNINTELLIGIBLE]. Seth Lind is our production manager. Emily Condon's our office manager.

[ACKNOWLEDGEMENTS]

Our website: thisamericanlife.org. This American Life is distributed by Public Radio International.

WBEZ management oversight for our show by our boss, Mr. Torey Malatia, who is, I don't know, kind of harsh. Back years ago when I first showed him my idea for this radio show--

Ira Glass

I'm Ira Glass, back next week with more stories of This American Life.

Announcer

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