“Stream Discharge, Drill Cuttings, Oil, Brine and/or Silt”: Response to Mike Knapp, MDS Energy Development (Or: best not to call me a junkie, Or, even better: A love affair: MDS, Snyder Brothers, and First Class Energy)

In the ongoing exchange between myself and the self-styled natural gas landman-maverick VP of Land and Public Relations, Mike Knapp—Snyder Bros/MDS Energy Services, I have sought to lay out in as thorough and objective a fashion as possible the facts relevant to Mr. Knapp’s/MDS claims that (a) natural gas extraction whether by vertical well drilling or hydraulic fracturing if safe, (b) that it will lead to the nation’s energy independence, and (c) that claims made by the anti-fracking activists are misplaced, if not entirely miscalculated. What I have shown is that Mr. Knapp (and his stalwart company, Tom Shepstone, Nicole Jacobs, Joe Massaro, among a selection of anonymous others posting on the Energy in Depth thread, “Natural Gas Protestors Have Overstayed Their Welcome at the Redwood Inn”) are either just mistaken, willfully ignorant, malicious, and/or actively engaged in mendacity with respect to each of these claims.

You can find the entire hoary thread here: http://eidmarcellus.org/marcellus-shale/natural-gas-protestors-have-overstayed-their-welcome-at-the-redwood-inn/12112/.

And you can find my original Raging Chicken piece here: http://ragingchickenpress.org/2012/08/19/response-to-mike-knapp-best-not-to-call-me-an-elderly-hippy/.

Not content to simply acknowledge the facts established by the Pennsylvania Department of Environmental Protection (DEP) concerning multiple and serious environmental and health-endangering infractions at the MDS drill sites between 2008 and 2010, and no doubt keen to defend his employer in the flush of a promotion to Vice President of Land and Public Relations for MDS Energy (formerly Snyder Bros.), Mr. Knapp posts the following—insisting that whatever mistakes may have been made in the past, MDS has become a model player in the Marcellus gas boom:

Mike Knapp:

“Sorry Wendy, all that your post shows is that the DEP is on the job and being very vigilant.

Many of those violations are redundant and much scarier than they sound. Our most “egregious” offense is that during some extremely hard downpours, some muddy water ran off of our access roads into streams already filled with muddy water. Its something that we try very hard to avoid, but it has happened a few times during extreme weather. But its not anything that has endangered the public health or the environment as I mentioned previously.”

“Improperly discharging tophole water? We hit some top hole drinking water quality water and discharged to a field. It hit a dry creek bed and went into a creek, so we got fined for the equivalent of someone leaving their garden hose running and having that water go into a creek. No threat to health.”

“Not maintaining 2′ of freeboard? That means our fresh water ponds accumulated too much rain water and DEP stopped by before we were able to pump them down. Not exactly an environmental threat. Proof that DEP is not letting ANYTHING slide.”

“You’ll also note that your list of violations stops 2 years ago. As we came to understand the new regulations and the way DEP was enforcing them, we’ve adapted, raised our standards, and haven’t had any problem since.”

“As I stated before, I am extremely proud of our environmental record and the guys that work hard to make sure we’re doing things right. Watching you grasp at straws in an attempt to discredit us is really showing everyone just how desperate you are. New York is finally coming to its senses and will soon be allowing hydraulic fracturing. Once NY residents see with their own eyes in their own backyards just how minimal an amount of disruption there is for such a benefit to the community, there will be no going back. So take your shots while you still can. The number of ears that are turning deaf to your nonsense are increasing every day.”

Unfortunately, the facts do not support Mr. Knapp’s support of MDS’ environmental record. Indeed, investigating a little further back to 2004 when MDS was still incorporated as Snyder Bros., what we find is evidence of a pattern of negligence, arrogance, and entitlement that characterizes the MDS drilling enterprise into the present.

From 2008-2010:

1. Mr. Knapp claims that all my post shows is that DEP is “on the job,” effectively conceding that MDS is guilty of the violations with which they are charged. But then Mr. Knapp tries to minimize and/or dismiss the DEP charges and fines in the interest of making MDS appear to be a good corporate citizen. Nothing could be further from the truth, and Mr. Knapp doesn’t get to have it both ways.

2. Mr. Knapp grossly distorts the facts when he insists “some muddy water ran off of our access roads into streams already filled with muddy water.” According to DEP reports, the company was found to have, for example, discharged “drill cuttings, oil, brine and/or silt” “into waters of the Commonwealth,” (“There was a steady flow of sediment laden water exiting the culvert and entering directly into the stream”/ “Discharge of Industrial Waste to the Waters of the Commonwealth”), “discharged pollutional material into the waters of the Commonwealth,” (same language —into stream), “failed to prevent sediment or other pollutant discharge into the waters of the Commonwealth,” failed to “case and cement to prevent migrations into groundwater,” failed to “plug a well upon abandonment,” “failed to minimize accelerated erosion,” and failed to “stabilize a site” towards site restoration. I have no idea which of these violations is the source of Mr. Knapp’s reference—since none of them fit “muddy water run-off.” What is clear is that MDS interests are served when as little of this record sees the public light of day as possible—and that, of course, is Mr. Knapp’s well-paid job.

3. Mr. Knapp similarly distorts the facts when, with respect to the discharge of top hole water, he insists that “so we got fined for the equivalent of someone leaving their garden hose running and having that water go into a creek. No threat to health.” Flatly false. Top hole water is, in fact, so potentially hazardous that, for example, Minuteman Environmental Services offers a specific “Top Hole Water Service” to insure its proper clean-up in case of spill: “At Minuteman Spill Response, we understand the challenges of operating in the natural gas drilling industry—and we understand your needs. Our team is practiced in top hole water service, emergency spill response, stabilization and containment, soil excavation and treatment, hazardous materials testing, crane recovery and much more” (http://www.minutemanspill.com/top-hole-water-service/). Nonetheless, MDS is cited not once, but twice, for top hole water that “discharged into a stream.” This is manifestly not like leaving your hose running—unless your hose runs from a frack-fluid well or waste pit. In fact, despite Mr. Knapp’s denial (below, comment) that tophole water is not toxic, the evidence makes clear that it not only may be toxic (in addition to drill cuttings), but that the DEP is concerned about this:

(a)  The owner and operator may not cause or allow a discharge of a substance to the waters of this Commonwealth unless the discharge complies with this subchapter and Chapters 91—93, 95 and 102, The Clean Streams Law (35 P. S. § §  691.1—691.1001) and the act.

(b)  The owner and operator may not discharge tophole water or water in a pit as a result of precipitation by land application unless the discharge is in accordance with the following requirements:

(1)  No additives, drilling muds, pollutional materials or drilling fluids other than gases or fresh water have been added to or are contained in the water, unless otherwise approved by the Department.

(2)  The pH is not less than 6 nor greater than 9 standard units, or is characteristic of the natural background quality of the groundwater.

(3)  The specific conductance of the discharge is less than 1,000 µmHos/cm.

(4)  There is no sheen from oil and grease.

(5)  The discharge water shall be spread over an undisturbed, vegetated area capable of absorbing the tophole water and filtering solids in the discharge, and spread in a manner that prevents a direct discharge to surface waters and complies with §  78.53 (relating to erosion and sedimentation control).

(6)  Upon completion, the area complies with §  78.53.

(7)  The area of land application is not within 200 feet of a water supply or within 100 feet of a stream, body of water or a wetland unless approved as part of a waiver granted by the Department under section 205(b) of the act (58 P. S. §  601.205(b)).

(8)  If the water does not meet the requirements of paragraph (2) or (4), the Department may approve treatment prior to discharge to the land surface. (http://www.pacode.com/secure/data/025/chapter78/s78.60.html).

In other words, top hole water may only be released to the surface IF it meets all of these requirements–and this makes clear that it very well may NOT. Indeed, it may be contaminated with “drilling muds, pollutional materials or drilling fluids other than gases or fresh water [that] have been added to or are contained in the water.” Not to mention “sheen from oil and greece.” And, as I have shown, MDS has been cited by DEP for violations pursuant to this code, 78.60–discharge requirements.

4. Not maintaining a freeboard: it apparently rains every time just before DEP comes by given the repetition of this infraction.

Let’s now turn our attention to the history of MDS: An intertwined, money-soaked family affair with Snyder Brothers:

The MDS pattern of  environmental violation is established well before MDS is incorporated as MDS in 2005. Just one example—but one that makes the MDS corporate ethos and values clear: While Snyder Bros. and MDS are legally two separate corporate entities, they are in fact deeply interwoven enterprises both professionally and through the family ties of their principle executives. Celebrating the close personal ties between the two companies, Knapp, for example acknowledges that “MDS Energy was founded in 2005 by owner and president Michael Snyder (son of David Snyder of Snyder Brothers Inc., largest independent gas producer in PA) with the purchase of a deteriorating pipeline system in Indiana County, PA. (http://knappap.blogspot.com/2012/07/proud-to-accept-position-at-mds-energy.html).  Michael D. Snyder is the MDS CEO since the 2011 formation of MDS as MDS LLC, and what’s clear is that the formation of MDS offers Michael Snyder and Mike Knapp–previously of Knapp Aquisitions (a property leasing agent) the opportunity to cash in not merely on land lease to drilling companies, but on the drilling itself. As Knapp puts it “I am honored and proud to announce that I have been offered and accepted the position of Vice President of Land and Public Relations at MDS Energy, the fast growing local natural gas producer based here in Kittanning.” That is to say, Knapp is honored and proud to be affiliated with a company whose effective parent company–both by blood and by corporate alliance– Snyder Bros., appears to have presided over one of the most tragic methane explosion disasters in Pennsylvania history. From Pro Publica:

“The most tragic Pennsylvania methane case began on March 5, 2004, in Jefferson County, about 80 miles northeast of Pittsburgh. According to Baldassare, gas seeped into the home of 64-year-old Charles Harper and his 53-year-old wife, Dorothy, from one of several adjacent wells being drilled by Snyder Brothers. The gas collected until it exploded and, according to court records and news reports at the time, reduced the home to “a pile of rubble.” Debris was found across the road, and insulation hung from trees 30 feet in the air. The bodies of the Harpers and their grandson, Baelee, were found buried in the debris.”

“Executives from Snyder Brothers did not return calls for comment. The company was sued in state court in Jefferson County and reached an undisclosed settlement with the Harper family.”

“State officials traced the methane’s geochemical fingerprint and determined it had come from one of three Snyder wells nearby. The investigation, however, remains open in part because Snyder has yet to comply with state orders to conduct pressure tests on the wells — orders delivered in 2005, according to Baldassare. But that doesn’t mean state officials aren’t sure about what happened.”

According to Baldassare [the state’s “dedicated methane migration investigator”], the Snyder methane caused the explosion.

“In my view,” he said, “there was no uncertainty” (http://www.propublica.org/article/water-problems-from-drilling-are-more-frequent-than-officials-said-731).

It is stunning—though unsurprising that any of the responsible executives at Snyder Bros. refused to be interviewed for the Pro Publica story. Indeed, the refusal is perfectly consistent with the pattern deployed by Mr. Knapp—deny, dismiss, paper-over, ridicule, evade. But this is the salient moral point: “The bodies of the Harpers and their grandson, Baelee, were found buried in the debris.” That is, people died—and Snyder Bros.’ response was to refuse comment despite the fact that the evidence made clear that Snyder was responsible for the explosion. Read in light of the record of reckless and negligent corporate behavior MDS exemplifies between 2008-2010, we can only conclude that MDS has no greater interest in the health—or even the lives—of the residents who live in their communities than does their effective parent company, Snyder Bros., Like Snyder’s MDS’ has a singular interest in insuring the profitability of the company—and the PR necessary to secure that goal.

Mr. Knapp claims that Snyder Bros. and MDS “have nothing to do with each other besides a family relation” (see comments below). But that is false on the evidence:

1. August, 2010″Kittanning, Pennsylvania-based MDS Energy, LTD is an independent natural gas exploration & production company that is a wholly-owned subsidiary of MDS Associated Companies. The parent company also owns the drilling and service company First Class Energy, LLC. MDS Energy specializes in developing small acreage for shallow wells in residential and commercial areas, as well as vertical Marcellus wells on larger tracts…The MDS Energy website, accessed in August 2010, indicates that it controls over 10,000 acres in ArmstrongButlerClarionJefferson, and Indiana Counties…A news account in August 2010 stated that MDS Energy had made an open invitation to landowners in its service area to join in a pool of up to 500,000 acres that could be offered for sale to a large bidder. The article mentioned that the company either already owned or else had commitments for 300,000 acres. Knapp Acquisitions & Production, LLC was partnering with MDS Energy on this project. Reportedly, MDS had drilled 11 Marcellus Shale wells, but required support, possibly from a joint venture partner, to further develop its acreage to best advantage.

  • Michael D. Snyder is President of MDS Energy, LTD and First Class Energy, LLC.
  • Shawn Cogley and Jason Knapp are MDS Energy land agents.
  • Mike Knapp, President of Knapp Acquisitions & Production, LLC, is contact on the MDS Energy leasehold sale.” (http://waytogoto.com/wiki/index.php/MDS_Energy,_LTD)

2. From the “Management” page of MDS: “Mr. Snyder is a son of David E. Snyder, the Chairman, Chief Executive Officer and President of Snyder Brothers, Inc., the brother of Bryan K. Snyder, a Vice President of Snyder Brothers, Inc., a nephew of Mark A. Snyder, the corporate Secretary of Snyder Brothers, Inc., and a cousin of Benjamin T. Snyder, the Vice President of Marketing of Snyder Brothers, Inc. Mr. Michael Snyder is also an indirect minority shareholder of Snyder Brothers, Inc. Snyder Brothers, Inc. has participated in drilling and currently operates more than 3,000 oil and gas wells in Pennsylvania” (http://www.mdsenergy.net/management.php). That is, Michael Snyder ‘s interests are the interests of Snyder Brothers, and these are simultaneously the interests of MDS where “Mr. Snyder will devote approximately 100% of his professional time.” The fortunes of these two companies are wedded at the hip. But should any reader remain unconvinced:

3. August 2009: “Kittanning-based MDS Energy Ltd has successfully completed their first Marcellus Shale natural gas well in Armstrong County. The well, located in Washington Township, was drilled to a total depth of 6,750 feet by MDS Energy’s sister company First Class Energy…“Based on the results of our first Marcellus Shale well, we feel confident in our ambitious plans to aggressively develop this formation over the coming years,” said Michael Snyder, President of MDS Energy” and First Class Energy, and an “indirect minority shareholder of Snyder Bros.” 

“The temporary well head in Adrian is shown here that is used to accept the sand/water mixture, blown down under the formation under pressure to crack the hard shale formation, allowing the gas to escape” (http://www.kittanningpaper.com/2009/09/03/washington-township-gas-well-now-operational/1714). Pretty, isn’t it?

Mike Knapp chimes in: “People are genuinely excited about all of this once you explain to them just how much of an impact it’s going to have on the region,” land agent Mike Knapp said. “Our operations are very environmentally friendly. They disturb a minimal area for a short period of time, and the economic implications are unimaginable.” Knapp said the area is set for an economic boom for Marcellus Shale gas that is similar to the boom of the 1850’s when the first oil well was drilled here” (http://www.kittanningpaper.com/2009/09/03/washington-township-gas-well-now-operational/1714).

Pictured are (from left to right) MDS Energy Vice-President Randy Morris, Jr, MDS Energy President Michael Snyder, and Snyder Brothers Inc. President David Snyder. Snyder Bros, MDS, First Class Energy–effectively the same corporation.

4. These are all the same folks who, exploiting Governor Tom Corbett’s appeal to the recession to force fracking onto public lands, want to drill on public school properties: “Because of that budget, school board officials are exploring alternative revenue sources – one of those being Marcellus Shale gas drilling…Facilities and Property Services Director William Henley started looking into the Marcellus Shale process five months ago after meeting with two Kittanning drilling companies – Snyder Bros. and MDS Energy…The district currently has a lease agreement with Snyder Bros. for gas deposits, with two wells being drilled on the West Hills school complex property, and asked representatives if they wished to drill for Marcellus Shale or at other school-owned properties” (http://www.kittanningpaper.com/2011/04/18/school-officials-explore-gas-drilling/16100). Note how school officials themselves refer to “Snyder Bros. and MDS as if they were one entity. That’s because they know this is, for all practical purposes, one entity.

5. Perhaps the most damning evidence, however, that MDS and Snyder are effectively the same company–despite Knapp’s virulent denials–come from Mike Knapp. Consider this unedited exchange with Veronica English (3.7.11):

English: “For starte[r]s according to the DEP web site MDS does not have any permits for Marcellus. If you follow any of the feeds you will quickly learn that they are strictly an aquisition co. For the most part MDS seems to run with Snyder Bros, Markham, Knapp, 1st Energy, all of which are in the business of accquiring land offering “leases” which in reality are an option of which if you very carefully read it starts as 5yr with an “automatic 5yr”renewal. They will say they only write for 5yrs, they just forget about the automatic renewal. Please be very weary of these. I’ve been called after the signing wanting to know my thoughts, only to see there is nothing that can be done” (http://gomarcellusshale.com/group/clarion_county_marcellus/forum/topics/mds-energy-ltd?xg_source=activity).

Knapp: “The owner of MDS Energy ( www.mdsenergy.net ) is Michael Snyder.  He also owns a sister company called First Class Energy ( www.firstclassenergy.net) , which runs 2 drill rigs, 2 service rigs, and many dozers and excavators.  Started in 2005 here in Kittanning (our hometown).  MDS is NOT an acquisitions company.   MDS is a production company.  They have drilled over 100 wells, including multiple Marcellus Shale wells.  Please disregard the peanut gallery.   Here is a link to the DEP website that clearly shows that MDS Energy drilled 21 shallow wells and 2 Marcellus wells in 2010.”

http://www.dep.state.pa.us/dep/deputate/minres/oilgas/2010%20Wells%…

“Snyder Brothers is one of the largest drillers/operators in Western Pennsylvania.  They have over 4,000 wells.  They are not an acquisitions company.  Knapp Acquisitions & Production ( www.knappAP.com ) is a land leasing company that secures leases on behalf of MDS Energy. Snyder, MDS, Knapp, and multiple other companies were leasing last year to include properties in a sale of some of our own acreage.  We only did this for about 6 months. We have since stopped pursuing leases to go into that deal and are back to securing leases which we intend to drill ourselves” (http://gomarcellusshale.com/group/clarion_county_marcellus/forum/topics/mds-energy-ltd?xg_source=activity).

In other words, MDS is Michael Snyder’s and Mike Knapp’s venture to cash in on the Snyder family legacy of gas drilling. This is about something far thicker than blood. It’s all about money.

And for those still unconvinced, we can just follow the money trail through identical Snyder Bros and MDS 2010 campaign donations to Jeff Pyle:

Snyder Bros, 5.6.10: $3126.48 (top donor to Pyle’s campaign)

MDS: 11.22.11:$2160. (sixth don0r out of 66)

Snyder Bros. makes no less than 13 donations to Mr. Pyle totaling $10, 426.48–the best influence over, say, decisions to locate gas wells on public elementary school grounds that money can buy (http://new.marcellusmoney.org/candidate/pyle-jeffrey-p).

Lastly, let’s turn to the present. As I have shown, natural gas extraction operations are not “environmentally friendly,” and MDS is a particularly poor steward of their environmental responsibility.

From 2011 into the present:

Mr. Knapp claims that my list of violations “stops 2 years ago.” Indeed, it does. Would MDS violations be able to make the same claim. But, alas, such is not the case.

A report written by Gerald Smith from the Coalition for a Healthy County (Indiana, PA) pretty much lays it out:

“1. From 2008 – 2011, between 50 and 60 percent of all gas drillers in Pennsylvania violated no DEP regulations. MDS is not in this category of drillers.”

“2. For companies with violations, MDS’s ratio of violations per permit is higher than other companies with a similar percentage of Marcellus permits.”

“3. The number of Marcellus permits is increasing, both industry wide and for MDS in particular.”

“4. MDS’s violations are increasing over the last few years, while the violations for the industry is on the decrease.”

“5. Many of MDS’s violations were on vertical Marcellus Shale wells. These involved failure to protect the waters of the Commonwealth, and failing to follow their own Erosion and Sediment Plan. MDS does not have any horizontal Marcellus wells.” (http://coalitionforahealthycounty.files.wordpress.com/2011/09/110905-mds-hearing-part-2-violations.pdf)

Mr. Smith continues:

“For companies with violations, MDS’s ratio of violations per permit is higher than other companies with a similar percentage of Marcellus permits…MDS Energy spokespersons have indicated that this is an environmentally concerned company, and have a very safe record. A review of their record compared to other drillers who have a similar percentage of Marcellus wells shows that MDS is in not a leader in drilling, and is fact behind the curve on safe drilling.”

In fact, for 2011, MDS has one of if not the highest comparative rate of violations for all drilling concerns in the Commonwealth: 60%. Moreover, in 2011, MDS achieved more violations per well permit than any other industry drilling in Pennsylvania (http://coalitionforahealthycounty.files.wordpress.com/2011/09/110905-mds-hearing-part-2-violations.pdf).

Mr. Smith recommends denial of a zoning permit to MDS.

In his comment, Knapp insists that “[a]s far as Gerald Smith, while we disagree on drilling, I think Gerald would tell you that I’m a pretty reasonable and decent guy. Weve stood around for hours debating gas drilling late into the night after pu[b]lic meetings had ended. We received our permit to drill that well and did so without any violations. We worked with the county to implement additional protections for the park. I actually just took out one of his wife’s anthropology students on a well site tour for his college project on gas drilling last week.” I have no idea what Smith think of Knapp personally; and that is entirely irrelevant. Smith recommended denial of the permit on the grounds that MDS’ record is plainly and dangerously poor.

So, there you have it, Mr. Knapp. The evidence clearly convicts MDS of precisely the corporate ethos that endangers the health and welfare of us all. The name of this ethos is “genocidal profiteering.”

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