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WILSALL – Every few months, Denis Prager reads the state land auction report, dreading the day he may see his land listed in a Montana mineral rights lease.

It may be his only warning before a fracking well is drilled on his Shields Valley property.

Prager and his wife Barbara own what used to be school-trust land, but not the mineral rights beneath it. The state kept those rights and can lease them to raise money for Montana’s schools.

The school trust makes a lot of money from oil and gas leases, even without royalties. In fiscal year 2011, oil and gas lease payments totaled $17.7 million, surpassing the $14 million made from agricultural leases.

A gas lease would help state coffers, but it would also allow gas drilling on Prager’s land, and he could do nothing to stop it.

“If a company decided it wanted to lease the mineral rights on our land, they would not have to tell us,” Prager said. “But I would hope they would.”

In 2008, the Pragers watched with foreboding as drilling rigs broke the desolate skyline, first to the northeast and then south of their land. It wasn’t aesthetics that had them worried — it was the effect that a modern gas extraction process known as fracking could have on their 320-foot water wells.

“The pinchers were closing in,” Prager said.

But then the pinchers froze.

The Shields Valley sits above the southern tip of the Cody Shale Formation, which is less than one-tenth the size of the Bakken Formation that has sparked a massive and ongoing economic boon in North Dakota and eastern Montana. Because it contains smaller gas reserves than other formations, companies may have moved on to easier pickings.

“They found the gas, and they know it’s here,” said Kerry Fee of the Park County Natural Gas Committee. “They capped the well, and it’s money in the bank for later.”

The few exploratory wells owned by the Devon Energy Production Company and the Bill Barrett Corporation are now abandoned, according to Montana Board of Oil and Gas Conservation records.

Calls to the Bill Barrett Corporation were not returned but a paragraph in their 2009 annual report said six exploration wells were drilled but none “tested commercial levels of hydrocarbons.”

Devon spokesman Chip Minty said the wells Devon drilled were also relative duds.

John LaFave, Montana Bureau of Mines and Geology hydrogeologist, said he figured the companies left empty-handed.

“It takes a lot of money to drill those wells. I don’t think they’d plug them if they could have used them,” LaFave said.

If the companies do return, the Shields Valley will have one advantage that few communities in the nation have: a chemical analysis of area water before fracking begins.

Water provides the driving force for fracking, and the process uses a lot.

Between 2 million and 5 million gallons of fresh water are pumped down each well to fracture the rock below, according to the Congressional Research Service. Often regions need “refracking,” which requires several million gallons more.

“Everyone worries where the water will come from,” Barbara Prager said. “Water is valuable.”

Fracking also pollutes that water, which has led to claims that polluted water from fracking has fouled fresh groundwater in some parts of the nation.

But because the 2005 Energy Policy Act exempted fracking from the regulations of the Safe Drinking Water Act, those claims are hard to prove. Companies maintain the recipes of chemicals they add to the water are proprietary and, because of that exemption, can refuse to divulge what specific chemicals are used.

In Pavallion, Wyo., residents complained in 2009 that their well water smelled of chemicals. The Environmental Protection Agency investigated. Six months ago, the EPA linked area fracking to drinking water contamination for the first time.

Communities in Pennsylvania and Texas have had a harder time establishing such a link.

Without knowing what chemicals companies were using, residents couldn’t prove the chemicals in their water came from fracking. They might have had a case if they knew what was in their water before fracking started, but none had the foresight to collect such samples.

As such complaints got national attention, Montana state Sen. Bob Hawks of Bozeman approached the industry and was allowed to see the files on 20 lawsuits from around the nation. He noticed that none of the plaintiffs were able to establish a connection to the chemicals used by the industry.

“I wanted the companies to document what they were using, so if it turned up later, they would be held responsible,” Hawks said.

Hawks was one of two legislators who sponsored bills in 2011 requiring such information. Both bills died in committee.

But the push for disclosure is getting stronger. Now the federal government is poised to implement similar rules for fracking on federal and Indian lands.

At the beginning of May, the Bureau of Land Management announced it might require companies to disclose their chemicals.

The comment period was scheduled to close June 25, but the deadline was extended to Sept. 10 after Wyoming groups, led by Gov. Matt Mead, requested a delay. Already, the BLM has received 170 comments.

Shari Kepner moved to the Shields Valley from northeast Pennsylvania, where her family still lives, surrounded by fracking well pads. She worries fracking and its potential dangers have followed her.

“Penn State gave a bunch of talks that got people to buy in,” Kepner said. “The big point was the water table was at 1,000 feet and the companies were drilling to 6,000 feet – they just kept touting that.”

Geologists and industry members claim fracking is safe because thick layers of rock protect aquifers above from fracking fluids in the shale below.

While the bottom of the wells may not be a problem, the wells themselves can be.

Well pipes, or casings, have to withstand the same pressure that is exerted on the shale during fracking, and they can fail, developing cracks at any depth. Such cracks can leak fracking fluids into the ground above or even within an aquifer.

For example, on June 17, Shell Oil notified the Pennsylvania Department of Environmental Protection of a methane leak from one of their wells. The leak caused a drinking water well almost a mile away to overflow and caused bubbling in a nearby stream.

A ProPublica review of 220,000 well inspections found that structural failures inside injection wells are routine. From late 2007 to late 2010, one well integrity violation was issued for every six deep injection wells examined — more than 17,000 violations nationally. More than 7,000 wells showed signs that their walls were leaking.

In June, the Pew Center on the States reported that because of a lack of manpower, most wells across the U.S. are not inspected in a given year, and many wells go two or three years without being checked.

Alan Johnston owns both land and mineral rights in the Shields Valley, and, like several of his neighbors, he leased his rights to a company for seven years in 2007. That was before he heard about some of the pollution issues.

“People didn’t know as much about fracking then,” Johnston said. “But the companies pay a lot of money, so you can see both sides of the issue.”

Johnston is active in the Shields Valley Watershed Group, which is focusing on the possible effects of fracking on local water.

As an irrigator, he knows water can become scarce in late summer. Most of the water rights in the valley are locked up, and agricultural rights can’t be changed to industrial rights easily, if at all. So companies won’t be able to use much valley water.

“They had to truck it in a few years ago, but we wondered where they got it from,” Johnston said.”

Fracking may not be able to deplete the valley’s water supply, but water quality is another matter.

“The main concern in Montana is what happens above ground, not below,” Johnston said. “It’s the wastewater in the cache ponds.”

Following advice from leaders of other Montana communities now surrounded by fracking wells, the watershed group knew the best course of action was to test the region’s water before the rigs returned. But chemical testing isn’t cheap, and an agricultural valley with 1,900 people doesn’t have a lot of resources.

“There was an estimate of around $75,000 for a private firm to sample just the first round,” Fee said. “They need to sample multiple times during the year for a few years so figure at least a quarter million dollars.”

Then they learned that Park County happened to be next in line for intensive groundwater sampling as part of the Montana Bureau of Mines and Geology groundwater characterization program. Sampling is scheduled to begin this fall.

The 1993 Legislature authorized the program to collect basic groundwater data statewide to provide better information for decisions on water development. Scientists spend about two years sampling groundwater a few counties at a time. So far, they’ve covered about a quarter of the state.

As long as they were at it, the watershed group requested tests for a few more chemicals associated with fracking. The bureau agreed.

“We don’t normally test for organic compounds, but we’re going to try to work up a more special focus for areas like this,” said hydrogeologist LaFave. “We’ll scare up some funding.”

Fee said the bureau’s help went beyond financial – it also lends credibility that would be harder for a gas company to question in court than data collected by a private company.

“The pieces are falling into place,” Fee said. “As far as we can tell, Park County may be way ahead of the curve on this.”

Johnston said it will be a few more years before some of the seven-year leases are up. Some people may not renew their leases, but, armed with baseline water quality data, some might.

“I would lease again, but I would ask more questions and put more requirements in,” Johnston said. “It’s not black and white. People are bringing up serious concerns, and that’s OK.”

Laura Lundquist can be reached at 582-2638 or

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