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March 20th, 2013

Will Your Tax Dollars Subsidize Fracking’s Wasteful Water Use?

By Mary Grant fracking for natural gas

This morning, the Senate is discussing a new bill that, among other things, will give federally subsidized loans to companies that sell water to the oil and gas industry.  

Tagged onto a big water infrastructure bill is the “Water Infrastructure Finance and Innovation Act of 2013,” often referred to by its acronym WIFIA. This speciously named, industry-backed program will give low-interest loans primarily to large water companies to finance certain projects, including desalination and other water supply activities.

Hidden in the fine print is evidence that the program seeks to use public dollars to finance water projects that benefit the oil and gas industry. In fact, it will give funding preference to those projects. The program has just nine criteria for determining which eligible projects will get financial support, and one of these nine factors is: “the extent to which a project serves regions with significant energy exploration, development, or production areas.”

This means projects that produce more water for fracking will get priority over other water projects outside of oil and gas drilling areas.

Fracking uses millions of gallons of water per well, and the major water companies are salivating at the opportunity to sell water to water-guzzling oil and gas companies. Aqua America, the second largest U.S. investor owned water company, has a whole section of its website describing its efforts to sell water to shale drillers. The company is an associate member of the Marcellus Shale Coalition, and the company’s CEO seems to act as a gas industry shill.

American Water — the largest U.S. investor owned water company — also sells water to the oil and gas industry. This month in a presentation to investors, the company reported that it made about $3 million in revenue last year from fracking deals and sold more than 430 million gallons to frackers.

Our issue brief “Why the Water Industry Is Promoting Shale Gas Development” delves deeper into the cozy relationship between large water corporations and the oil and gas industry. These two powerful industries held their first ever Global Water: Oil & Gas Summit in Dubai last year to come up with plans for how to mutually benefit from water intensive shale development.

One thing is clear: The federal government should not use our tax dollars to subsidize corporate water sales to the oil and gas industry.  

Act now to tell your Senators to oppose WIFIA and its low-interest loans to large water corporations that sell water for fracking.   

2 Comments on Will Your Tax Dollars Subsidize Fracking’s Wasteful Water Use?

  1. Amiante Tarvoke says:

    I just received a response from Dianne Feinstein about this. In it, she states “The proposal also does not incentivize fracking of oil and gas wells, which are not eligible for funding under the WIFIA program.”

    Is there a misunderstanding?

    The act passed the Senate on May 15 by a vote of 83 to 14 and included the WIFIA provision.

  2. kfried says:

    Hi Amiante,

    I think that in this instance, it’s a matter of slight differences in interpretation. Oil and gas companies cannot directly apply to WIFIA for funding. WIFIA, however, could give government-subsidized loans to private water companies that sell water to oil and gas companies for fracking. WIFIA even prioritizes assistance to projects that serve areas with “significant energy exploration, development, or production areas.” We worry that private water companies will use WIFIA loans to build new water supply projects, including desalination plants, so that they can sell more water to oil and gas drillers for fracking.

    Check out this article (http://articles.philly.com/2013-05-05/business/39028594_1_marcellus-shale-joint-venture-aqua-america-inc) from earlier this month to see how Aqua America is profiting by selling water to oil and gas drillers in the Marcellus Shale. The company also plans to expand to its water sales to drillers in the Utica Shale.

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