How Fracking in the Northeast Could Impact Farmland in Oklahoma

• Joe Wertz
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  Joe Wertz was a reporter and managing editor for StateImpact Oklahoma from 2011-2019. He reported on energy and environment issues for national NPR audiences and other national outlets. He previously worked as a managing editor, assistant editor and staff reporter at several major Oklahoma newspapers and studied journalism at the University of Central Oklahoma.

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Ray Kemble delivers fresh water to a home that had their water contaminated due to hydraulic fracturing on January 18, 2012 in Dimock, Pennsylvania.

The federal government issues mortgages and loan guarantees to low-income Americans living in rural areas.

But the U.S. Department of Agriculture is considering requiring environmental studies before issuing money to those leasing their land for oil and natural gas production.

Why is this happening? U.S. Rep. Dan Boren says it’s because the USDA is bowing to political pressure exerted by opponents of hydraulic fracturing — particularly those in the Northeast, reports the Tulsa World.

The USDA’s Rural Housing Service generally doesn’t require a down payment, and has been especially popular in the wake of tight credit markets, writes New York Times reporter Ian Urbina:

… the program’s loans have roughly quadrupled since 2004.

Much of the money has gone to states like Pennsylvania, Texas and Louisiana, which are booming with oil and natural gas drilling.

The National Environmental Review Policy Act — NEPA — requires environmental reviews before federal money is spent, but home and rural business loans are generally excluded.

The rural housing decision might also impact the department’s Rural Business and Cooperative Program, which issues grants and loans to rural businesses.

Hydraulic fracturing is an increasingly common drilling technique, and it’s has had a big economic impact in Oklahoma and a lot of states. But there are environmental concerns about water contamination, spills and air pollution.

Over the last year, some banks and federal agencies have started revisiting their lending policies to account for the potential impact of drilling on property values, reports the Times.

One Agriculture Department office in New York said they were no longer financing homes with gas leases because, in part, of the expensive environmental studies.

It’s not clear if this is happening yet in Oklahoma, reports the World, but Boren isn’t waiting for confirmation.

“… taking away this loan option would only discourage economic development in rural communities like the many located in my eastern Oklahoma district,” Boren wrote Monday in a letter he sent to Agriculture Secretary Thomas J. Vilsack.

“Not only would an environmental review harm the individuals that need the loans the most, it would also be detrimental to our nation’s progress towards energy independence,” Boren wrote. “If we make potential home owners choose between getting a home loan to keep their house or maintaining a mineral lease, viable sources of oil and gas may become less accessible.”