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L’Eau DeBenedictis: Aqua America, Water Insecurity, The Manufacture of Scarcity, and Fracking

Merely “surreal” might describe the interview given by Aqua America’s CEO, Nick DeBenedictis, to Crissa Shoemaker DeBree did the fact that he is lying not portend such devastating consequences for so many people. The security of the nation’s water supply is an important, but often silent, priority for water companies, said the head of Aqua America. The worldview evinced in DeBenedictis’ brief interview with DeBree is not, in fact, surreal; it’s not even “merely” self-deluded. Rather, it epitomizes the “up is down,” “true is false,” “the sky is pink” (thanks Josh Fox) propaganda promoted by the hydraulic fracturing corporations and their associates in order to justify the construction of 200,000 fracked wells, their attendant compressor stations, water withdrawal depots, freshwater impoundments, and “produced water” deep injection disposal wells. For DeBenedictis, the sky is pink—and water is the green of a big fat dollar bill.

“The security of the nation’s water supply is an important, but often silent, priority for water companies, said the head of Aqua America, one of the largest water utilities in the country…. ‘It’s something we think about every day in our business,’ said Nick DeBenedictis, chairman, president and CEO of the publicly traded water utility” at an invitation only Central Bucks Chamber of Commerce Global Executive Briefing of about fifty like-minded fellows at the Barely Sheaf Farm in Buckingham, PA.

DeBenedictis is right on the dollar—but not for the reasons he proffers.  The security of the nation’s water supply is as much a priority for DeBenedictis as is controlling fifteen million acres of mostly rural farmland for Chesapeake’s CEO Aubrey McClendon: both commodify a condition of life—water and soil respectively—both promise profitability well beyond being water or being a site on the Marcellus (or Utica or Barnett) Shale, and both require hefty bank leveraging.

Both also promise the opportunity for manufacturing a variety of scarcity that insures a market for their products.

“Manufactured” plays a specific and dual role in this context. It means both “the falsely conscious product of propaganda and advertizing” and “scarcity generated as an empirical reality.” When DeBenedictis claims that the “water supply is an important, but often silent, priority for water companies” he insists that the threat to that supply is not terrorism, but “aging infrastructure.” Yet in implicitly soliciting the prospect of terrorism, he effectively evokes a threat to national security via attack on the nation’s water supplies.

Both his remark about water security and the location—Buck’s county—are rife with irony; first because he solicits terrorism, denies it, and reaffirms it as a threat since an aging water system is precisely what compromises water security—and makes it a target. Second, Bucks county is one of only two counties in Pennsylvania exempt from “the controversial [and now jeopardized as unconstitutional] law that strips municipalities of local control over gas drilling operations everywhere else in the state,” Act 13. Third, it’s Aqua America country: “Aqua America serves 3 million residents in 12 states. Its Aqua Pennsylvania subsidiary has 1.4 million customers in 30 counties, including Bucks and Montgomery.”

In other words, its Aqua America’s aging infrastructure, and hence Aqua America that renders us vulnerable to terrorist attack. Yet it’s also Aqua America which promises to deliver us from that prospect—if we just agree to its terms.

If it seems, however, that the notion of an implicit appeal to the threat of terrorism is over-reaching, consider the following: when asked a question about activists opposed to fracking, DeBenedictis responded by appealing directly to national security:

But if you’re opposed to the whole process, then anybody who helps the process become more efficient gets blamed. I think the bigger picture is national energy security. And then you’ve — let’s start there and then work our way down. So there’ll be people who are upset with us, but it has not — absolutely not worked into anybody in the regulated section having any problems. That’s what your real question is, right?

Short-sighted, wrong-headed, and potentially unpatriotic—these are the implications of any such appeal to “national energy security” which evokes “the bigger picture.”

A “bigger picture” endangered not only by foreign terrorists, but, we might surmise, by the home-grown variety–like the residents who refused to be bribed by the insulting $2500.00 DeBenedictis offered  them to move out of the Riverdale Mobile Home Community.

Surely that’s De Benedictis “real question.” Any other might suggest the activists have legitimate grounds for complaint—and that opens a Pandora’s box of questions about whether we can evince respect for human rights and simultaneously commodify the conditions necessary to the exercise of even the most basic of these rights: survival. I think we can’t—not if we want to maintain even the veneer of reason or conscience.

 

DeBenedictis’ recent water withdrawal for fracking gambit invites further comparison with Chesapeake’s Aubrey McClendon:  just as is Chesapeake’s massive land acquisitions only incidentally about natural gas extraction, so too Aqua America’s is only incidentally about water per se. By controlling access to a dwindling resource—clean water—DeBenedictis can leverage as profit both fears about water security and demands for industrial use. After all, water pumped from rivers like the Susquehanna can find their destinations in either water treatment plants—and then be returned to the water table—or in deep injections wells—trucked off to Ohio for “permanent” disposal (from public scrutiny if not from groundwater contamination).

Folks who want clean water will pay more and more for this “privilege.” Industries like Chesapeake who need water for fracking will have priority access because they will be willing to pay more. How better to “frame” such a strategy than in terms of jobs and national security? “In short,” said DeBenedictis, “we want to support the efforts to grow an industry that provides tremendous economic benefits to Pennsylvania and critical energy resources for our country.”  This is one sweet deal. DeBenedictis is water guy for a substantial number of the residents of a county exempted from the potential hazards of a process of natural gas extraction—fracking—from which he now stands to make millions by supplying water pipelined out of the Susquehanna a few counties—and several economic classes away—at the former Riverdale Mobile Home Park, in Jersey Shore, PA.

Put differently: the only corporate gambit missing from DeBenedictis’ portfolio is an investment in the manufacture of plastic water bottles for L’eau DeBenedictis, to stow what drinkable water remains at the end of 200,000 wells drilled everywhere in Pennsylvania except for the counties where he’s the keynote speaker at invitation-only corporate luncheons, clean water for which we’ll pay top dollar since it’s not only precious and increasingly scarce, but a fully commodified necessity of life.

Indeed, the only folks who’ll be able to afford L’Eau DeBenedictis are those pricey luncheon attendees whose tap water is likely the safest (not that these folks drink tap water), and the folks most in need of access to bottled water because their tap water’s either ignitable or otherwise suspect are folks like Riverdale’s Deb Eck that DeBenedictis is perfectly comfortable seeing evicted from their mobile home communities in order to build the water withdrawal facility that, with the help of Range Resources, will pipeline 3 million gallons of water a day to active frack pads nearby.

That’s 1,095 million gallons a year added to the 2,190 million gallons per year from close-neighbor water withdrawals for a grand total of 3 billion, 285 million gallons per year from just three sites. But that’s literally a drop in the bucket of what the fracking industry will need for the 100,000 wells projected by 2015.  Destroyed. Forever.

Whatever else is true, Nick DeBenedictis knows how to capitalize on every possible facet of the shale play, and it’s in this sense that he epitomizes the ‘Good Ole’ Boy” worldview of hydraulic fracturing. In a 2011 note to Aqua America stockholders, DeBenedictis claim that “[w] are currently pursuing the growth opportunities provided by the shale drilling industry…and focusing on the clean water aspects of the drilling business.”

He also argues that among the advantages of water withdrawal pipeline constructions like that at Riverdale is the reduction of truck traffic transporting clean water to frack pads:

Aqua America Inc. (NYSE: WTR) and Penn Virginia Resource Partners, L.P. (NYSE: PVR) (“PVR”) today announced that a newly constructed private pipeline supplying fresh water to certain natural gas producers drilling in the Marcellus Shale in north-central Pennsylvania is now fully operational. It marks the first time water is being commercially supplied directly to drill sites in the Marcellus Shale without the public-highway use of heavy-weight 5,400-gallon tanker trucks customarily employed in well completions. In less than a month of operation, the pipeline has already eliminated more than 2,000 water truck trips over rural roadways. In addition, this project supported the creation of approximately 100 local jobs over the course of construction…The pipeline project is owned and operated by Aqua — PVR Water Services, LLC, a joint venture of certain Aqua America and PVR operating subsidiaries. The 12-inch diameter steel pipeline largely parallels the trunkline of PVR’s gathering system in Lycoming County and shares PVR’s existing rights-of-way. PVR constructed the fresh water pipeline and handled negotiation of water pipeline capacity contracts with producers. Each company has invested approximately $10.2 million as of March 31, 2012, for construction of the first segment of the project. The joint venture has entered into a three-year agreement with Range Resources – Appalachia, LLC, a wholly owned subsidiary of Range Resources Corporation (NYSE: RRC), to supply fresh water to three of Range’s water impoundments.

The only problem here is that every word of this is either misleading or false. First, the delivery of fresh water to fracking operations where it will be permanently contaminated is not being involved in “clean water” other than that DeBenedictis Aqua America stockholders are encouraged to turn a blind eye to what happens the moment that water arrives at a fracking operation. Second, the 2000 water truck trips eliminated by the Riverdale pipeline are hundreds of jobs eliminated with them, replaced by one hundred temporary construction jobs pitting one set of low-paid non-unionized workers against another.

Third, DeBenedictis has no intention of eliminating truck traffic—and every intention of expanding trucking operations including trucks than run on the natural gas whose fracking operations Aqua America depends upon to support its water withdrawal stations. As Kate Fried of Food and Water Watch observes 10.31.12:

According to publicity materials recently released by the company, DeBenedictis said that he supports regulations that would help pave the proverbial road to fuel more cars and trucks with natural gas. Earlier this year, Aqua America even committed to transition many of its vehicles to burn the oil and gas industry’s current favorite fossil fuel… The fracking required to extract the gas to fuel these vehicles requires water—lots and lots of water and Aqua America wants to tap that market. Earlier this year, Aqua America was instrumental in evicting residents of the Riverdale Mobile Home Village from their homes so it could build a water withdrawal facility to supply the industry. We can only assume that Aqua America’s upcoming plans to exploit shale gas development are more trick than treat…DeBenedictis has said that selling water to shale gas operations could comprise 10 percent of Aqua America’s total income in 2015. That means that he expects those water sales to bring in more than $15 million in profit. This year, the company expects to make about $1.5 to 2 million in profit from selling water to the fracking industry via the same pipeline that caused the eviction of residents in the Riverdale Mobile Home Village.

So the only corporate venture DeBenedictis does not appear to have undertaken in the interest of completely monopolizing water security is the manufacture of plastic water bottles—L’Eau DeBenedictis. But this isn’t because he cares about people’s access to water:

Aqua America is the second largest publicly traded water and wastewater corporation based in the United States. It has pushed its way to the top through a strategy of aggressive acquisitions and drastic rate increases…Aiming to make several dozen acquisitions a year, the company targets smaller systems to avoid a citizenry armed with resources to fight the takeover. And it pursues systems in states that have fast growing populations, corporate friendly regulatory environments and considerable investment needs.
Of course, all of this is done with an eye toward its bottom line…Not long after taking over a system, the company begins its almost continual process of increasing rates. In just the first nine months of 2007, the company increased rates in nine locations. It has nine additional rate increases pending and plans even more over the course of 2008…While families see skyrocketing water bills, the company sees booming revenue growth: 13 percent in 2007 alone. But rather than reinvesting all the money from community bills into improving their water and sewer systems, as a public utility would do – the company is delivering solid returns to its shareholders.”

In other words, while families like Deb Eck’s struggle to survive along a heavily “frafficked” truck route traveled by trucks powered by natural gas requiring massive water withdrawals supplied by the very corporations who raise the price of water, thereby effectively converting it into a scarce resource, DeBenedictis can rest assured that he’s “delivering a solid return to shareholders.” While Deb Eck is potentially exposed to the hazards of asbestos, DeBenedictis can plan his next rate hike. While Deb Eck may be forced to turn to bottled water given the fact that the well water upon which her family depends is in frackland, DeBenedictis works tirelessly towards privatizing municipal water authorities.

 

No wonder Aqua America is called “the Exxon of Water.” All he needs are the plastic water bottles.  DeBenedictus would, no doubt, find such observations loathsome in face of the fact that he’s on record opposing the growing use of plastic water bottles and has invested heavily in the upgrade to municipal water infrastructure in places like Factoryville, PA. The problem again is that his actions speak far louder than his words. As reported by Sarah Pavlus, Think Progress:

 Two of the country’s largest private water utility companies are participants in a massive lobbying effort to expand controversial shale gas drilling — a heavy industrial activity that promises to enrich the water companies but may also put drinking water resources at risk…The water companies – American Water and Aqua America – are leading drinking water suppliers in Pennsylvania, where drilling is booming. They also sell water to gas companies — which use a drilling technique that requires massive amounts of water — and have expressed interest in treating drilling wastewater, a potentially lucrative opportunity…These investor-owned, publicly traded water utility companies are also dues-paying “associate members” of the gas industry’s powerful Marcellus Shale Coalition, a fact confirmed by coalition spokesman Travis Windle, who says associate members pay $15,000 annually in dues. “Our associate members are really the backbone of the industry,” adds Windle.

 Perhaps DeBenedictis is hedging his bets—making sure that municipal drinking water infrastructure is secure for some folks, say, so that cities like Factoryville don’t become the next Dimocks, and investing heavily in the one industry that might need even more of “his” water: fracking. How can he lose? Whether it comes out of the tap, out of a plastic bottle, or straight from the river into a Range Resources transmission line, it’s all liquid gold for Aqua America.

It’s even better than liquid gold: DeBenedictis can use our fear of frack-contaminated water to sell us even more of the clean stuff at a higher premium. Such is the manufacture of scarcity, and it has a distinctly gendered and classed signature in that the people most vulnerable to the fear-mongering implicit in DeBenedictis fracking gambit are the very same people he had no trouble evicting from Riverdale: struggling families, single mothers, elderly people. Nick DeBenedictis epitomizes the “Good Ole’ Boy Extraction Club” because his actions exemplyfy the mercenary sense of entitlement which translates into the privatization of public goods as if there were no moral question to raise about whether existential conditions should be subject to commodification. That DeBenedictis makes it a special point to aggressively pursue small municipality water systems in order to avoid public outcry is modeled after the fracking industry’s construction of thousands of smaller compressor, dehydration, water withdrawal facilities which bypass laws governing the right to public comment.

 

L’Eau DeBenedictis’ is America’s “aqua” in the same sense that Chesapeake is America’s Real Estate Mogul: genocidal profiteering.

3 Comments to L’Eau DeBenedictis: Aqua America, Water Insecurity, The Manufacture of Scarcity, and Fracking

  1. thanks for this excellent article, Wendy. Few people realize that their water is privately owned. Aqua continually hikes rates and circumvents public oversight of these hikes.

  2. Wendy, you must be getting to them… Aqua has just hired a “big gun” to handle internal and external communications:

    http://www.thestreet.com/story/11784663/1/justin-pizzi-has-been-hired-as-communications-director-for-aqua-america-inc-photo-aqua-america-inc.html

  3. Yup–and I just posted the link to the essay here on the Business Wire article. Thanks, Liz!

    w

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