Pa. Regulators Fail To Protect Environment in Marcellus Shale Boom

Above Photo: The Clermont West compressor and processing station is in Elk County. Clermont West compresses natural gas from Seneca Resources well pads and also processes the gas and turns it into transmission-quality gas. Seneca Resources gives a tour of Marcellus Shale gas drilling operations in Elk and Cameron counties in northern Pennsylvania, May 14, 2015. Dan Gleiter, PennLive.com.

They struck gold.

It was a river of energy under our feet so large it promised to end America’s dependence on foreign oil.

The Marcellus Shale would provide a seemingly endless supply of natural gas that would boost Pennsylvania’s economy and, in a recession, create jobs in great numbers.

Lawmakers were hungry for the gas trapped in rock as deep as 9,000 feet below ground and quickly set energy policies aimed at balancing economic growth with environmental protection.

But the scales tipped too far in favor of industry.

Ten years into the natural gas boom, a PennLive investigation uncovered systemic failures on the part of state regulators to enforce environmental, health and safety standards for the multibillion-dollar industry.

Reporters spent six months reviewing thousands of documents, interviewing dozens of officials and residents, and traveling to towns and well sites throughout Pennsylvania to examine the oversight of Marcellus Shale development.

PennLive found a state Department of Environmental Protection that relied heavily on energy companies to largely police themselves and, in the process, ignored citizens’ constitutional right to clean air and water.

The department designed to “protect Pennsylvania’s air, land and water from pollution and to provide for the health and safety of its citizens through a cleaner environment” failed on a basic level to adhere to its mission.

Here are some of our findings:

• DEP knew frack water impoundments were leaking years before any fines were issued. Documents show DEP knew about leaks and spills since at least 2011, but no fines were issued until 2014, just prior to the Wolf administration taking office.
• Codes the agency uses to test water are designed to leave out certain results. DEP uses a lab code system to test water around oil and gas sites that ensures certain contaminants that might be in residents drinking water will never be reported. 
• DEP used a gas company’s wording in what was supposed to be an agency’s expert report. One DEP employee testified that his “expert report” included a conclusion that was not his. DEP’s flawed and incomplete data continues to be used as evidence in court cases and policy decisions. 
• After a 2011 agency restructuring that required enforcement decisions to be made in Harrisburg, fines dropped dramatically. Fines issued to drillers decreased 90 percent during the administration of former Gov. Tom Corbett.  
•  A missing record calls into question the agency’s recordkeeping.Violations were recorded electronically on Aug. 30, 2010, for a leak at an impoundment site. Those alleged violations occurred around the time residents noticed changes in drinking water quality. DEP says, while an inspector noted violations, no notices were issued to the company. 

Regulations lagged behind deep, horizontal drilling and the new technology being used by energy companies that were attracted to Pennsylvania.

Those operations went virtually unregulated for years.

Enforcement has remained inconsistent as the state struggles to respond to the industry’s meteoric rise and its attendant environmental risks.

“When the fracking boom started in Pennsylvania, we had a lot of these cowboys coming up and constructing these wells in a haphazard, slap-it-in-the-ground manner,” said former Gov. Ed Rendell, who oversaw the push to enact more stringent regulations.

That effort, combined with new standards passed in 2012, resulted in what industry groups such as the Marcellus Shale Coalition have called the toughest regulations in the country for hydraulic fracturing, the process of using water and chemicals to break apart rock deep beneath the earth and extract natural gas.

But the DEP, which is required to conduct inspections of well sites and impoundments, did so irregularly and many of the results are still inaccessible to the public.

A lack of oversight of the drilling industry has earned DEP a nickname among some as “Don’t Expect Protection.”

Corbett, in his first interview since leaving office, said there was no concerted effort to stifle oversight.

“No inspectors received a direction from the governor’s office (to) turn your head and avoid it,” he said. “If there’s a violation there, fine them.”

Michael Krancer, who was Corbett’s pick to lead the DEP, said the agency had discretion over which violations to issue, just as an attorney general has discretion over which cases to prosecute.

Current DEP Secretary John Quigley said he too believes the agency has some discretion.

But state law does not provide for discretionary reporting, according to Auditor General Eugene DePasquale. In fact, the word “discretion” does not appear in any of the regulations governing oil and gas operations.

All violations are to be reported. How they are enforced can be negotiated, but there should be a public record of the violations, he said.

Anything less threatens a person’s constitutional right to clean air and water, DePasquale said.

DEP is using a faulty interpretation of the law in determining when to order gas companies to address water quality issues, the auditor general said. It comes down to a section of the Oil and Gas Act that states DEP “shall issue orders” to ensure compliance by drillers.

(Editor’s note: Appearing below is a year-by-year count of active gas wells across the state, per information from the state’s Department of Environmental Protection. To follow the progression, click on the slider that will move the square from year to year.)

“The rationale is they believe they had the discretion and we believe they did not,” DePasquale said. “I think ‘shall’ means ‘shall.’ Look it up in Webster’s.”

Neither Quigley nor Gov. Tom Wolf seem interested in slinging mud at Corbett’s team, though both have said there’s a need for improvement.

“I don’t think it would be a productive use of my time to review how the agency handled certain cases,” Quigley said. “I’m much more interested in ongoing instances of pollution of the waterways of the commonwealth.”

The environmental department is moving forward with an overhaul of Chapter 78 regulations, which govern the above-ground oil and gas operations. 

Also, Wolf’s DEP in June issued a record $8.9 million fine to Range Resources for a violation first noted during the Corbett administration in September 2013.

Moreover, he added $10 million in his state budget so the department could hire more regulators to “make sure that we have enough feet on the street to make sure the environmental regulations we have in place are being fully complied with,” he said.

He has also linked his massive education program to the financial health of the industry with a proposed severance tax on drillers.

Wolf said he wants the oil and gas industry to succeed in Pennsylvania, repeating the familiar vow of his predecessors to balance economic development with environmental protection.

“I want this to work for us economically, and that has to work for us environmentally. If we don’t have a clean environment, air and water, and that’s the price we’re being asked to pay for an industry – any industry – it’s too high a price,” he said.

But that promise isn’t enough for Pennsylvania residents such as Denny Higgins, a Butler County resident who hasn’t had a permanent source of water since it turned orange more than four years ago.

He maintains the drilling activity of Rex Energy is to blame, though no court ruling nor DEP testing has proven that to be true.

Higgins and his neighbors have joined in a lawsuit against the company, and he’s given up on asking the DEP for help.

“After four years, you lose hope. There’s no hope,” he said.

Higgins wants the new DEP secretary and governor to see how he lives, offering Quigley and Wolf an open-ended invitation to his home.

“I’m living worse than some third-world countries. Water’s your main necessity of life. I’m 44 years old – this is embarrassing to say – I get a shower every five days,” he said.

Sometimes Higgins gets a shower in a janitor’s closet at his maintenance company.

Other times, he takes his family to a park in Slippery Rock “to get the government’s free water.”

“You know how embarrassing it is to load up everybody in the car and go to Moraine State Park to get a shower?” Higgins said.

This PennLive investigation shows the negligence that has encumbered three administrations and the ripple effect of that neglect.

It’s a regulatory failure that continues today.