Marcellus Shale drilling industry 'is not operating at an excellent level,' state official says

DONALD GILLILAND, The Patriot-News
Wed., August 4, 2010

There are too many spills, too many leaks, and too much natural gas migrating into people’s drinking water wells due to drilling in the Marcellus Shale, said John Hanger, Pennsylvania’s Secretary of Environmental Protection.

“The industry as a whole is not operating at an excellent level,” he said. “We are not demanding perfection, but we are demanding excellence.”

Hanger’s comments were made in response to a report from the Pennsylvania Land Trust that Marcellus Shale drilling companies had been cited for 1,435 regulatory violations in the last two and a half years.

“The report disproves the claim made by some that this industry is not regulated in Pennsylvania,” Hanger said. “All of those violations were written by DEP personnel and are an indication we are regularly at drilling sites.”

Hanger responded to criticism that his agency wasn’t doing enough and had been hamstrung by budget cuts.

“I don’t think the public knows a lot of what’s actually been happening,” he said.

Despite budget cuts, he said, the agency has actually more than doubled its oil and gas inspection staff. By the end of this month, DEP will have hired 105 additional oil and gas inspectors, for a total of 193.

“We have more inspectors than the state of Louisiana,” Hanger said. “There’s no state in the country that has come anywhere close to having our oil and gas staff.”

Money for those new hires has come from raising permit fees for Marcellus drillers from $100 to a sliding scale that averages between $5,000 to $10,000 per well, Hanger said. Those increased fees have generated $10 million so far.

He said DEP has opened new offices in Williamsport and Scranton to put inspectors closer to where the drilling is taking place. The agency has equipped them with better technology, like infrared cameras to better detect leaks.

An ongoing review of agency rules and regulations has resulted in new water quality standards that require drilling companies to treat wastewater to drinking water standards before returning it to a commonwealth stream.

Getting that regulation into effect has taken two years, during which time, “the industry has been looking at other options, and they now reuse a large proportion of drilling wastewater,” Hanger said.

“Range Resources publicly say they are a zero discharge company now. That’s major progress as a result of tightening the rules.”

More stringent rules for well construction are also in the works.

“It’s not the case we’re just starting today,” Hanger said. “We’ve been working at it for two years.”

Some of the violations in the report involved serious consequences for companies, he said, because sometimes it’s appropriate “to take out a regulatory two-by-four and hit companies over the head with it.”

However, it would have been helpful, he said, if the report had also included a top 10 list of companies with the least violations per well drilled.

“In attempting to move this industry to a standard of excellence ... It’s useful to identify companies that are doing it well,” Hanger said.

“This industry requires strong oversight; there’s no question about that,” he said, but the record of some companies — like Anadarko — “really points out it’s possible to operate in a manner that creates few problems.”

“At the end of the day, what’s really going to determine if the industry maintains public confidence or loses it entirely — and at best it’s shaky right now — is their safety record and their environmental record,” Hanger said.

“We are creating strong incentives for safe operations, but it’s absolutely true that the government doesn’t run these wells and doesn’t drive the trucks. ... There are limits to what government can do. The companies themselves are writing their own safety record, and that record in Pennsylvania is going to be public.

“This industry has a huge amount at stake to create a true culture of safety,” Hanger said.
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