DEP Secretary: I'm Bullish About This Budget And In Our Ability To Deliver

Secretary of Environmental Protection Michael Krancer told the Senate Appropriations Committee Wednesday DEP has the resources and personnel to properly regulate and protect pubic health and safety and the environment in all areas of the department, including Marcellus Shale.  "I'm bullish about this budget and in our ability to deliver."

            A copy of Secretary Krancer's formal budget statement is available online and a summary appears below.

            Here are some highlights of the Committee's two hours of questioning on DEP's proposed budget--

Drilling Wastewater Treatment: Drilling companies have complied with the request to not send their wastewater to public wastewater treatment facilities without the ability to properly treat the water.  He said it is one of the real success stories that happened without the need to issue orders.  90 percent or more of the wastewater is being recycled and about 10 percent is being sent for disposal.   He also said there are facilities being developed in-state specifically for treating drilling wastewater.

            He added DEP is continuing to monitor rivers like the Monongahela River for the impact of the drilling wastewater policy, but it is too early to draw any conclusions from the information.

            This issue was also addressed in Secretary Krancer's written opening statement (below).

County Option Marcellus Fee: In response to a question about what happens if counties like Bradford do not adopt the new impact fee, Secretary Krancer said the funds DEP expects are supplementing the funding they have now.  The revenue from the impact fee is not "backfilling" funding that is not there.

Coordination With PUC On Impact Fee: Secretary Krancer said he has a good personal relationship with the Chair of the PUC Robert Powelson and talks to him almost every day so coordination on implementing the new impact fee should not be a problem.

Marcellus Shale Air Inventory: In answer to a question about the Marcellus Shale air emission inventory DEP is working on, Secretary Krancer said it will yield important data about the nature and extent of emissions related to the industry.

            This issue was also addressed in Secretary Krancer's written opening statement (below).

Uniform State vs. Local Regulation: Asked whether the limits on local regulation of Marcellus Shale drilling would be replicated for other industries, Secretary Krancer said he had no way to predict whether it will be expanded to other industries.  He noted a similar concept was applied to farming.

Marcellus Well Inventory: In response to a question about a newspaper report that 495 Marcellus wells were not in the DEP database, Secretary Krancer said DEP is working on its data management system which is always an issue.  He said the agency does not make decisions based on newspaper articles.

            This issue was also addressed in Secretary Krancer's written opening statement (below).

Encourage Natural Gas Use: Secretary Krancer agreed there should be more end use of natural gas and its byproducts, but decisions about its use should be left up to the market to decide.

DRBC Drilling Regulation: Secretary Krancer said he does not know when the Delaware River Basin Commission will finalize its drilling regulations.  He said it should have been done last year.  He noted other states have reduced their funding to DRBC by 70 percent (Delaware) when Pennsylvania only reduced it by 5 percent.

Drinking Water Well Standards: In response to a question about the need to set drinking water well construction standards, Secretary Krancer said the Center for Rural Pennsylvania documented the many issues with private water wells and that DEP has testified in favor of legislation setting water well standards.

Permit Review Times/Consistency: The reorganization of the agency last year was aimed in part at making improvements in the consistency of permit reviews between regions Secretary Krancer said.  He also said an enforcement and permit process review in the agency found different ways of doing the same things and those are in the process of being corrected.

            He said permit processing time depends on the quality of the applications coming in the door.  Applicants need to give the department a good product to work with, said Secretary Krancer.  He also noted the agency is developing an e-permitting application process for certain programs.

            This issue was also addressed in Secretary Krancer's written opening statement (below).

Hazardous Sites Cleanup: Secretary Krancer said with the phase out of the Capital Stock and Franchise Tax there will need to be a conversation on how to fund the Hazardous Sites Cleanup Fund, although the new Marcellus impact fee does provide some funding for the program.

Flood Recovery Funding: Secretary Krancer said the cuts to the flood control and stormwater funding line items will not have a bearing on funding projects related to last year's flood damage.   It was noted the House is getting signals from the Corbett Administration they do not think any more needs to be done on flood control projects, part of the six bill bipartisan package passed by the Senate last September.  Secretary Krancer said he would be happy to talk about the issue.

            This issue was also addressed in Secretary Krancer's written opening statement (below).
Delaware River Flooding: In response to a question about New York reservoir releases contributing to flooding along the Delaware River, Secretary Krancer said Pennsylvania has been working with New York under the flexible flow management agreement to provide better control of Delaware River levels.
Riparian Buffers: Secretary Krancer said they are looking to see how the requirement included in Chapter 102 regulations requiring riparian buffers works in practice before he considers changes.
Federal Mine Reclamation: DEP expects about $67 million in federal mine reclamation funds in FY 2012-13, up from $47 million in the current year.

Sewage Facilities/Operating Grants: Secretary Krancer said the reality is the sewage related line items have been going down for some time.  He noted local governments could support these with fees.  This issue was also addressed in Secretary Krancer's written opening statement (below).
Expanding Recycling: In response to a question about whether the state should expand the recycling program, Secretary Krancer said he would like to take that as a homework assignment.

            Formal Opening Statement
            In his formal budget statement, Secretary Krancer highlighted many different initiatives undertaken in the agency over the last year to improve operations and address major issues in the department--

DEP Reorganization: The objective of the reorganization was aimed a recasting DEP to reflect Gov. Corbett's and his policy priorities of, among other things, getting DEP back to its basic mission, consistency in the application of rules and regulations and emphasizing brownfields redevelopment.            

Flood Response: The budget request includes the necessary state funding needed to trigger matching funds from the federal government for flood recovery.  Secretary Krancer noted DEP had a major role in flood recovery in response to Hurricane Irene and Tropical Storm Lee, including issuing over 1,000 emergency permits for flood debris cleanup, distributed about 3,000 drinking water well test kits, enhanced vector control programs to monitor and spray in 18 counties, helped facilitate county-centralized debris collection centers and secured a gasoline shortage declaration for Western PA.
Drilling Wastewater: Secretary Krancer said the call to drillers to cease delivering wastewater to 15 water treatment facilities previously exempted from Total Dissolved Solids regulations was a success and a "dramatic sea change" from what has occurred in Pennsylvania in prior years.

Enforcement Activities: He highlighted the largest penalty ever assessed against a drilling operation as evidence of tough enforcement which agency staff worked very hard to accomplish as well as other major enforcement actions.
Permit Backlog Review/Analysis: He said DEP undertook "business-like steps" to examine the permit backlog problem, diagnose it and resolve it noting improvements to the way drilling operations are regulated under Chapters 78 (well construction standards) and 102 (erosion and sedimentation), web-based training for the new Chapter 102 regulations agency-wide and they initiated several projects to create additional general permits where appropriate to simplify the permitting process to drastically reduce the agency's workload, without negatively impact the environment.

Comprehensive Regulation/Policy Review: As promised during Gov. Corbett's campaign, the agency completed its review of DEP's 5,500 pages of regulations and over 530 technical guidance documents during the first 90 days of the Administration for necessity, clarity, administrative efficiency, economic competitiveness and federal consistency.  That review, he said, was ongoing in a staged manner in coordination with the Governor's Policy Office.

DEP's Enforcement Consistency Study: An internal team of DEP staff reviewed the agency's oil and gas enforcement policies, the violations issued and enforcement actions taken and announced recommended program changes aimed at achieving more consistency last November.  DEP has already implemented a more detailed electronic inspection form and developed additional training for inspectors and water quality specialists.
Marcellus Shale Well Numbers: DEP has been working diligently to address data quality issues both internally and with the regulated community regarding the way information on wells is reported.  It is not true, he said, the lack of any information from DEP delayed the consideration of Marcellus Shale legislation.

Marcellus Drilling-Related Air Emissions: He noted air quality has improved across the state, even in areas with drilling and burning more natural gas will further improve air quality.  In 2010 and 2011 short-term air assessments where drilling is happening does not identify concentrations of air contaminates likely to trigger air-related health issues.  He said without legislation, DEP is undertaking an inventory of air emissions from Marcellus Shale operations which he said the agency will publish by the end of this year.

Southeast Refineries: DEP stands ready to work with the seller and any buyers of the Southeast Pennsylvania refineries recently shutdown to transfer permits or on any new required permits.  DEP is also "on watch" to make sure there are no public safety concerns during this process.

Spending Reductions: He said spending reductions over the last two years were achieved without the furlough of any DEP employees and with "no reduction in the delivery of environmental oversight and protection."  The budget reduction did result in the elimination of 51 positions in the agency that were vacant.

Sewage Facilities Enforcement & Planning Grants: He noted applications for enforcement grants have decreased since 2008 and local governments have the ability to raise fees and have budgeted for the reductions in reimbursements.  He said there is currently a backlog of several years worth of sewage facilities grants which will not receive reimbursement until 2015-16.  As a result, there should be minimal impact on local sewage planning activities.  In addition, the new Marcellus Shale law will provide more funding for water and sewer projects through PennVEST and the H20 Program.

Marcellus Shale Law: Secretary Krancer said the new Marcellus Shale law is a balanced, multilateral approach to responsible domestic energy development in Pennsylvania and fulfills his major goals for the program, including providing additional protection for the environment and public health.  He also noted the impact fee will provide significant additional funding for Oil and Gas Operations, as well as water infrastructure programs and the Environmental Stewardship (Growing Greener) Fund.