PA Environment Digest Blog: Marcellus Shale Coalition: PA Regulators: Grand Jury Report 'Factually Inaccurate,' 'Disservice To Commonwealth'

There have been many reactions to and comments on the Attorney General Josh Shapiro’s announcement of the Grand Jury Report on regulatory failures. PA Environment Digest will continue to post those comments as they are received so there can be an informed discussion of the issues raised in the Report--

The Marcellus Shale Coalition, which represents the unconventional gas industry in Pennsylvania, released this additional statement June 26--

An Attorney General report released yesterday ignores Pennsylvania’s modern, world-class regulatory framework, relies on decade-old unnamed anecdotal sources, and advances a false, deeply misguided understanding of safe, responsible shale development.

The report, which comes as the result of a two-year grand jury investigation, “presents an inaccurate and incomplete picture of Pennsylvania’s regulatory program,” Pa.’s Department of Environmental Protection (DEP) wrote in response, with many aspects of the report “factually and legally inaccurate” and “does a disservice to the citizens of the Commonwealth.”

For more than a decade – spanning three governors, two Democratic and one Republican – MSC and its members have taken a proactive and collaborative approach to ensuring Pa.’s regulations encourage safety and environmental protection.

We have supported significant fee increases to fund DEP oversight, transparently disclosed chemical use prior to it becoming law, adhered to stricter setback requirements, and pioneered innovative water recycling and reuse practices, to name a few of the meaningful regulatory and voluntary actions.

“Environmental safety and public health is a priority for the industry,” MSC’s Dave Spigelmyer said in response to the AG’s report. “The tens of thousands of Pennsylvanians who work across the sector – building and union trades, professional engineers, environmental professionals, health and safety experts, as well as exploration and production companies that contract with hydraulic fracturing service providers, midstream companies and countless other Pennsylvania-based small, family-owned businesses – have every reason to place the highest value on regulatory compliance and transparency.”

A review of Pa.’s unconventional oil and gas regulatory landscape details 43 laws on the books, seven technical guidance documents, and 28 permit authorization packages just with the DEP.

From 2010 to 2019, DEP inspected unconventional well sites 134,681 times, including more than 19,000 well site inspections last year with 677 unconventional wells being drilled, the highest to date.

In fact, the Commonwealth’s regulatory framework has been repeatedly referenced as a model for others to follow. The State Review of Oil and Natural Gas Environmental Regulations – an independent, non-profit regulatory review commission – has given Pa.’s oil and gas program high marks, citing it as “well-managed, professional and meeting program objectives.”

“The review team has determined that Pennsylvania has a rigorous process for developing regulations, reviewing regulations and obtaining input from various stakeholders including the public,” the organization wrote in a 2013 review. “The state’s well completion report requirements and chemical disclosure requirements exceed public disclosure and reporting requirements.”

Even former DEP Secretary John Hanger, a former PennFuture executive who led the agency under Gov. Ed Rendell, wrote to the New York Times in 2011 that “Pennsylvania has the strongest enforcement program of any state with gas drilling. Period.” Seven years later, current DEP Secretary Patrick McDonnell confirmed before lawmakers that Pennsylvania has “very good oil and gas regulations.”

We’re proud of our industry’s shared commitments to keeping Pennsylvanians safe while enhancing our environment – especially air quality – and helping to create good-paying jobs across the Commonwealth.

“For anyone to suggest that we are not protecting our environment and public health while responsibly and safely producing clean and abundant American natural gas should better understand the facts and science behind natural gas energy development,” Spigelmyer said.

Unfortunately for Pennsylvanians, this report does little to meaningfully advance discussion around the safe, responsible development of our abundant natural gas resources. It specifically ignores more than a decade of regulatory upgrades and recommends policies that are already on the books.

These basic, fundamental flaws suggest the Commonwealth’s top law enforcer has a poor understanding of modern, responsible shale development and little knowledge of the laws developed over the last decade to protect the public and advance environmental goals.

Ignores Existing Law

Since shale development began in earnest, the Commonwealth’s laws, regulations, and policies have been studied, reviewed, and modernized under Governors Rendell, Corbett and Wolf.

As the DEP noted in their official response, jurors were not provided “accurate information about the existing laws, the scientific and policy underpinnings of the regulations, and the commitment of DEP staff to create and implement a comprehensive and effective regulatory program that protects the citizens and environmental resources.”

Of particular concern, the report is missing key components of Pa. Act 13, the comprehensive unconventional oil and gas act signed into law in 2012, which includes, among others:

-- Chemical disclosure – Act 13 requires chemical additives and the amounts used to be transparently disclosed to regulatory agencies and made publicly available on the FracFocus.org, a national disclosure clearinghouse.

-- Pre-drill notification – Operators seeking permits must notify host and adjacent municipalities of their intent to drill and list these municipalities on the permit application. In addition, the law requires applicants to notify surface landowners and water purveyors near the well site.

-- Water well testing – Operators are fully responsible for completing pre and post testing of water wells within a half mile radius. If changes in water quality occur, operators are presumed liable.

-- Setbacks – Act 13 enhanced the distance a well can be constructed from 300 to 1,000 feet from public water wells and springs and 500 feet from buildings.

-- Impact Fee – The Impact Fee is the state’s tax on natural gas production, which is on top of all other taxes in the Commonwealth, and has generated more than $1.9 billion since inception, with approximately two-thirds of the revenues directly supporting all 67 counties and local governments.

Other significant legislative changes include Act 127, Act 9, and more recently Chapter 78 and 78a.

Pa. Act 127 was signed into law in late 2011 and enables the Public Utilities Commission (PUC) to enforce federal laws pertaining to the transportation of gas and hazardous liquids throughout the Commonwealth via pipelines. Act 127 also requires the PUC to maintain a registry of pipelines and pipeline operators.

The Marcellus Advisory Commission was established in 2011 through an executive order by Governor Tom Corbett to ensure proper emergency and safety protocols are created at each well site.

Under the order, which is Pa. Act 9, the DEP and PEMA are required to “adopt emergency regulations directing the operators of all unconventional wells within this Commonwealth to register street and GPS addresses, to post signs, and to develop and implement emergency response plans.”

More recently Chapters 78a regulations were adopted in 2016, focusing on well monitoring, public resource impact screening, water supply replacement standards, waste management and disposal, and site remediation.

Recommends Existing Policies

The AG’s report identifies eight policy recommendations, many of which already exist under Pennsylvania law or would amount to an outright ban on development. A review of some of the proposed policies include:

1. AG Proposal: Expand the setback distance between homes and gas wells from 500 feet to 2,500 feet and require an even bigger buffer between wells and schools and hospitals.

Pennsylvania has the second largest well drilling setback requirement in the nation: No unconventional well may be drilled within 500 feet of a building or private water well, and cannot be drilled within 1,000 feet of a public water supply well, reservoir, or other water supply point unless approved by the building or well owner.

In fact, in DEP’s response, the agency questions the proposed setback, calling them “arbitrarily” set and not supported by scientific or technical rationale. Under current regulations, municipalities can set zoning restrictions and have the authority to regulate noise, among other items.

A 2,500-foot setback would essentially ban natural gas development in Pennsylvania which, as the U.S. Chamber of Commerce identified last year, would destroy more than 600,000 good-paying jobs and result in a $261 billion hit to the state’s GDP.

2. AG Proposal: Stop the “chemical cover-up” by requiring drillers to make public to everyone, not just the DEP, all the chemicals used in drilling and fracking.

Pa. Act 13 and Chapter 78 both mandate oil and natural gas operators to disclose chemical additives – and the amount used – to the public and state regulators, and to physicians and emergency first responders.

MSC and its members were first movers, adopting the use of FracFocus.org – a national, publicly accessible chemical disclosure site, prior to being required by law in 2012.

The report also omits the significance of the Zone of Presumption law, which automatically presumes any water contamination is a result of oil and natural gas operations, and fails to state that pre-drill water testing is completed within a half mile radius of the well.

3. AG Proposal: Require regulation of all gathering lines.

Act 127, which is not mentioned in the AG’s report, extended oversight, construction and operational standards to unconventional pipelines transporting gas and hazardous liquids.

Then State Representative Shapiro voted in favor of the law, which passed in 2011, and granted the Public Utility Commission the authority to regulate the safety of pipelines that are operated by public utilities, including intrastate transmission lines and natural gas distribution systems.

MSC has long-supported – and continues to support – the marking of gathering lines in rural areas.

4. AG Policy: Adding up all sources of air pollution in a given area to accurately assess air quality.

The DEP established air emission requirements at unconventional well sites in 2013, which are among the most stringent in the nation. These regulations include leak detection and repair, recordkeeping and reporting requirements, and emission controls.

Prior to the construction of a well, compressor station, processing plant or transmission facility, operators must obtain either a GP-5 or GP-5A air quality permit, which ensures sites are using the best available technology for source emission control. Most notably, these permits are the first of their kind in the nation.

Further, a DEP air monitoring report near well sites and compressor stations in Washington Co. found “little risk of healthy residents getting sick from breathing the air nearby.” Other actual air quality reports have found little-to-no change in air quality near well sites.

5. AG Proposal: Requiring safer transport of the contaminated waste created from fracking sites

This recommendation “misstates the existing law and existing permitting requirements related to management and transportation of wastes generated in unconventional drilling,” the DEP wrote in its response.

Pennsylvania regulations include specified provisions related to waste management and disposal, with attention to handling radioactive materials. In 2016, the Surface Activities Rulemaking imposed more stringent regulations related to the storage, transportation and disposal of waste from unconventional development, as well as new requirements that regulate drill cuttings and wastewater.

A 2015 DEP study, which is considered “the most comprehensive radiological study of the oil and gas industry ever conducted,” determined there’s “little or limited potential for radiation exposure to the public and workers from the development, completion, production, transmission, processing, storage and end use of natural gas.”

What’s more, more than 90 percent of water used in hydraulic fracturing operations is recycled and reused, greatly minimizing the need for disposal wells and significantly reducing freshwater withdrawals.

Given the report’s fundamental lack of information about existing laws and regulations, DEP affirmed “the report also fails as a meaningful tool for improving the regulation of the unconventional gas industry, because the report is not at all informed by applicable law or facts.”

“Although the grand jury believed it was advancing the public good in preparing and planning to publicize its report, it actually does the public a disservice,” the DEP concluded.

Click Here for the original Marcellus Shale Coalition posting

NewsClips:

-- AP-Mark Scolforo: AG Grand Jury Finds Systematic Regulatory Failures In Natural Gas Drilling

-- Don Hopey/Laura Legere: AG Shapiro: Grand Jury Report Reveals PA’s Systemic Failure To Regulate Shale Gas Industry

-- Stephen Caruso: AG Shapiro Calls Out Gas Drillers; Faults PA Agencies For Not Adequately Watchdogging The Industry

-- Frank Kummer: AG Releases Scathing Grand Jury Report On Fracking Industry, State Regulators

-- Reid Frazier/Susan Phillips: PA Grand Jury Report On Fracking: DEP Failed To Protect Public Health

-- Charlie Thompson: PA Attorney General’s Report Highlights Shortfalls In State’s Marcellus Shale Oversight

-- Grand Jury: State Failed To Protect Public From Fracking

-- Grand Jury Report Blasts DEP, Health Department Over Fracking Failures In PA

-- WITF Smart Talk: Attorney General On Police Reforms, Fracking, Child Abuse

-- AG Shapiro: Grand Jurors Praised For Report On Fracking Impacts, Govt. Oversight