PA Environment Digest Blog: DEP Projects Over $1.5 Million Deficit In Account Funding Oil & Gas Regulation Program In FY 2023-24

Thursday, March 23, 2023

DEP Projects Over $1.5 Million Deficit In Account Funding Oil & Gas Regulation Program In FY 2023-24

In response to questions from Sen. Elder Vogel (R-Beaver) at the March 22 Senate Appropriations Committee hearing on DEP’s budget request, the Department of Environmental Protection said it is projecting a $1,581,000 deficit in funding for the Oil and Gas Regulation Program.

Jessica Shirley, DEP Acting Executive Deputy, said the misnamed Well Plugging Restricted Account which sets aside permit review fees, fines and penalties to fund the Oil and Gas Program, “Is in jeopardy. It is running out of money.”

“The [drilling] activity has slowed down and our permit fees are not enough to cover the amount of cost [for the program],” Shirley said.

Funding for the program that does permit reviews, inspections and enforcement of state laws and regulations covering conventional and unconventional shale gas drilling and natural gas infrastructure is based on permit review fees and an occasional $6 million transfer to DEP from the Marcellus Legacy Fund supported by Act 13 drilling impact fees.

The number of unconventional shale gas drilling permits DEP has received in recent years has dropped significantly due to natural gas market conditions.

In August of 2020 when the last permit fee increase was put in place, DEP estimated it would need the revenue from 2,000 unconventional shale gas permits a year to adequately support the regulatory program for both conventional and unconventional oil and gas drilling.

In calendar year 2022, DEP received 731 unconventional shale gas permits. So far in the first 10 weeks of 2023, DEP received 135 unconventional shale gas drilling applications, and if that pace continues, will receive revenue from between 700 and 800 permit applications in 2023.

In February 2022, DEP reported to the Environmental Quality Board an estimated 60 percent of the costs of the Oil and Gas Program are accounted for by activities related to unconventional oil and gas wells-- about $15,988,224 and 40 percent by conventional oil and gas wells-- about $10,658,816. Read more here.

DEP also reported to the Board conventional oil and gas drilling companies only paid $46,100 of the $10,658,816 it cost for DEP to regulate that industry in FY 2020-21. Read more here.

In 2015, the Oil and Gas Program had an authorized complement of 226 positions. Last September the program had 167 filled positions. Read more here.

There are reports DEP has lost even more staff from the Program since last fall, in particular in Washington and Greene counties with some of the highest levels of natural gas development activities in the state.

In spite of staff shortages, in 2022 DEP issued a record number of notices of violation to both the conventional-- 5,059-- and unconventional shale gas-- 1,148-- during 2022 due to increasing program efficiencies and using information technology to make inspections and permit reviews more efficient. Read more here.

DEP did 12,846 inspections of conventional operators and 21,627 inspections of unconventional shale gas operators in 2022. Read more here.

Click Here for a summary of Oil and Gas Program actions in 2022.

DEP Workload Expands/Unresolved Cases Mount

Every year, DEP’s workload in the Oil and Gas Program expands as more conventional and unconventional wells are drilled, more natural gas infrastructure is developed and the need to better regulate facilities like underground natural gas storage areas and oil and gas waste injection wells increases.

For example, DEP’s investigations of four major incidents involving natural gas facilities in 2022 are hampered by the lack of staff to do the work and make determinations if enforcement actions or additional safety and environmental remediation measures are needed to resolve these cases.

On June 19, 2022, EQT Corporation reported an alleged ‘frack-out’ after a lateral on one of its shale gas wells hit an abandoned conventional gas well near New Freeport, Greene County causing water to flow out of the well. Dozens of private water supplies serving homes in the area were discovered to be contaminated. DEP’s investigation is ongoing. Read more here.

From November 6, 2022 through November 19, the Equitrans Rager Mountain Natural Gas Storage Facility had an uncontrolled release of an estimated 1 billion cubic feet of natural gas that was monitored from space. Read more here. Equitrans appealed the orders DEP issued to fix the conventional wells accessing the facility. DEP’s investigation is ongoing. Read more here.

On December 25, 2022, the excitement of Christmas Day morning was replaced with fear at 7:20 a.m. when the Energy Transfer Revolution Cryogenic Natural Gas Liquids Processing Plant in Smith Township, Washington County suffered an explosion and fire that burned for 11 hours. For at least 9.5 hours, the company said the plant had an uncontrolled release of ethane and possibly other chemicals. DEP’s investigation is ongoing. Read more here.

Just two days later and a few miles away on December 27, 2022, the CNX Oak Springs Natural Gas Gathering Pipeline Pigging Station in South Franklin Township, Washington County had a valve malfunction causing the uncontrolled release of between 546,000 and one million cubic feet of natural gas and other chemicals that sounded like a jet plane from the homes 1,500 feet away. DEP’s investigation is ongoing.

Effective action to respond to citizen reports of continued road dumping of conventional oil and gas wastewater, in spite of the fact it is illegal [Read more here]; failure of conventional operators to report how much waste they generate and where it is disposed for 57 percent of conventional wells [Read more here]; and routine abandonment of conventional oil and gas wells [Read more here] are being hampered by the lack of DEP staff.

Navy veterans Patrick and Helen Robinson have been waiting since 2015 for problems associated with the construction of the Mariner East Pipeline in Indiana County to be resolved [Read more here].

The Shawley Family in Cambria County had their water supply compromised and septic system and home damaged from Mariner East Pipeline construction that have not been resolved. [Read more here]

Washington County farmer Bryan Latkanich had to file a lawsuit against a shale gas drilling company for endangering his health, contaminating their water supply and not protecting their land due to lack of followup by DEP staff [Read more here].

In Lycoming County, construction of water and natural gas pipelines to serve shale gas drilling pads on State Forest land is threatening the Exceptional Value Loyalsock Creek and the habitat of the rare Eastern Hellbender, Pennsylvania’s state amphibian and clean water ambassador. [Read more here.]

And these are just a few examples.

Mounting Evidence Of Health/Environmental Impacts

Senate hearings and conferences during 2022 added to the mounting number of studies showing evidence of negative health impacts from shale gas industrial development in Pennsylvania.

Several new studies also show health impacts extend from well sites, through pipelines and processing facilities, to the natural gas stove tops used in our homes.

This information points to the need to update DEP’s regulations covering both conventional oil and gas well and unconventional shale gas drilling to keep pace with protecting public health and the environment. Read more here.

This all adds to DEP’s workload.

The claims that Pennsylvania has the toughest oil and gas regulations in the U.S. ring hollow when compared to the number of deficiencies we know are in the program, in part, due to the lack of resources to properly fund the Oil and Gas Program.

PA Oil & Gas Public Notice Dashboards:

-- Pennsylvania Oil & Gas Weekly Compliance Dashboard - March 11 to 17; Fracking 2 Wells Interfered With Another Shale Gas Well In Westmoreland County [PaEN]

-- PA Oil & Gas Industrial Facilities: Permit Notices/Opportunities To Comment - March 18 [PaEN]

PA Oil & Gas Compliance Reports

-- Feature: 60 Years Of Fracking, 20 Years Of Shale Gas: Pennsylvania’s Oil & Gas Industrial Infrastructure Is Hiding In Plain Sight [PaEN]

-- Conventional Oil & Gas Well Owners Failed To File Annual Production/Waste Generation Reports For 61,655 Wells; Attorney General Continues Investigation Of Road Dumping Wastewater [PaEN]

-- DEP Issued 754 Notices Of Violation For Defective Oil & Gas Well Casing, Cementing, The Fundamental Protection Needed To Prevent Gas Migration, Groundwater & Air Contamination, Explosions [PaEN]

-- DEP Report Finds: Conventional Oil & Gas Drillers Routinely Abandon Wells; Fail To Report How Millions Of Gallons Of Waste Is Disposed; And Non-Compliance Is An ‘Acceptable Norm’ [PaEN]

-- DEP 2021 Oil & Gas Program Annual Report Shows Conventional Oil & Gas Operators Received A Record 610 Notices Of Violation For Abandoning Wells Without Plugging Them [PaEN]

-- PA Oil & Gas Industry Has Record Year: Cost, Criminal Convictions Up; $3.1 Million In Penalties Collected; Record Number Of Violations Issued; Major Compliance Issues Uncovered; Evidence Of Health Impacts Mounts [PaEN]