Who Does the Law Protect? The Problems the Regulations Allow

Much of the regulatory problem of the issue of hydraulic fracturing to extract natural gas boils down to a fox guarding a henhouse. The agency responsible for permitting an industry should be completely separate from the agency regulating that industry. The conflict of interest the Department of Environmental Protection must face is clear. It earns money from permitting an industry it is legally required to regulate in order to protect state residents. By allowing the DEP to perform contradictory functions, the state jeopardizes the safety of the commonwealth’s people.

Frack Fluid Disposal

While 75% of fracking fluid remains in the Marcellus Shale, the rest of it comes back to the surface through the well. This returning water is called flowback, and contains heavy metals, radioactive material, salts, and the chemicals used in the water’s initial injection. The DEP allows the flowback to be processed by wastewater treatment plants approved to handle it. Currently, there are few in the state. Ralph Kitsberg of the Responsible Drilling Alliance doesn’t believe that treating it will work. “You can’t filter for this crap,” he warns. The flowback is also allowed to be injected into deep underground “impoundments,” which must be both impervious and structurally sound. There are eight of these commercial disposal wells in the state, and each is only permitted to accept 800,000 gallons a month.

One resident of Dimock told us she saw an oil/gas company truck with a tanker (presumably full of flowback) with a hose draining into the filling tank of an abandoned gas station. Other residents of northern Pennsylvania have reported seeing trucks of fracking fluid “racing” to the New York border. If space to store the millions of gallons fluid is limited, and few are approved to clean it, where does it go? Ken Komoroski, a representative for Cabot, claims that his company now re-uses all of its fracking fluids.

Too Many Wells, Too Few Inspectors, Too Little Time

The DEP reports that there are presently 120,000 active oil and gas wells in the state. Presently, there are thirty DEP agents assigned to oil and gas operations. For the sake of “consistency,” the DEP has removed county conservation districts from the permit review process for new drilling operations, despite the counties’ willingness to help the understaffed DEP. (County conservation districts were created by the Pennsylvania legislature in an attempt to facilitate local grassroots conservation efforts.)

The DEP recently raised the financial cost of the permits needed to construct and operate a drilling site, but has continued to push these permit requests through an expedited review process. This means that agents in the DEP have mere days to choose to approve or deny a permit request. In Tioga County, it can take as few as two days for a permit to be approved. “A rubber stamp review is no review at all,” says Matt Royer, a representative from the Chesapeake Bay Society.  An expedited review leaves very little time for a thorough analysis. In fact, one permit was approved for a drill pad in a floodplain, which is strictly forbidden for water safety reasons. It wasn’t until the Chesapeake Bay Society appealed the permit that it was revoked. Allowing drilling in a floodplain is a “disaster waiting to happen,” Royer warns. Drilling pads under five acres do not even need to submit detailed plans for safety and sediment control.

Any proposed construction in Pennsylvania must have an approved stormwater management plan in place before it will be approved. The Energy Policy Act of 2005 exempted oil and natural gas from this stipulation.  Why regulate one earth disturbance and not another?

The “Halliburton Loophole”

In what some call the “Halliburton Loophole,” a regulatory gap was created by the Energy Policy Act of 2005, which exempted the process of hydraulic fracturing from following the regulations of the Safe Drinking Water Act. That act was intended to protect the public water supply from industries that discharge large amounts of contaminated water. (The process of hydraulic fracturing was invented by Halliburton, the corporation of which Dick Cheney was formerly Chair and CEO and is presently a large stakeholder. The Energy Policy Act of 2005 was signed into law while he functioned as the Vice President of the United States.)

Beyond the regulatory gap created by the Energy Policy Act of 2005, Lynn Senick, a Susquehanna County resident, is frustrated with the lack of enforcement of the few regulations that remain. “Oh good, we have a law for that... but its not enforced, and when something does happen, they get a slap on the wrist,” she laments.

Groundwater Contamination

Scott Perry, a representative from the DEP, agrees with the people of Dimock that “groundwater contamination from oil/gas drilling is unacceptable.” He reports that contamination found within 1000 feet of a well, within six months of drilling, is automatically presumed to be caused by the drilling activity. Gas companies can only deny responsibility by furnishing a pre-drilling sample of contaminated water. Cabot, however, continues to deny responsibility for the pollution in Dimock. (See website for updated story.)

Landowners may be taking a risk when signing off to an attractive-sounding drilling offer. While some gas companies do offer to test the water at lease signing, not all do. Hydrologist Jim Llewellyn stresses that landowners need some type of baseline testing of their water as soon as they sign a lease with a drilling company, to protect themselves in case of contamination.

The water testing done by gas companies, according to George Turner, another local hydrologist, has been found unreliable. Turner recommends using a third party for more accurate results. He witnessed several occasions of cross-contamination by a water sample collector for a natural gas company.

A test at signing would reflect any changes in the water later on, but it may not be enough. To hold up in court, the results need to be verified by a certified laboratory. At $5,000 per test, the price tag on this security measure can be prohibitive for the average person.

Framing Disaster as Accident

Gas companies frame accidents as “incidents,” calling explosions “unexpected releases of pressure.” They deem deep production safe, claiming only shallow gas drills leak. Naturally occurring radioactive material, stirred up from deep below the Earth’s surface, collects on equipment and in the fracking brine. The industry calls this “NORM,” an acronym meant to soothe minds disturbed by the term “radioactive material.”

Where Do We Go from Here?

Proposed legislation in both the federal House and Senate seeks to make the industry subject to the terms of the Safe Drinking Water Act and requires the industry to publicly disclose the types and amounts of chemicals used in the fracking process. The twin bills go by the nickname FRAC Act, which stands for Fracturing Responsibility and Awareness of Chemicals. In a best-case scenario, according to a representative from the office of Senator Bob Casey (D-PA), this legislation could pass within a year. Ken Komoroski, a representative for Cabot Oil and Gas, declares that Cabot is in favor of both regulation of water supplies and disclosure of the chemicals used. Previously, the recipes were guarded as ‘proprietary’ material, considered confidential ‘trade secrets.’

Some groups, including the environmental lobbying group PennFuture, suggest imposing a severance tax on the oil and gas companies who profit in our state. Ideally, this tax money would go towards environmental stewardship and to local governments. Out of the 32 states that have natural gas extraction, Pennsylvania is one of only two that does not impose this tax.

Drilling companies contend that this tax would stunt the growth of an “infant” industry. The companies involved, however, are not new to the American public. ExxonMobile alone has invested $31 billion in Marcellus exploration. In fact, natural gas drilling has been occurring for decades. The only thing in infancy is the use of hydraulic fracturing.

Moreover, these companies pay few taxes to begin with, since they are classified as energy providers. West Virginia began imposing a tax of $.047 per cubic foot extracted in 2005, and saw no change in the amount of extraction.  

The rate of return on investment for energy companies is actually higher for Marcellus Shale drilling than extraction elsewhere, due to the quality of the gas extracted. Proponents for the tax claim that it would internalize a current externality: that extraction companies would now have to pay for their damage to the ecosystems in the state.  The majority of states in the county have this type of tax some natural resource. The nation collected over $16 billion in severance taxes in the 07-08 fiscal year.

The Commonwealth of Pennsylvania currently obtains its only revenue from natural gas extraction from leasing state forestland to natural gas companies. The state must then pay to repair the damages done to bridges, roads, and other infrastructure by the natural gas companies.

Some environmentalists argue a more drastic solution: a moratorium on hydraulic fracturing until lengthy studies have been completed on the process’ effects on land, air, water, and wildlife. While a moratorium on drilling on private property is a hard sell, it is possible that one could be passed on the fracking occurring right now in commonly owned state forests. The EPA is set to begin a study on the effects, but the 2011 budget may or may not cover the costs of the research.

The most important thing to take away from our work on natural gas drilling in Pennsylvania is that you must dismantle the lies spread from above, by getting the story from people below. The stories from above just don’t add up. Why, if the materials used in fracking are safe in water like Halliburton claims, did they write themselves an exemption from water pollution regulation? If the industry is good for the economy, then why are there no jobs? If the people who sign leases like what’s done to their land, why do they move away? Why, if energy companies claim to want to ‘move forward,’ do they utilize the same unrenewable technologies and create even more devastating ones? If imposing a tax to benefit the state would kill the industry, why hasn’t it done so in other states? And better yet, why would it necessarily be a bad thing?