Study examines violations in developing natural gas in Pennsylvania's Marcellus shale

BUFFALO, N.Y. — The University at Buffalo’s Shale Resources and Society Institute issued a report, "Environmental Impacts During Shale Gas Drilling: Causes, Impacts and Remedies," which offers the first quantitative data review of Pennsylvania's regulation of hydraulic fracturing of natural gas. The report's authors — UB institute director John P. Martin, University of Wyoming professor Timothy J. Considine and Pennsylvania State University professor emeritus Robert W. Watson — examined 2,988 violations, from nearly 4,000 natural gas wells, processed by the Pennsylvania Department of Environmental Protection (PADEP) from January 2008 through August 2011.

They found that 1,844 of the violations, or 62 percent, were administrative and preventative in nature. The remaining 1,144 violations, or 38 percent, were environmental in nature. The environmental violations were the result of 845 events, with 25 classified as "major" environmental events. The report defines major environmental events as major site restoration failures, serious contamination of local water supplies, major land spills, blowouts, and venting and gas migration.

The authors found that the percentage of environmental violations in relation to the number of wells drilled declined from 58.2 percent in 2008 to 30.5 percent in 2010. The number dropped to 26.5 percent during the first eight months of 2011. The report suggests that Pennsylvania's regulatory approach has been effective at maintaining a low probability of serious environmental events and in reducing the frequency of environmental violations.

"This study presents a compelling case that state oversight of oil and gas regulation has been effective," lead author Considine said. "While prior research has anecdotally reviewed state regulations, now we have comprehensive data that demonstrates, without ambiguity, that state regulation coupled with improvements in industry practices results in a low risk of an environmental event occurring in shale development, and the risks continue to diminish year after year."

The authors also analyzed how the violations and environmental events that occurred in Pennsylvania would be dealt with by emerging regulations, such as those under review in New York. They found that the proposed regulatory framework in New York could help avoid or mitigate the 25 major events identified in Pennsylvania.

"New York's current regulations would prevent or mitigate each of the identified major environmental events that occurred in Pennsylvania," Martin said. "It's important that states continue to learn from the regulatory experience — both strengths and weaknesses — of others."

Watson concludes, "Remedial actions taken by operators largely mitigated the environmental impacts of environmental events. Only a handful of events resulted in environmental impacts that have not yet been mitigated."

The report was peer reviewed by the following:
• Andrew Hunter, a lecturer at Cornell University's School of Chemical and Biomolecular Engineering;
• Brigham McCown, a former U.S. Department of Transportation executive and consultant with United Transportation Advisors;
• George Rusk, a regulatory specialist at Ecology and Environment, Inc.;
• Scott Anderson, senior policy advisor with the Environmental Defense Fund's Energy Program (see CE News editor’s note below**); and
• Robert Jacobi, co-director of the Shale Resources and Society Institute and longtime UB professor of geology.

Announced by UB on April 5, the Shale Resources and Society Institute's goal is to provide accurate, research-based information on the development of shale gas and other unconventional energy sources. The institute conducts and disseminates peer-reviewed research that can help guide policymakers on issues relating to hydraulic fracturing. This is the first report produced by the institute; download the entire report at http://buffalo.edu/news/pdf/UBSRSI-Environmental%20Impact.pdf.

**CE News editor’s note: In a blog on the Environmental Defense Fund’s website, Anderson wrote:

“While I was a reviewer, this does not mean that all of my suggestions were taken or that I agree with all of the report’s opinions and conclusions.

“Does the report have strengths? Absolutely. Unfortunately, it is hard to find understandable, comprehensive data describing natural gas industry environmental violations and the responses taken by enforcement agencies. The University at Buffalo has done a great service by bringing such information to light for the period studied (2008 through August 2011).

“At the same time, several of the opinions and conclusions in the report are questionable. These include:
• The idea that a violation isn’t an “environmental” concern if it is a violation of “paperwork” or “preventative” regulations and didn’t result in immediate, actual harm to the environment.
• Characterizing the rate of environmental violations (narrowly defined) as “low” in the first eight months of 2011 when, even using a narrow definition of environmental violation, violations were found at 26.5% of the wells drilled.
• The suggestion that the present regulatory program is effective because the incidence of “environmental violations” (narrowly defined) declined from 58.2% of wells in 2008 to 26.5% of wells in 2011.
In sum, there’s a lot of good information to be gleaned from the study, but caution should be exercised with regards to some of the conclusions.”