Pa. Auditor General finds state’s fracking oversight a fiasco Probe finds lack of inspections, enforcement, transparency

Pennsylvania’s regulation of the shale gas boom has been underfunded, inconsistent and ineffective, according to an investigation by the state’s auditor general released today.

Auditor General Eugene DePasquale likened the Pennsylvania Department of Environmental Protection’s efforts to oversee the industry to “firefighters trying to put out a five-alarm fire with a 20-foot garden hose.” He added: “There is no question that DEP needs help and soon to protect clean water.”

The audit, covering a period of 2009 through 2012, was launched by DePasquale immediately after he was sworn in as auditor general in January 2013. It came in the wake of a controversy over whether state investigators obscure or alter the outcome of investigations into drilling’s impact on water supplies by disclosing an incomplete suite of chemical tests. The intention of the probe, according to a letter from DePasquale at the time, is to determine the "adequacy and effectiveness of DEP's monitoring of water quality as potentially impacted by shale gas development activities, including but not limited to systems and procedures for testing, screening, reporting and response to adverse impact such as contamination."

The report was blunt in its findings: the problems related to shale gas development are much deeper and broader than the DEP can presently handle, and they often go unaddressed or left up to industry without adequate follow-up by the agency. The problem is rooted to a wholesale lack of inspections, enforcement and transparency.

Often, according to the report, the agency does nothing about confirmed cases of water pollution tied to drilling problems.  After reviewing a selection of 15 files of water degradation tied to nearby shale gas operations, auditors found the agency issued only one order for the driller to restore or replace the water supply. Instead, the DEP relied on voluntary action by companies to resolve complaints and violations.

“When DEP does not take a formal, documented action against a well operator who has contaminated a water supply, the agency loses credibility as a regulator and is not fully accountable to the public,” DePasquale said. “When DEP has enforcement authority under the law it must exercise that authority routinely, consistently, and transparently. Those gas well operators whose actions cause harm to water supplies should not get an enforcement ‘pass’ just because they have convinced DEP that they will come into compliance with the law or that they negotiated a settlement with the property owner.”

Among other findings:

• The DEP does not post required inspection information on its website. Auditors found errors of more than 25 percent in key data fields, and 76 percent of inspectors’ comments were omitted from the online inspection reporting.  “It is unfathomable to us that for a basic responsibility of DEP -- inspecting oil and gas facilities – little criteria exists for when those inspections should occur,” DePasquale said. “Until DEP updates its out-of-date inspection policies, to include mandated inspections at specific critical drilling stages and during the life of the well, it will be nearly impossible to measure DEP’s performance in conducting this very basic responsibility to protect the environment.”

• The DEP does not use an official and independent system to track shale gas well waste from the well site to disposal.  Instead, the agency relies upon a “disjointed process that includes self-reporting by well operators with no assurances that waste is disposed of properly.”

• With respect to transparency, auditors discovered that accessing DEP data is “a myriad of confusing web links and jargon” that was often incomplete. “We could not determine whether all complaints received by DEP actually were entered into the system. What’s more … it is difficult to figure out exactly how many complaints were received, investigated, and resolved by DEP,” DePasquale said.

Although reports critical of the gas industry and regulators are nothing new, the inspector general’s report is noteworthy because it comes from within an independent arm of state government.

The DEP disagreed with all of eight findings of the audit critical of the agency, but agreed with a majority of the 29 recommendations for improvement.

Auditors encouraged DEP to:

• Issue orders to a well operators who pollute water supplies —even if DEP used the cooperative approach in bringing the operator into compliance or if the operator and the complainant have reached a private agreement;

•· Develop better controls for how complaints are received, tracked, investigated, and resolved;

• Hire additional inspectors to meet the demands placed upon the agency;

• Create and follow policy requirements for timely and frequent inspections;

• Create a functional system to track shale gas waste and be more aggressive in ensuring that the waste data it collects is verified and reliable;

·• Reconfigure the agency website and provide complete and pertinent information in a clear and easily understandable manner.

SUNY Buffalo’s fracking report erodes industry credibility Officials reconsider “peer review” stamp of approval

Timothy Considine and Robert Watson: Do those names ring a bell?

If you follow the natural gas drilling industry in Pennsylvania, the answer is probably yes. Both academicians are well known within drilling circles as industry consultants, proponents and, when the occasion requires, PR front men. Considine, formerly of Penn State and now with the University of Wyoming, has received funding from industry groups including the Marcellus Shale Coalition, the Wyoming Mining Association, the American Iron and Steel Institute, and the American Petroleum Institute. Watson – an associate professor emeritus of Penn State whose build his career around industry interests -- also sits on a board that advises officials of the Pennsylvania state Department of Environmental Conservation on policy issues related to natural gas production. There’s nothing wrong with any of that, of course; certain fields of academics have long overlapped with and served interests of various industries. But it becomes a problem when people such as Considine and Watson, and their colleagues, use their positions to disguise industry public relations campaigns as independent “peer reviewed” science.

That charge was recently directed at the State University of New York at Buffalo, which published an industry funded report by Considine, Watson, and others, as an independent and neutral work of scholarship showing that regulations are effectively reducing environmental problems related to Marcellus shale gas development. And it’s an example of how academia is becoming another important front in the national controversy over the safety and merits of fracking. The SUNY Buffalo report, titled Environmental Impacts During Shale Gas Drilling: Causes, Impacts and Remedies, provides an analysis of violations levied by the Pennsylvania DEP on the gas industry. It found that serious violations were rapidly decreasing, many others were inconsequential to begin with, and that oversight was working just fine. “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,” states a press release by the University summarizing the work.

The report immediately drew the ire of watchdog groups that had university administrators back pedaling in a hurry. This week, the university published a correction casting doubt on the credibility of the entire report by noting that the initial claim -- that the report stood up to the rigors of the peer-review process -- "may have given readers an incorrect impression."

It’s not the first time Constidine and Watson have been caught dressing up an industry claim in an academic cloak. The authors were reproached by Penn State administrators for a report they authored in 2009, originally published by the university as an independent and objective analysis, and later found by investigating university officials to “cross the line” between analysis and advocacy. The 2009 Penn State “study,” titled An Emerging Giant: Prospects and Economic Impacts of Developing the Marcellus Shale Natural Gas Play - projected that the industry would generate more than 175,000 jobs over the course of a decade, 10 times the number projected by the Pennsylvania Department of Labor. But that’s not what brought an eventual renouncement from the university.

More on that in a minute. First some background: The release of the Penn State report came at a critical time, as the Pennsylvania legislature debated how to manage oversight of the rapidly expanding industry. As the industry began to take off, top officials at the Pennsylvania Department of Environmental Protection under Gov. Ed Rendell’s administration, complained they lacked the wherewithal to inspect wells first hand and otherwise keep up with the industry’s growth. Instead, they were left to rely on industry reports and logs, which often ended up incomplete or missing altogether. Rendell’s administration was seeking a tax, like that imposed on the industry in Texas, to fund inspections and permitting operations and otherwise keep up with an industry with an unprecedented growth curve and regional impacts on land use, waste disposal, water consumption, and municipal infrastructure. Constidine and Watson’s “independent” assessment at Penn State, presented as scholarship, warned that any taxes would create a serious decline in jobs and economic activity, and offered this explicit advice for lawmakers: “As the Pennsylvania Marcellus shale industry develops, policymakers should keep in mind the trade-offs between any short-term gains from taxation or regulation with the long-term effects on industry development.” (The tax proposal was eventually defeated.)

As with the SUNY Buffalo report, the funding source and slant of the Penn State report was pointed out to university officials by enraged advocacy groups, prompting a subsequent review by the university that “found flaws in the way the report was written and presented to the public.” The fact that the report failed to identify its sponsor – an industry group called the Marcellus Shale Coalition -- was a “clear error.” Further, “The authors could and probably should have been more circumspect in connecting their findings to policy implications for Pennsylvania, and may have well crossed the line between policy analysis and policy advocacy.” A disclaimer was added to subsequent versions of the report, noting the role of the Marcellus Shale Coalition and stating that no parties from the university warranted its accuracy, completeness, or usefulness.

The SUNY Buffalo report released this month purports that, of 2,988 violations tabulated by the Pennsylvania DEP from 2008 through 2011, only 25 were “major.” Further, “In all but six cases, the resulting environmental impacts from major events have been mitigated.” It dismissed 1,844 violations, or 62 percent, vaguely attributed to “administrative or preventative reasons.” Accounting for these and other factors, the authors concluded, the Marcellus shale operators have cut the number of environmental violations by more than half in three years, an achievement it characterized as “a notable indicator of improvement by the industry and oversight by the regulators.” Beyond the obvious lack of transparency, it’s easy to find glaring problems with this report, even ignoring errors of logic and math and accepting the numbers as the authors present them. Perhaps the most egregious problem is their dismissal of 1,844 “administrative” violations. These are not only significant, they are in fact at the center of the problem regulators face in holding industry accountable for problems it causes. When operators fail to file paperwork and logs documenting the goings on at a given site, this is considered an administrative offense. And it’s important because the self-reported paper trail the industry leaves is a primary tool inspectors have in checking for problems. Without it, documenting problems becomes difficult. As recounted in my book, Under the Surface, that was the case in the Dimock, Pa. where methane from nearby shale gas operations contaminated an aquifer supplying residents on Carter Road. DEP regulators were unaware of the problems (eventually traced to mechanical complications, stuck drill bits, and faulty casings) until after the explosion of Norma Fiorentino’s water on January 1, 2009 triggered an investigation. The DEP’s subsequent search of Cabot’s records and well logs found many of them incomplete and missing, greatly complicating a resolution to the problem and obviously doing nothing to prevent it.

Beyond its spotty environmental track record, which is hard to completely track without objective, accurate, and comprehensive record keeping, the industry faces a lack of credibility with a population that values accountability over obfuscation. Holding forth the type of analysis in both the Penn State and SUNY Buffalo reports as independent and objective hurts the industry’s PR efforts far more than it helps them.