Feb. 9: This post has been updated.
For months, the gas drilling industry and environmentalists alike have been fixated on New York, waiting for its environmental agency to hash out final drilling regulations so companies can take advantage of the vast gas reserves buried there.
But now some of those expectations can shift to New York’s neighbor to the south, Pennsylvania, where Gov. Edward Rendell has announced that the Department of Environmental Protection will nearly double its enforcement staff, open a new office closer to the drilling action and release new drilling regulations of its own.
In December, when ProPublica surveyed all 31 drilling states, we found that Pennsylvania was part of a national trend – as gas drilling ramped up, inspection staffing levels didn’t keep pace.
In 2008, Pennsylvania had just 35 people to oversee 74,774 wells – that’s more than 2,000 wells per inspector. But unlike many states, as the industry grew in Pennsylvania, the state started to buck this trend, beefing up its enforcement staff to 76 in 2009.
Now, with the DEP expecting permits for drilling in the Marcellus Shale to more than double this year, Pennsylvania is preparing to add 68 more people to its Bureau of Oil and Gas Management. To pay for the expansion, the DEP will dip into the fees it charges for drilling permits, which it raised last year for the first time since 1984. A proposed extraction tax – which Rendell mentioned in a press release announcing the new positions and is expected to bring up in his annual budget address today – could cushion the department even more.
DEP spokesman Neil Weaver tells us that 45 of the new hires will be on the oil and gas enforcement staff, bringing the number of inspectors to 121, more than three times as many as it had just two years ago. To put that in perspective, in 2008, Texas, the largest drilling state, had an enforcement staff of 106 to oversee 263,704 wells, of which 16,569 were new and required the most oversight.
The governor has also announced the opening of a new satellite oil and gas office in Scranton – in the heart of the Marcellus Shale – where 10 of the new hires will be based.
Myron Arnowitt, Pennsylvania director of the citizens’ advocacy group Clean Water Action, offered a mixed review of the increase. "Obviously we’re glad to see that they’re continuing to increase the staff," he said, "but I do think there are some holes still, and some of it has to do with the funding process."
For this fiscal year, the DEP had more than a quarter of its budget cut. And when the state laid off 319 employees, the biggest hit – 138 positions – was dealt to the DEP. Another 120 vacant positions at the DEP were cut too, bringing the total department loss to 258 positions. Although the oil and gas division is adding positions because of the increased permit fees, that won’t help other divisions that are also involved in the drilling boom.
"There are other departments at DEP that are spending a lot of resources addressing the impacts of drilling," Arnowitt said. "Especially water management, which is issuing regulations, has an increase in wastewater plants applying, and water-related enforcement."
As drilling has ramped up in Pennsylvania, complaints about environmental problems have followed suit. Residents in Dimock had fields damaged from spills, and some believe that drilling caused the contamination of drinking water there. Elsewhere, the Monongahela River was contaminated by toxins from drilling wastewater, and there have been a slew of violations reported at drill sites across the state.
So along with the increased enforcement staff, Pennsylvania is revising its drilling regulations. The proposed regulations, which you can find here, strengthen well construction guidelines, hold drillers responsible for restoring or replacing water sources that are contaminated by drilling, and require drillers to notify DEP immediately if wells are over-pressurized, if casings are defective or if gas has migrated into drinking water sources.
The Marcellus Shale Coalition, which represents many of the drilling companies and industry interests in Pennsylvania, issued a news release supporting Rendell’s moves but declined to comment for this article.
The proposed regulation changes were released late last month and will be open to public comment until March 2. After the comments are reviewed, DEP’s Weaver explained, the department can make changes and submit a new version of the regulations to the Environmental Quality Board, which can either accept them or send them back to the department for revisions. If the board accepts the regulations, they will then be reviewed by several agencies (including state congressional committees, the Office of the Chief Counsel, the Independent Regulatory Review Commission and the state attorney general). Once they sign off, the regulations will be published in the Pennsylvania Bulletin and become enforceable.
The proposed revisions are on a smaller scale than New York’s, where the Department of Environmental Conservation is completely reworking its regulations. New York’s public comment period drew more than 12,000 responses, including a sharply worded technical review from the U.S. Environmental Protection Agency, which expressed serious concerns about the effect that drilling could have on public health.
David Sternberg, a spokeswoman for the EPA’s mid-Atlantic region, said the EPA doesn’t plan to comment on Pennsylvania’s revisions. "The proposed regulations are to change their construction standards for gas well drilling," he said. "That’s something that EPA really doesn’t have jurisdiction over."
The drilling industry has special exemptions from seven federal environmental regulations, so most regulation falls to state agencies. But that may be about to change. Matching bills in Congress would make the industry accountable under the federal Safe Drinking Water Act, and increasingly, the EPA is situating itself into the debate.
Late last month, the agency announced that it had created a tip line so the public could report "suspicious activity" related to drilling.
"Public concern about the environmental impacts of oil and natural gas drilling has increased in recent months, particularly regarding development of the Marcellus Shale formation where a significant amount of activity is occurring," said a press release announcing the tip line. "EPA wants to get a better understanding of what people are experiencing and observing as a result of these drilling activities. The information collected may also be useful in investigating industry practices."
Instructions for using the tip line can be found here.
Update: Pennsylvania Gov. Ed Rendell proposed a tax on gas extraction in his 2010-2011 budget address today, projecting that it would result in $160.7 million in wellhead taxes in the coming fiscal year, rising to $1.8 billion over five years. (Check out Reuters' story on the budget here.) The proposed tax would be similar to West Virginia’s, which has a 5 percent severance tax and an additional tax of 4.7 cents per million cubic feet of gas produced.