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Wednesday, May 16, 2012

Buffalo or Bull?

The University at Buffalo's (UB) Shale Resources and Society Institute has issued a report, "Environmental Impacts During Shale Gas Drilling: Causes, Impacts and Remedies," which offers a quantitative data review of Pennsylvania's regulation of hydraulic fracturing of natural gas from January 2008 through August 2011.  One of the study’s stated purposes is to ease drilling fears in New York State, where a de facto moratorium on drilling is still in place.

The two principal authors released economic impact “analyses” of Marcellus drilling in Pennsylvania in 2010 and again just a year later in 2011 that were sponsored by the Marcellus Shale Coalition.  The studies were used successfully by the industry to beat back the enactment of a reasonable severance tax on gas production in Pennsylvania.  The UB study does not disclose the source of its funding.  But it does – incongruously - contain more economic "analysis."  Why was THAT included in a report on environmental violations, I wonder? 

I will be blunt.  In my view, the study attempts to put the best possible face on the gas industry’s environmental record in Pennsylvania.  But judge for yourself.  The study breaks down this top level data:

Between January 2008 and August 2011, there were 2,988 violations of Pennsylvania environmental regulations by the natural gas industry.  The study does not indicate whether the rate of inspection stayed constant, decreased, or increased – a rather important piece of data.  Of those almost three thousand violations - according to the study’s methodology - 1,844, or 62 percent, were administrative in nature or issued to prevent pollution from occurring. The remaining 38 percent, or 1,144 notices of violations, were for environmental violations.  (Again, you be the judge of the methodology.)  Further, those 1,144 violations stemmed from 845 unique environmental “events”.

The study defined “major environmental events” to include major site restoration failures, serious contamination of local water supplies, major land spills, blowouts and venting, and gas migration.  The UB study identified 25 such “major environmental events” in the 44 months studied.  Appendix B, a summary of the major violations, makes for interesting reading.  

The study adds that “In all but six cases, the resulting environmental impacts from major events have been mitigated.”  That leaves, by my calculation, 24 percent of major environmental impacts that have not been mitigated.

Three out of four isn’t bad?

Further: “Non-major environmental events concern site restoration, water contamination, land spills, and cement and casing events that do not involve what is classified as having major environmental impact.”

Reassuring, right? 

The UB study found that the incidence of polluting environmental events declined 60 percent between 2008 and August 2011, from 52.9 percent of all wells drilled in 2008 to 20.8 percent through August 2011.  The authors stated, “On this basis, the Marcellus industry has cut its incidence of environmental violations by more than half in three years, a rather notable indicator of improvement by the industry and oversight by the regulators.”

So the industry’s rate of failure has fallen from 53 percent of all wells drilled to 21 percent of all wells drilled. This is supposed to be reassuring?

Based solely on the data presented in the UB study, the industry's performance has improved.  Fair enough.  But there are still too many violations of state environmental laws. The number of violations is declining only as a fraction of wells drilled, not in absolute numbers.  Serious violations and pollution incidents continue to occur, and a quarter of those that have occurred have yet to be mitigated. 

Hundreds of violations is not a statistic that the industry can be proud of, nor is it acceptable.

The gas industry can and must do better.  


  1. A must-read story on the above report:

  2. Here's another story on the UB report: