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Wednesday, October 10, 2012

GAO: shale gas regulation hampered by lack of cumulative impacts analysis, data, and jurisdiction

The Government Accountability Office, the non-partisan investigative arm of the U.S. Congress, has issued two reports on shale gas development at the request of members of the House of Representatives and the Senate who have raised questions about fracking.

The reports offer no surprises, but do repeat well-established concerns about risks, lack of data and analysis, limited Federal jurisdiction, and problems with inspection and enforcement.

“oil and gas development, whether conventional or shale oil and gas, pose inherent environmental and public health risks, but the extent of these risks associated with shale oil and gas development is unknown, in part, because the studies GAO reviewed do not generally take into account the potential long-term, cumulative effects.”

In addition, there is significant variability in risks:

“the extent and severity of environmental and public health risks identified in the studies and publications GAO reviewed may vary significantly across shale basins and also within basins because of location- and process-specific factors, including the location and rate of development; geological characteristics…climatic conditions; business practices; and regulatory and enforcement activities.”

The second report, Key Environmental and Public Health Requirements, analyzed federal laws, state laws in six selected states (Colorado, North Dakota, Ohio, Pennsylvania, Texas, and Wyoming), and interviewed federal and state officials and representatives from industry, environmental, and public health organizations. The report found that enforcement is limited and inspection efforts are hampered:

 “…requirements from eight federal environmental and public health laws apply to unconventional oil and gas development...However, key exemptions or limitations in regulatory coverage affect the applicability of six of these environmental and public health laws...In addition, oil and gas exploration and production wastes are exempt from (certain provisions of) the (Clean Water Act), and from the (Resource Conservation and Recovery Act) hazardous waste requirements.

The GAO found that the EPA – and states - have difficulty in regulating, investigating, and enforcing water contamination cases:

“Federal and state agencies reported several challenges in regulating oil and gas development from unconventional reservoirs. EPA officials reported that conducting inspection and enforcement activities and having limited legal authorities are challenges...(C)onducting inspection and enforcement activities is challenging due to limited information, such as data on groundwater quality prior to drilling. EPA officials also said that the exclusion of exploration and production waste from hazardous waste regulations under RCRA significantly limits EPA’s role in regulating these wastes. In addition, (Federal Bureau of Land Management) and state officials reported that hiring and retaining staff and educating the public are challenges…retaining employees is difficult because qualified staff are frequently offered more money for private sector positions within the oil and gas industry.”

The GAO reports underscore the need for more research – particularly on cumulative impacts of shale gas development – and what industry leaders, investors, and the rest of the world have been saying: regulation of shale gas development in the US – whether at the Federal or state level - is not yet strong enough.   

Monday, October 8, 2012

Abandoned oil and gas wells are a threat to public health and the gas industry - UPDATED

The natural gas industry maintains that there has never been a documented instance of groundwater contamination resulting from hydrofracturing, and some studies indicate that any risks can be virtually eliminated.

But the industry mantra and the studies are premised on, among other things, the presence of layers of solid rock between fracking activities and groundwater. What if the intervening rock is pinholed with perhaps hundreds of thousands of old, abandoned oil and gas wells?

That changes everything.  

Ongoing assessments  and shoddy company performance aside, one of the most serious risks to groundwater from natural gas development is presented by orphaned, abandoned, and undocumented gas wells.  They are potential leakage pathways – a threat to public health AND to the natural gas industry.

And Pennsylvania has a lot of them.

In 2000, Pennsylvania’s Department of Environmental Protection (DEP) issued a report - Pennsylvania’s Plan for Addressing Problem Abandoned Wells and Orphaned Wells. The report states:

In the 140 years since the first oil well was drilled, an unknown number of oil and gas wells have been drilled in Pennsylvania. An estimate by the Independent Petroleum Association of America places that number at approximately 325,000. DEP has records of 88,300 operating wells which it regulates, 44,700 plugged wells, and approximately 8,000 orphaned and abandoned wells. The status of the remaining 184,000 wells is unknown.

With proper action, funding, and regulation, the risks posed by those wells can be reduced, and future risk minimized. 

First, how do we find those wells? There are scavenger hunts, and high-tech approaches like aeromagnetic surveys - the US Department of Energy is looking for abandoned wells with helicopter-borne metal detectors.  Those surveys can find abandoned wells – IF they have intact metal casings.  Uncounted wells don’t have such cases, making more difficult, painstaking and laborious measures necessary.

But finding existing abandoned wells, while an urgent need, is not enough.  With perhaps hundreds of thousands of shale gas wells to be drilled in Pennsylvania in the coming decades, a healthy measure of prevention must be added to the cure of finding abandoned wells.  Despite a century-old problem, Pennsylvania’s bonding requirements for oil and gas wells have been grossly inadequate - $2,500 per well or $25,000 for a blanket bond -
leaving taxpayers holding the bag to plug abandoned wells.  And unfortunately, despite a study from Carnegie Mellon University that recommended that Pennsylvania require full-cost well bonding – especially important since plugging a Marcellus well can cost $100,000 or more – Pennsylvania’s new Act 13 failed to require full-cost bonding.  This is more than a little ironic.  Pennsylvania requires full cost bonding when companies drill for gas on state forest land (see paragraphs 16.03 and 16.04 of the DCNR lease document), and that hasn’t diminished industry interest in drilling one iota.  

Old wells pose risks to public health and the gas industry. Minimizing those risks serves both interests.

Starting tomorrow, StateImpact Pennsylvania is doing a series of reports examining Pennsylvania’s abandoned oil and gas wells and the prob­lems they can cause. I will update this post daily with links to each story.

October 9 update:  Here is part 1 of StateImpactPA's series.

October 10 update: Here is part 2 of StateImpactPA's must-read reporting.

October 11 update:  Here is part 3 of StateImpactPA's report.

October 12 update:  Here is the fourth and final segment from StateImpactPA.