Thursday, September 27, 2012

Reviewing Earthworks Report Ripping State Enforcement Of Oil & Gas Rules: More Hatchet Than Lantern

Enforcing oil and gas regulations is vital to producing gas, protecting the environment, and building a culture of safety throughout the gas industry.  With the stakes high on the quality of regulation, enforcement must be a key topic about which professional, objective discussion is needed.

And so, despite the jarring cover page, I hopefully began reading the Earthworks report entitled, "Breaking All The Rules." I hoped it would provide a real analysis of the current strengths and weaknesses of enforcement activity.

Most unfortunately, for it is a lost opportunity to have a real dialogue that could lead to necessary further improvements in regulation, the Earthworks Report is a partisan document.   The Report is more hatchet than lantern and betrays the seriousness its topic should command.

For example, if you favored stronger enforcement and learned that a state had increased its budget for oil and gas oversight from $700,000 to $12.5 million from 2008 to 2010; raised inspections from 7,236 in 2002 to 22,600 in 2011; increased staffing; increased the number of regulatory citations issued to the gas industry from 1,153 in 2002 to 4,069 in 2011; had tripled the maximum daily fine; and had inspected every shale well and most multiple times, would you have something, anything, positive to say about that state's effort to regulate the gas industry?

The foregoing is a quick summary of Pennsylvania's regulatory record and most of that data is buried in Earthworks' Report.  Yet, the report is unrelentingly negative from its cover page to its end. It assiduously avoids crediting  any strengths or positive trends no matter that Pennsylvania increased its enforcement budget 18 fold, increased inspections three-fold, increased the number of citations to industry more than three-fold.  The Report stays on its message that state enforcement of gas rules is in crisis and bad.

For example, thanks to the comprehensive information about violations that is available to the public in Pennsylvania, the Report at pages 39 and 42 lists companies that do poorly on a couple metrics used by the Report.  The Report, however, does not list the companies that do well on those same metrics.

Too many environmentalists make a mistake, and commonly do so, by looking only at companies performing badly and not at those companies performing well.  Indeed, in terms of increasing safety, holding up for public praise those companies doing well, and understanding why they are, is as important as highlighting those performing badly.

The Report also manipulates the reader in a variety of ways, including by choosing to do most of its analysis on 2010 data, though 2011 data is available in many cases.  For example, the reader will be told repeatedly in the report that Pennsylvania conducted 15,000 inspections, the 2010 number, and most of the Report's analysis uses the 15,000 inspection number for Pennsylvania.

Yet, buried in an Appendix, one learns that the 2011 inspection number jumped again--up to 22,670.  And after being told that Pennsylvania has 65 inspectors on page 23, the persistent reader will find--again in an Appendix--that Pennsylvania had 88 inspectors in 2011.  The Report, however, never says that Pennsylvania actually increased the gas oversight staff from 88 in 2008 to 210 in 2010, opened 2 new gas drilling oversight offices, equipped staff with infrared cameras, and deployed mobile testing labs.

Again, the analysis in the Report uses the much lower inspection and inspector numbers of 2010, because they produce a "better" result for the authors.  These are but two examples of many manipulations.

Still another slanting involves the difference in the well totals in 2010 and 2011.  The 2011 data shows that the number of active wells with production in Pennsylvania fell to 55,812 from 69,626 in 2010.  But when crunching its main number to slam state regulation--the percentage of all wells inspected--the report uses 2010 data, the bigger and out of date number.

For the authors of the report determined to mine the most negative case, 2010 is a better year than 2011. After all, 2010 in Pennsylvania had both a much lower number of inspections than in 2011 and much higher number of wells.

Indeed, to slant its basic frame even more, the report calculates its percentage of wells inspected by using not just the 2010 data that creates a much higher percentage but by using a bigger category of gas wells.  That category is "active" gas wells that includes about 22,000 wells that are not producing.

In 2010, the "active" gas wells in Pennsylvania were 91,167 of which 69,626 had production.  By comparison, the active wells in 2011 were down to 77,898, and those with production fell to 55,812.

If 2011 data and "producing wells" were used for Pennsylvania, the Report would have found that Pennsylvania inspected all shale gas wells and about 30% or more of all producing wells, instead of reporting that Pennsylvania did not inspect 91% of gas wells.

And let's discuss for a moment what most producing gas wells really are in Pennsylvania.  They are shallow, small production wells that have been operating in many cases for 20, 30, 40, 50 or more years.  They are often so small that they barely register.   And most certainly they are not the shale gas wells that are the focus of attention and concern.

The Report's discussion of Pennsylvania contains many other errors. The list is too long to discuss here and includes a major mistake about DEP funding levels. But I must note that the Report does not put in its analysis the $4.1 million placed in escrow accounts for 18 families in Dimock, as a result of enforcement action to compensate them for gas migrating to their properties due to mistakes in gas drilling.

In addition to Pennsylvania, the Report also looks at Colorado, New Mexico, New York, Ohio, and Texas.  Enforcement can and should be improved in all of these states.  The topic of enforcement is critical.  It deserves a real lantern that sheds light.

1 comment:

  1. Mr. Hanger --

    We respond to your post here:

    Alan Septoff, Earthworks