5 Things You Need To Read In Governor Corbett’s Shale Commission Report

July 22, 2011 | 6:00 PM

By Scott Detrow

• Comment
• Email
• Tweet

137 pages can be a lot to read through, espe­cially when they’re inside a gov­ern­ment report, and not a sum­mer beach novel.

To guide you through the Mar­cel­lus Shale Advi­sory Com­mis­sion’s final report, StateIm­pact Penn­syl­va­nia put together a list of the document’s top five most inter­est­ing sections.

(Read the full report here.)

Pool­ing? What Pooling?

Last Fri­day, com­mis­sion mem­ber Terry Engelder pre­dicted the sec­tion on “pool­ing” would be the report’s most con­tro­ver­sial rec­om­men­da­tion. The panel voted to sug­gest revis­ing a 1961 law, so that gas in the Mar­cel­lus Shale for­ma­tion could, under cer­tain cir­cum­stances, be extracted from under a person’s land against his or her will. That sit­u­a­tion can hap­pen – with full com­pen­sa­tion – in nearly every other geo­log­i­cal for­ma­tion, but the leg­is­la­tion excluded the Marcellus.

If you missed this con­tro­ver­sial seg­ment on your first pass through the doc­u­ment, you’re not alone. “I went through it and I was try­ing to find the word pool­ing, or even ref­er­ence to the act it comes out of, and I couldn’t find it,” said Pen­n­Fu­ture pres­i­dent Jan Jar­rett.  “They did every­thing but say pooling.”

In fact, they didn’t say pool­ing at all. Here’s the recommendation’s text:

Pennsylvania’s statutes should be mod­ern­ized in a timely man­ner to:

–Include the Mar­cel­lus Shale and other deep uncon­ven­tional geo­logic for­ma­tions cur­rently excluded from exist­ing con­ser­va­tion statutes;

–Con­form with the best prac­tices for shale gas devel­op­ment in the great major­ity of states with said production,

–Ensure the pro­tec­tion of prop­erty rights for both sur­face and min­eral rights owners;

–Account for the oppor­tu­ni­ties afforded by advances in tech­nol­ogy of nat­ural gas extrac­tion practices,

–Ensure the min­i­miza­tion of sur­face impact through the proper place­ment and spac­ing of well pads;

–Pre­vent the waste of strand­ing of nat­ural gas so as to max­i­mize job and revenue-generating oppor­tu­ni­ties for the Com­mon­wealth and its citizens.

Ensure the pro­tec­tion of prop­erty rights! Con­form with the best practices…in the great major­ity of states! Max­i­mize job and revenue-generating oppor­tu­ni­ties! What’s con­tro­ver­sial about that?

It’s cer­tainly dif­fer­ent word­ing than what Cor­bett used in April, say­ing, “It’s pri­vate emi­nent domain. I don’t think that’s right. If I see a bill that con­tains forced pool­ing, I won’t sign it.”

Step­ping Up Enforcement

Given the way Democ­rats and envi­ron­men­tal groups have char­ac­ter­ized the com­mis­sion and its rec­om­men­da­tions – the left-leaning Bud­get and Pol­icy Cen­ter called them an “indus­try wish list” today – you might be sur­prised to see the num­ber of increased penal­ties and reg­u­la­tions sug­gested in the report.

The com­mis­sion wants to steepen “penal­ties for vio­la­tions of the Oil and Gas Act….from $25,000 to $50,000,” and up the daily penalty from $1,000 to $2,000.” (Rec­om­men­da­tion 9.2.1). The report also sug­gests “expand[ing] an operator’s pre­sumed lia­bil­ity for impaired water qual­ity from within 1,000 feet of a well to within 2,500 feet of a well, and from 6 months to 12 months of com­ple­tion or alter­ation of the well.” (Rec­om­men­da­tion 9.2.6). The com­mis­sion is call­ing for more trans­parency, with detailed well reports posted on the DEP web­site list­ing chem­i­cals used dur­ing frack­ing, iden­ti­fi­ca­tion of sources used to extract drilling water, and “whether methane was encountered…other than tar­get for­ma­tion dur­ing drilling.” (9.2.14).

The report also sug­gests statewide stan­dards for newly con­structed pri­vate drink­ing wells. Right now, no such guide­lines exist.

On top of that, the com­mis­sion rec­om­mends increas­ing the dis­tance between wells and streams (9.2.24) and the cre­ation of a “population-based health reg­istry with the pur­pose of char­ac­ter­iz­ing and fol­low­ing over time indi­vid­u­als who live in close prox­im­ity to gas drilling and pro­duc­tion sites.” (9.2.40)

Speed­ing Things Up

Ever since hydraulic frac­tur­ing moved into Penn­syl­va­nia, crit­ics’ biggest com­plaint has been the speed at which the drilling indus­try has expanded. They’ve wor­ried Pennsylvania’s reg­u­la­tors are play­ing catch-up, and the proper restric­tions aren’t yet in place.

While the report does sug­gest those tighter reg­u­la­tions, it also offers sev­eral rec­om­men­da­tions meant to expe­dite – not slow down – drilling. Take 9.1.13: “A lead state agency should be des­ig­nated to alle­vi­ate delays in lin­ear pipeline project devel­op­ment and approval; to iden­tify redun­dant (state and fed­eral) nat­ural and cul­tural resource reviews which should be elim­i­nated…” This is in an area where there the state doesn’t have any reg­u­la­tory over­sight – in fact, six rec­om­men­da­tions ear­lier, the com­mis­sion sug­gests putting the Pub­lic Util­ity Com­mis­sion in charge of pipeline over­sight. (9.1.7).

The report also rec­om­mends “state agen­cies should offer accel­er­ated per­mit reviews within guar­an­teed time frames, pro­vided any incre­men­tal costs asso­ci­ated with the accel­er­ated review shall e paid by the per­mit appli­cant.” (9.1.14). The rec­om­men­da­tion comes a few weeks after DEP promised to slow down its per­mit­ting process, under cer­tain circumstances.

Kick­ing The Can Down the Road?

The com­mis­sion had 120 days to “iden­tify, pri­or­i­tize and craft” its rec­om­men­da­tions. Given the amount of time and energy spent on the sub­ject, there sure are a lot of sug­ges­tions that boil down to, “this issue needs to be stud­ied a bit more.” For example:

-“Pen­nDOT should cal­cu­late and eval­u­ate increased traf­fic vol­ume to con­tin­u­ously cal­cu­late impacts…” (Rec­om­men­da­tion 9.1.10)

-“The Commonwealth…should under­take a detailed assess­ment of air ser­vice and infra­struc­ture needs…” (Rec­om­men­da­tion 9.1.8)

-“Con­duct an engi­neer­ing analy­sis of spill con­tain­ment sys­tems at unvon­ven­tional shale gas well sites…” (Rec­om­men­da­tion  9.2.27)

-“The Depart­ment of Health should col­lect and eval­u­ate clin­i­cal data pro­vided by health care providers.” (Rec­om­men­da­tion 9.2.38)

-“Pen­nDOT, or an inde­pen­dent con­sul­tant, should eval­u­ate the future rail needs nec­es­sary for max­i­miz­ing shale devel­op­ment…” (Rec­om­men­da­tion 9.4.3)

-“A com­pre­hen­sive eval­u­a­tion of Pennsylvania’s com­pet­i­tive busi­ness cli­mate should be con­ducted…” (Rec­om­men­da­tion 9.4.4)

Addi­tion­ally, the com­mis­sion sug­gests Gov­er­nor Cor­bett cre­ate a per­ma­nent com­mit­tee charged with study­ing the drilling indus­try, and rec­om­mends the Depart­ment of Con­ser­va­tion and Nat­ural Resources cre­ate its own nat­ural gas advi­sory committee.

Given the fact Cor­bett essen­tially halted all drilling-related leg­is­la­tion until the com­mis­sion had a chance to weigh in, you could for­give skep­tics for won­der­ing, “We waited all this time for what? A com­mis­sion to rec­om­mend more com­mis­sions should look into this?”

Cawley’s spokesman, Chad Say­lor, said that misses the point. “There’s a level of detail in the report on a num­ber of things,” he explained. “…But there are other areas where there was, by design, some flex­i­bil­ity. Less spe­cific [rec­om­men­da­tions]. The goal of that was, this is the begin­ning of the process. The gov­er­nor will be tak­ing it from here, and he needs to work it out with legislators.”

A “Really Really Bad” Proposal

Beyond the report’s two “big ticket” items – the impact fee and “pool­ing” – the most heated reac­tions from envi­ron­men­tal groups cen­tered on rec­om­men­da­tion 9.4.9, which reads, “The Alter­na­tive Energy Port­fo­lio Stan­dards Act should be amended to include nat­ural gas as an eli­gi­ble Tier 2 fuel source.” Pen­n­Fu­ture pres­i­dent Jan Jar­rett called it, “really, really bad.”

She con­tin­ued:

That includes stuff like coal waste plants, it includes munic­i­pal waste incin­er­a­tors like Har­ris­burg. It includes large hydro­elec­tric projects. 10 per­cent of our elec­tric­ity must come from those sources by 2020. Well nat­ural gas, right now, gen­er­ates about 25 per­cent of our elec­tric­ity. So num­ber one, it doesn’t need it. And num­ber two…if nat­ural gas takes up the whole thing, the util­i­ties aren’t beholden to buy any­thing else, and it would reduce the value of that credit to noth­ing. It’s a bad pro­posal. It’s bad for alter­na­tive energy in Penn­syl­va­nia, and it would be bad for the city of Harrisburg.

Jarrett’s col­league, for­mer DCNR Sec­re­tary John Quigley, added he “strongly disagree[d]” with the suggestion.

Other rec­om­men­da­tions aimed at incen­tiviz­ing the nat­ural gas indus­try include, “develop[ing] ‘green cor­ri­dors for nat­ural gas fueled vehicles…located every 50 miles and within 2 miles of des­ig­nated high­ways” (9.4.5).