Battle over Pennsylvania's new drilling rules continues

The state Department of Environmental Protection was back in court this week, facing a lawsuit from Marcellus Shale drillers over its new oil and gas regulations.
Although nearly a decade has passed since Pennsylvania’s gas boom took off, the state only finalized the new regulations within the past month. The new rules have spurred a bitter fight between environmentalists, the industry, legislators and state regulators, which is still unfolding.
Here’s a brief look back at how things got to this point.
“Fighting all the time”
Last month Scott Perry, who heads DEP’s oil and gas office, addressed a room full of gas industry representatives at the Marcellus Shale Coalition’s annual conference in Pittsburgh. He began by telling a story about a time he and a friend got into a fist fight in the eleventh grade.
“It was pretty lame actually, because neither one of us wanted to fight,” Perry said. “During the course of wrestling around, I was like, ‘You used to be my friend! Why are you doing this?”‘
He said they’d only started fighting because two senior guys were egging them on.
“I kinda feel like I’m in a bit of that same situation now,” Perry said. “I’m meeting with folks and on the side they’re saying, ‘Scott I really think there’s gonna be some litigation over these rules.”
He spent the next hour politely asking the industry to not sue DEP over its new regulations.
“There’s a better way of doing business than fighting about it all the time,” he said.
Among other things, the new rules create tougher standards for waste management and replacing damaged water supplies. Another section gives DEP more oversight of well permit applications near public resources, such as parks– a provision that’s a major sticking point for drillers. Perry repeatedly urged the industry reps to work with the agency.
“Don’t let the first phone call be to your lawyer,” he said.
That appeal was not successful.
“Onerous and costly”
Within a week of the rules taking effect in earlier this month, the trade group, the Marcellus Shale Coalition filed a lawsuit, while another industry group already had one in the works. Coalition President David Spigelmyer says DEP overstepped its authority when it published the rules, known as Chapter 78a.
“There are aspects of Chapter 78a that are onerous, costly, and they provide little environmental benefit from our perspective,” Spigelmyer said, while estimating the rules could amount to an additional $2 million per-well cost and hurt jobs.
Before they took effect October 8, the regulations had been under development for nearly six years at DEP.  But shortly after Governor Tom Wolf, a Democrat, took office in 2015, the agency made a slew of significant changes. This prompted pushback from drillers and some lawmakers, who said the agency hadn’t been transparent about the way it changed the membership of its Technical Advisory Boards, which review the rules. The DEP was also accused of making the rules for the conventional oil and gas industry (which drills shallower wells) too similar to those for the deeper, bigger wells of the Marcellus Shale industry.
In April the two standing committees in the House and Senate voted to reject the regulations. Rep. John Maher (R- Allegheny) is majority chair of the House panel. He criticized both the substance of the rulemaking and the process DEP followed.
“These are not mere technicalities,” he said. “I will remind you it was a Republican initiative that set forth to review and update regulation of the gas patch.”
The disapproval from legislators wasn’t the end of the story. The regulations then went before the state’s Independent Regulatory Review Commission, which held a seven-hour-long meeting in April, and heard from people like Joe Thompson of Devonian Resources, who argued the regulations would cripple small, conventional drilling businesses like his.
“The spirit of the law has been ignored,” Thompson told the panel. “Our already-reeling industry stands to suffer a death blow.”
Despite similar pleas, the commission approved the rules. It appeared like a win for environmental regulators, and there was a lot of internal high-fiving at DEP.
The deal
But then, came another twist.
In a now-infamous, profanity-tinged email, DEP Secretary John Quigley sharply criticized environmental groups, for failing to push back against legislative attacks on the regulations. When word of the note surfaced, Quigley was out of a job, much to the delight of some in the gas industry. Not long after that Governor Tom Wolf’s administration announced a deal with the Republican-led legislature.
It was June, the annual state budget-crunch time. The deal was that half the regulations would be tossed out—those dealing with the conventional oil and gas industry. The Marcellus Shale drilling regulations were allowed to move forward. Rep. Greg Vitali (D- Delaware), is the minority chair of the House Environmental Resources and Energy Committee, was not impressed.
“I don’t think the people remaining in Wolf’s top echelon really prioritize the environment,” Vitali said.
The intense political battle over these rules is pretty unprecedented, according to Kurt Klapkowski, director of DEP’s Bureau of Oil and Gas Planning and Program Management. He says it’s unlike anything he’s seen in his nearly 23 year career at the agency.
“It’s just the reality we operate in. We tried to be analytical. We tried to professional,” says Klapkowski. “We tried to divorce ourselves from those political processes as much as possible.”
It remains to be seen whether that is possible. The department is now fending off the lawsuits and trying to re-boot the regulations for the conventional industry. It will likely take another two years.
 

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