MSC Responds to Pennsylvania Attorney General Report on Natural Gas Industry

The Office of the Attorney General of Pennsylvania recently put out a controversial Grand Jury Report on the practice of hydraulic fracturing in the Commonwealth. The report, which makes eight policy recommendations and admonishes both the natural gas industry and state regulators at the Department of Health and Safety (DHS) and the Department of Environmental Protection (DEP), fails to accurately characterize current state law on these issues and prescribes policy changes that would amount to a de facto ban on natural gas drilling by making it nearly impossible to site a well. All of this is done under the guise of consumer protection. 

The report describes an environment of lax regulation, unsafe practices, and poor oversight. This description defies reality. In a seven-page letter, Marcellus Shale Coalition President David Spigelmyer examined the recommendations within the context of current legislation, this blog post aims to characterize both the policy prescriptions offered in the report,  and their refutations from the MSC coalition letter. 

The eight policy prescriptions made in the report were:

1. “Expand the no-drill zones”

The grand jury report asserts that the 500 foot minimum setback distance should be increased to 2,500 feet because “all the impacts of fracking activity are magnified by distance.” Spigelmyer on the other hand argues that Pennsylvania already has the second farthest setback rule in the country, and that a 2,500 foot setback would make a large portion of Pennsylvania natural gas effectively unreachable, and curtail the property rights of thousands of landowners in the state. 

2. “Stop the chemical cover-up”

On this point, the report emphasizes the need for openness about what chemical compounds are used in fracking processes. “Let’s end this camouflage, provide transparency to the public, and mandate disclosure of all chemicals used in any aspect of unconventional drilling, so their possible hazards can be properly considered.” This is all well and good, transparency is important, and people should be able to find out what chemicals are being used in their direct vicinity. But, as Spigelmyer points out, it’s a moot point because, “Shale gas operators are already required to disclose all chemicals used in the drilling and hydraulic fracturing process.” This disclosure is already required by PA Act 13 of 2012. The grand jury report appears to have been written with a limited view of the existing law. 

3. “Regulate the pipelines”

The report claims that gathering lines, the network of smaller pipes that bring gas into larger more central pipelines, are “almost completely unregulated.” But, as the letter asserts, their construction is heavily regulated in the state, and they are also subject to “rigorous onsite inspections by PA DEP and conservation district personnel.” This is a far cry from the “completely unregulated” pipelines that the grand jury report characterizes. 

4. “Add up the air pollution sources”

The report suggests aggregating all sources of pollution in an area for purposes of air quality assessment. But, according to the letter, the standards established by the PA DEP exceed federal emissions standards, and are rigorous for both midstream facilities and well pads. 

5. “Transport the toxic waste more safely”

The report claims that it is because of federal exemptions that wastewater from fracking is transported with the label of “residual waste” rather than “hazardous waste”, but Spigelmeyer argues that the reason these trucks are placarded as such is because that is exactly what they contain. 

6. “Deliver a real public health response”

The report also seeks to respond to fracking as a public health crisis, and to “collect sophisticated data and conduct sophisticated analysis.” Spigelmyer’s response was that, “Employees of the natural gas industry live in the very communities in which we operate. They have every incentive to ensure that they, and their families, are healthy and that development is done safely.” Natural gas companies are bought into their communities. They create jobs, bring in economic activity, and provide necessary electricity. These are not distant operators divorced from the on the ground situation, rather they themselves are members of the communities in which they work. Because of this, the letter emphasizes that studies of health impacts are important to the natural gas industry as well. “The shale gas industry has already expressed its support for a broad-based, impartial approach to studying health impacts that properly takes into account all risk and environmental factors.” There is no disagreement on the need for studies and data, it appears that any disagreement that exists is rather a difference of interpretation of the results of those studies. 

7. “End the revolving door”

The report says that, “DEP employees, once trained about fracking at government expense, are often poached away to much higher-paying jobs in the oil and gas industry.” It also says that, “A revolving door rule would reduce that potential conflict by requiring a period of delay before taking a new job in the regulated industry.” According to Spigelmyer, “the state Ethics Act already establishes appropriate ‘cooling off’ periods for former state employees.” He points out that many businesses try to hire experienced workers, and that this often means hiring them from government agencies, but that this does not inherently lead to unethical behavior. 

8. “Use the criminal laws”

The report suggests that because DEP has been hesitant to use its prosecutorial powers against natural gas companies, jurisdiction over these issues should be extended to the state AG’s office. The letter on the other hand points out that jurisdiction to prosecute these cases falls to individual counties’ district attorneys, and that “there does not appear to be any rational justification to extend jurisdiction of one segment of one industry to the Attorney General.” It also points out that an agency that seeks additional jurisdiction should have a firm understanding of the subject matter, which the report itself shows is lacking at the AG’s office. 

Conclusion

Although media coverage of the Grand Jury Report makes it sound as though systemic corruption and dangerous practices in the industry were just discovered, this couldn’t be further from the truth. As Spigelmyer’s letter lays out in detail, the conclusions drawn by the report were often off base, out of touch with current law, and politically motivated.