Monday, December 16, 2013

Pa. regulators seek public comment on shale development Seven years into the play, hearings intended to shape regs

We will soon know how passion and reason of stakeholders and the general public might shape regulations of shale gas development in Pennsylvania.

The state Department of Environmental Protection is holding a series of public meetings on provisions of Act 13, a bill intended to upgrade the state’s Oil & Gas law to accommodate unconventional gas extraction. The DEP is charged with taking into account public sentiment as it draws up specifics to implement the bill, which Governor Tom Corbett signed into law last year. Issues range from impacts on parks and wildlife areas to managing waste disposal and spills. The draft rulemaking also includes standards affecting the construction of pits, gathering lines, and temporary pipelines, provisions for identifying and monitoring abandoned wells (and related hazards of drilling through them) and the industry practice of spreading brine, which can include radio-active material and other well waste, on roads.

These and other highlights are summarized on the DEP website. But the overview does not mention key elements of Act 13 that have spawned controversy and law suits, and which are bound to also come up at the hearings. One is a provision regulating physicians who treat patients suffering from exposure to drilling and fracking chemicals. Commonly known as “the gag rule,” the regulation prohibits doctors’ access to information about chemicals in exposure cases. To get this information, physicians must sign a legal contract that prevents them from sharing it with anybody, including other health care providers.  In October, a U.S. District Court threw out a doctor's claim that the rule violates First Amendment rights. The ruling was made only because the doctor, Alfonso Rodriguez, brought the case before the court as a hypothetical situation, and therefore did not have standing. It did, however, leave the door open for claims based on actual events. (More on that here.)

Another touchy provision of Act 13 limits the power of municipalities to influence or ban development within their borders, while allowing drill rigs, waste pits, and pipelines in residential districts. The matter is now before Pennsylvania’s high court after municipalities -- including South Fayette in Allegheny County; and Peters, Cecil, Mt. Pleasant and Robinson in Washington County – successfully argued before the Commonwealth Court that the law was unconstitutional.

UPDATE: On Dec. 19th, the Pennsylvania Supreme Court ruled that part of Act 13 restricting local jurisdiction over gas wells was unconstitutional.

The Oil and Gas industry is exempt from both local and national regulations that apply to other business, ranging from zoning to the handling and disposal of hazardous waste. The justification for this (as I discuss in previous posts): cheap fossil fuel cannot be pulled from the earth with an overabundance of nit–picking inspectors and onerous regulatory burdens.

The degree to which shale gas operations should be regulated, and under which jurisdiction, is one thing. Banning them altogether is something different. The Environmental Quality Board, chaired by the Secretary of DEP, is responsible for adopting regulations and considering petitions to change them, and it will be interesting to see how much of a platform the hearings will become for stakeholders who want no regulation, some regulation, or an outright ban.

A 60-day comment period on the rule-making process began Sunday. The first of seven public hearings across the state is scheduled for Jan. 7 in Wyoming County. Officials have also scheduled informational webinars on Dec. 19, from 2:30 p.m. to 3:30 p.m., and Friday, Jan. 3, from 9:30 to 10:30 a.m. For information about schedules and how to submit testimony, click here.

Since the Marcellus drilling boom began in 2006, more than 6,500 shale wells have been drilled in Pennsylvania – making the Marcellus the number one natural gas play in the country. With the encouragement of pro-drilling governors, first Ed Rendell and now Tom Corbett, the DEP approach has been regulate-as-you-go. That’s a striking contrast to New York state, where officials suspended permitting for high volume hydraulic fracturing in 2008 pending an environmental review and policy overhaul, now in its sixth year and still absent resolution to questions about health impacts. As I have written in Under the Surface, contrasting political cultures and histories in New York and Pennsylvania have shaped the states’ respective approaches to shale gas development. The delay in New York has encouraged anti-fracking activists – bolstered by governor Andrew Cuomo’s liberal base advocating renewable energy - to organize campaigns against the industry, and use public meetings to showcase their opposition.

Will the forthcoming hearings in Pennsylvania also become a showcase for anti-frackers? Perhaps, but it is unlikely they will follow the pattern in New York. The organizational challenge to tip the balance away from the status quo is daunting, especially in this late stage of the game. For anti-frackers to simply show up is part of it, but influencing the process requires comments that are on point and informed. This is a strong suit for industry professionals, who make a living out of mastering policy and related practical, legal, economic, and regulatory intricacies.  And there are thousands of these details with far-reaching consequences encompassing a spectrum of issues, ranging from exemptions to burden of proof to liability to enforcement to bonding to well construction standards to impact fees and taxes… Etc, etc.

Doug Shields, an outspoken industry critic who was instrumental in passing a fracking ban when he was a Pittsburgh councilman in 2010, was later featured in Josh Fox’s Gasland II as a person on the front line of the anti-fracking movement in Pennsylvania. He told me that he expects activists to attend the DEP hearings to exert political pressure, but it will take more than that to significantly alter the course of fracking in Pennsylvania. “A big turnout sends a message to the elected,” he said. “But the meat and potatoes on regulations will be on the technical points.”  He added that he also expected some of the large environmental NGOs to take the lead in assessing and critiquing chapter and verse of the state’s proposal. ‘We will need to get some technical expertise to look at the proposed regulations and determine where the weaknesses are.”

In New York, the anti-fracking movement was able to draw on active chapters of groups such as the Sierra Club and the National Resources Defense Council, combined with  decisive technical help from figures such as Sandra Steingraber and Walter Hang, who each led sophisticated and ultimately effective critiques of New York’s draft guidelines and regulations. Advancing grass roots opposition early in the process on technical rather than ideological grounds, Hang marshaled letter writing campaigns and list serves to educate followers on the nuts and bolts of proposed permitting guidelines – called the Supplemental Generic Environmental Impact Statement -- and to guide responses that favored the movement. Steingraber adopted a similar approach – an online guide called the 30-Days of Fracking Regs – to encourage technically relevant comments first on fracking regulations and later on infrastructure projects. The efforts of both Hang and Steingraber have encouraged a flood comments that stalled the process.

Hang and Steingraber are among activists intent on blocking, rather than regulating the industry. Compared to Pennsylvania, the political ethos and history of New York has favored land preservation more than mineral extraction. Geology is also undoubtedly a factor. Pennsylvania’s extemporaneous approach to establishing rules for the shale gas industry (more than five years into the play) reflects a political tolerance tied to a storied history of extraction, including coal, oil and natural gas, in the state for better and worse. The forthcoming hearings and public comment period on Act 13 will be a grass roots test of how moved the electorate is to change the status quo of carbon dependency. A small response will reflect a willingness to defer to regulators and the state, while the opposite will provide critics with potentially potent raw material for change.

Saturday, December 7, 2013

10% or 90% - How much fracking waste is recycled? Loose definitions give industry lots of leeway

Shale wastewater released from a treatment plant in Josephine, Pa.
Bloomberg reporters David Wethe and Peter Ward recently shed a little light on a critical aspect of the shale gas boom – wastewater disposal. Their article last week explains how recycling – once pitched as a market-based panacea for dealing with 21-billion barrels of brine, solvents, metals, and radioactive elements produced annually from domestic oil and gas production – is less of a hit with investors than anticipated. The reason: technological limits.

The article, Fracking Bonanza Eludes Wastewater Recycling Investors, frames the issue in a quote by Mark Kidder, head of an oilfield unit for Schlumberger: “We’ve spent millions and millions of dollars evaluating virtually every available and reasonable-looking technology out there, always hoping we’d find the silver bullet … At this point, we found nothing.”

News outlets looking for accessible material are not likely to find much, either, in the way of simplicity in the fracking waste story. It’s an area clouded by confusion, noise, and lack of baseline reporting standards and enforcement. There is no easy measure to gauge the problem’s impact -- a hallmark of good journalism and one of the first calculations reporters tend to make in considering a subject. But there are still ways to get at this story, and the financially oriented Bloomberg uses an approach that carries the most weight with its readers – economic analysis. Wethe and Ward cite these benchmarks:

Of the $31 billion spent each year on managing water resources in U.S. and Canadian oilfields, $2.8 billion, or less than 10 percent, is spent on recycling, according to PacWest Consulting Partners LLC... 
In Pennsylvania last year, operators cleaned and reused 85 percent of fracking and produced water because state rules, as well as geology, makes water disposal more expensive there. In most other regions, where disposal wells are more plentiful, recycling amounts to 10 percent or less, according to PacWest estimates.

Interesting, to be sure. But the article does not explain the vast discrepancies in other reports attempting to quantify the extent of frack water recycling in the oil patch, or why the PacWest estimates are any truer than other numbers cited by experts, media, and interested parties. Several notable examples come to mind:

The Wall Street Journal, citing figures from the Susquehanna River Basin Commission, reported that 14 percent of frack water in central Pennsylvania was recycled as of November, 2012.

A report in October of this year by San Jose State University and Earthworks, an environmental group, found that about one third of Pennsylvania fracking waste is “reused” and about half is discharged into rivers and streams either through brine/industrial waste treatment plants or municipal sewage treatment plants. The report also found that only about 8 percent of injected fracking solution water is reclaimed from wells in Pennsylvania to begin with, which suggests that many production wells become long-term repositories for unrecovered waste.

Energy In Depth, the industry public relations arm, claims that the industry “reused” or “recycled” 90 percent of flowback water in the last half of 2013.

Adding to this confusion is the problem of definition. “Recycled,” much like “all natural,” is one of those marketing idioms that invites abuse by those seeking to paint something green. Colleen Connolly, a spokeswoman for the Pennsylvania Department of Environmental Protection, explained to me this week that the agency in fact does not make a distinction between “reuse” and “recycling” and that “recycling” generally applies to fracking waste that undergoes some sort of treatment. The “recycled” label therefore applies to flowback from shale gas production wells that has been treated and discharged into a river, even if it contains unscreened or unrecovered hazards, such as total dissolved solids, solvents, metals, and radionuclides. Lacking a good-faith statutory definition, the “recycled” label suggests a certain environmental stewardship while in fact allowing the industry convenient options for waste disposal – whether actually reusing it, discharging it, or injecting it in the ground.

As with much of the industry (which is exempt from both federal Safe Drinking Water Act and hazardous waste disposal laws) the fracking-waste reporting “system,” varying in form and rigor from state to state, offers the illusion of transparency while obscuring actual practices. Operators in Pennsylvania and other states are required to report their waste production and disposal on a database that is available on the Internet. But there is little or no oversight, let alone enforcement. Perhaps the biggest telltale sign of a problem is a disclaimer on the DEP website that visitors must agree to before viewing the agency’s files. The DEP notes that the data is self-reported, unchecked, unverified, and possibly incomplete.

DEP makes no claims, promises or guarantees regarding the accuracy, completeness or timeliness of the operators’ data that DEP is required to post. 
DEP expressly disclaims any liability for errors or omissions related to the production data contained within these reports. No warranty of any kind is given by DEP with respect to the production data contained within these reports posted on its website.

Are we expected to trust this data, even when the DEP clearly doesn’t?

The shale gas boom is taking shape in an age where free market interests are strong and the will to regulate is relatively weak. Rather than looking to government reporting data that is inconsistent, unreliable, or non-existent, the Bloomberg report tackles the recycling analysis in a way that hits home with investors – by gauging economic feasibility rather than regulatory compliance. That’s fair and good, yet there are additional ways to get at this story, and many of them are taking shape in the Ivory Tower rather than the newsroom.

A research team led by Sheila Olmstead of the University of Texas measured water quality changes at thousands of points downstream from waste treatment plants and drilling sites for more than a decade. In a paper published in the National Academy of Sciences early this year, the team found a trend of elevated chlorine concentrations – a marker of fracking pollution -- downstream of waste water treatment facilities, but not downstream of drilling sites. As New York Times blogger Andrew Revkin notes in Dot Earth, the findings suggest that spills and leaks at specific sites are not statistically visible, but impacts of poorly processed wastewater are. In other words, we should be aware of the “cumulative impacts,” or the toll taken in water quality over time as shale gas development becomes more commonplace, even in areas previously untouched by mineral extraction.

Salts are a telltale marker of waste -- known as “flowback” – that is regurgitated from natural gas wells after they are stimulated with hydraulic fracturing fluids. Studies, including one by the USGS in 2011, show that radioactive levels tend to correspond with total dissolved solids (TDS). TDS is a measure of concentration of salts and other impurities dissolved in water that tends to fluctuate depending on operators' production and disposal schedules. They are not visible to the naked eye, and they are flags for water problems, including radioactivity.

SU grad student Sunshyne Hummel works on groundwater study
The Olmstead team is one example of a burgeoning field of study focused on fracking and water quality. (There are many others, including one featured in this report I wrote for Syracuse University Magazine.) Yet the subject could use much more reporting than it gets in the mainstream press. The problem is, it requires a level of commitment and investigative wherewithal beyond the reach of many beat reporters working in an age where resources are scarce, staffs are small and growing smaller, and deadlines are more pressing as ever due to Internet immediacy. Instances that do make it to mainstream media outlets often originate with press-releases from NGOs, universities, or government agencies regarding events that are too conspicuous to ignore, including the following examples from Pennsylvania:

Waste Treatment Corp., a plant on the Allegheny River in Warren County, Pa. has been operating under a state permit that sets no limit on the amount of total dissolved solids and chlorides it can send to the river from oil and gas and other waste streams. Late last month, the DEP negotiated an order with the company that allows the plant to send a monthly average of 176,000 pounds per day of total dissolved solids into the river on an interim basis for two more years. The company has until January 2016 to trim the salt discharge to a monthly average of 888 pounds per day of total dissolved solids. As part of the proposed agreement with the state, the company agreed to a $25,000 fine.  Waste Treatment Corp. still faces a law suit filed by Clean Water Action, an environmental group, in U.S. District Court. The group claims that the plant is illegally discharging fracking wastewater containing high levels of salts, heavy metals and radioactive compounds into the Allegheny River.

Samples collected in Blacklick Creek downstream from discharges from the Josephine Brine Treatment Facility, in Indiana County, found radium levels 200 times greater than samples upstream and background sediments. The levels exceed thresholds for radioactive waste disposal and pose “potential environmental risks of radium bioaccumulation in localized areas of shale gas wastewater disposal,” according to a peer reviewed study by Duke University scholars studying the impact for shale waste.

Last summer, the DEP revoked the permit of Aquatic Synthesis Unlimited after numerous spills and violations at the plant, built on an old rodeo site about 40 miles northeast of Pittsburgh. The plant had problems from the beginning, when it started construction in December 2011 without first getting a permit from the DEP. As the demand for wastewater treatment grew, the DEP issued a conditional permit in April 2012 that allowed the plant to accept flowback, but soon the facility was inundated. It treated some of the wastewater it had on site in July and August last year, but in September it was cited by the DEP for moving wastewater off-site for injection into deep wells, in violation of its permit.

One of the most mysterious and troubling frack-water-treatment messes involves one of the highest-profile and promising plants. Minuteman, a service company in Milton Pa. that handles fracking waste, was heralded by Governor Tom Corbett as “an American success story.” Corbett made a personal visit to showcase the plant as part of a pitch to promote job-creation incentives in February, 2012. Owner Brian Bolus (who happened to be a $10,000 contributor to Corbett’s campaign) began the company in 1991 and built it into a $5 million operation with 200 trucks and 158 employees. In what remains an unexplained turn of events, the FBI, accompanied by agents from the DEP, the IRS, and various local agencies including the Milton Sewer Authority raided the plant in May. Federal agents bound some Minuteman workers in plastic cuffs, also handcuffed Bolus' wife Karen in front of their son, interviewed incoming waste truckers and left with a huge haul of boxes of documents.

Minuteman issued a statement that characterized the probe as "baseless," and a result of unfounded complaints from "disgruntled" employees speaking to the AG's office. There have been no follow-up reports since the event late last spring. Dennis Fisher, a spokesman for the Attorney General’s Office, refused to comment on the status of the investigation or address any of my questions about it.

Of course, there are hundreds of treatment plants profitably treating or “recycling” frack wastewater throughout the Commonwealth without undue attention or incident. (You can view a video of one here by Kirsi Jansa, a Finnish journalist, who takes viewers on a tour of Reserved Environmental Services.)  Many, undoubtedly, follow “best practices” – a term that refers to standards set and policed by industry rather than government. But in the absence of clearly defined federal standards, enforcement, or even a more precise definition of “recycling,” it’s hard to know where the bar is set and who is actually meeting it.