There is no more fundamental role for government than to protect the air we breathe and the water we drink. In Pennsylvania -- a state with a history of severe air and water pollution -- state government is abdicating that role in favor of natural gas drillers.
The Pittsburgh Post-Gazette reports that the U.S. Environmental Protection Agency has strongly criticized Pennsylvania's new policy guidelines for regulating air pollution emitted by Marcellus Shale gas wells. EPA says that a draft Pennsylvania Department of Environmental Protection policy breaks with federal law and violates the state's own air pollution control plan in the way it proposes to regulate air pollution emissions from gas wells, compressor stations, and natural gas pipelines.
A policy consistent with the federal Clean Air Act would aggregate multiple gas development activities and treat them as a single major source of air pollution, requiring them to meet stricter emissions standards. EPA says that the new draft DEP policy de-emphasizes the inter-relatedness of oil and gas facilities and favors treating multiple emission sources as individual, minor sources of air pollution, and “appears to alter the conventional way in which aggregation determinations have been made federally and by PADEP."
Kathryn Klaber, president of the Marcellus Shale Coalition, was quoted by the Post-Gazette as saying that the industry supports the amended policy " because it "gives predictability for development. ... It’s a good compromise."
What is being compromised is air quality. Does Pennsylvania want to go the way of Wyoming, which is reporting smog worse than Los Angeles because of a boom in natural gas drilling?
Meanwhile, in the Pennsylvania General Assembly, water quality and taxpayer protection are faring no better. Republican majorities in the House and Senate have succeeded in passing competing bills to anemically regulate and tax the shale gas industry, and negotiations between the chambers to craft a compromise (there’s that word again) bill to send to the governor’s desk are ongoing.
One of the key provisions in both measures would set the amount of bonds that drillers would have to post to cover the cost of decommissioning and plugging gas wells. While DEP’s air pollution policies are going in the wrong direction, the General Assembly’s bonding policies are not going nearly far enough in the right direction.
Gas well bonding requirements, geared to Pennsylvania’s history of shallow gas drilling, were last updated in 1984. Drillers are currently required to post a $2,500 bond for a single well and a $25,000 blanket bond to cover an unlimited number of wells.
To oversimplify a bit, the Senate measure proposes a $10,000-per-well bond and a $140,000 maximum blanket bond if a driller has up to 25 wells. The House bill is even weaker, with a $10,000-per-well bond and a $60,000 maximum blanket bond for up to 25 wells. Both bills are woefully inadequate. Since shale gas wells extend much deeper than shallow gas wells, they will cost vastly more than that to plug. A recent study by Carnegie Mellon University called for the adoption of full-cost bonding -- something required when state forest land is leased -- which would translate into bonds in excess of $100,000 for each shale gas well.
Getting bonding requirements right is important for taxpayers. If a driller defaults and the amount of the bond is inadequate, taxpayers make up the difference in plugging an abandoned well. More importantly, orphaned, abandoned, and undocumented wells in Pennsylvania -- perhaps over 180,000 of them -- are potential leakage pathways that could allow methane or drilling chemicals to reach drinking water wells or groundwater. They are risks to public health AND to the natural gas industry. Pennsylvania should not increase the risk or add to that total with lax bonding requirements for shale gas wells.
What direction will Pennsylvania take in regulating shale gas? Stay tuned.
