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Summary: GSPH Shale Gas Conference 2011

2nd Annual Health Effects of Shale Gas Extraction Conference
Hosted by: University of Pittsburgh Graduate School of Public Health
November 18, 2011 – Pittsburgh, PA

Presentation Summaries (in presentation order below) | Conference Website | Presentation Videos | Photos (coming soon)

Bernard D. Goldstein, MD 
Emeritus Professor, University of Pittsburgh, Graduate School of Public Health, Environmental and Occupational Health department

“Public Health, Sustainability and the Marcellus Shale”

Goldstein works in the areas of sustainability and Marcellus shale issues, where he sees much overlap. However, in his sustainability work he sees hope for the future – and in his Marcellus shale work he worries that we have not learned from our past.

There is confusion around Marcellus Shale gas extraction. Most of this confusion centers around two keys issues: what do people mean when they say ‘fracking’, and how old is this technology. Fracking can be narrowly defined as just the fracturing of shale with highly pressurized fluid, or meant more widely as the entire process from pad creation to the production of natural gas. The technology used to extract gas from the Marcellus shale is a new twist on an old technology. This lack of definition and clear communication leads to mistrust.

When communities and individuals who are against Marcellus shale drilling are asked about the source(s) of their concern, health is high on their list. However, health professionals are rarely on local, state, or national advisory committees on the subject. Public health professionals must be at the table when talking about Marcellus shale issues.

According to Goldstein, there are three certainties in moving forward with the Marcellus Shale: surprises, disease clusters, and less pollution over time. A prospective study now would be preferable to a retrospective study after the disease clusters appear. Therefore, resources must be spent now on gathering data and conducting research to develop evidence-based recommendations.

Sustainability has much in common with the public health goal of prevention. Therefore, we must look to lessons in sustainability when thinking about and solving Marcellus shale problems.

Robert Jackson, PhD 
Nicholas Professor of Global Change, Duke University, Nicholas School of the Environment

“Shale Gas, the Environment, and Human Health”

Jackson’s presentation focused on the need for cooperation and interaction of state regulatory agencies with university researchers and also his own research on groundwater analyses and contamination. He began with a background of the pros and cons of the issue, asking, “Why might we want natural gas to power the world?” There are many incentives, especially when considering legacy pollution caused by the coal industry with mountain top mining and acid mine drainage.

Jackson explained that the geology and density of people in Pennsylvania and Texas are different from Wyoming’s tight sand shales, and in PA the drilling setback limit is 250 feet. The density of wells within PA also differs among areas. Whereas the legacy of conventional gas wells is mostly located in western PA, the majority of Marcellus Shale gas wells are located in Northeast PA, so this is where his researched has been conducted.

He posed the research question, “If you are near a natural gas well is your water quality different?” To try to answer the question he used three methods: stray gas forensics (methane, ethane, and propane), isotopic composition, and tracking the fate of hydraulic fracturing fluid. He began by establishing geochemical and isotopic tools for tracing gases and fluids from produced water. His team took samples and conducted field readings but most analytical work was done in the lab. The team analyzed well water samples for isotopes of Carbon, Hydrogen, Oxygen, Boron, Strontium, as well as analyses of other elements and radionuclides. Isotopic ratios can to be used as fingerprints, since they are different depending on the geological source of the sample, i.e. surface water or from deep underground.

Their findings indicated no evidence of hydraulic fracturing fluids or produced water in wells, but did suggest a relationship between distance to a wellhead and concentration of methane, ethane, and propane in homeowners’ drinking water. The gas was identified as thermogenically created, with a different isotopic signature than most “surface methanes.”  Jackson also noted that most homeowners do not typically have problems.  “What is the cause of this difference?” The issue is something that can be addressed first by fixing the most likely mechanism for the leaks – poorly constructed wells.

Jackson then went on to discuss some of the new regulatory changes to well construction and cementing in PA. There is not a consensus on the possibility of an intermediary fracture that connects with a fissure that leads to the surface and groundwater, and most agree this pathway is less likely than issues with well construction. Faulty casing and cementing is the likely to be the most common source of groundwater contamination.

Jackson discussed the state of future unconventional drilling in his home state of North Carolina, if NC legalizes horizontal drilling and hydraulic fracturing. His recommendations for NC included to collect generous pre-drilling data, have aggressive zone and setbacks to protect property, to plan for water disposal, to require full disclosure of chemicals, have fees to cover monitoring, and provide landowners with better information as there are not any oil and gas lawyers in NC.

Other work that Jackson and researchers at Duke are pursuing includes using isotopic ratios to investigate sources of methane seeps. The surface seeps do not appear to look like Marcellus Shale deep methane. Using a mobile air monitor, methane leaks and losses from pipelines have also been mapped with colleagues at Boston University by driving the monitor around city blocks. In Boston there were hundreds of leaks identified that need to be fixed. Air quality is also being researched as methane extraction leads to the release of precursors of ozone.

Jackson finished his presentation with recommendations. There are certain data needs that should be filled, including: identifying mechanism for migration (such as well casing failures), making more data publically available, gas isotope data, chemical and isotopic profiles with depth, data disclosure (including “frac” fluid constituents). Health studies still need to be conducted, including the following studies: chronic, low-level exposure to methane have not to his knowledge been completed; air quality effects, including VOC’s; longitudinal health studies; and green-house gas accounting. There also needs to be better collaboration among industry, universities, and regulators.

Allen Robinson, PhD
Professor, Carnegie Mellon University, Engineering and Public Policy and Mechanical Engineering, Center for Atmospheric Particle Studies

“Regional air pollution emissions from the development and production of Marcellus Shale”

There is a lot of attention on water quality impacts from Marcellus, and rightly so, however, we also need to consider the impacts on air quality from the natural gas boom especially when considering our already pollutant saturated region. There are certainly end-use benefits to natural gas usage over coal and other fuel sources, and these benefits must be considered into the prudence of energy production types. There are many sources of emissions throughout the complete cycle of unconventional gas drilling to production and those sources are distributed all over Pennsylvania. Impacts can be localized to nearby communities, but also air pollution can travel and mix with other sources across larger spatial scales. “The emissions are all interconnected in a way, whether its distance or a functional connection such as a pipeline, regardless there are good reasons for emissions to be aggregated,” says Robinson. The emissions are also distributed across a very large area, so we also need to consider the contribution to other areas such as Philadelphia, New York, etc. The pollutants of concern with oil and gas development are:

    • Criteria Pollutants
      • Ozone
      • PM2.5
    • Hazardous Air Pollutants/ Air Toxics
      • Diesel particulate matter
      • Benzene, toluene, ethylbenzene, xylenes
      • Formaldehyde, acrolein
    • Climate Change
      • Methane
      • Black Carbon

Unconventional gas drilling has occurred in other areas of the US, and significant research has occurred in the last 10 years on the impacts in these areas. NOx and VOC emissions in the Barnett Shale region in the Dallas-Fort Worth area are a large source of pollution once the sources are aggregated. The combined emissions of NOx and VOCs for the aggregate emissions in the areas of shale development are comparable to the mobile emissions from cars and trucks in the metro area of Dallas-Fort Worth (Armendariz, 2009). The synergy between meteorology (weather) and emissions plays a major role in ozone concentrations in general. This synergy was apparent in the Jonah-Pinedale Anticline in Wyoming where for the first time, ozone levels in the winter were above the health-based NAAQS, putting this area in non-attainment for 8-hour ozone concentrations (Pinto, 2009). Some of the rural areas around some of these operations are experiencing elevated levels of benzene for example. These levels are not incredibly high, but in some of these areas it is 4-5 times higher than it should be. Living in Grand Junction, CO is therefore somewhat comparable to living next to Neville Island.

To estimate the relative contribution of emissions from natural gas operations in Pennsylvania, emissions inventories for all the sources, their activities and respective emissions factors must be calculated, estimated, and averaged. Once these estimations are verified, computer model simulations can predict the relative contribution or perturbations of pollutants concentrations in the air to their respective sources. The majority of the emissions of NOx are related to drilling activities as calculated in 2009, but emissions in 2020 is predicted to be caused more by production activities such as compressor stations. The regional median NOx emissions increase was estimated to be about 5% attributable to Marcellus Shale drilling operations in 2009. In 2020, the median increase is predicted to be around 17.5% current NOx emissions. In developing a state implementation plan (SIP), these contributing sources must certainly be taken into account.

Adam Law, MD
Owner, IthacaMed; Clinical Assistant Professor, Weill Cornell Medical College; Founding board member, Physicians, Scientists and Engineers for Healthy Energy

“Endocrine and Metabolic Disruption”

As a clinical endocrinologist, Law treats many chronic diseases of the endocrine system. The endocrine system consists of the pituitary, thyroid, and adrenal glands as well as the ovaries and testes. Law is concerned with Endocrine Disrupting Chemicals (EDC) in the environment which can interfere with the body’s natural estrogen, androgen, and thyroid hormone production and functionality.

Law is concerned that some gas companies are less than forthright with revealing all chemicals in their proprietary fracking fluid. This limits the ability of scientists to determine effects of these chemicals in our environment. There are three chemicals in hydrofracking fluid that are known EDCs: cadmium, arsenic, and thiourea. Cadmium causes prostate cancer in rats; arsenic interacts with seven hormone receptors and has been linked to Type II diabetes; and thiourea reduces production of the thyroid hormone, as well as causing adverse pregnancy outcomes.

EDCs are also of great concern because of their non-linear dose-response curves and their ability to bioaccumulate in fat deposits. A non-linear dose-response curve means that a small dose of these chemicals has unusually large effects on the body. Accumulation in fat deposits leads to these chemicals being released again into the body when fat is used for energy – namely during pregnancy, breast feeding, and during illnesses. Additionally, there likely are unknown synergistic effects of many of these chemicals acting together.

In light of this information, Law would like to see industry disclose all of the chemicals in their fracking fluid. This would allow scientists to further study, identify, and restrict the EDCs being released into our environment.

Charles Werntz, DO, MPH
Associate Professor, Clinical Emphasis, West Virginia University, School of Medicine, Community Medicine & the Institute of Occupational & Environmental Health department

“Worker Health Concerns in Marcellus Shale Work”

In his presentation, Werntz from the Institute for Occupational and Environmental Health (IOEH) at the University of West Virginia considered the health impacts of a group that is significantly affected by the Marcellus Shale but not often discussed: the people who work on the well sites themselves. Werntz’ occupational health data comes from people who have come into the IOEH seeking medical attention from a variety of afflictions, from events occurring throughout the entire life cycle of the well from the development of the well pad through post production activities.

Common health issues include injuries from slips and falls, traumatic accidents related to heavy equipment and ATV usage, and skin and respiratory ailments due to chemical exposures. Werntz indicates that there has been some progress in this last category, as the industry has trended away from hand mixing of hazardous chemicals for the hydraulic fracturing process of well stimulation. According to Werntz, it was common for workers to mix these chemicals by hand, protected only with surgical style latex gloves, whereas now such tasks are completed in enclosed mechanical mixers. The IOEH hasn’t had a hand mixing injury in two years, he said, reflected improved practices in the field.

Werntz also asserted that in an environment such as an active drilling site, the nature of injuries cannot always be predicted. To exemplify this point, he discussed the so-called sparkly cloud incident, in which three of six workers on site were hospitalized after being exposed to a cloud that is thought to have occurred from an exploding lithium battery. Two years after the incident, two of the three hospitalized workers still cannot work on drill sites without triggering chemical asthma.

Many steps can be taken to improve the health and safety of workers on the job site. And while not all chemical exposure injuries can be prevented, Werntz indicates that treatments can be dramatically improved by fully disclosing the chemicals used for each hydraulic fracturing action, so that physicians do not have to sift through the potential reactions of hundreds of different chemicals on the approved list of hydraulic fracturing chemicals.

William Burket, CFPS
Regulatory Affairs Manager, EOG Resources, Inc.

“Industry Safety Initiatives and Community Emergency Preparedness”

Burket outlined multiple elements of the Marcellus Shale Coalition’s Industry Safety Initiative in his remarks. Burket prefaced this discussion with a quick summary of the regulations already in place at the upstream (well development), midstream (gas production), and downstream (delivery to homes and businesses for use) phases of natural gas production. He then explained that the Marcellus Shale Coalition is an organization with includes 260 companies, about 40 of which are producers, and the rest of which are contractors which provide services to producers.

The Coalition participates as a state chapter of the national STEPS (Service, Transmission, Exploration, Production, Safety Network). Its members are asked to adopt best management practices that have been developed in the industry. Burket provided illustrations of these best practices, which typically exceed regulatory requirements, in each area of activity. For example, transportation regulations specify speed limits, hours during which headlight use is required, and requirements for logging hours worked for long-distance drivers. The STEPS best practice standard calls for lower speed limits in inclement weather, use of headlights whenever in transit, and logging requirements for local and well as long-distance drivers.

Burket explained that the industry is seeking “green chemistry” to use in the drilling mud and hydro-stimulation processes. He also noted that while flaring will continue to be used in emergency situations, the industry is working toward the development of “green completions.” Finally, Burket summarized the efforts the Coalition has made in the area of emergency preparedness. In the last 3 years, in collaboration with the State Fire Academy and State Fire Chief, the Coalition has helped to facilitate the training of 2200 county-based emergency responders from 42 counties and has worked on other community preparedness measures.

Simona Perry, PhD 
Research Scientist, Rensselaer Polytechnic Institute

” ‘It’s like we’re losing our love’: Documenting and Evaluating Social Change in Bradford County, PA during the Marcellus Shale Gas Boom (2009-2011)”

Perry presented on the ongoing ethnographic research she began in July 2009 in Bradford County, PA. Perry seeks to explore the relationship that the marginalized residents of Bradford County have with the Susquehanna River and surrounding area. The timing of her study is propitious in that it began at roughly the same time as the Marcellus Shale gas drilling boom. Over the last 2 years, the county has been virtually “occupied” by the natural gas industry, changing both the landscape and the lives of those interviewed one-on-one and in focus groups conducted by Perry.

Bradford County is a rural community. It has a history of land-based and extractive industries (agriculture, lumber, and mining), racial homogeneity, and a population whose families had lived in the community for generations (with declining population in recent decades). Their ties to the land and the value they placed on clean air and water, fertile soil, and a rural way of life were well-established prior to the arrival of the gas drilling activities in 2009. Initially residents believed that local government would be able to regulate the increase in traffic and out-of-town workers, and light and noise pollution resulting from around-the-clock drilling, and that the industry would improve the local economy. Residents even saw it as their patriotic duty to welcome the industry which promised to make the country energy independent.

Within the next year, their experiences with traffic, destruction of roads, noise, toxic chemical releases in water and air, and destruction of the landscape created such stress among residents that Perry characterizes their impact as similar to the trauma suffered by domestic abuse on the individual level, and collectively like the trauma observed in communities experiencing significant natural disasters. She has observed that the cycle of abuse observed in intimate relations – tension building, leading to an incident, followed by reconciliation, the a calm period followed again by tension building – is evident in the community at large in her field notes over the last 2 years. Perry concludes that the residents who have chosen or have no choice but to remain in the community need the assistance of mental health and environmental professionals who can help them protect their rights and prepare them for future impacts.

Kathy Brasier, PhD
Associate Professor of Rural Sociology, Pennsylvania State University, Agricultural Economics and Rural Sociology department

“Community Impacts of Natural Gas Development in the Marcellus Shale: A Research Summary”

Over the last 2 years, Brasier has worked with a team of researchers in her institution to study community impacts of Marcellus Shale drilling using mixed qualitative and quantitative methods. She has a particular interest in community risk perception and trust in social institutions. Brasier’s research team is seeking to conduct longitudinal research in communities across Pennsylvania starting with “pre- or early state-Marcellus Shale boom period” forward. The team is using the “boom town” literature developed in the 1970s and 80s in the western US, although it recognizes that its applicability to the East may be limited.

Using case studies conducted in 6 counties and a geographically broader household survey, the research explores the social disruption caused by stress on infrastructure and social relations in areas of Marcellus Shale activity. Results from both types of investigation indicate that the deterioration of roads, increased traffic, housing shortages and concern about the future environmental and community impacts are greatest community concerns. Changes in the population – more and different kinds of people with a different connection to place – are both changing relationships in the community and increasing stress on local human service systems.

The economic impacts are viewed as favorable insofar as the drilling boom has brought jobs and income to previously depressed communities. The opportunities for young people to remain in their home communities upon completing their education are improving. Yet there is also evidence that the gas industry’s higher wages have bid skilled workers away from existing employers creating shortages in some places. Additionally, it is not clear whether existing struggling industries, such as dairy farming, will survive. While some farmers use income acquired from leasing mineral rights to revive their farms, others use it to get out the business and/or community completely. The future of tourism is likewise uncertain, depending upon the impact of drilling on the quality of the environment.

The survey data collected thus far indicates that respondents’ assessments of the impact of Marcellus Shale drilling depend on location. Considerations of access to a metro area, the history of extractive industries, whether the community is a hub for company headquarters or drilling activity all influence perceptions. Overall, about twice as many people have a positive attitude toward the industry compared to a negative assessment (45% vs. 21%). But Brasier notes that this leaves one-third of the sample undecided about their perception, and that responses to this question differ regionally as well. The research will continue to explore whether the industry, regulators, and other institutional players are viewed as competent to manage risks and predictable in how they do so. These factors contribute to institutional trust which is critical to the future of the industry.

Tom Biksey, MPH
Director Risk Assessment, EHS Support, Inc.; Doctorate Candidate, University of Pittsburgh, Graduate School of Public Health, Environmental and Occupational Health department

“A Risk Assessment of Fracing Fluid Flowback Water from an Operation in an Asian Pacific Setting”

Biksey presented a risk assessment model of exposure pathways from a Marcellus Shale well pad. He began the presentation with an explanation of the Risk Assessment paradigm and the importance of risk assessment for regulatory processes. The model was based on the conservative assumption that a drill rig can be placed next to a residence. It was also assumed that the residence had potable groundwater source, as well as a surface water, or stream, adjacent to the site, to include pathways including surface water contamination. Multiple scenarios were tested. They included dermal contact by a trespasser exposed to the surface water, workers repairing lines, and the impact on livestock and native fauna, such as cattle drinking from the surface water source. Two phases of exposure were modeled. First, a mass balance was calculated for the hydraulic fracturing chemicals returning to the surface as flowback . At that point the water quality monitoring program was not yet established for sampling sources of the water. Material safety data sheets (MSDS) and other specifications of chemical risks were used to derive a cumulative risk., Next, modeling was designed to track the fate and transport of the chemicals in the flowback to determine where they go and at what concentration.

Three scenarios with different flowback fluids of differing contaminant concentrations were included in the model. One exemplified flowback fluid prior to any type of treatment, the second a blended mixture of wastewater streams, and the third flowback water after reverse osmosis. Biksey presented a diagram of the model to show exposure source locations. The five modeled receptors included a trespasser, worker, livestock, wildlife (medium sized such as a deer), wildlife (small mammal), each with their own exposure time frame and dermal contact (exposure route).

There is a necessity for transparency of these evaluations due to the many variables. The EPA has an approved worksheet for presentation of the data. All the data for a receptor goes into an intake equation all info in gives you dose and what type of exposure. An unknown variable was the amount of mass that would be recovered/returned from the well, so both 20% and 80% return were included. Inputs included an empirical list of detected chemicals of particular concern (COPCs) including constituents from the formation materials. The only poly-aromatic hydrocarbon was naphthalene. For certain COPC’s, oral RfD’s for the Toxicity Assessment had to be derived.

For the risk characterization, a cumulative carcinogenic risk was evaluated. A risk of less than 1×10-6 was considered acceptable. A risk of less than 1×10-4 requires a best practice control measure for reduction, and a risk of greater than 1×10-4 is unacceptable. The maximum carcinogenic risk determined from the model with maximum exposure was 3.7×10-5 from surface water. This theoretical showed a limited risk for maximum exposures at the well-site but there is room for improvement with the model.

Myron Arnowitt, MPH
PA State Director, Clean Water Action

“Review of the Citizens Marcellus Shale Commission board report”

Arnowitt is the Pennsylvania director for Clean Water Action. His presentation took a look at the efforts of the Citizens Marcellus Shale Commission board report and discussed the reason for its formation. The 16-member commission was set up by numerous nonprofit organizations, and is co-chaired by two former state representatives, Dan Surra (D-Clearfield and Elk Counties) and Carole Rubley (R-Chester and Mongomery Counties).

The Citizens Marcellus Shale Commission was set up to provide an independent perspective and provide an opportunity for the public to participate in the review process, features that were notably lacking from the process for Governor Corbett’s Marcellus Shale Advisory Commission. To this end, the commission conducted 5 public hearings, attracting over 400 participants from 48 counties in Pennsylvania, according to Mr. Arnowitt.

Largely based on this public participation, the Commission have put forth a number of recommendations on their report, including air quality issues, the handling of public lands, ground and surface water contamination, economic issues and health issues. Arnowitt says that much of the report can be summarized by the phrase “slow it down”. This applies both to the expedited permitting process as well as the frenetic pace of the industry in general.

Summary Writers

  • Kyle Ferrar, MPH
  • Matt Kelso, BA
  • Jill Kriesky, PhD
  • Lynne Marshall, MS
  • Drew Michanowicz, MPH, CPH

Study Offers 7 Safeguards For Hydraulic Fracturing

Duke University Press Release

A new report by Duke University researchers offers several health and environmental measures for North Carolina lawmakers to consider as they debate legalizing horizontal drilling and hydraulic fracturing for natural gas.

The study, which has been accepted for publication in the journal Duke Environmental Law and Policy Forum, looks at potential environmental hazards and how lawmakers in other states are factoring health and environmental risks into regulatory approaches targeting the natural gas extraction method.

”If North Carolina legalizes shale gas extraction, we need to consider what’s worked best in other states and avoid what hasn’t,” said Rob Jackson, Nicholas professor of global environmental change at the Nicholas School of the Environment. “That’s the only way to get it right.”

Legislation passed earlier this year has moved North Carolina closer to producing shale gas, and is directing the Department of Environment and Natural Resources to complete a study on the effects of hydraulic fracturing, often called “fracking,” by May, 2012.

Authors of Duke’s own study say if North Carolina legislators allow natural gas production through hydraulic fracturing, they should consider seven measures to help avoid and mitigate any possible negative effects. These include:

  1. Securing baseline data on groundwater prior to shale gas production and at each stage of the drilling process;
  2. Funding for regulatory programs and an agency to carry them out;
  3. Planning for withdrawals from area water supplies related to the production;
  4. Minimizing the risks of spills and contamination caused by equipment failure and human error by implementing safety requirements;
  5. Thinking through options for the disposal and treatment of wastewater resulting from the hydraulic fracturing process;
  6. Assessing the impacts on air quality and assure attainment of federal ground-level ozone standards; and
  7. Requiring some degree of disclosure regarding the chemicals used in fracturing fluid.

“Lawmakers have the unique opportunity to decide whether or not hydraulic fracturing is appropriate for the state,” said Jonas Monast, director of the climate and energy program for the Nicholas Institute for Environmental Policy Solutions. “Before making a decision, we need to understand the full range of potential economic, environmental, and health impacts.”

The paper “Considering Shale Gas Extraction in North Carolina: Lessons Learned in Other States,” is written by Sarah Plikunas, Brooks Rainey Pearson and Jonas Monast of Duke’s Nicholas Institute for Environmental Policy Solutions and Rob Jackson and Avner Vengosh of the Nicholas School of the Environment. To read it, click here.

PA Data Updates, New DataTool Charting Functionality

Several oil and gas datasets from the Pennsylvania Department of Environmental Protection (DEP) have been updated on the FracTracker DataTool, including:

Additionally, a Pennsylvania zip code dataset from the US Census has been added, but it appears to have some errors, with some zip codes inside Pennsylvania missing, and some outside of the border included.

PA zip codes. Please click the “i” tool then any map feature for more information.

Also, Rhiza Labs, the software developer of our DataTool, has been working hard to add new charting functionality to their Upshot platform. Any data that is classified as numeric upon upload can be charted. Play around with it, and let us know what you think.

DEP = Department of…Economic Promotion?

In today’s Post-Gazette, Laura Olson quotes the DEP Deputy Secretary of Oil and Gas Management Scott Perry refuting the notion that hydraulic fracturing is an unregulated process, saying:

“It’s important to point this out, because I think if the public loses confidence in the department’s ability to manage this industry, it’s going to have some consequences and perhaps some unfortunate policy decisions will be made. It ultimately will result in less opportunities for everyone.”

In times like these, isn’t it nice to know that even the Department of Environmental Protection has the economy foremost on their minds?

“I feel like I’m trying to convince the public that Sasquatch doesn’t exist.”

Hasn’t anyone told him? There have been 951 confirmed Sasquatch sightings in the Marcellus Shale portion of the Commonwealth so far this year.

Even if I’m taking this quote of Perry slightly out of context, the point remains valid: The DEP stands for the Department of Environmental Protection. That’s what they should talk about, and denying that there are problems doesn’t make it seem like they are paying any attention to their own data.

Report: Economic Consequences of Marcellus Shale Gas Extraction

By Susan Christopherson, PhD – Cornell University

Gas Pipeline Construction

Gas Pipeline Construction

The Economic Consequences of Marcellus Shale Gas Extraction report outlines some of the key issues explored by a team of researchers centered at Cornell University during the period of New York’s moratorium on high volume hydraulic fracturing (HVHF) for natural gas.  Our research focused on Pennsylvania, where Marcellus HVHF drilling has already begun, and on New York, which is still considering how to regulate HVHF, but we also made use of the experience of other states that have shale gas plays where HVHF has been in use far longer than in Pennsylvania.

At 17 pages, this report is a series of snapshots about what we found.  For a more fulsome account of our analysis and findings on most of these issues, we encourage you to read the complete working papers and policy briefs we have made available for download.

We launched this research project because it had become evident that the public and policy discussion over the consequences of Marcellus shale gas extraction had devolved to a polarized debate contrasting potential effects on water supplies with potential economic benefits – such as job creation.  The consequences for water resources were (and are) receiving a great deal of attention; the economic consequences were not.  We did not begin with a disposition for or against shale gas extraction, but we wanted to develop a realistic picture about what to expect, and about the economic consequences both in the short term and in the longer term.

As you will see in the report, the consequences that should concern us all go well beyond environmental concerns, and their economic implications include costs as well as benefits.  On balance, is shale gas extraction likely to be an economic winner? Not necessarily.  We conclude that while there are real economic benefits for some parties, if shale gas extraction is to be at all a positive force for economic development broadly and long term, it will require intensive planning and a new structure of regulation, monitoring and enforcement – along with the means to pay for it – that are not currently in place.

Susan Christopherson, PhD
Professor, Department of City and Regional Planning, Cornell University
Principal Investigator

Update from US EPA on Hydraulic Fracturing Study

US EPA Proceedings of the Technical Workshops for the Hydraulic Fracturing Study

In its Fiscal Year 2010 Appropriations Report, the U.S. House of Representatives Appropriation Conference Committee identified the need for a focused study on the relationship between hydraulic fracturing and drinking water resources. EPA scientists, under this Administration and at the direction of Congress, are undertaking a study to better understand any potential impacts of hydraulic fracturing (HF) on drinking water resources.

The scope of the proposed research includes the full lifespan of water in HF, from acquisition of the water, through the mixing of chemicals and actual fracturing, to the post-fracturing stage, including the management of flowback and produced water and its ultimate treatment and disposal.

 

EPA held four technical workshops from February through March 2011 to explore the following focus areas:

The goal of the technical workshops was three-fold:

  1. Inform EPA of the current technology and practices being used in hydraulic fracturing,
  2. Identify research related to the potential impacts of hydraulic fracturing on drinking water resources, and
  3. Provide an opportunity for EPA scientists to interact with technical experts. EPA invited technical experts from the oil and natural gas industry, consulting firms, laboratories, state and federal agencies, and environmental organizations to participate in the workshops.

EPA will use the information presented in these abstracts and presentations to inform research that effectively evaluates the relationship between HF and drinking water.  Learn more»

Flood Control and Shale Gas Wells

Flooding from Hurricane Irene in Wilkes-Barre PA

Photo Credit: Salvation Army, Randall Thomas, Wilkes-Barre, PA

Pennsylvania is no stranger to water and flooding, as we receive between 38 and 45 inches of rain per year on average. Unfortunately, the storms that hit the region starting on August 27th were more than we could handle – to say the least. During this time Hurricane Irene and the remnants of Tropical Storm Lee burdened the eastern portion of the state with flooding at water levels that rivaled Hurricane Agnes (1972).

While most residents hit hardest by flooding focused on protecting their families, homes, and livelihoods, others throughout the Commonwealth were also concerned about the impact that rising water levels could have on natural gas well pads. This is especially an issue for those sites operating in floodplains with open frac ponds. According to the reports we have been able to gather no shale gas well sites were compromised or sustained environmental damage in PA.  Apparently, Marcellus Shale drillers were advised to prevent overflows from wastewater/’frac’ ponds by the governor, although due to a communication loophole it is unclear as to whether all of the relevant sites temporarily shut down during the inclement weather. Regardless, with the number of wells being drilled in PA especially in the northeast, being able to prevent any incidents during these storms is quite a feat on the part of the drillers and should be recognized as such. Industry reports also indicate that drilling companies provided financial contributions, expertise, equipment, work hours, and supplies to aid in the flood relief efforts. Learn more about these contributions here.

We ask that if you have any knowledge that contradicts this information, please let us know and contact your local representative to report the incident.

January to August Marcellus Shale Violations by Operator

The Pennsylvania Department of Environmental Protection’s Bureau of Oil and Gas maintains violation data on their website (download the Excel file). The following is a summary of Marcellus Shale violations issued in the first eight months of this year, including the number of wells that were flagged for violations.


Marcellus Shale violations and offending wells in Pennsylvania: January – August, 2011

Severance Tax vs. Impact Fee, Revisited

It may not seem like it when you head to the pump, but the price of oil has plummeted in recent months. After peaking near $114 in April, the price has fallen all the way to $77.27, as of today. Natural gas, which was $4.27 last month, has fallen 15 percent since then to $3.62. Surely with all of this uncertainty, the Corbett’s proposed impact fee makes more sense than the traditional severance tax which most states use? Perhaps it would be better to take the predictable lump-sum amount than basing that portion of the state’s coffers on the vagaries of the market?

No, not really.

Corbett’s plan allows the counties to charge up to $40,000 per well per year, for a period of up to 10 years per well. According to the Post-Gazette, his administrations figures it could bring in $120 million in the first year, and up to $200 million per year by the sixth year.

Or, as I pointed out in June, we could tax like Texas. Texas imposes a 7.5% severance tax on natural gas and 4.6% tax on oil and condensate. Using yearlong production data for non Marcellus Shale wells in Pennsylvania and the average wellhead price of gas and price per barrel of liquid hydrocarbons for 2010, I estimated that non-Marcellus wells would have brought in $72.5 million if we taxed our resources just like Texas does. What’s more, based on six month production data, I showed that the wells in the Marcellus Shale formation would produce at least $173 million, for a statewide total of $246 million through all formations.

But that was before the bottom fell out of the price of oil and gas. What if we used today’s low prices as a guide?


Estimated six month severance tax from the Marcellus Shale formation in Pennsylvania.

Even with the low energy prices, that six month total is almost as much as Corbett’s administration figures to raise in a year, and it doesn’t even include the tens of thousands of wells that aren’t drilled into the Marcellus Shale.

While the proposed impact fee does more for Pennsylvania than the current nothing-at-all policy, in the scheme of things, it is a great deal for the drilling industry.

And one final aside: does it seem strange to anyone else to let the counties set the impact fee? Is this some sort of attempt to have them compete with each other to keep the prices low? If so, it seems unlikely to work in my opinion. If a county charges the maximum $40,000, that represents only about 0.8 percent of cost of a well that costs $5 million to drill, and that figure is on the low end of the spectrum. The drilling companies will want to drill where the resources are, and whatever fees or taxes are charged will not change that fact.

Governor Unveils County Drilling Fee, Other Marcellus Shale Proposals

Reposted from PA Environment Digest

Proposal calls for 75% of fee revenues to remain local, 25% to the state

Gov. Tom Corbett today said he agrees with 94 of the 94 recommendations made by his Marcellus Shale Advisory Commission and will be recommending legislation authorizing counties to adopt a drilling fee whose revenue would be split between the state (25 percent) and local governments (75 percent) to offset costs imposed by natural gas development. The recommendations not adopted by the Governor include: forced pooling, re-writing the authority of local governments to regulate drilling linked to a drilling fee and adding natural gas to Tier II of the Alternative Energy Portfolio Standards. The Governor’s Office did not release legislative language or mention which recommendations would be adopted by legislation, regulation or policy. However, he said about one-third require legislative changes; more than 50 are policy-oriented and can be accomplished within the state agencies. The legislative priorities outlined today will be submitted to the legislative leadership in the near future. The governor has instructed the relevant Cabinet Secretaries to create implementation plans for the policy-oriented recommendations and to submit them to his office within 30 days. “This natural resource will fuel our generating plants, heat our homes and power our state’s economic engine for generations to come,” Corbett said. “This growing industry will also provide new career opportunities that will give our children a reason to stay here in Pennsylvania. We are going to do this safely and we’re going to do it right, because energy equals jobs.”

County Drilling Fee

Under the Governor’s drilling fee proposal, counties with Marcellus or Utica natural gas shales are authorized to adopt a per well drilling fee starting at $40,000 per sell and decreasing to $10,000 per well in four years. A county may provide for a fee credit of up to 30 percent if the driller makes approved investments in natural gas infrastructure, which include setting up natural gas fueling stations or natural gas public transit vehicles. “Estimates show that this impact fee will bring in about $120 million in the first year, climbing to nearly $200 million within six years,” Corbett said. “As the number of wells grows, so will the revenue. Almost all of the money it brings in will go to benefit the places experiencing the impact.” A quarter of the fee revenues would be sent to state government for several specific uses:

  • 4.5 percent– up to $2 million– to the PA Emergency Management Agency for emergency response planning, training and coordination;
  • 3.75 percent– up to $2 million– to the Office of State Fire Commissioner to develop and support first responder activities;
  • 3.75 percent– up to $2 million– to the Department of Health for collecting and disseminating information and supporting outreach activities for investigating health complaints related to shale gas development;
  • 7.5 percent– up to $2 million– to the Public Utility Commission for inspection and enforcement of pipelines;
  • 10.5 percent– up to $10 million– to plug abandoned oil and gas wells and provide for the enforcement of oil and gas programs requirements; and
  • 70 percent and an balance remaining to PennDOT for road and bridge maintenance and repair and transportation infrastructure improvements in counties hosting shale gas development.

Seventy-five percent of the revenues would be retained at the local level and allocated to counties (36 percent), host municipalities (37 percent) and 27 percent to municipalities in shale counties distributed by population and highway miles. Local governments could use the funding for road and bridge repair, water, stormwater and drinking water systems, reclaiming surface and subsurface water supplies, GIS and other information technology, project to increase the availability of housing to low income residents, delivery of social services including domestic relations, drug and alcohol treatment, job training and counseling, court system costs and conservation districts inspection and oversight of natural gas development.

Other Recommendations

As a part of this proposal, Corbett announced a series of prudent standards related to unconventional drilling, including:

  • Increasing the well setback distance from private water wells from the current 200 feet to 500 feet, and to 1,000 feet from public water systems;
  • Increasing the setback distance for wells near streams, rivers, ponds and other bodies of water from 100 feet to 300 feet;
  • Increasing well bonding from $2,000 up to $10,000;
  • Increasing blanket well bonds from $25,000 up to $250,000;
  • Expanding an unconventional gas operator’s “presumed liability” for impairing water quality from 1,000 feet to 2,500 feet from a gas well, and extending the duration of presumed liability from 6 months after well completion to 12 months;
  • Enabling DEP to take quicker action to revoke or withhold permits for operators who consistently violate rules;
  • Doubling penalties for civil violations from $25,000 to $50,000; and
  • Doubling daily penalties from $1,000 a day to $2,000 a day.

Corbett’s proposal also seeks to help secure energy independence and reduce reliance on foreign oil by developing “Green Corridors” for natural gas vehicles with refueling stations at least every 50 miles and within two miles of key highways; by amending the PA Clean Vehicles Program to include “bi-fuel” vehicles (diesel and natural gas); by helping schools and mass transit systems to convert fleets to natural gas vehicles; by stabilizing electric prices by using natural gas for generating electricity; and by encouraging the development of markets for natural gas and natural gas byproducts, such as within the plastics and petrochemical industries.

A summary of the Governor’s proposal is available online. Visit the Marcellus Shale Advisory Commission webpage for a complete copy of the July report.