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Issuance of PA Marcellus Shale Violations Over Time and by DEP Region

 
Changes Over TimeEvery time I think about the number of violations issued by the Pennsylvania Department of Environmental Protection (DEP) Bureau of Oil and Gas Management, I am struck on the one hand by the sheer magnitude of them–last year, the DEP issued 2,704 violations(1), a number that everyone would like to see go way down in the years ahead. On the other hand, at least that means the DEP is paying attention. It is with this spirit that I delved into the numbers, hoping to find patterns either in time or space.


The DEP has only occasionally issued more Marcellus Shale violations per month than for other combined oil and gas formations.

The monthly issuance of violations is surprisingly erratic in a industry that is accelerating drilling activity steadily, especially for the Marcellus Shale. Once we look at the data on an annual basis, though, a clearer picture begins to emerge.


Based on a projection from the first quarter of 2011, this year will be the first year with more new Marcellus Shale wells drilled than DEP violations issued.

The number of drilled Marcellus Shale wells in Pennsylvania has been growing rapidly since the first well was drilled in 2006. Violations have been on the rise as well, but if the projections for 2010 hold true, there will actually be fewer violations this year than last year, despite the fact that there will be more Marcellus wells drilled. Again, due to the erratic nature of violations issued per month, such a projection should be taken with a grain of salt. On the other hand, it does fit with the long term trend of Marcellus Shale violations issued per wells drilled for the same calendar year.


The number of Marcellus Shale violations per well has been decreasing over time, as has the budget of the Pennsylvania Department of Environmental Protection.

This graph is an attempt to look into the issue of whether the trend of decreasing violations per well might be due to DEP budget(2) issues rather than an overall increase in compliance by the industry. While this graph does not answer the question, it does lend the notion credibility.

Variance by DEP Region

Although there are six DEP regions, the Bureau of Oil and Gas is active out of three of them: the Northwest Regional Office (NWRO), the Southwest Regional Office (SWRO), and the North Central Regional Office (NCRO). All oil and gas activity in other portions of the state are included with the NCRO, giving them by far the largest territory to cover.

Violations per Well

2010 Violations per Well by PA DEP Oil and Gas Region (large)
Marcellus Shale violations per well by issuing DEP region. Click on the map for a larger, dynamic view.

The NCRO issued more than three times as many violations per Marcellus Shale well in 2010 than either of the other two regional offices. This is despite having the largest territory, and, as it turns out, the heaviest Marcellus Shale workload (3).

Violations per Inspection


DEP workload by region.


Number of Marcellus Shale inspections and wells drilled in 2010 by DEP Region.

Each DEP Oil and Gas Region had at least twice as many inspections as new drilled wells for the Marcellus Shale in 2010.

PA DEP Violations per Inspection (large)
Marcellus Shale violations per inspection by issuing DEP region. Click the image for a larger, dynamic view.


The North Central Regional Office issued over eight times as many violations per inspection for Marcellus Shale wells as either of the other two DEP offices in 2010, despite the heaviest Marcellus Shale inspection workload.

Enforcement

PA DEP Enforcemnt Actions per Inspection (large)
The NCRO issued more than twice as many enforcement actions per inspection for Marcellus Shale wells than either the SWRO or NWRO in 2010.

As a quick review of the numbers for the Marcellus Shale from 2010, the NCRO compares to the other regions by issuing more than:

  • Three times as many violations per well
  • Eight times as many violations per inspection
  • Two times as many enforcement actions per inspection

The DEP briefly entertained the notion of centralizing violations and enforcement actions of Marcellus Shale wells. One wonders whether the end result would have been to reduce the vigilance of the NCRO, or whether the SWRO and NWRO would be instructed to catch up with their sibling. Indeed, either course of action could occur, even without Secretary Krancer’s direct approval of such actions.

Operators Active in Multiple Regions

Although the violation and enforcement numbers of the NCRO above are already convincing, there is another variability that could potentially skew the data: drilling operators. Some of the better operators in terms of violations per well such as Consol and Range Resources are active primarily in the SWRO’s jurisdiciton. Could it be that the NCRO just has more bad apples than the other two regions?

To answer this, I narrowed the list of Marcellus Shale operators from wells drilled in 2010 to those active in more than one region, the results of which are below.


There were 17 drilling operators that drilled Marcellus Shale wells in more than one DEP oil and gas region in 2010.

Even when we limit the field to the eleven operators active in the NCRO and one of the other districts, we once again see that the North Central Regional Office issued about three times as many violations per well as did the others.


Drilling operators with at least one 2010 Marcellus Shale well in the NCRO as well as either the SWRO or NWRO. Seneca Resources is the only instance where there were fewer violations issued in the NCRO than elsewhere.

It seems difficult to imagine that the geology in the NCRO jurisdiction is really that much more challenging to work with than the rest of the state. Short of that, I cannot speculate on a reason for the consistently stark contrast in violation and enforcement patterns other than to suggest that the North Central Regional Office is run with a culture of vigilance that is unmatched by their counterparts in the Southwest and Northwest.

The goal should be for the industry to achieve a greater level of  compliance with Pennsylvania’s environmental laws, not to see a greater number of violations. At the same time, every person deserves to know that he or she is being aggressively protected from an industry that can be very dangerous and polluting. Undoubtedly, there is a lot that goes into the inspection process beyond the issuance of violations and enforcement actions, and the numbers can only go so far in providing a description of events on the ground. Nonetheless, those numbers are striking and consistent in showing a North Central Regional Office that takes a no-nonsense approach to its efforts of regulating the Marcellus Shale industry, at least as compared to either the Southwest Regional Office and Northwest Regional Office.

  1. The numbers from this summary page do not match exactly with the DEP violations page data for 2010.
  2. I would have rather compared violations to the Bureau of Oil and Gas budget, but it is not separated in that fashion within the budget reports.
  3. The NCRO does have the smallest overall workload, but this blog is focused on the Marcellus Shale.

PA Marcellus Shale Violations by Operator and County

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Earlier this month, I examined 2010 oil and gas violation data for Pennsylvania on a summary level. Now I’m going to focus just on Marcellus Shale wells, and from the perspective of trying to determine the extent that drilling operators and location have on the likelihood of increased violations for any given well.

There are a number of ways in which this could be done. Although I am interested to see if the number of wells drilled in an area or by a drilling operator has a noticeable effect on violations, I have limited both investigations to 10 or more Marcellus Shale wells, both to avoid the erratic results of small sample sizes, and because the large number of results tends to make for crowded data displays.

Violations are only for 2010, both because it is current, and with 1,544 records, it is sufficiently large to make some generalizations about. As for wells, I decided to go for all drilled Marcellus Shale wells rather than just the 2010 wells, because wells that were spudded between 2006 and 2009 might well be included on the violations list. Also, the overall number of wells is a handy way to gauge the relative weight of a given operator or county on the industry as a whole.


2010 Marcellus Shale (MS) violations per total MS well, for counties with 10 or more MS wells.


2010 MS violations per total MS well, for operators with 10 or more MS wells.

There are, of course, a number of issues once we start looking at the data in detail. One of the biggest challenges is that many of these wells change hands, or else the companies that drill them change hands or are no longer active in the Marcellus Shale drilling industry in Pennsylvania. For example, in a previous analysis, I noted that Turm Oil had a large number of violations per well, and now they had none at all. I checked to see when their most recent well was drilled, and found my answer:


List of operators with 10 or more MS wells, with 2010 violations, frequencies per well, and the date of the most recent well drilled

Turm Oil hasn’t drilled a Marcellus well in almost two years. Looking at the chart above, Turm and Dominion don’t really belong in this analysis, and Eastern American and Fortuna may not for 2011. These four operators account for everyone with 10 or more total Marcellus Shale wells and no violations in 2010 except for Consol—kudos to Consol!

Does the number of wells impact violations?

Clearly, there is a tremendous range of violations per well, both in regards to who the operator is, as well as where the well is located. My hypothesis going into this analysis was that the more wells an operator drilled or the more wells drilled in a county, the fewer violations per well there would be.

I had several reasons for suspecting this to be the case. First of all, think of what must be done for a drilling operation without violations being issued. The site must be carefully placed, in accordance with all applicable regulations. The site must be prepared, taking into account all ground disturbing regulations. Then you have to drill through thousands of feet of rock, making sure that there is a structurally sound casing and cementing job to prevent gas migrations. Then there is the horizontal drilling, and the hydraulic fracturing. All along the way, not a drop of fracing fluid, diesel fuel, brine, or really anything else can touch the ground or enter Pennsylvania’s waters in any way. And when the drilling is done, the site must be restored in a timely fashion. And those are just a few of the regulations that the drilling operators agree to when they undertake drilling operations in Pennsylvania.

Let’s face it—that’s a lot to achieve. In order to consistently come in and out of a site with a clean record has got to take some practice. I’ve heard from industry sources that Marcellus Shale wells cost about $5 million to drill, so to do it right without cutting corners clearly takes significant resources as well.

In addition to all of that, a county level map of Marcellus Shale violations per well shows that the counties which produce the most Marcellus Shale gas wells are not the ones with the highest number of violations per well.

Map showing Marcellus Shale violations per county. Counties outlined in red have 100 or more Marcellus Shale wells. Click the gray compass rose and double carat (^) to hide those menus.

So is there then any correlation between the number of wells drilled and the violations issued? Let’s take a look (1).

The equations for the trendlines were calculated by Excel, and I selected the ones with the highest R-squared values. I was surprised that the best fit for operators was a convex polynomial. In the graph above, there is indeed a cluster of operators with between 300 and 400 wells, and with about 0.5 violations per well or less, but on the other end of the spectrum, the violations per well are spread far apart. There are so many operators big and small with around 0.5 violations per well or less that it seems some other factors must be at play for all of the operators that exceed that value by a significant margin. Perhaps not everyone will achieve zero violations like Consol did in 2010, but it doesn’t seem reasonable that Williams Production Appalachia should have more than twice the amount of violations as Range Resources Appalachia, despite having only 8 percent of the number of wells as the gas extraction giant.

The correlation was a bit stronger for the counties than for the operators. I’m not entirely sure what factors are at play here, other than perhaps having a crew that is well familiar with the geology of the region and all the specific challenges associated with that. Again though, that doesn’t seem to explain why Wyoming County would have 3.44 violations for every Marcellus Shale well, while those in Washington county can only expect a violation for less than one well out of eight drilled.

[photo removed]

Again, I’m sure that the way this analysis was set up had an effect on some of these numbers, and Wyoming is certainly a smaller sample size than Washington. I also don’t want to infer that there aren’t problems when large operators drill in well established portions of the Marcellus Shale. What’s more, while over 1,500 Marcellus Shale violations in a year is a huge number, it likely doesn’t account for all of the actual incidents, just the ones that the DEP can demonstrate, apparently beyond a shadow of a doubt (2). And even in the best scenario, there are significant impacts upon the land and neighboring residents near the well site.

I am suggesting, however, that there are companies that need to do better in their efforts to comply with laws designed to protect Pennsylvanians from pollution and other deleterious effects of oil and gas drilling. Excuses that environmental regulations are too strict don’t hold water, as their competitors are closer to compliance, sometimes dramatically so.

  1. In order for Excel to be able to calculate all of the various regression lines, counties and operators with zero violations per well had to be excluded from this analysis.
  2. I have personally talked to numerous residents who feel that their well water was spoiled by gas operations on neighboring lands. A common theme in their complaints is that the DEP places the burden of proof on residents that their wells were not spoiled before drilling operations began–an almost impossible situation for the residents to predict and be proactive about.

Pennsylvania 2010 Oil and Gas Violation on FT’s DataTool

2010 Oil and Gas Violations per Drilled Well (small)
All oil and gas violations issued by the PA DEP in 2010, divided by the number of wells drilled in the same time frame, by county. Please click the map for a larger, dynamic view.

Two new violation datasets are up on FracTracker’s DataTool: 2010 Oil and Gas Violations in PA and 2010 Violations by County. The first set includes the raw data from the Pennsylvania Department of Environmental Protection (DEP)(1), and the second set includes violation and other oil and gas data at the county level.

Well Violation Data


See the legend for description of well type. Please click the gray tabs with the compass rose and the double carat (^) to hide those menus. for information on specific wells, click the “i” tool then any map feature.

There are a number of problems with this dataset. Altogether, there were 3,273 violations, but the total number of unique wells that represents is not known, because 271 of the violations didn’t even have a valid well API number associated with it. Since this data does not contain longitude, latitude, well type, or any indicators as to whether the violating wells were Marcellus Shale wells or horizontally drilled, none of this information can be known about these 271 violations.


2010 Oil and Gas Violations: Marcellus Shale, Other Formations, and Unknown Wells

In fact, of the remaining 3,011 violations, 665 are from wells where the API number do not match a compilation of over 40,000 permits from 1998 to 2010 which has been published on the DEP website. It’s a pity, since the rate of violations per offending well is lower than either of the other category then we must say that this value for both Marcellus Shale and non Marcellus Shale wells are overstated. We just don’t know by how much.


Violations per offending well type, January 2007 to September 2010

However, in a previous analysis over a 40 month period (including a nine month overlap with this data), the number of violations per offending wells were fairly comparable to the 2010 data. In the older dataset, offending Marcellus Shale wells were likely to have 1.47 times as many violations as their non Marcellus counterparts, and in the current data, that number is 1.44.

The most frequent violations are as follows:


Most frequently cited oil and gas violations in 2010 (2)

Here are the five wells which were issued the most citations in 2010:


Wells with most violations issued by the PA DEP in 2010

County Level Violation Data

The 2010 Violations by County dataset linked to above contains a wealth of county level oil and gas data for Pennsylvania. Also included are the number of drilled wells in 2010, July 2010 to December 2010 Marcellus Shale production data (3), as well as ratios of violations to both categories.

2010 Marcellus Shale Violations per Drilled Well (large)
2010 Marcellus Shale (MS) violations per 2010 MS well drilled. Please click the image for a dynamic view.

2010 Violations per Non Marcellus Shale Well (large)
2010 non MS violations per 2010 non MS drilled well. Please click the image for a dynamic view.

To my mind, it is notable that Washington and Green Counties in Southwestern Pennsylvania both have relatively few violations per well, despite the fact that they are both in the top five counties in terms of Marcellus Shale production.

Speaking of production, let’s take a look at that. While violations per well can give you an idea of what to expect for any new well in a geographic area, production from the Marcellus Shale is uneven. Some may argue that industry violations are more permissible in areas that yield more gas. Whether that argument holds water for you or not, violation per production amount is still a useful cost-benefit tool.

2010 MS Violations per Bcf of Gas Produced (large)
2010 MS violations per billion cubic feet (Bcf) produced by the MS between July 2010 and December 2010. Counties with at least 5 Bcf of production in that period are outlined in red. Please click the image for a dynamic view.

As was the case in Utah, a pattern is emerging where the most violations come from areas where drilling is relatively less well established or productive. None of the seven counties with at least 5 Bcf produced (outlined in red) are near the top of the violations per Bcf map.

  1. The dataset required heavy formatting to be transformed into a usable file. If you look at the original data linked above, you will note that there are boxes, in which values listed at the top apply to all boxes in that range. There are Excel tricks to allow for automatically filling these boxes, yet those could lead to significant error. There are instances where the box ends, but the spaces below are blank as well. My interpretation of this is that that values outside of the box are intended to be blank. It would be preferable if the DEP output filled in all of these cells appropriately, not only saving time, but reducing the chance for errors, and removing viewer interpretation as a factor in the dataset.
  2. The large number of “Failure to plug a well upon abandonment” for the “Unknown Formation” category may suggest that most of these wells are non Marcellus Shale, as many of those wells are older and more likely to be abandoned. In retrospect, I might have gotten more well number matches if I had used the PASDA list, which includes wells older than 1998, and last I checked, has over 120,000 wells in their database. PASDA data includes location, but no indication of whether the wells are Marcellus Shale or horizontally drilled.
  3. Unfortunately, there is no way to separate out Marcellus Shale production for the first half of the year, the data for which had been formatted to reflect a July to June fiscal year. Also, as of this writing, no production data for non Marcellus Shale wells for any part of 2010 is available.