Sustained Outrage

Are states properly regulating natural gas drilling?

Gazette photo by Lawrence Pierce

Delegate Tim Manchin, D-Marion and co-chair of a special Marcellus Shale committee, made it pretty clear yesterday where he stands on whether the state Legislature should stop stalling action on a new natural gas drilling regulatory bill:

If the industry uses its vast arsenal of lobbyists and other means to delay or defeat a meaningful bill, you won’t have to come back here to hear about it, because I’ll be coming to Washington to ask for your intervention to protect our citizens and our beloved West Virginia hills.

Down at the state Capitol yesterday morning, lawmakers finished adding the last amendments to their Marcellus bill, as The Associated Press reported:

One aims to encourage drillers to reach voluntary agreements on compensation and land access with the owners of the surface property that would host a well. In such cases, the operator may have obtained the mineral rights through separate owners. Another amendment Monday sets qualifications for state gas field inspectors.

The AP story also reported possible objections to parts of the bill are being raised by the Tomblin administration:

Tomblin Chief of Staff Rob Alsop also said earlier that the governor shares some of the industry’s disagreements with the bill.

“There are some provisions of the bill that give us some concern,” Alsop said Sunday. “We hope to work over the next couple weeks with the co-chairs and legislative leaders to come to a resolution.”

Gazette photo by Lawrence Pierce

Across town a while later, Sen. Joe Manchin and other state political leaders made it pretty clear that their main goal is to keep those pesky federal regulators from the U.S. Environmental Protection Agency out of the business of regulating the Marcellus Shale boom. As we explained in this morning’s Gazette story:

Delegate Manchin made his remarks against the backdrop of a Senate Energy and Natural Resources Committee hearing that appeared designed at least in part to argue against increased U.S. Environmental Protection Agency involvement in the growing controversy over Marcellus Shale drilling.

Sen. Manchin was the only committee member who attended the hearing, held at the Robert C. Byrd U.S. District Courthouse in Charleston, and in chairing the event his comments and questions repeatedly returned to his desire to minimize any permitting or enforcement role for EPA.

In his opening remarks, Sen. Manchin said he believes that the industry needs a regulatory system “driven by the states” and that his major concern is protecting state “primacy” over drilling rules.

“Then if we don’t do our job, then I believe EPA has a right to move,” Sen. Manchin said.

Sen. Manchin echoed the rhetoric he uses in deriding EPA’s crackdown on mountaintop removal, saying, “We’re not looking for a handout. We’re looking for a work permit.”

Tomblin general counsel Kurt Dettinger also referenced EPA’s mining policies, saying in prepared testimony that the state’s approach to gas-drilling rules will be “neither punitive nor based on fear or political ideology.”

And Randy Huffman, secretary of the state Department of Environmental Protection, also took a shot at EPA, saying the federal government’s job shouldn’t include “perpetuating the myth” that states cannot regulate mining or drilling.

Then, last evening, the news service Greenwire posted a fascinating story headlined, Puny fines, scant enforcement leave drilling violators with little to fear, reporting:

Oil and gas drillers who pollute groundwater, spill toxic chemicals or break other rules have little to fear from the inspectors and agencies regulating the surge in American petroleum production.

A Greenwire review of enforcement data from the largest drilling states shows that only a small percentage of violations result in fines, and the fines that are levied often amount to little more than a rounding error for billion-dollar companies.

In Texas, 96 percent of the 80,000 violations by oil and gas drillers in 2009 resulted in no enforcement action. West Virginia, a state with 56,000 wells, issued 19 penalties last year. And Wyoming, the center of Rocky Mountain energy, collected $15,500 in fines in 2010.

A chart posted with the story appears to report that, out of nearly 500 enforcement actions last year alone, the West Virginia Department of Environmental Protection fines drilling operators only 19 times, for a total of less than $90,000.

Greenwire reporter Mike Soraghan explained:

According to the federal Energy Information Administration, shale gas production grew, on average, nearly 50 percent a year from 2006 to 2010.

Regulation of that boom falls almost entirely to a patchwork of state agencies such as the Pennsylvania Bureau of Oil and Gas and the Colorado Oil and Gas Commission. In Texas, oddly enough, oil and gas production is regulated by the Texas Railroad Commission, a three-member panel that has not overseen railroads in years. The agencies vary widely in approach, resources and assertiveness.

Oil company executives and state regulators say those agencies are aggressively regulating this new wave of drilling. Congress has largely taken them at their word. And the oil industry has fiercely disputed any suggestion that more federal regulation is needed.

“The system is working well from an environmental standpoint,” said Lee Fuller, vice president for government relations for the Independent Petroleum Association of America, which represents many of the companies driving the current surge.

“If you look at the overall management of oil and gas production, you have a million wells out there. They’re drilling 35,000 or so a year. There is no compelling systemic indication that this is causing environmental problems,” Fuller said.

State agencies, he continued, “are capable of modification, which is what you’d ask of any program. The counterpoint is to put it in the hands of the EPA, where there’s no knowledge and no better capability to handle what’s taking place.”

But there is little to back up the assertions that states are doing a good job besides the word of the industry and regulators themselves.