Economic and Environmental Consideration of Hydraulic Fracturing in Pennsylvania

This is a topic that I had to research in school and would like to share it with you.

Hydraulic Fracturing is the process of drilling into shale rock which is very fragile and easily broken, the drilled holes are then injected with a fracturing fluid which breaks up the fragile shale rock and releases natural gas.  Hydraulic fracturing or “fracking” has become the newest craze in gas drilling, being one of the most prevalent domestic methods of extracting the large deposits of natural gas in the United States. The natural gas boom however is not specific to all of the United States but in a select few shale formations such as the Marcellus Shale Formation, and the Utica Shale Formation.  These formations span many states which make the widespread regulation of this process very difficult. The environmental considerations are serious and often debated due to the lack of sufficient evidence from agencies such as the Environmental Protection Agency and the Departments of Environmental Quality. There are many government agencies, large oil/gas companies and citizens that have been fighting to regulate or deregulate this process.  Currently there are only a few federal regulations that include hydraulic fracturing in the regulation spectrum. There are however local  and state ordnances that can regulate the drilling process until federal laws are put into place to control the gross use of chemicals and ignoring if geological restrictions on drinking wells and aquifers. Proposing a comprehensive regulation of geological water restrictions and chemical use in the fracturing process will be the best available way to control pollution and to encourage economic growth through the use of hydraulic fracturing to produce domestic gas at a cheaper cost to the consumers.

                Of the many locations where natural gas is found in shale rock formations none are more prevalent for current drilling practices than in the State of Pennsylvania. Pennsylvania is the epi-center for the drilling rush and has felt the brunt of the many environmental consequences seen by this process (Steven, 2013). By looking at the method more closely a better understanding can be gained in determining what the environmental risks might be such as ground water contamination, forest degradation, aquifer contamination and residential disturbances.  In Pennsylvania alone there are 467 sites available for drilling at this time and this includes residential area’s that may be affected (Marcellus Coalition, 2013). The reason this method is so controversial is not so much the act of drilling into the ground but the high pressure fluids that are injected into the ground. The drilling process consists of first drilling holes into the shale rock which requires a “slick” that comprises of oils, and chemicals to allow the drill components to operate correctly (Marcellus Coalition, 2013). There are several holes that are drilled within a drill site to allow maximum containment of the natural gas. Then there is a fluid injected into the drilled hole at very high pressure which breaks up the shale rock from the naturally occurring fissures within the shale rock itself. The fluid contains water, sand, and other chemicals which are for the most part not disclosed to the public. The sand and chemicals act as the propping agents to hold the rock open and allow the release of the natural gas that can then be siphoned up the drill hole. Some of the reported chemicals used in the fluids are hydrochloric acid, sodium chloride, ethylene glycol and polyacrylamide (Environmental Protection Agency, 2013).

                There are a number of environmental concerns due to the drilling process, wastewater and ground water contamination being the two largest. In the process large amounts of water are being used combined with sand and chemicals and then typically delivered to local municipal sewage plants (Schmidt, 2013). The Pennsylvania Department of Environmental Quality secretary Michael Krancer called on the Marcellus Shale Coalition to stop this gross neglect and asked that the water be recycled or repurposed in another way (Department of Environmental Quality , 2013) . The industry heads did comply and shifted a minimum of 70% in flow back water to be re-used and as much as 100% is being used as recycled water for the drilling process. This does however increase the risk of wastewater contamination of the drinking water in area’s near residential communities (Schmidt, 2013).  The ground water contamination is a serious and unavoidable problem for the people of Pennsylvania who happen to live in an area where drilling is occurring. The Responsible Drilling Alliance (RDA) is a grassroots group that has dedicated itself to the pursuance of regulation that will control the pollution of ground water and help to make “fracking” a viable commerce for the state (Responsible Drilling Alliance , 2013). The RDA uses the views, and personal experiences and stories of the people directly effected as a means of combating the process. There have been countless reports on the contamination of drinking water and some of the major companies have been forced by the Pennsylvania DEP to provide safe drinking water in such places as Dimock, Pennsylvania (Responsible Drilling Alliance , 2013).

                There are several major constituents that are involved in hydraulic fracturing in Pennsylvania, Cabot Oil & Gas Corporation, Chesapeake Energy Corporation, Delaware River Basin Commission, the Pennsylvania Department of Environmental Quality, Environmental Protection Agency, and community coalitions like Responsible Drilling Alliance. There are two sides to the issue, those who are proponents for the process and those who oppose the process. The oil and gas companies are obviously for the process and count on the billions of dollars to be made from the gas industry in Pennsylvania. With the natural gas economy ever rising, the economic benefits are also hard to ignore. Natural Gas prices have increasingly gone up and have averaged from 2011 to 2013 7 cents to the dollar and rising as high as 8.3 cents to the dollar. The Natural Gas industry is heavily taxed which provides needed income for the states. In Pennsylvania the drilling companies can be taxed up to 40.6 percent which is much higher than other industries operating in the state. Cabot Oil & Gas has several programs that deal with the “fracking” process such as the Appalachian Shale Recommended Practices Groups (ASRPG) (Cabot Oil & Gas Corp. , 2013). This group is a way of encouraging drilling operators to use recommended practices for responsible and environmental quality that will be sufficient (Cabot Oil & Gas Corp. , 2013). On the opposite side of the spectrum the Delaware River Basin Committee created in 1961 is a committee of delegates and agencies that has the power to create law and enforce it when dealing with the river and waterways in its jurisdiction and this includes the upper northeast part of Pennsylvania (Delaware River Basin Commmittee , 2013). The committee has issued a moratorium in 2010 on drilling permits and has not lifted it. The reason for this moratorium is there are no federal regulations that contain permitting and chemical use information for hydraulic fracturing (Delaware River Basin Commmittee , 2013). This is a controversial way of controlling the drilling process and is implemented across several states in the basin area.  The Environmental Protection Agency and the Department of Environmental Quality are both involved in the process and have issued reports stating the investigation of the process but have come up with conflicting results. The EPA has been completing a comprehensive study of the process and has not released any information from the study as of yet (Environmental Protection Agency , 2013). The DEP is also conducting an independent study of the process and has released some information pertaining to the issues and concerns of the process (Department of Environmental Quality , 2013). There is of course citizen coalitions that have been formed such as the Responsible Drilling Alliance that have combated these reports stating the real and personal effects from the drilling process within a community and near to residential areas (Responsible Drilling Alliance , 2013).

                Each of these stakeholders is involved in some way in the process of hydraulic fracturing, which is either to help push for regulation or to report voluntary company restrictions to keep the appearance of responsible proprietorship. The companies involved all want to appear as if the company specific processes are revolutionary in the environmental considerations. The usage of vague wording and even less facts to back up the methods assumes the practices are not as concerned with environmental quality as they appear to be. The facts that should be taken into consideration are the reports that are tested for environmental quality such as the EPA’s report on the process. In 2010 the EPA released a statement about the 1.9 million dollar study to be conducted, case studies to be completed, and water, soil, and air quality to be considered in reference to the Hydraulic Fracturing process. This process is not safe from stakeholder manipulation. The statement did disclose that significant input and cooperation from the stakeholders would take place, meaning the companies would have a say in the sites that where being considered (Maykuth, 2010).  There are several case studies being done by the EPA in Pennsylvania in Susquehanna and Bradford County. There is also significant research into the town of Dimock which has been the largest reported site of water contamination. There have not been any significant findings from the EPA or the DEP despite the continuous reports on the effort to conduct meaningful and acceptable testing on drill sites and community wells. There has been no official statement from either on the process or the regulations that may be needed to control pollution efforts. There are however some other state agencies that have attempted to control the situation such as the Delaware River Basin Committee, and the states courts system. This has come in lue of the overwhelming concern and outcry from citizens and several court cases that have fought the outright abuse of the local commodities and land rights.

                In several important court battles and with the creation and amendments to several federal laws the battle over land rights and usage pertaining to hydraulic fracturing is in full swing. For the most part the environmental impacts should have had jurisdiction restrictions under the current environmental acts such as the Clean Water Act, Drinking Water Act and the Clean Air Act. These acts would normally have regulated the fracturing fluids and the methane release into the air. There have been several amendments to these acts that have exempted these fluids from the regulation process and have caused the debate between opponents and advocates as to the environmental consequences with increased air and water pollution and the economic benefits to be reached.  The Safe Drinking Water Act applies regulation to the injection of fluids into the ground that may or may not enter groundwater. In the case of fracturing fluids the act only imposes standards upon drilling operations that use diesel fuel, and nothing is mentioned about other fluids concerned with the “fracking” process (Steven, 2013). In a 2003 negotiation between the EPA and Halliburton Energy Services, BJ Services and Schlumberger Technology the companies voluntarily ceased use of diesel fuel in the fracturing process but stated that some of the acceptable chemicals used posed some environmental concerns (Steven, 2013). This was then followed by a study by the EPA into the effects and then the passing of the Energy Policy Act of 2005 which contained an amendment to the SDWA’s definition of injection fluids to exclude specifically injection fluids and propping agents used in Hydraulic Fracturing operations (Steven, 2013). This meant that states no longer had to require permits before drilling could commence. The clean Water Act which is the primary source of regulation pertaining to the containment and treatment of flow back water mentioned earlier. This does regulate the methods and treatment of the flow back water to certain specifications and does require special permitting and charges for the disposal and treatment of such waste water. There have been several attempts to pass amendments to the Clean Air Act to include hydraulically fractured gas wells. In 2012 the EPA passed national air quality standards for hydraulically fractured emissions and required compliance by all operating companies by January 1, 2015 (Steven, 2013). This is to reduce the amount of emissions by 95% by that time and save the oil and gas companies needless fines due to non-compliance (Steven, 2013). These are the only federal standards to regulate the emissions and pollution dealing with “fracking” and the rest is left up to the specific states to do the rest.

                In Pennsylvania there has been hard fought debate over the control of hydrofracking. Under state oil and gas laws local governments in Pennsylvania can regulate but not stop “fracking” from occurring. After the long debates Pennsylvania passed Act 13 which preempted local control (Steven, 2013). This required local government to include hydrofracking as an accepted permitted use in all zoning districts, which is a direct violation of the moratorium enacted by the Delaware River Basin Committee which is another government agency allowed to create and implement policy in Pennsylvania. In the court case Robinson Township v. Commonwealth found that the Commonwealth used the states oil and gas legislation to make irrational land use classifications and failed to protect the citizens and owners of land used in the process from harm (Steven, 2013). This preempted the states legislation of allowable permits. There are local zoning localities that specifically restrict the imposed municipalities from allowing certain activities within certain zoning codes under the chapter 32 zoning rights of the state. In Pennsylvania there is also the Municipal Planning Code (MPC) which requires that adoption of plans to create proper zoning districts due to federal and other state enforcements, this means environmental ordinances as well (Steven, 2013)l.  Act 13 has conflicted with these codes and many are contending the sheer ignorance and lack of regulation under the pretense of economic benefit and special interest group manipulation. The Pennsylvania courts have ruled that there is substantive evidence that Act 13 does indeed violate the comprehensive plans that would regulate hydrofracking and has given power to the local ordinances to create municipal zoning codes that would allow the regulation of hydraulic fracturing (Steven, 2013). The courts have ruled that local governments should be allowed to regulate zoning laws, and that state preemption of these rules violated the standardized regulations of local governments.

                In Pennsylvania due to the preemption of local ordinances by the state government has caused a delay in the regulation process as the land use zoning districts cannot be properly organized and determined who, what, when and how the permits will be given and where the drilling will be allowed. It is clear that there are benefits economically to the local markets that come directly from hydraulic fracturing as jobs and commerce will be large in number. There are however environmental considerations that need to be concluded as well. The companies involved have shown compliance with voluntary actions to reduce or at least acknowledge the environmental impacts of this process. If there were comprehensive policies relating to the process itself and specifically a balance can be reached. In the terms of the actual steps in the process that should be regulated, the flow back waste water should be help to proper standards and enforced under the acts that are already in place by the local authorities. The air quality standards can also be further enforced by local authorities based on the federal standards in place. The amendments to the Clean Water Act and the Safe Drinking Water Act should be dissolved and new standards should be set to include regulations on known hazardous chemicals especially including those that are already being found in contaminated water such as naphthalene, formaldehyde, hydrochloric acid, sodium chloride, ethylene glycol and polyacrylamide (Environmental Protection Agency, 2013). These substances are entering ground water and contaminating drinking water aquifers. This is a major point source pollution that should be regulated on a federal level and then can be enforced more stringently by local authorities in Pennsylvania. The companies have already begun to reach negotiations and include voluntary actions in this manner so the implementation of federal regulation is not far from the future. In Pennsylvania there have already been small steps taken to regulate the process and further federal regulations will help the local authorities to have a solid legal standing for the regulation of such processes. The citizens and opponents of the process have been dutifully working to gain support for such regulations and will most likely accept any federal regulation standards dealing with this process as well.

                In conclusion by proposing a comprehensive regulation of geological water restrictions and chemical use in the fracturing process will be the best available way to control pollution and to encourage economic growth through the use of this method to produce domestic gas at a cheaper cost to the consumers. In Pennsylvania the use of injecting high pressure fluids into drill holes to release the natural gas and in doing so contaminating the ground water, polluting the air, and creating waste water that must be disposed of is a major concern that cannot be ignored. There are large economic considerations that are being considered mostly by the companies in which are using this source of natural gas as a means of solid income. These companies such as Cabot Oil & Gas Corporation, Marcellus Shale Coalition, and Chesapeake Energy Corporation all see the benefit in the large store of natural gas that is trapped within the Marcellus Shale Formation sitting directly under Pennsylvania. Not only will this process bring added domestic gas, but can create needed jobs, and increase the economy for the local markets. The citizen coalitions such as the Responsible Drilling Alliance understand the need for the economic growth the drilling can bring but are deeply concerned with the environmental and more importantly social effects. Proper regulation is called for and needed to be able to accurately and legally restrict certain practices. The major issue currently facing this process is the preemption of state power over local power. This is a concern being seen from the numerous court cases that have found that state regulation that has allowed any and all drilling directly violated the zoning restrictions of local governments. This lack of cooperation between the local governments and the state and federal ones is a problem that must be fixed in order to properly and comprehensively create policy that will regulate the process. What policy will be created in the future will be directly related to the cooperation between the government agencies, the citizens, and the companies involved in the process. The cooperation between stakeholders and the creation of comprehensive policy will be the only way to regulate this method of drilling and allow for the economic benefits to be shown in a strong and environmentally cons

References:

Cabot Oil & Gas Corp. . (2013, 7 15). Policy on Hydraulic Fracturing Fluids . Retrieved from Cabot Oil & Gas Corp. : http://www.cabotog.com/pdfs/Frackingfluidpolicy.pdf

Delaware River Basin Commmittee . (2013, 7 15). About DRBC. Retrieved from Delaware River Basin Committee: http://www.state.nj.us/drbc/about/

Department of Environmental Quality . (2013, 7 17). Hydraulic Fracturing . Retrieved from Pennsylvania Department of Environmental Proctection : http://www.portal.state.pa.us/portal/server.pt?open=512&objID=14295&mode=2&PageID=590867&q=Fracking &cp=Site,Documents,News

Environmental Protection Agency . (2013,a). Key Issues to be Investigated at Case Study Locations. Retrieved from Environmental Protection Agency: http://www2.epa.gov/hfstudy/key-issues-be-investigated-case-study-locations

Environmental Protection Agency. (2013,b). Hydraulic Fracturing. Retrieved from Environmental Protection Agency : http://www2.epa.gov/hydraulicfracturing

Marcellus Coalition. (2013, 5 21). Natural Gas Deposits . Retrieved from Marcellus Coalition : http://marcelluscoalition.org/

Maykuth, A. (2010). Federal EPA to study hydraulic Fracturing. The Philidelphia Inquirer.

Responsible Drilling Alliance . (2013, 6 4). About RDA. Retrieved from Responsible Drilling Alliance: http://www.responsibledrillingalliance.org/index.php/education/water-quality

Schmidt, C. (2013). Estimating Wastewater Impacts from Fracking. Environmental Health Perspectives, 121(4), 117-117.

Steven, J. N. (2013). Hydrofracking: State Preemption, Local Power, and Cooperative Governence. Case Western Law Review, 63(4), 995-1039.