“One Chance” To Get Gas Right Says PA DEP Chief

On Tuesday evening, January 10, 2012 the PA Department of Environmental Protection Secretary, Michael Krancer, once again put the onus on gas companies to protect our land, air and water. The secretary was speaking at Villanova University, at a presentation organized by PA Association of Environmental Professionals and The Pennsylvania Environmental Council, and facilitated by Burack Environmental Law.

To the strident observer, it’s stunning how much faith Secretary Krancer places in the corporate good intentions of shale gas drillers. It’s as if he’s incognizant of the industry’s shoddy track record in Pennsylvania, and how they wracked up a whopping 1.8 average violations per inspection in 2011. This may actually be the case, considering the DEP’s inherited problems with record-keeping, the depth of which was revealed last week by the diligent staff at The Pittsburgh Post-Gazette in Drilling numbers do not add up. The paper reported that the DEP website data under-reported the number of Marcellus wells operating in Pennsylvania in 2011 by 495 wells.

“We Must Get It Right
Krancer opened his remarks on the Marcellus to the lecture hall full of environmental lawyers, industry consultants and execs, and me, by calling shale gas an “unconventional opportunity.

“We have to get it right,” he said. “We have one chance.”

He continued to say he’s in favor of the proposed Impact Fee and all for “beefing up” the Oil and Gas Code, in case you didn’t know already. He said he hopes new legislation will be passed in January, though he acknowledged that he’s an optimist. He stated that the DEP would welcome any share of the fees generated. “We’ll take all the supplemental funding we can get.” Presently, permit fees generate the primary revenue used to run his department.

The Secretary opened the floor to questions early on, and when asked about having only “one chance” to get it right, and what needs to be done, Krancer succinctly replied that the industry must adopt a “standard of excellence.”

He waxed nostalgic over the cultural ethos of Exelon Corporation, where he served as Assistant General Counsel from 2008 to 2009. “We were the standard in the industry, the gold standard…” Then he got a little preachy, “We are all our brothers’ and sisters‘ keepers… In this business, even our enemies are our friends.” He acknowledged that mistakes are inevitable. They won’t be perfect. “But they all need to be excellent.

Krancer alluded to companies operating in Pennsylvania who “get it,” stopping just short of saying which ones. “Many multi-nationals, they do have that ethos, safety first, beyond regulations.” Again, his solution to the problem of having only “one chance” to get it right, “More accountability among companies.

He went on to bemoan “lazy permit applications” and how drillers expect the DEP to educate them and “do their job for them.” He said he’s very interested in the idea of rewarding drillers for filing permits properly, by expediting them and perhaps awarding applicants with “Grade A-type” status, enabling agents to charge more for their services. He was interested to learn such a program already exists in New Jersey.

From where I sat, it didn’t sound like gas drillers have created a successful “culture of excellence” when it comes to filling out basic paperwork anymore than the DEP has nailed it when it comes to record-keeping. Scary.

DRBC Is “Punting

The next question was from PennEnvironment, and I was a little relieved not to be the only fractivist in the room. Asked for the DEP’s take on the Delaware River Basin Commission’s proposed drilling regulation package, Krancer laughed a bit, saying it was because, “We all know how Pennsylvania feels about the DRBC’s regs package, right?” Then Krancer did what few in the public arena ever bother to do, he answered the question directly. He said he thought the DRBC should stop “punting.”

Scorn for the EPA
My job is to be concerned about all things at all times.” Krancer thrice invoked Chapter 78., The PA Oil & Gas Code, and when he extolled the importance of enhanced well-casing standards, the audience’s attention pricked up. A guy at one end of my row was clutching a colorful proposal entitled, ‘Working Together on Shale Opportunities.’ Krancer deftly directed all job hopefuls to newly “elevated” DEP Deputy Secretary, Scott Perry, who is presiding over expanded Oil & Gas programs and “strategic planning.” When asked about DEP reorganization, Krancer said, “As far as I’m concerned, it’s in place.

At last, Clean Air Council’s Matt Walker asked about the state’s new Air Aggregation Policy, and I held my breath for Krancer’s reply. In his most scathing tone of the evening, he expressed scorn for the Environmental Protection Agency.

I don’t agree with EPA,” he said tersely, suggesting Walker look at the federal law, if he’s a lawyer, and “dive down into that. We’re already in court over it,” he said. Krancer finished skewering EPA’s legal claim to regulate fracking by saying, “The way I see it, the law starts with the statute, then policy, regulation, then letters… Do we want a government by letters? I sure don’t.

Next, Secretary Krancer “dove down” into the exciting economics of the Marcellus, assuring us that the low prices of natural gas, around $3, are absolutely thanks to this massive new supply. Measured yet stoked, he said there could be anywhere from 60,000 to 100,000 new wells in Pennsylvania, though no one is able to speculate on commodity prices ten years from now. He made no mention of the massive amount of gas being burned off at the moment because of those same low prices, nor how lower revenues may drive drillers to cut corners and take greater safety risks.

Permits, Fees and Christmas Trees

When finally asked about the sustainability of the land, and if the DEP would ever limit the number of permits, Krancer described fracking’s relatively small footprint when compared to “strip mining” and “building a nuclear plant.” Disregarding any discussion of Conservation, however, he did take a moment to blast Wind for using “a lot of land, and killing a lot of birds” and to take a shot at Solar for being possibly more “greenhouse gas intensive” (when used in a large electrical grid and supplemented by idling coal-fired plants).

The Secretary continued cheerleading for the gas industry until I thought my head might explode.

Krancer endorsed the concept of “Forced Pooling,” citing Penn State Professor, and Mack Daddy of the Marcellus, Dr. Terry Engelder, noting, “We do have a Conservation Act.” In terms of land use, Krancer said, “Of all energy sources, gas is efficient. It uses three-four-five acres, with a rig up for 3-4 months, then 3-4 weeks of fracking, maybe you frack again, and you’re left with an apparatus the size of a Christmas tree.

Still, Krancer proclaims the need for a “diverse energy portfolio.” He said he believes that “Energy is what we all live on… Every economy has been based on it.” He then quoted ‘his’ governor, Tom Corbett, saying that “e = jobs.”  “You can’t make an omelet without breaking a few eggs. It’s up to us to do it in a right way.

The Price of Eggs

Perhaps it was the mention of Engelder, the geologist whose findings have been among the most influential in gas development so far, or maybe it was the hotly contested idea of Forced Pooling that prompted Rebecca Rotor’s question about the “societal cost” of shale gas drilling. Specifically, she wanted to know the Secretary’s thoughts on “necessary sacrifice,” and she wondered if he would be willing to hold similar forums for impacted residents in drilling regions.

I hear the criticism,” Krancer said plainly.

It’s just a suggestion,” said Rotor.

Then, I hear the suggestion,” Krancer replied, pleasantly surprised.

Walker, from the Clean Air Council, joined the discussion, questioning why a large environmental group like his should have such difficulty discovering how to comment on pending GP5 permitting regulations, inviting a few scoffs from one corner of the room.

Have Joe Minott call Joyce Epps, whom he’s known for twenty years,” was Krancer’s helpful suggestion. Clearly, he was hoping to usher the Clean Air Council’s Executive Director through the correct channels.

Rotor then voiced her concern over the lack of transparency in DEP reporting. “I live in the Susquehanna county. There’s a compressor station going in down the road, and I would like to know what’s in the air I’m breathing. It’s not easy for a citizen. I have to petition for this information.

You live in Susquehanna County?” Krancer confirmed.

Yes, I live in the ‘Sacrifice Zone,’ ” said Rotor.

I don’t use that term,” the Secretary quickly assured her.

No, but Engelder does,” she pointed out. “Maybe you should call him.”

Frank Finnen, citizen of Susquehanna county, spoke up next. “I never saw a well pad with only a Christmas tree on it, but I’d trade ya.

~

Pennsylvania DEP Secretary Michael Krancer BIO [Source: DEP Website]

The Pennsylvania Association of Environmental Professionals

The purpose of the Pennsylvania Association of Environmental Professionals is to promote environmental education, research, planning, assessment, review, and management through the formation and operation of a nonpolitical multidisciplinary professional society.  [SOURCE: www.paep.org]

Pennsylvania Environmental Council
Vision & Mission
The Commonwealth of Pennsylvania will be a model for implementing collaborative solutions to environmental protection and restoration. This success is built from the work of partners that recognize the inextricable links between the environment, the economy and our quality of life.

The Pennsylvania Environmental Council (PEC) protects and restores the natural and built environments through innovation, collaboration, education and advocacy. PEC believes in the value of partnerships with the private sector, government, communities and individuals to improve the quality of life for all Pennsylvanians.  [SOURCE: www.pecpa.org]

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