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PA Oil & Gas Industry Has Record Year: Cost, Criminal Convictions Up; $3.1 Million In Penalties Collected; Record Number Of Violations Issued; Major Compliance Issues Uncovered; Evidence Of Health Impacts Mounts

The oil and gas industry had a record 2022 in many ways-- natural gas prices increased over 94.7 percent and stock prices of drillers skyrocketed in Pennsylvania. The industry generally had record LNG natural gas exports linking the U.S. to high-priced markets in Europe and Asia caused by Russia’s war in Ukraine.

The PA Public Utility Commission warned consumers in November surging prices for natural gas were not only increasing the cost of gas provided by utilities by as much as 128 percent, but electric costs would be going up by as much as 34 percent in the state. Read more here.

Here are some highlights from 2022 on what we learned about public health and environmental impacts and the compliance record of the conventional and unconventional oil and gas industry in Pennsylvania--

-- The most criminal convictions for environmental violations;

-- A record number of environmental violations issued by DEP;

-- The conventional industry accelerated the pace of abandoning their oil & gas wells;

-- DEP said in a special report on conventional oil & gas industry environmental compliance the industry has a “culture of non-compliance as an acceptable norm”;

-- Conventional drilling wastewater continues to be illegally dumped on our roads;

-- Conventional & unconventional drillers are creating hundreds of new brownfields and waste dumps on well pads wherever they drill; and

-- Evidence continues to mount on the negative public health and environmental impacts of oil and gas facilities.

Major Compliance Actions

Actions brought by Attorney General Josh Shapiro resulted in a record number of criminal convictions of companies involved in the oil and gas industry during 2022.

Energy Transfer Partners/Sunoco/ETC Northeast were convicted of criminal charges related to some aspects of the construction of the Mariner East and Revolution Pipelines. As part of the settlement, Energy Transfer is to provide independent water well impact assessments and offer to replace water supplies affected by the pipeline construction. Read more here.

Coterra Energy was convicted of a criminal charge related to the long-standing issue of water well contamination caused by shale gas drilling in Dimock, Susquehanna County. Read more here.

As part of the settlement with the Attorney General’s Office and DEP, Coterra is to spend $16.29 million to provide public water to those property owners affected and pay their water bills for 75 years. DEP also imposed a penalty of $444,000 to resolve past violations. Read more here.

Southeast Drilling pleaded guilty to charges of contaminating a water supply in Washington County and was required to pay a $15,000 penalty. Read more here.

In June, the Office of Attorney General also filed criminal charges against Energy Corporation of America, now Greylock Production, LLC, for allegedly failing to address environmental hazards created by the storage of fracking waste fluids and other operations from 2015 to 2020 at various well sites in Clearfield and Greene counties. Read more here.

Over $3.1 million in penalties were imposed on oil and gas companies by DEP during 2022, including: PBF Petroleum Terminal in Philadelphia-- $1,050,000; Shell and its Falcon Ethane Pipeline contractor-- $670,000; John A. Joseph, a waste hauler, was fined $600,000 for illegal disposal of over 1,800 truck loads of oil and gas drilling waste in Fayette County; CNX was penalized $200,000 for wastewater spills in Greene County; and Rice Drilling was fined $147,250 for erosion and sedimentation plan violations in Greene County.

An uncontrolled release of an estimated 1 billion cubic feet of natural gas from an Equitrans underground natural gas storage facility in November resulted in DEP ordering the company to plug additional conventional storage wells at the storage facility and bring existing wells up to current casing standards in the wake of the release. Read more here.

DEP also ordered a “top to bottom” review of how it regulates underground natural gas storage areas. Read more here.

In December, DEP issued a notice of violation to the brand new natural gas liquids Shell Petrochemical Plant in Beaver County for air quality violations in September and October. Read more here.

The plant has had incidents of major flaring of natural gas at the facility that turned the sky orange, a visible throwback to Pittsburgh’s industrial past. Read more here.

Conventional Oil & Gas Compliance

On December 29, the Department of Environmental Protection released the first-ever assessment of how well conventional oil and gas drillers comply with state environmental laws and concluded, “(the) conventional oil and gas industry’s recent record of compliance with Pennsylvania law is simply not good, particularly with regard to improper abandonment of wells.” Read more here.

“A significant change in the culture of non-compliance as an acceptable norm in the conventional oil and gas industry will need to occur before meaningful improvement can happen.” Read more here.

“This record of non-compliance will require DEP to further develop and refine its techniques for deterring violations and encouraging compliance with relevant statutory and regulatory provisions.

The report looked at environmental compliance in the industry between 2017 through 2021. Read more here.

Specifically, the report found--

-- Abandoning oil and gas wells most frequent violation, noting conventional operators were issued 3,123 notices of violation for the practice during the five years reviewed;

-- Huge gaps exist in reporting waste generated by conventional wells: Over 56 percent of conventional well operators fail to report the amount of waste they generate and how it is disposed of meaning more than half of the wastewater being produced may be unaccounted for-- roughly 118 million gallons-- but we don’t know for sure due to the lack of reporting.

-- Failure to report mechanical integrity of wells by over 59 percent of conventional well operators means they are not making sure their oil and gas wells are not leaking fluids into groundwater or surface water or natural gas into the air or operating their wells safely.

Compliance Overview

DEP issued a record number of notices of violation to both the conventional-- 5,059-- and unconventional shale gas-- 1,148-- during 2022. Read more here.

DEP did 12,846 inspections of conventional operators and 21,627 inspections of unconventional shale gas operators. Read more here.

In calendar year 2021, DEP issued 4,386 violations to conventional operators and 1,000 violations to unconventional shale gas operators.

In calendar year 2021, DEP did 11,684 inspections of conventional operators and 18,048 inspections of unconventional shale gas operators.

Some of the most significant compliance issues of the year included--

-- New Oil & Gas Well Abandonments Accelerating: DEP records show new well abandonments without plugging are a pervasive part of the conventional drilling industry, and the pace of issuing notices of violations for abandonments accelerated in 2022. Read more here.

DEP issued over 4,270 notices of violation for new well abandonments from 2016 through 2022. In 2022 alone, DEP issued a total of 354 notices of abandonments-- 322 for conventional operators and 32 for unconventional shale gas wells. Read more here.

The Pittsburgh Post-Gazette reported DEP has only $15 per well available to plug the number of active conventional oil and gas wells now on the books with DEP.

A new report from the Ohio River Valley Institute in April shows Diversified Energy, the nation’s largest owner of primarily oil and gas wells, does not have enough funds to plug its entire catalog of wells, including an estimated 22,507 wells in Pennsylvania. Read more here.

Specifically, the report found abandoning oil and gas wells most frequent violation, noting conventional operators were issued 3,123 notices of violation for the practice between 2017 through 2021. Read more here.

The report makes a series of recommendations for taking additional enforcement actions to deter future abandonments, but notes existing state law limits the agency’s ability to increase well plugging bonding rates. Read more here.

There is also a rulemaking petition pending with the Environmental Quality Board that proposes to increase well plugging bond amounts for both conventional and unconventional drillers as a way to discourage new abandoned wells. Read more here.

-- Road Dumping Conventional Wastewater Continued: In May, Penn State University released a new study on road dumping conventional oil and gas wastewater that found runoff from spreading conventional oil and gas wastewater on unpaved roads contains concentrations of barium, strontium, lithium, iron, manganese that exceed human-health based criteria and levels of radioactive radium that exceed industrial discharge standards. Read more here.

Plus, it doesn’t work any better than plain water.

In spite of the fact DEP continues to tell conventional operators the practice is illegal [Read more here], drillers reported road dumping over 977,671 gallons in 2021 and the practice continued in 2022. Read more here.

The Office of Attorney General was reported by the industry to be investigating the practice. [Read more here.]

In December, the Better Path Coalition reported 65 organizations and businesses and 2,700 individuals petitioned Gov.-Elect Shapiro to ban road dumping conventional wastewater just like DEP did for unconventional shale gas drillers in 2016. Read more here.

On December 29, DEP issued a report on environmental compliance by the conventional oil and gas industry that put off a decision on including a ban in proposed regulations it was developing, no doubt to let the Shapiro Administration make the decision. Read more here.

-- Oil & Gas Drillers Creating Hundreds Of New Brownfields & Dump Sites: Between 2016 and 2021, DEP approved 721 plans to dispose of drill cuttings by “dusting” into the air and tophole wastewater by pumping it from conventional wells out over drill sites directly into the environment. [Read more here]

Unconventional shale gas operators reported creating over 270 new brownfield sites in oil and gas areas cleaned up under the Land Recycling Program. These locations represent nearly 55 percent of the pending site cleanups under the Program. Read more here.

Interestingly, DEP said waste generated by the new federally funded conventional oil and gas well plugging program will not be exempt from hazardous waste regulations like the wastes from active drilling sites. Read more here.

In addition, DEP said on-site disposal of well plugging wastes was also being reevaluated as a result of the new federal well plugging program. Read more here.

-- Exceptional Value Watershed Designations Offer No Protection From Oil & Gas Facility Impacts: The designation of the Loyalsock Creek Watershed in Lycoming County as a Special Protection Watershed and PA River of the Year and ownership of the land by DCNR, were not enough to protect the watershed from industrialization by the oil and gas industry. Read more here.

In addition to water quality impacts, the habitat of the rare Eastern Hellbender, Pennsylvania’s official clean water ambassador, is also being negatively impacted. Read more here. Read more here.

The struggle to have shale gas companies comply with even basic erosion and sedimentation regulations continues in the Loyalsock Watershed and many other places. Read more here.

-- Natural Gas/Hazardous Liquids Pipelines NOT Required To Carry Insurance: Natural gas and hazardous liquids pipelines are not required to have insurance or financial assurance in place to cover property damage, bodily harm and environmental cleanup resources in the event of a leak or an explosion. Read more here.

For decades, general liability, and many times environmental cleanup insurance, has been a key part of many environmental programs to pay the cost of injuries to people, property and the environment in case something goes very wrong. Read more here.

But, operators of pipelines carrying gasoline, natural gas, natural gas liquids and other hazardous and explosive substances do not have to have insurance or a financial assurance plan. Read more here.

-- Still Working On Updated Conventional Oil & Gas Drilling Regulations: DEP has been working for more than two years on updating conventional oil and gas environmental protection and waste disposal and handling standards, after the last comprehensive update was “abrogated” by the General Assembly in 2016. Read more here.

The first of two regulatory packages dealing with permitting and environmental protection standards was expected to come before the Environmental Quality Board for action late in 2022, but didn’t.

The draft of the second package-- dealing primarily with waste disposal, handling and similar requirements-- also was not completed.

On December 1, Kurt Klapkowski, Acting DEP Deputy Secretary for Oil and Gas Management, said the schedule for considering updates to environmental protection standards for conventional oil and gas drillers will be up to the incoming Shapiro-Davis Administration. Read more here.

-- DEP Expects Deficit In Oil/Gas Permit Fee Revenue To Fund Program: DEP has been warning policymakers all during 2022 that revenue from the per well permit fees is significantly below where it should be to pay for the costs of regulating the conventional and unconventional shale gas industry in Pennsylvania. Read more here.

The current fees became effective in August of 2020, but they were out-of-date even before they were adopted.

DEP estimated revenue from 2,000 unconventional shale gas permits a year was needed to support the program. As of December 23, DEP received 731 permits for review in 2022.

In February, DEP reported to the Environmental Quality Board conventional oil and gas drilling companies only paid $46,100 of the $10,600,000 it cost for DEP to regulate that industry in FY 2020-21. Read more here.

DEP estimates 60 percent of these costs are accounted for by activities related to unconventional oil and gas well activities-- about $15,988,224 and 40 percent by conventional oil and gas wells-- about $10,658,816. Read more here.

Currently, DEP has a staff complement in this program of somewhere around 190, when a fully staffed program would need 226+ people. Read more here.

At DEP’s budget hearings again in 2022, there were complaints about the time it takes the agency to review permits. Turns out, the unconventional shale gas industry hasn’t used 40 percent of the permits DEP already issued for wells, wasting a tremendous amount of staff time in the process. Read more here.

Personal Stories Of Oil & Gas Impacts

2022 brought to the forefront a series of personal stories telling how the oil and gas industry impacts residents and the environment in drilling areas--

-- Loss Of Water Supply From ‘Frack Out’: On November 12, the Observer-Reporter reported dozens of Greene County households affected by an alleged EQT drilling “frack-out” from an unconventional shale natural gas well are benefiting from a Center for Coalfield Justice water donation drive. Read more here.

The families said they haven’t had clean drinking water since a June 19 “incident” where EQT reported a “possible communication” between its 13H lateral well and an abandoned conventional oil or gas well while fracking two new wells at its Lumber pad along Martin Hill Road near New Freeport in Greene County. [Read more here.]

In response, Coalfield Justice organized the donation drive asking for people to bring cases of bottled water or jugs to help residents when the company, DEP and local officials would not help. Read more here.

-- Violating Terms Of Drilling Lease, Damaging Water Supply & Property: On October 28, the owner of a Washington County farm-- Bryan Latkanich and his three children Ryan, Hunter and Colton-- filed a lawsuit against Chevron and EQT shale gas companies alleging they violated the terms of their drilling lease by endangering their health, contaminating their water supply and not protecting their land. Read more here.

-- 7-Year Struggle To Correct Water Supply, Flooding Issues From Pipeline Construction: In 2015, Sunoco Pipeline LP started work on the Mariner East Pipelines on the Indiana County property owned by Navy veterans Patrick and Helen Robinson, and their lives have not been the same since. Read more here.

The Robinson’s water well was contaminated, dramatic changes to water flow on their property resulted in flooding, compliance issues with the erosion and sedimentation permit have not been resolved and construction practices have resulted in land slips and other issues with the pipeline itself. Read more here.

-- Unresolved Water Supply, Septic System, Home Damage From Pipeline Construction: On December 14, the Shawley Family of Jackson Township, Cambria County filed a lawsuit in federal court against Sunoco Pipeline, L.P. following over three years of struggles to get access to clean water and a functioning septic system for their home impacted by the construction of the Mariner East Pipeline. Read more here.

-- First-Hand Account Of How Road Dumping Conventional Oil & Gas Wastewater Is Tearing Up Dirt Roads, Creating Multiple Environmental Hazards: Farmington Township [Warren County] lies in Northwest Pennsylvania. In 2017-18, the Township became ground zero in the debate over using public dirt roads for oil and gas wastewater disposal, related Siri Lawson. Read more here.

The township roads became brine dumpsites, and the practice continues elsewhere. The excessive, repetitive, sanctioned road spreading causes Township roads to physically, mechanically and chemically change and break down. Read more here.

-- DCNR Land Ownership, County Opposition No Protection Against Oil & Gas Development: Despite unanimous opposition expressed by Lycoming County Commissioners after visiting neighborhoods on both sides of the Loyalsock Creek in July 2021, a massive gas industry project in the Loyalsock Valley is now proceeding in two townships on DCNR-owned land in a Special Protection Watershed.

The unsuccessful efforts to avert or mitigate this industrialization underscore critical issues affecting citizens statewide. Read more here.

-- Activist And Citizen Scientist Works To Identify Dangers Of Abandoned Wells: In November, the FracTracker Alliance announced Pennsylvania’s Laurie Barr was a winner of of the 2022 Community Sentinel Award for Environmental Stewardship for her work hunting for orphan and abandoned oil and gas wells and researching stream health. Read more here.

Mounting Evidence Of Health/Environmental Impacts

Senate hearings and conferences during 2022 added to the mounting number of studies showing evidence of negative health impacts from shale gas industrial development in Pennsylvania.

Several new studies also show health impacts extend from well sites, through pipelines and processing facilities, to the natural gas stove tops used in our homes.

Dr. Brian S. Schwartz, Professor of Environmental Health and Engineering, Epidemiology and Medicine at Johns Hopkins Bloomberg School of Public Health and the founding director of the Geisinger Health System Environmental Health Institute in Danville, testified before a Senate Committee in June. Read more here.

He said, “the body of evidence is large, growing and consistent” that shale gas development is having a negative impact on public health. He spoke of asthma, congestive heart failure, adverse birth outcomes, including preterm birth, high-risk pregnancy and birth weight, mental health and other impacts. Read more here.

At the annual Shale Gas and Public Health Conference in November hosted by the PA League of Women Voters and the University of Pittsburgh Graduate School of Public Health included presentations with these conclusions from the most recent studies--

-- “We’ve Got Enough Compelling Evidence To Enact Protective Policies For Families Now” By Edward C. Ketyer, M.D., President, Physicians for Social Responsibility Pennsylvania;

-- Living Near Oil & Gas Facilities Means Higher Health Risks, The Closer You Live, The Higher The Risk - By Nicole Deziel PhD MHS, Associate Professor of Epidemiology at the Yale School of Public Health;

-- Economically, Socially Deprived Areas In PA Have A Much Greater Chance Of Having Oil & Gas Waste Disposed In Their Communities - By Joan Casey, PhD, Assistant Professor of Environmental Health Sciences, Columbia Mailman School of Public Health; and

-- When It Started, It Was Kind Of Nice, But What Happened Afterwards Really Kind Of Devastated Our Community - By Rev. Wesley Silva, former Council President Marianna Borough, Washington County.

In July, the Environmental Health Project and HealthFirstPA released a major report outlining how policy makers failed to protect public health from the impacts of the shale gas boom and what we can do now to correct it. Read more here.

The recommendations cover strengthening setbacks and other regulations, providing more transparency and accountability by the industry and the government agencies regulating them.

The Physicians for Social Responsibility and the Concerned Health Professionals of New York released their Eighth Compendium of Scientific, Medical and Media Findings On The Risk and Harms of Fracking And Associated Natural Gas And Oil. Read more here.

The Compendium is a collection of some 2,000 abstracts of and links to medical, scientific and investigative reports about the consequences of oil and gas drilling, fracking, and infrastructure related to public health, the environment and climate. Read more here.

The 2022 edition includes reports on liquefied natural gas (LNG). Read more here.

Earthworks and the FracTracker Alliance released an online, interactive map that allows residents to find oil and gas wells and natural gas facilities so they can better understand the potential threats close to them. Read more here.

The FracTracker Alliance also released another in its series of watershed-based impact analysis in the Susquehanna River Basin, this one covering the Towanda and Schrader Creek watersheds. Read more here.

In August, the Yale School of Public Health Study released a study which found Pennsylvania children are two to three times more likely to be diagnosed with leukemia if they left near unconventional shale gas facilities. Read more here.

The state Department of Health and the University of Pittsburgh Graduate School of Public Health are in the process of completing several studies to better understand the impact of shale gas development on public health, in particular the prevalence of rare cancers in children in Washington County. Read more here.

Some of those results should start to become available in early 2023. Read more here.

In September, the Lawrence Berkeley National Lab and the University of California released the first peer-reviewed study of EPA-designated Hazardous Air Pollutants in the natural gas transmission systems which found industry data showed HAPS were “ubiquitous throughout the gas transmissions system, including pipelines, LNG facilities and storage facilities.” Read more here.

Also in September, the American Lung Association released a report detailing health and environmental impacts of fuel-burning appliances in the home, including natural gas. Their study concludes these fuels release pollutants that impact residents’ health like increasing asthma symptoms and decreasing the lung function of children. Read more here.

In October, DEP and the Appalachian Low-Level Radioactive Waste Compact Commission reported Pennsylvania fracking operations sent nearly 236,000 cubic feet of radioactive TENORM (Technologically Enhanced Naturally Occurring Radioactive Material) waste to low-level radioactive waste facilities for disposal in 2021. Read more here.

DEP also released final, revised guidance on handling radioactive waste generated by unconventional shale gas drillers (but not conventional drillers) in June. Read more here.

In mid-December, the U.S. Environmental Protection Agency accepted DEP’s final regulations limiting VOC/methane emissions from conventional and unconventional oil and gas facilities for evaluation. Read more here.

The final regulation not only benefits public health, but also sets limits on a potent greenhouse gas that affects climate change.

The conventional oil and gas operators have challenged the regulation in state court. Read more here.

Also in December, the Concerned Health Professionals of PA asked health professionals to sign a letter urging the in-coming Shapiro-Davis Administration to protect public health and the environment from the negative impacts of the oil and gas industry. Read more here.

Federal Well Plugging Program

In 2022, DEP began to release the first bid packages to plug 277 conventional oil and gas wells under the federal Bipartisan Infrastructure Law well plugging program. Read more here.

Federal funding has helped support the addition of staff at DEP to administer the program and pay for contracting resources to support the effort.

Over the next 15 years, DEP is expected to receive approximately $395 million from the federal Bipartisan Infrastructure Law to plug oil and gas wells abandoned by conventional drillers. Read more here.

But as noted above, if DEP does not take steps to prevent new abandoned conventional oil and gas wells, this program risks falling further and further behind.

Through the end of September, DEP issued a total of 322 notices of violation to conventional operators for abandoning wells without plugging them and 32 NOVs to unconventional shale gas operators for a total of 354 wells. Read more here.

To learn more about regulating the oil and gas industry, visit DEP’s Office of Oil and Gas Management webpage.

DEP Public Notice Dashboards:

-- Pennsylvania Oil & Gas Weekly Compliance Dashboard - Dec. 24 to 30 [PaEN]

-- PA Oil & Gas Industrial Facilities: Permit Notices/Opportunities To Comment [PaEN]

-- DEP Posted 50 Pages Of Permit-Related Notices In Dec. 31 PA Bulletin [PaEN]

Related Articles - Oil & Gas Industry:

-- PA Environment Digest Articles On Oil & Gas Industry Impacts

Related Article This Week:

-- DEP Report Finds: Conventional Oil & Gas Drillers Routinely Abandon Wells; Fail To Report How Millions Of Gallons Of Waste Is Disposed; And Non-Compliance Is An ‘Acceptable Norm’ [PaEN]

-- UnionProgress.com - Laura Legere: ‘Rule Rather Than The Exception’: DEP Rips Conventional Oil & Gas Industry For Noncompliance

-- Observer-Reporter: Explosion, Fire At Energy Transfer’s Revolution Natural Gas Cryogenic Plant Burned For Nearly 11 Hours On Christmas Day In Smith Twp., Washington County [PaEN]

-- DEP Issues 2021 Oil & Gas Program Annual Report