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Strictly Business: N.Y. is learning Marcellus Shale lessons

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Study examines Pa. gas well violations and proposed rules in Empire State

4:49 PM, May. 19, 2012  |
A tanker truck heads south on state Route 328 leaving New York and entering Pensylvania. / JEFF RICHARDS / STAFF PHOTO

The following information may come as bad news to the opponents of hydrofracking, but a study released last week by the University of Buffalo says gas drilling regulations under review in New York could help avoid or mitigate 25 "major" events that have taken place in Pennsylvania as a result of extracting natural gas from Marcellus Shale.

I've said all along that I hoped New York was using Pennsylvania's mistakes as guides for what not to do. And apparently, it looks as if that's what has happened.

"New York's current regulations would prevent or mitigate each of the identified major environmental events that occurred in Pennsylvania," said John P. Martin, the director of UB's Shale Resources and Society Institute. "It's important that states continue to learn from the regulatory experience -- both strengths and weaknesses -- of others."

In putting together the study, UB's Shale Institute examined 2,988 violations, from nearly 4,000 natural gas wells, processed by the Pennsylvania Department of Environmental Protection from January 2008 through August 2011.

They found that 1,844 of the violations, or 62 percent, were administrative and preventative in nature. The remaining 1,144 violations, or 38 percent, were environmental in nature. The environmental violations were the result of 845 events, with 25 classified as "major."

The report defines major environmental events as site restoration failures, serious contamination of local water supplies, major land spills, blowouts, venting and gas migration.

But the bright spot behind that dark cloud is this: The authors found that the percentage of environmental violations, when compared to the number of wells drilled in Pennsylvania, declined from 58.2 percent in 2008 to 30.5 percent in 2010. Furthermore, the number of environmental violations dropped to 26.5 percent during the first eight months of last year.

The report suggests that Pennsylvania's regulatory approach has been effective at maintaining a low probability of serious environmental events and in reducing the frequency of environmental violations.

The study, its lead author Tim Considine says, presents a compelling case that Pennsylvania's oversight of oil and gas regulation has been effective. While prior research has reviewed state regulations anecdotally, there is now comprehensive data that demonstrates that state regulation coupled with improvements in industry practices results in a low risk of an environmental event occurring in shale development. And those risks, Considine says, continue to diminish year after year.

Robert Watson, the third author who put together the study, drops the biggest bomb of all when he says the remedial actions taken by operators largely mitigated the environmental impacts of environmental events. Only a handful of events resulted in environmental impacts that have not yet been mitigated, the retired Penn State University professor said.

There are undoubtedly a gaggle of naysayers out there who, after reading this, will say UB's Shale Institute is being bankrolled by the drilling industry. They are also likely to say it lacks credibility for any number of reasons.

However -- and this is something I've said before -- a day doesn't go by where groups on either side of the fracking debate flood my e-mail inbox with, for lack of a better word, propaganda advocating their respective stances.

For example, the Independent Petroleum Association of America is critical of the Environmental Protection Agency's draft report that states groundwater contamination near Pavillion, Wyo., was caused by hydrofacking. But I wouldn't expect the IPAA to say anything different.

On the other hand, it was recently announced that 55 major investment organizations and institutional investors, with nearly $1 trillion in assets under management, have come together to support "best practices" for the fracking of shale gas. I'm betting the group is looking more closely at the value of their investments rather than protecting the environment.

But the UB study is prepared by a neutral party -- three academics who have crunched the numbers and come up with their results. And what's become a debate largely fueled by emotion, I see the study as a welcomed breath of unbiased fresh air.

G. Jeffrey Aaron is the business writer for the Star-Gazette. His column about business happenings and issues appears weekly on the Sunday business page. To suggest a column topic or story idea, call him at (607) 271-8288 or e-mail him at This email address is being protected from spambots. You need JavaScript enabled to view it..

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