Page 16 ■ Thursday, February 16, 2012


NATION & WORLD No vote yet for Pa. gas drilling fee


By MARK SCOLFORO Associated Press


Bakken Breakout publishes bi-monthly and takes an in-depth look at oil


exploration and production in the Williston Basin, providing important information about one of the hottest shale plays in the world today.


HARRISBURG, Pa. — Pennsylva-


nia, the only major gas-producing state that does not tax the taking of natural gas from its soil, moved closer Feb. 7 to imposing a fee on the drilling in the vast Marcellus Shale reserves that have trans- formed the state in recent years. The state Senate voted 31-19 in fa-


vor of fees that could raise $180 million from the industry in the fi rst year, while expanding regulations for the booming industry, but debate in the House got un- der way late in the evening and lawmak- ers adjourned without taking a vote after running up against a nightly curfew. The measure, which could return to


the House fl oor, includes a requirement for online disclosure of chemicals used in hydraulic fracturing, or fracking, and would fund road work and environmen- tal efforts. It also would allow local gov- ernments to decide whether to impose the fees on wells in their territory. “The truth is, it’s better than hav- ing nothing at all,” said supporter Rep. Mario Scavello, R-Monroe. “It’s gener-


ating plenty of money. It’s made some improvements over what’s in place, and we’ll continue to monitor it.” Opponents called the bill a giveaway


to energy companies and said its envi- ronmental provisions were too weak. House Democratic Whip Mike Han-


na, D-Clinton, said the approach put profi ts of multinational corporations ahead of the health and safety of state residents, and raised the specter of envi- ronmental damage from Pennsylvania’s coal and timber industries. “We have to learn from those past


mistakes, and we should not repeat them,” Hanna said. But Senate President Pro Tempore


Joe Scarnati said the new regulations included a toughest-in-the-nation well bonding requirement,


“more penal-


ties for misbehaving producers,” stream setback rules, a one-call system before drilling starts and the fracking chemical disclosure. “These wells have impacted our envi-


ronment, and people’s lives in the region and beyond,” Scarnati said. Since 2008, Pennsylvania has been mobbed by energy companies eager to


reap the reserve’s riches, drilling at least 4,000 wells in an arc that spans the state, from southwest to northeast. Several supporters spoke of a desire to regulate the activity without hampering a grow- ing industry that has brought employ- ment and investment to areas that need both. “This bill is good for Pennsylvania, it’s good for jobs, it’s good for the environ- ment and it’s going to help us maintain a dedicated revenue source for so many valuable programs,” said House Appro- priations Chairman Bill Adolph, R-Dela- ware.


The industry itself has been split on


whether to support a levy, and the cur- rent bill would not link the fee amount to how much a well produces, as is the case in some other gas-producing states. Proceeds would help fund drilling


regulation, fi x bridges and water and sewer plants, buy fl eet vehicles powered with natural gas and possibly help de- velop a petrochemical refi nery in south- western Pennsylvania and reuse three Philadelphia-area oil refi neries that are shutting down.


Drilling violators escape fi nes


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By MATTHEW DALY Associated Press


WASHINGTON — Federal policing


of oil and natural gas drilling on public lands is lax and inconsistent, with only 6 percent of violations resulting in mon- etary fi nes over 13 years, House Demo- crats said in a report Feb. 8. Fines over that time totaled less than


$275,000, an amount that the Democrat- ic staff of the House Natural Resources Committee characterized as little more than “pocket change” for oil and gas companies. The report said federal regu- lators issued no fi nes in the period stud- ied, February 1998 to February 2011, in eight of the drilling states. The report, obtained by The Associ-


ated Press before its public release later Feb. 8, said the government does little to ensure accountability or protect the environment, even as drilling on federal land has increased in recent years. The in- crease is driven in part by hydraulic frac- turing, or “fracking,” a drilling technique that has allowed companies to extract oil and gas long locked underground. The report focuses on drilling activ-


ity that occurred on federal land in 17 states during three administrations, two Democratic and one Republican. A total of 2,025 citations for safety and drilling


violations were issued to 335 companies, the report said, with 64 companies fi ned a total of $273,875 “It would be an overstatement to even call these fi nes a slap on the wrist. For oil and gas companies making billions from drilling on America’s public lands, this kind of inadequate oversight and en- forcement is little more than a pin prick,” said Massachusetts Rep. Edward Markey, the committee’s top Democrat. Markey and Rep. Rush Holt, D-N.J., requested the report. The Obama administration is consid-


ering new rules for fracking at oil and gas wells on federal land. President Barack Obama said in his


State of the Union speech last month that the Interior Department will require energy companies to publicly disclose chemicals used in drilling for natural gas on public lands. Federal rules for frack- ing on public lands are set to be released in a few weeks. In fracking, millions of gallons of


water, sand and chemicals are pumped into wells to break up underground rock formations, allowing oil and gas to es- cape. Energy companies have greatly ex- panded their use of fracking as they tap previously unreachable shale deposits, including the lucrative Marcellus Shale formation in Pennsylvania, New York


and neighboring states. The drilling practice has also attracted


increased attention from Congress and regulators, as private groups and govern- ment agencies research whether it poses a danger to drinking water. The report found that more than


2,000 violations were handed out by the Interior Department to oil and gas companies drilling on federal land. Of these, 549, or 27 percent, were classifi ed by committee staff as a major environ- mental or safety violation. More than half the major violations stemmed from a nonfunctioning or missing blowout preventer, the same device that failed in the BP oil spill in the Gulf of Mexico, the report said. A total of 113 major violations cited


inadequate well-casing or cementing, another problem that occurred in the BP spill. Onshore, well-casing and cement- ing are a key defense against groundwater contamination. On at least 54 occasions, oil and gas companies began drilling on federal land before receiving formal ap- proval to do so, the report said. Despite those problems, monetary


fi nes were rarely issued, the report said. In eight states — Alaska, Arkansas, Louisiana, North Dakota, Nevada, Ohio, South Dakota and West Virginia — no fi nes were issued for the period studied.


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