An Issue of Enforcement

Can the DEC do its job?

If an energy company complies with the current Generic Environmental Impact Statement (GEIS), then it can drill a conventional oil or gas well without a lengthy State Environmental Quality Review. The Supplemental GEIS will extend these conditions to cover “horizontal drilling and high-volume fracturing to develop Marcellus Shale and other low-permeability gas reservoirs.” Once it is finalized, can the New York State Department of Environmental Conservation (DEC) enforce both the GEIS and the SGEIS to protect our environment and our community?

In a word, no.

The history of gas production in New York State is a series of boom and busts, as new sources of gas are discovered and then drained. Production from the Oriskany Sandstone in the 1930s was followed by that from the Medina Sandstone from the1970s to 1990s. Production from the current Trenton/Black River Limestones has started to decline. The coming boom from the Marcellus and Utica black shales may be the largest yet, and will require outsized resources to regulate.

The DEC had a staff of 3,775 in the 2007/2008 fiscal year, but recent budget cuts will reduce that to under 3000 – down over twenty percent in less than three years. DEC Commissioner Pete Grannis was recently fired for a memo outlining the dire effects of these cuts.

Not all of the staff work on permits and oversight of the oil and gas industry. The DEC has eleven offices, one of which is Remediation and Materials Management. This office has three divisions, one of which is Mineral Resources (DMR). This division has two bureaus, one of which is Oil and Gas Regulation (BOGR) – one of the smallest in the DEC. It is the Permits Section of the BOGR that approves and oversees wells.

The Bureau of Oil and Gas Regulation is critically understaffed. For much of the 1990s, it was approving permits for 100 to 200 wells annually with a staff of 20 [see figure below]. Then, in the late 1990s, gas was discovered in the Trenton and Black River Groups south of the Finger Lakes and the annual number of permits began to climb. In 2008, BOGR approved 740 permits for drilling with a staff of 19. This year, their staff is down to 16.

From the late 1990s to the early 2000s, the number of permits gradually increased from 100 to 200 each year. In that time, annual inspections increased from 2,000 to 3,500 [see figure at right]. Despite the rapidly increasing number of permits and completions since 2003, all BOGR can manage is 2,500 annual inspections.

Permitting future wells is not the only responsibility of BOGR. It oversees approximately 75,000 existing wells. Inactive wells account for an estimated 60,000 of these, of which only half have been located. Of the 30,000 in the database, over 5,000 are orphaned, unplugged, and in need of attention, with more being discovered each year. BOGR manages to plug 100 to 200 abandoned wells each year. Then there are the 15,000 active wells and the hundreds of new wells being drilled each year.

How can they manage all this with only 2,500 site visits each year? The GEIS does not require a single site visit to most active wells. The only two required visits are to the site before the permit is issued and then, after the well has been plugged and the site reclaimed. Only if the drilling is through a primary or principle aquifer (sands and gravels in river valleys) is an inspector required to oversee cementing of the surface casing after drilling reaches below the aquifer. Otherwise, all the GEIS mandates is that BOGR reviews the submitted paperwork.

But was a staff of 20 adequate even in the less-busy 1990s?

Again, the answer is no.

New York is the only state that makes no attempt to verify the production of oil and gas from wells. Instead, it accepts reports from energy companies at face value. In a 2005 audit (2005-S-54), the state Comptroller faulted the BOGR for not testing accuracy of meters, not spot-checking by reading meters, and not auditing company records – not even for wells on the tens of thousands of acres in state forests, where royalties are paid to the state. A second audit (2009-F-1) found that other than requiring periodic tests of meters on state lands, there has been little progress.

What is the DEC’s record of ensuring safe drilling in New York State? It is hard to tell, but it’s not nearly as good as has been claimed. A search of the DEC Spills Database for the 30 years of its existence found hundreds of reports connected to drilling. There may be many more because a letter of agreement between the DEC and the Department of Mineral Resources makes the DMR the lead agency concerning oil and gas spills. And their records are not available.

Industry and the DEC claim that there is no proven pollution of aquifers by drilling, but this is deceptive because neither has done testing both before and after drilling. It is just as true to say there is no proof that the 75,000 wells have not polluted. What is more, this high-volume fracking has not yet been attempted in New York.

The responsibility for regulating the oil and gas industry falls almost entirely on the BOGR. The same law that created the DMR preempts almost all powers from local governments. Our town and village boards are left only with oversight of wear on local roads and of property taxes on well sites. Should an energy company lease an acre or two within the Village of Franklin, our local governments could do nothing to prevent drilling there.

What can the federal government do to regulate the oil and gas industry?

Not much.

The industry has successfully lobbied Congress to exempt it from almost every federal environmental law. For example, after a federal judge required the Department of Environmental Protection to enforce the section of the 1974 Safe Drinking Water Act (SDWA) that covers underground injection (including fracking), the Energy Policy Act of 2005 was passed containing an exemption for fracking – the notorious Halliburton loophole.

Besides the SDWA, the oil and gas industry is exempt from parts of the Clean Air Act (1963/1990), the National Environmental Policy Act (1970), the Resource Conservation & Recovery Act (1976), the Comprehensive Environmental Response Act (1980), and the Compensation, & Liability Act; Emergency Planning and Right to Know, Superfund Act (1986). There is virtually nothing left to protect us.

What can be done? To finance a robust DMR, permit fees could be increased and a severance tax on all gas and oil production could be legislated. The SGEIS could set out a schedule of site inspections and document reviews for each well and specify the work load of each inspector. Local government could challenge the preemption of their zoning powers – as was successfully done for mining. Exemptions from Federal laws could be repealed so that the same laws that regulate all other industries regulate oil and gas.

Brian Brock is a geologist and associate editor of this newspaper. He lives in Franklin.