Fracking Oversight in Pennsylvania Faulted by State Watchdog

Jul 22, 2014 4:22 pm ET

(Updates with comment from state environmental group in ninth paragraph.)

July 22 (Bloomberg) -- Pennsylvania regulators were unprepared for the fracking-fueled boom in natural gas production during the past decade, putting drinking water supplies at risk, the state’s watchdog said.

The state’s Department of Environmental Protection failed to order drillers to clean or replace tainted water supplies, or to act quickly on residents’ complaints of contamination, Auditor General Eugene DePasquale said today. It also used a 25- year-old inspection policy.

“Shale gas development offers significant benefits to our commonwealth and nation, but these benefits cannot come at the expense of the public’s trust, health and well being,” DePasquale, a Democrat, said in a letter to Governor Tom Corbett that accompanied a report with 29 recommendations. “DEP needs assistance. It is underfunded, understaffed, and does not have the infrastructure in place to to meet the continuing demands” of the gas boom.

Pennsylvania is the nation’s fastest-growing natural gas producer as hydraulic fracturing, or fracking, was used to tap gas trapped in rock that’s part of the Marcellus Shale formation, one of the world’s richest such formations. The state is the No. 3 producer of shale gas after Texas and Louisiana, and the boom has brought Pennsylvania tax revenue, jobs and manufacturing facilities, supporters say.

Practice Scrutinized

The rapid development has led to scrutiny of the practice, with the woes of homeowners in Dimock highlighted in the 2010 documentary “Gasland.” In that case the state determined that Cabot Oil & Gas Corp. was responsible for the methane in the water, although the company contests the allegation.

Corbett, a Republican seeking re-election, has embraced the industry as a benefit to jobs and economic development. Since 2009, more than 7,100 wells have been drilled in the Marcellus region, according to state records. DePasquale’s audit covered 2009-2012.

“Because the report focused on the time period up until the end of 2012, most of this audit reflects how our Oil and Gas Program formerly operated, not how the program currently functions,” DEP Secretary E. Christopher Abruzzo said in a statement. “Many of these recommendations have already been implemented, or are in the process of being implemented.”

State Cases

The state agency has established 209 cases in which homeowners’ water supplies were contaminated from nearby drilling since 2008, said Eric Shirk, a DEP spokesman. the state has received thousands more complaints of contaminated wells, felled cattle or dangerous explosions, environmental advocates say.

“We know that a number of these problems have persisted,” said Tracy Carluccio, deputy director of Delaware Riverkeeper, which has been tracking the result of gas production on the state. “It’s a screaming need that the water supply problems be addressed.”

The auditor’s report identified eight areas in which the environmental regulator fell short. At the top of its list: The agency didn’t issue administrative orders against drillers in many cases in which it found that water had been contaminated.

“Operators should not be allowed to circumvent a violation order by offering settlement agreements,” the auditor’s report said. “DEP needs to be a stronger regulator and use its enforcement powers consistently.”