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Federal Economic Data Makes Clear the Marcellus Shale’s Positive Impact Across the Commonwealth

Canonsburg, Pa. –  The Mighty Marcellus Shale – the world’s second largest natural gas field – continues to be a driving economic force in the Commonwealth, helping to create jobs for tens of thousands of Pennsylvanians, revitalizing rural economies, generating millions in tax revenue, bolstering small business and manufacturing growth and creating opportunities for a host of other industries across the region. Because of the ‘enormous’ benefits associated with clean-burning, American natural gas – as President Obama said in a recent speech – an American Renewal is underway in the region.

And while tens of thousands of good-paying, Pennsylvania jobs, tied directly to responsible Marcellus Shale development, have been created – upwards of 212,000 jobs over the coming years, according to Penn State University experts – data from the U.S. Bureau of Labor Statistics (BLS), an arm of the Labor Department and the “the principal fact-finding agency for the Federal Government in the broad field of labor economics and statistics,” clearly demonstrates this connection.

What follows is an overview of BLS economic data – specific to “Natural Resources and Mining” jobs [direct natural gas production-related employment is accounted here] – from 2009 to 2010 in key Marcellus Shale producing counties across the Commonwealth, as well as the number of Marcellus wells drilled in each county during that same time period. Of important note, 1,224 construction-related jobs were created in these Marcellus-producing counties during the same period, according to BLS data. This uptick in construction-related employment is attributable to the robust supply chain supporting Marcellus development.

COUNTY	Marcellus Wells Drilled,    Sep’09-Sep’10 (Source: PADEP)	12 month percent change in average [Marcellus] weekly wage, Sep’09-Sep’10	12 month percent change in [direct Marcellus] employment, Sep’09-Sep’10	12 month change in [direct Marcelus] employment, Sep’09-Sep’10
Bradford	376	105.8%	203.5%	633
Tioga	290	139.6%	66%	70
Washington	182	5.3%	34.5%	442
Lycoming	101	13.7%	106.6%	305
Susquehanna	99	52.3%	72.6%	313
Westmoreland	53	16.5%	21.6%	149
Centre	41	71.3%	115.6%	245
Fayette	37	31.2%	65%	367
Sullivan	9	271.2%	446.2%	58

Some companies exceed state requirements in their Pa. operations

Cliff White
March 27, 2011
Centre Daily Times

PITTSBURGH — The rows of seats in the cavernous David L. Lawrence Convention Center stretched as far as the eye could see, and the hall was full as Range Resources Chairman and CEO John Pinkerton delivered a call to action Tuesday at the Marcellus Midstream Conference.

“This play has enough return in it so we can take a higher standard of care,” Pinkerton said to the hundreds of natural gas industry executives in attendance. “Our charge is to make sure it’s done safe, in an environmentally sensitive way, so we can put our heads on our pillows knowing we’ve done what we can.”

Range Resources, which has land holdings in Centre County, is one of a select number of drilling companies pushing for more stringent oversight of the industry as it ramps up its activities in the gas-rich Marcellus Shale.

“You tend to drive slower and more cautiously if state troopers are out. We’re the same way — when regulators are out there, things button up,” company spokesman Matt Pitzarella said. “The second part is enforcement. If Range or any other operator should commit a (violation), if you enforce the fine, that changes behavior.”

Drillers have plenty of other reasons to want to minimize their environmental impact. U.S. Sen. Bob Casey, D-Pa., citing the industry’s public safety record, recently introduced a bill that would give the Environmental Protection Agency control

over regulating hydraulic fracturing, the process being used in Marcellus Shale. And the industry also faces public scrutiny over its processes and whether a severance tax should be instituted to ensure the state can cover the costs of potential future environmental cleanup.

Both Range Resources and Anadarko Petroleum, which also has a presence in the county, exceed state-mandated requirements for well casings on all the drilling they do in Pennsylvania. Range Resources cements every steel string of casing it puts in its wells, while Anadarko adds an extra cemented steel casing that extends below the water table as an added buffer against migration between gas and frack water inside the well and the environment outside it.

Range Resources has also gone beyond Pennsylvania’s industrial requirements for reporting its recycled water, disclosing the fluids it uses in its fracking process, and adding extra layers of protection to its water impoundments. It also pays voluntary “nuisance fees” to residents it feels have undergone or might face excessive inconvenience due to its activities.

Anadarko, for its part, lines all of its pads with an impermeable lining to prevent against spills, and has introduced a closed-loop system that helps the company recycle frack water and reduce its consumption of fresh water.

“The reason we go beyond the requirements of what the DEP requires is that, everywhere we operate, we look at our corporate best practices and local and state regulations, and adhere to the greater and more environmentally sound practices of the two,” Anadarko spokesman Matt Carmichael said.

Rex Energy, which is based in State College and has an interest in some Centre County wells, also lines all of its pads and uses a closed-loop system. Range Resources, Anadarko and Rex all perform baseline water testing for residents living up to 2,500 feet from planned well sites; the state suggests, but does not require, testing out to 1,000 feet.

Each of these improvements adds up to millions of extra dollars spent. But even with the anticipated profits to be had in the Marcellus play, as noted by Pinkerton, many question whether companies will be motivated to spend more than they have to.

“We’re environmental stewards, and we pride ourselves on that. We care about our neighbor and definitely don’t want to have any negative impact on the commonwealth,” said Melissa Hamsher, Rex Energy’s vice president of environmental, health, safety and regulatory compliance.

“Also, it hurts us a lot more if we do it incorrectly. It’s a big expense to do these things we’re doing, but we’re making sure we’re never in a situation where a substantial violation might jeopardize our operations in the state.”

Shelley Alpern, a vice president at Trillium Asset Management, a $1 billion investment management firm with a “deep commitment to advancing environmental sustainability, social justice and human rights through innovative investment, research and advocacy,” according to the firm’s website, said shareholder activism is one way to motivate publicly traded companies to improve their codes of conduct.

“For years, we’ve invested in Anadarko,” Alpern said. “We’ve always found them to be responsive.”

Trillium filed a shareholder resolution with Anadarko in December requesting the company compile a report listing the “known and potential environmental impacts of Anadarko’s fracturing operations” and policy options for the company to adopt “above and beyond regulatory requirements and (the) company’s existing efforts, to reduce or eliminate hazards to air, water and soil quality from fracturing operations.”

The firm withdrew its resolution last week, citing the company’s progress on releasing information to the Securities and Exchange Commission and on its website. Alpern said more disclosure and higher environmental standards are good for the company’s economic health.

“The more that shareholders, regulators and the general public can see some of the positive initiatives Anadarko is taking, the more that will be positively reflected in its share price,” Alpern said. “Doing the right thing does pay off —

There were 2,021 violations recorded at Marcellus Shale wells, including 38 in Centre County, between January 2008 and October 2010, according to the Pittsburgh Business Times’ searchable database, which is compiled from information provided by the Department of Environmental Protection. Included in the database are administrative violations and of environmental health and safety violations.

During that time period, Cabot Oil and Gas was ranked highest with 417 violations, followed by Chesapeake Energy with 407 violations and Chief Oil and Gas with 402 violations. Further down the list, Anadarko Petroleum had 160 violations, Range Resources and Williams both had 115 violations, Rex Energy had 13 violations.

In Centre County, Exco Resources had 22 violations, Anadarko Petroleum had 12 total violations and Carrizo Oil and Gas had four violations.

A few examples of offenses committed in Centre County:

pit. Mailbox containing well permit and some erosion and sediment and stormwater inspection reports is located in a tree near the entrance — erosion and sediment plan not on site. Erosion and sediment controls are in place and working adequately. As of Dec. 10, 2009, past violations resolved, case closed.

Feb. 24, 2010, Anadarko Petroleum, Curtin Township.Rat hole not filled — drilling is complete and a valve is attached to the casing. Rat hole was not filled before drilling equipment was moved off of location.

March 18, 2010, Carrizo Oil and Gas, Rush Township.Failure to restore site within nine months of completion of drilling or plugging. Well drilling was completed April 19, 2009. Fracking was completed Aug. 24, 2009. Well is completed and not yet in production. Site ID is still in place, no well tag in place.

March 24, 2010, Exco Resources, Burnside Township.Failure to minimize accelerated erosion, implement erosion and sediment plan, maintain erosion and sediment controls. Failure to stabilize site until total site restoration. Conductor has been set and well is currently being air drillied. Water and cuttings are being directed into a lined pit. The liner does not appear to be compromised in any way and freeboard is being maintained.

Report within 30 days of completion of well. Production well with a digital meter. Completion report never that’s part of the investment theory that we apply.”

High-profile gas-related accidents, including a well blowout in Clearfield County and the migration of methane from a drilled well into drinking water supplies in Dimock have increased concern that state regulations are not strong enough, causing a drive to shift regulation of the industry to the federal level.

The industry, as a whole, staunchly opposes Sen. Casey’s bill, known as the FRAC Act, arguing regulatory powers should be left in state hands.

“Just because it’s federal regulation doesn’t mean it’s any better or any different (than state regulation),” Pitzarella said. “All you’ll end up having is a dramatic slowdown while the EPA consults the states, who’ve been (regulating the industry) for 70 years.”

Revised state regulations approved by the state Department of Environmental Protection late last year strengthen the requirements companies must meet in order to drill.

DEP spokeswoman Katy

submitted. Resolved Aug. 16, 2010.

June 15, 2010, Anadarko Petroleum, Snow Shoe Township.Discharged 150 gallons of hydraulic fluid to the ground, the potential for pollution to waters of the commonwealth. Hydraulic fluid remains under the rig until the rig is moved off-site for final cleanup.

Sept. 8, 2010, Exco Resources, Burnside Township.Failure to notify DEP of pollution incident. No phone call made forthwith. Two diesel fuel spills were not reported to the department, (inspector) found the spills during an inspection of the well pad and notified the operator. The two spills constituted approximately 20 to 30 gallons.

Sept. 29, 2010, Anadarko Petroleum, Snow Shoe Township.Discharge of industrial waste to waters of commonwealth without a permit. Spillage of what appears to be a relatively small volume of drilling fluids, no apparent movement from immediate area. Anadarko notified by phone on Sept. 30, 2010.

Dec. 22, 2010, Anadarko Petroleum,

control or dispose of industrial or residual waste to prevent pollution of the waters of the commonwealth. Production fluid released from a line disconnected from a gas water separator by a contract worker and left uncapped or sealed for 24 or more hours. Gresh acknowledged the update was necessary and overdue.

“Many of the previous regulations on gas well construction and water supply replacement were created in July 1989 and, for the most part, had not been changed,” Gresh wrote in an email. “Previous rules did not provide enough details on safely casing and cementing wells. Also, previous rules did not address the need for an immediate response by operators to a gas leak complaint. And, they did not require operators to inspect wells regularly.”

Still, even with the new rules in place, there’s a good chance that with the amount of drilling Pennsylvania is likely to see over the coming years, more accidents will occur. A recent incident involving Chesapeake Energy, considered by those in the industry to be a more responsible driller, reveal problems such as gas migration through faulty well casings may even occur to those companies that exceed state standards.

On Sept. 2, the DEP received reports of bubbling water on the Susquehanna River in Wilmot Township, Bradford County. According to a DEP news release, the gas was found to be migrating from near six of the company’s wells located on three pads approximately two to three miles northwest of the river. After the incident, the company instituted a review of all 171 wells it had drilled in Pennsylvania and announced it would add an extra string of steel casing and cement at the potential depths of shallow gas.

Pitzarella, of Range Resources, said preventing all accidents may be difficult, but it should be the goal of all drillers.

“I believe we all have room for improvement. You’re only as good as your worst day, and only as reputable as an industry as your weakest player,” he said. “It’s a big industry and we have a lot of different opinions … but a vast majority of companies want to do it the right way.”

– Click HERE to access the source article.

• “By recycling the wastewater, they can reduce their transportation costs and the overall environmental footprint of the industry”
• “There’s nothing in flowback water that’s particularly difficult for an environmental engineer to manage”
• “The DEP analyses are determining that the average daily consumption in the shale industry is ‘no greater than one of our power plants’”

“Expert Says Marcellus Drillers Reusing Two-Thirds of Water”: A hydrogeologist from Penn State says companies drilling in the Marcellus Shale play through hydraulic fracturing (hydrofracking) are recycling about two-thirds of the wastewater that returns to the surface. David Yoxtheimer, a researcher with the university’s Marcellus Center for Outreach and Research, presented his findings Sunday at the annual Geological Society of America conference in Pittsburgh. “The regulatory framework is such that there are higher costs to take wastewater to a treatment facility that is permitted to treat and dispose of that water, plus more higher costs for them to get more fresh water and haul it in,” Yoxtheimer told NGI’s Shale Daily on Tuesday. “By recycling the wastewater, they can reduce their transportation costs and the overall environmental footprint of the industry.” … Yoxtheimer found that the 30-day average recovery of flowback totaled between 8% and 10%. He said that from June 2008 to May 2010, drilling companies had reused about 44.1 million gallons and disposed of 21 million gallons, a recycling rate of nearly 67%. (Shale Daily, 3/23/11)

Carnegie Mellon University Environmental Engineering Professor: “There’s nothing in flowback water that’s particularly difficult for an environmental engineer to manage,” said [Kelvin Gregory, assistant professor of civil and environmental engineering at Carnegie Mellon University, who has studied recycling operations]. (Philly Inquirer, 3/23/11)

“Gas drillers reuse two-thirds of water, expert finds”: A Penn State University researcher found that Marcellus shale gas drilling companies reused at least two-thirds of the water returned to the surface during 30 days of drilling. “The industry is striving to reuse as much flowback as possible,” said David Yoxtheimer, a hydrogeologist with Penn State’s Marcellus Center for Outreach and Research. … Reusing the water reduces reliance on groundwater or municipal sources of water, reducing the environmental impact, said Yoxtheimer. (Pittsburgh Tribune-Review, 3/21/11)

PSU Hydrogeologist:Marcellus Water Use a Fraction of Other Sources, Industrial Purposes: Yoxtheimer cited data from the Pennsylvania Fish and Boat Commission, which found 9.48 billion gallons of water are being extracted from surface and groundwater sources every day in Pennsylvania. Of that amount, 1.9 million gallons per day (gpd) is used in Marcellus Shale development. By comparison, thermoelectric power uses 6.43 billion gpd, the public water supply draws 1.42 billion gpd and industrial users are taking 770 million gpd. (Shale Daily, 3/23/11)

“Marcellus Water Issue Overrated, Pennsylvania [DEP] Official Says”: Water use in Marcellus Shale drilling “may not be as big an issue as we originally thought it was,” a Pennsylvania Department of Environmental Protection (DEP) official told a natural gas forum on Capitol Hill in Washington, DC, last Wednesday. Dana Aunkst, an engineer and DEP’s acting deputy secretary for field operations, said the DEP analyses are determining that the average daily consumption in the shale industry is “no greater than one of our power plants.” … There are no current health hazards but said the state is taking “precautionary controls” and intends to require close monitoring of wastewater, along with “accelerating the frequency at which downstream drinking water intakes may have to monitor their water just to be on the safe side.” (Shale Daily, 3/21/11)

PSU Cooperative Extension: “In counties with ten or more Marcellus wells…tax income increased 325.3 percent”

Canonsburg, Pa. – The Marcellus Education Team at Penn State University’s Cooperative Extension recently issued a comprehensive analysis highlighting the positive and growing tax revenues being generated throughout the Commonwealth tied directly to the responsible development of clean-burning, homegrown natural gas. Kathryn Klaber, president and executive director of the Marcellus Shale Coalition (MSC), issued this statement regarding Penn State’s findings:

“The responsible development of clean-burning natural gas is creating tens of thousands of good-paying jobs, providing stable, American energy supplies for consumers and generating hundreds of millions of dollars in tax revenues at the same time. This data brings into perspective the enormous amount of taxes our industry’s work is generating for Pennsylvania’s economy, especially in rural communities. Without question, each and every Pennsylvanian is benefitting from Marcellus Shale development.

“Unfortunately the ongoing tax debate has been framed too narrowly. This study, however, importantly broadens the understanding of the tax revenues our industry is helping to produce for state and local governments.”

Key excepts from Penn State University’s new study: “State Tax Implications of Marcellus Shale: What the Pennsylvania Data Say in 2010”

• State Sales Tax Revenues Soar in Marcellus Producing Counties: “The data indicate that counties with 150 or more Marcellus wells experienced an 11.36 percent increase in state sales tax collections between 2007 and 2010. Counties with fewer Marcellus wells reported declining state sales tax collections, but they still did better than counties with no Marcellus wells, which reported steeper declines. These data suggest that counties with Marcellus shale development fared better in retail sales during the years 2007–2010 than those counties without.
• Realty Transfer Tax Collections in Marcellus Producing Counties Stronger than Non-Marcellus Counties: “Across the state, realty transfer tax collections were down between July 2007 and June 2010, reflecting overall weaknesses in the real estate market. However, counties with Marcellus shale development typically declined less than those without such development.”
• “Counties With Marcellus Activity Showed Greater Increases in Tax Income”: “The state personal income tax is a levy on personal income, including wages and salaries, investment income, and leasing and royalty income. Counties with Marcellus activity showed greater increases in tax income than non-Marcellus counties even though there was little difference in the number of returns filed. Counties with ten or more wells reported an average 6.96 percent increase in taxable income, and counties with between one and nine wells reported a 3.08 percent increase. Those areas with no wells witnessed a 0.89 percent increase in taxable income.”
  • “In counties with ten or more Marcellus wells, returns reporting royalty income increased 44.1 percent and tax income increased 325.3 percent.”
    
  • “Counties with ten or more wells recorded an 10.8 percent increase in net profits [what business owners pay on their business earnings] between 2007 and 2008, and counties with fewer than ten wells saw a 7.1 percent increase in such income. Counties with no gas activity had increases of only 1.5 percent.”

• “Positive Economic Activity for [Marcellus] Communities”: “State tax collections in counties with significant activity related to Marcellus shale on average had larger increases in sales and personal income tax collections and less precipitous declines in realty transfer tax collections than did other Pennsylvania counties. The data indicate that Marcellus shale development brings some positive economic activity for communities.”

NOTE: Click HERE to view this study online.

Harrisburg, PA – Pennsylvania’s oil and natural gas industry, represented by the Marcellus Shale Coalition (MSC), American Petroleum Institute of PA (API-PA) and the Pennsylvania Independent Oil and Gas Association (PIOGA) issued the following joint-statement in response to news reports that a waste transportation company illegally discharged “sewer sludge and greasy restaurant slop” as well as produced water from drilling operations, “in holes, mine shafts and waterways,” across a six-county region in southwestern Pennsylvania:

“Illegal actions that threaten Pennsylvania’s environment and waterways cannot be tolerated. If found guilty of these appalling acts, those charged must be prosecuted to the fullest extent of the law. The oil and natural gas industry speaks with one voice in condemning these unthinkable acts and blatant disregard for the environment.”

NOTE: A press release from Commonwealth’s Acting Attorney General announcing these charges, ranging from 2003 and 2009, is available HERE.

ICYMI — “Friends of the Marcellus Shale” Rally Support for Responsible Natural Gas Development

• · An hour before the hearing began, a group calling itself “Friends of the Marcellus Shale” held a rally that drew about 40 people to the portico of the City-County Building, next to the courthouse on Grant Street. “Say yes to Marcellus,” they chanted. Asked why they were there, rally participants talked about jobs and spin-off economic benefits that Marcellus Shale drilling have brought to the region. (Pittsburgh Post-Gazette, 3/11/11)

• Natural gas worker Robert Henwood: “It comes down to jobs and our families. … I just had a baby, he’s two months old and I want to feed him.” (KDKA-TV, 3/10/11

Supporters of drilling demonstrate on Thursday evening in front of the City County Building, Downtown,

while a public hearing is conducted before Allegheny County Council. (Tribune-Review, 3/11/11)

• Terry Clark, of Arlington Heights, said natural gas production created a win-win situation. “It creates jobs, helps us with our energy problems and boosts tax revenues,” the retired Pittsburgh firefighter said. Joe Myzak said he had experienced the practical benefits of the gas boom. His company, Myzak Hydraulics of Houston, Pa., which rents heavy equipment to the industry, has grown from 12 to 52 workers in two years, he said. (Pittsburgh Post-Gazette, 3/11/11)

• · Natural gas worker Mike Yilit: “You reap the benefits of it. It’s a natural resource. In Western Pennsylvania…there are 40,000 jobs that have been created.” (WPXI-TV, 3/10/11)

• State-of-the-art technologies, transparency and strict regulation are assuring that natural gas drilling is being done responsibly in southwestern Pennsylvania, Steve Forde told council. He is policy and communications director for the Marcellus Shale Coalition, an industry group. Mr. Forde said he had personal reasons for wanting to assure that extraction is done safely. He, his wife and two young daughters make their home in Cranberry. (Pittsburgh Post-Gazette, 3/11/11)

* * To view more pictures from yesterday’s “Friends of Marcellus” rally,

visit the Marcellus Shale Coalition’s Facebook page. * *

* * * Interested in becoming a “Friend of the Marcellus”? Join our team today.

MCLEAN, Va. (March 10, 2011) — Science Applications International Corporation (SAIC) announced today that it has joined the Marcellus Shale Coalition (MSC) as an associate member in order to provide technical expertise and demonstrate the company’s strong commitment to the natural gas industry. SAIC has a solid understanding of the multidiscipline permitting, regional geology, water resources/management, engineering, and site investigation/remediation requirements for exploration and development in the Marcellus Shale.

“SAIC is driven to help tackle the growing need for a clean, reliable, and secure energy supply while addressing our concern for the environment and preserving our natural resources. By becoming a member of the MSC, we will be able to apply our business acumen and technical expertise to further the advancement of natural gas production while fostering the MSC’s commitment to responsible gas extraction in the Marcellus region,” said Herschel Roberts, SAIC’s Water, Environment, and Transportation operations manager.

SAIC has supported oil and gas companies nationally and within the Appalachian Basin for more than 30 years and has extensive experience providing solutions to companies that are developing natural resources in the Marcellus Shale footprint. With four Pennsylvania offices, the company has performed a broad array of science, engineering, and compliance services for exploration and production firms, midstream firms, and service providers in the Marcellus shale area.

To learn more about production of natural gas from the Marcellus shale, visit www.marcelluscoalition.org.

NOTE: Click HERE to view this release on SAIC’s website.

Canonsburg, PA – At a meeting scheduled for tomorrow, the Allegheny County Health Department (ACHD) will consider and review a set of recommendations to enhance transparency, streamline permitting processes and strengthen overall enforcement, which, taken together, aim to increase the region’s air quality. These Environmental Air Quality Task Force recommendations were released in a December 2009 report.

“Our industry supports increased transparency and a common sense, workable regulatory framework at the county level that is consistent with state regulations,” said Kathryn Klaber, president and executive director of the Marcellus Shale Coalition (MSC).

The Task Force reviewed the following areas within ACHD’s Air Bureau, seeking to determine if the current regulatory structure “facilitated, challenged, or compromised” the delivery of effective and efficient operations:

• County air quality regulations;
• Permitting and appellate process;
• Enforcement;
• Air quality monitoring; and
• Organizational design.

“If these recommendations are implemented and ACHD is able to modernize its current air quality regulatory framework, our industry is confident that environmental, public health and economic benefits associated with shale gas development all will progress together,” noted Klaber, who served as a Task Force member.  “The natural gas industry is committed to partnering with key stakeholders, community members and the ACHD to advance the Task Force’s important work.”

In August 2008, Allegheny County executive Dan Onorato created an Environmental Air Quality Task Force. The group’s mission was to review the county’s air quality programs and provide recommendations to enhance efficiencies. Given the interdependence of the county and state governments with respect to air quality management, it was the Task Force’s charge to identify the effective management tools to meet the needs of the community.

Leading industry group announces $100k fund to heighten water monitoring, establishment of Energy Research Collaborative

Canonsburg, PA – As the Pennsylvania Department of Environmental Protection (DEP) unveiled a sweeping set of water quality monitoring results from November through December of 2010 associated with Marcellus Shale development across the Commonwealth, the Marcellus Shale Coalition (MSC) today announced a number of steps it is taking to further safeguard the environment as responsible energy production continues in the region. According to DEP, “All samples showed levels at or below the normal naturally occurring background levels of radioactivity.” Of the results, acting DEP secretary Michael Krancer says: “Here are the facts: all samples were at or below background levels of radioactivity; and all samples showed levels below the federal drinking water standard for Radium 226 and 228.”

“These fact-based results are not only encouraging, but they also underscore how closely and aggressively state regulators monitor water use and management associated with the development of clean-burning natural gas from the Marcellus Shale. As acting DEP secretary Krancer reinforced, it’s imperative that facts serve as the foundation of these ongoing conversations. These findings also address a host of recently raised claims in a series of intellectually dishonest news reports,” said Kathryn Klaber, president and executive director of the MSC.

Klaber noted that Pennsylvania’s shale gas industry is recycling more produced water each month, significantly reducing disposal to DEP permitted treatment plants and the Commonwealth’s waterways. As in other industries, water that is not recycled is treated in accordance with strict regulations to remove solids prior to permitted discharge. The landfills to which these solids are transported are also highly regulated and monitored for radioactivity.

Following today’s DEP notice, the MSC announced its own plans to further ensure that Pennsylvania’s drinking water supplies and natural resources are protected, while underscoring the importance of transparency during the ongoing development of the Marcellus Shale.

• The MSC announced the creation of a $100,000 fund to help support heightened water testing associated with ongoing Marcellus natural gas development and water treatment.
• The MSC also will facilitate an Energy Research Collaborative, including representatives from academia, government, industry, and other key stakeholders, to advance the science across the many disciplines associated with responsible shale gas development. This collaborative will focus on areas in need of more fact-based investigation, beginning with the important considerations around naturally-occurring radioactive material (NORM).

“The MSC’s Guiding Principles emphasize our commitment to state-of-the-art environmental protections, as well as continuously improving our practices in ways that increase transparency,” continued Klaber. “With these common sense obligations in mind, we’re pleased to announce the creation of a $100,000 industry-funded account aimed at heightening water testing and monitoring efforts at municipal authorities and other water treatment facilities. Coupled with our establishment of a diverse, multi-discipline Energy Research Collaborative, we remain as committed as ever to protecting our environment for our children and grandchildren and getting this historic opportunity right in the Marcellus.”

Canonsburg, PA – Pennsylvania leads the nation in recycling water used to produce clean-burning natural gas from shale formations – a process that has been refined, enhanced, and expanded widely over the past year. At the same time, Pennsylvania has regulations and laws in place to ensure water is managed effectively and in a way that protects the environment. These policies are clear, straightforward and the toughest in the nation. A recent review of Pennsylvania’s oil and natural gas regulatory program by the non-profit, multi-stakeholder group STRONGER determined that the state’s oversight of Marcellus development is “well-managed.”

While the New York Times raised some valid points in Sunday’s story — particularly on the issue of increased radium testing, something the Marcellus Shale Coalition supports — the paper’s second installment on produced water recycling is woefully unbalanced and inaccurate. Meanwhile, and not to be outdone, the Associated Press, in a story also filed this week, lodges a host of misleading, out of context claims about Marcellus wastewater management.

 AP Assertion: “Pennsylvania’s natural gas drillers are still flushing vast quantities of contaminated wastewater into rivers that supply drinking water…”

• Fmr. PA DEP Sec. John Hanger: “Here’s the reality: Every drop of tap water that was publicly treated is required to meet the safe drinking water standard.” (Allentown Morning Call, 1/5/11)
• “The new drilling wastewater rule…singles out drilling wastewater for the strongest requirements.” (John Hanger personal blog, 1/27/11)
• By design, the AP fails to mention this critical fact in its lead, but mentions these industry-leading regulations later in the story.

NYT Claim: “In Pennsylvania, for example, natural-gas companies recycled less than half of the wastewater they produced during the 18 months that ended in December, according to state records.”

• But later in the piece, the reporter concedes “the amount reported recycled in the past six months is roughly 65 percent of the total produced, up from roughly 20 percent during the 12 months before that.” As of October 2009, only one Marcellus operator was recycling water across their operations while others were still in the initial phases – so why does the Times focus on recycling data going back 18 months?
• “According to production reports due Feb. 15 and posted last week…Marcellus Shale operators directly reused 6 million barrels of the 10.6 million barrels of waste fluids produced from about 1,500 different wells between July and December. At least an additional 978,000 barrels were taken to facilities that treat the water and return it to operators for reuse.” (Scranton Times-Tribune, 2/27/11)
• “The amount reused or recycled is about seven times larger than the 1 million barrels of wastewater Marcellus Shale drillers said they directly reused during the 12 months between July 2009 and June, the first time the drillers’ waste reports were made publicly available on the website.” (Scranton Times-Tribune, 2/27/11)
• “The majority of companies are working toward reusing 100 percent of their flowback water for several reasons. Environmentally it makes sense, and economically it makes more sense,’ [Penn State hydrologist Dan] Yoxtheimer said.” (Pittsburgh Post-Gazette, 3/1/11)
• “Of the 10.6 million barrels of wastewater that gushed from the wells in the final six months of 2010, at least 65 percent was recycled, a dramatic increase from previous years, when little or no recycling took place.” (Associated Press, 3/1/11)

AP Assertion: “They are unable, however, to remove the salty dissolved solids and chlorides that the wastewater picks up as it travels through the shale beds. There have been concerns about the salt levels rising in some Pennsylvania rivers that supply drinking water.”

• “The water that’s coming out of the tap in Pennsylvania is meeting the safe water drinking standards when it comes to total dissolved solids,” said Hanger. “Every single drop that is coming out of the tap in Pennsylvania today meets the safe drinking water standard.” (KDKA, 1/4/11)
• “The new permitted limit for discharges of wastewater from gas drilling is 500 mg/L of total dissolved solids and 250 mg/L for chlorides. All new and expanding facilities that treat gas well wastewater must now meet these discharge limits.” (Hanger blog, 1/27/11)

NYT Claim: “More than 90 percent of well operators in Pennsylvania use this process, known as hydrofracking, to get wells to produce. It involves injecting water mixed with sand and chemicals at high pressures to break up rock formations and release the gas.”

• The fact is 100 percent of shale gas wells in the U.S. are hydraulically fractured to enhance the flow of gas. The 90 percent figure – just one of the many inaccuracies in the story – perhaps refer to the percentage of total oil and natural gas wells fractured in the U.S.
• In failing to provide proper context, the Times does not indicate the fact that more than 99.5 percent of the fluids used in the fracturing process are water and sand. The small portion of additives used prevent bacteria and corrosion from forming in the well-bore, and reduce friction during fracturing operations.

NYT Claim: “Wells also create waste that is not captured by recycling, because operators typically recycle only for the first several months after a well begins producing gas.”

• All Marcellus shale natural gas sites in Pennsylvania are equipped with storage tanks that capture residual wastewater after the initial flow-back. Like all wastewater, this water is treated and disposed by reuse and recycling, deep underground injection wells or treatment and surface disposal.

NYT: Within hours, the Times was forced to make at least two factual changes to the story, including at least one direct quote:

• Original quote from Dr. Radisav Vidic, engineering professor, University of Pittsburgh: “The wastewater that comes up from the well will, without a doubt, increase to some degree in radium and other radionuclides with each new fracking.”
• Updated: “The wastewater that comes up from the well will likely increase to some degree in many contaminants such as salts and possibly radium and other radionuclides with each new fracking. But the data is very limited on this issue so not much is known.”
• Original statement regarding abandonment of natural gas wells in Pennsylvania: “Though the amount of wastewater decreases over time, the wells can continue to ooze for decades, long after many of them are abandoned.”
• Updated: “Though the amount of wastewater decreases over time, the wells can continue to ooze for decades after they have been hydrofracked. There are regulations, however, that govern how gas wells are plugged and abandoned.”
• Marcellus Sale natural gas wells do not “ooze” for any period of time. All liquids that flow to the surface as natural gas is produced are captured in DEP regulated tanks. When a well no longer produces, it’s plugged according to strict guidelines laid out by the Pennsylvania Oil and Gas Act, section 601.210 and 25 Pa. Code Sec. 78.91 et seq.