The oil and gas industry has always been an easy target for ambitious politicians. Jimmy Carter based much of his 1976 presidential campaign on using the industry as a boogeyman, blaming it for embargoes and price shocks that it had had nothing to do with. Barack Obama made the industry a target in every one of his State of the Union addresses, proposing to repeal every oil and gas-specific treatment in the tax code year after year.
More currently, presumptive Democratic nominee Joe Biden has at various times during the course of this campaign promised to ban hydraulic fracturing, end the use of oil and natural gas in the United States and make it impossible to drill new wells on federal lands, all of which plays great to the party’s voter base.
The utility of bashing “big oil” has historically been most advantageous during times of high gasoline prices, as that has been a necessity for the vast majority of drivers. But even in this current time of very low prices at the pump, one politician in Pennsylvania, Democrat Attorney General Josh Shapiro, is apparently attempting to leverage a campaign of assaulting that state’s natural gas producers to further his own political ambitions.
On June 25, Shapiro released a report from a two-year grand jury investigation which largely uses anecdotal allegations to lambast the state’s industry and regulators for a variety of sins both real and not-so-real. In constructing his report the Attorney General managed to either ignore or misstate at least a dozen important facets of Pennsylvania law.
The state’s own Department of Environmental Protection (DEP) found the report so lacking that it filed its own detailed official response in which it takes the AG to task for failing to provide jurors with “accurate information about the existing laws, the scientific and policy underpinnings of the regulations, and the commitment of DEP staff to create and implement a comprehensive and effective regulatory program that protects the citizens and environmental resources.”
The DEP went on to say that the report is “critical of today’s DEP regulatory program while demonstrating little knowledge or understanding of it.” The agency also defended its employees, saying that “Together, they have fought battle after battle, before the General Assembly, in the regulatory review process, before the courts, and with the industry to craft and implement an effective regulatory program that protects the environment and the public health and safety. Those individuals should be recognized for their work and not indirectly denigrated by this investigation.”
David Spigelmyer, the President of the Marcellus Shale Coalition, was so taken aback by the factual errors in the Attorney General’s report that he began a letter sent to every member of the state’s General assembly by saying, “The sheer breadth of factual inaccuracies, misrepresentations, legal omissions and unsubstantiated allegations compel my response on behalf of the tens of thousands of Pennsylvanians – your constituents – who take great pride in working to safely and responsibly develop the Commonwealth’s natural gas resources for the benefit of us all.”
Among other misstatements of fact, the report alleges that the industry “uses explosives” in hydraulic fracturing operations. This is simply not true, and obviously included in the report for alarmist purposes. [Note: Small explosive charges are used in perforating wells, a part of the well completion process that long pre-dates the development of hydraulic fracturing during the late 1940s.]
Shapiro also falsely alleges that companies who perform frac jobs are not required to disclose the chemicals used in the fracturing fluids, a controversy that the industry began addressing voluntarily on a national basis way back in 2010, was mandated by Texas and Colorado in 2011, and became mandated under Pennsylvania law by Act 13 in 2012. It is now required in every shale-producing state.
Spigelmyer also alleges that the report includes a number of anecdotal allegations without providing any factual basis to support them, adding that “The report fails to identify any specific instance that substantiates its claims of impacts, which conveniently means they cannot be directly refuted. Interestingly, there is no evidence that any member of the grand jury – or the Attorney General – has ever visited an active drilling or production site, pipeline construction site, compressor or processing facility.”
If accurate, that is a glaring omission of duty on Shapiro’s part. How can anyone in a position of authority stand in such harsh judgment of any business or industry without having engaged in any first-hand observations of its operations?
Moving from the ridiculous to the sublime, Shapiro contends that he doesn’t want to “ban” fracking in their state, yet his report recommends an onerous 2,500-foot setback rule copied from the infamous Colorado Proposition 112, which was resoundingly rejected by the voters of that state in the 2018 elections. As anyone with the most rudimentary understanding of the process and the state of Pennsylvania would understand, if you can’t drill a well within half a mile of any house, church, school, business office, convenience store or any other occupied dwelling, as well as any river, creek, lake or pond, then you have effectively banned drilling – and thus, fracking – in the state of Pennsylvania. The negative economic consequences that would result from that outcome would be harsh and would immediately impact every Pennsylvanian.
Obviously, the AG must fully understand that reality.
In traveling down this demagogic road, AG Shapiro does a disservice not just to the industry and its regulators, but also the citizens of his state. As the Attorney General, he has an obligation to know and enforce all of the laws and regulations of the state. Instead, he has invested two years at great cost to the taxpayer to do what, exactly? Produce a report that attempts to re-litigate cases from a decade ago and which doesn’t even get the current law right.
On the other hand, the AG did win the approval of actor/activist Mark Ruffalo, who responded to the report on Twitter, saying “[Josh Shapiro] is right. This never should have happened. Fracking companies have devastated PA & poisoned residents & PA Department of Environmental Protection was complicit.” Naturally, Mr. Shapiro responded with a Tweet of his own: “Thank you @MarkRuffalo for putting a spotlight on this issue. We need to listen to the Grand Jury’s recommendations and implement them to make sure we protect every Pennsylvanian’s right to clean air and pure water.”
Funny, the people at the DEP thought that was exactly what they’ve been doing all along.