Thursday, July 10, 2014





Straightforward action required for shale industry COMMENTARY Mike Uretsky


February 16. 2013 12:13AM
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PENNSYLVANIA HAS one of the largest natural gas deposits in the world. Its responsible development can enhance national security and heighten economic recovery for our country, state and citizenry – all while moving us toward a sounder environment.


While Gov. Tom Corbett's budget proposals and related Comprehensive Shale Legislation outline successes, plans for recovery and updates to shale development regulations, other actions are needed to continue the momentum. These actions are straightforward and can yield significant benefits.


Some benefits already are being realized. Increased use of gas from domestic sources is reducing dangerous dependence on foreign oil sources that are subject to both political conflicts and growing competition. A recent Penn State study shows that gas exploration already has added 156,000 jobs to the Pennsylvania economy with the potential of another 250,000 by 2020.


Although Pennsylvania has reaped benefits and its regulatory structure is a model for others, there are still areas that need to be addressed.


Fears need to be addressed. Many people are scared of hydraulic fracturing and its effects. While few of these fears are supported by good science and experience, they are real to many people. Both industry and the government must explicitly recognize their existence and continually demonstrate that they are being addressed in a responsible manner.


The regulatory structure needs to be streamlined. The good news is that all critical aspects of gas exploration (seismic acquisition, site selection, construction, drilling and completion, well startup, production and release) are regulated by a combination of federal, state and local agencies. As shown in the "Governor's Marcellus Shale Advisory Commission Report," these regulations involve more than 11 organizations – each with its own regulations and bureaucracy. The complexity of this structure makes understanding the regulations difficult, and it leaves open opportunities for problems to "drop between the cracks." It also creates both unnecessary expense and time delays.


These problems could be avoided by establishing a state-level organization – a single focal point – with responsibility for overseeing the entire gas development process.


The thrust of the regulations must be revised to encourage ongoing improvements. Current regulations focus on what can and cannot be done. They ignore focusing on what they are trying to achieve. A natural consequence is that operators are discouraged or prevented from introducing technological advances that could improve the processes and profitability. The existing regulatory structure should be reviewed and revised to focus on intent.


Gas exploration in some portions of the state is subject to additional regulations imposed by interstate commissions (e.g., the Susquehanna River Basin Commission or the Delaware River Basin Commission). These organizations set their own regulations and administrative structures, sometimes ignoring explicit agreements that they have with the states. This can result in problems that damage both the state and its regulations.


As an example, the Delaware River Basin Commission is holding Northeastern Pennsylvania hostage because it has established a moratorium on gas exploration pending issuance of revised regulations and supporting procedures. They have been unable to develop these regulations despite two years of work and they have no published timetable for getting closure. Pennsylvania and its residents are being hurt, and the Corbett administration has the responsibility to take strong action that will force closure.


Local communities bear the burden of natural gas exploration. Their physical and human infrastructures must deal with the sudden growth of new industry, an influx of workers, displaced residents, emergency services, etc. The Corbett administration has an obligation to make sure that there are community plans building on the opportunities provided by natural gas exploration.


All of the above suggestions are straightforward. They can be implemented quickly and yield significant benefits.




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