The Price of Vigilance in the PennLive “Shale Bargin”

PennLive’s ‘Shale Bargain’ series a reminder of the price of vigilance:

The Shale Bargain: PennLive investigates Pennsylvania’s natural gas boom

From an Article by John L. Micek, PennLive.com, October 22, 2015

>>> Ten years into Pennsylvania’s natural gas boom, PennLive reporters Wallace McKelvey and Candy Woodall investigate how state regulators enforced environmental, health and safety standards for this multi-billion dollar industry. <<<

Have you ever been in the middle of reading something and found yourself just kind of nodding your head in recognition?

That’s been happening a whole lot this week as I’ve worked my way through “The Shale Bargain,” an investigation of Pennsylvania’s booming Marcellus shale natural gas industry written by PennLive reporters Wallace McKelvey and Candy Woodall.

If you haven’t read it yet, do yourself a favor and make the time to do just that. It’s eye-opening. And it’s a pretty terrific example of the kind of long-form journalism that everyone seems to (incorrectly) believe the Web has killed.

But back to shale …   And back to about 2004-2006. By then, we’d all heard the tales about the energy bonanza just below the hard ground of southwestern and northeastern Pennsylvania.

And if you were, as I was, among the cohort of journalists who heard those tales firsthand during the early years of the boom, and covered the story, then you heard them all the time. The cheerleading was relentless.

At a time when most Pennsylvanians were casting a hostile gaze at the Middle East, the idea that this natural gas-harboring rock beneath our feet could free us from the tyranny of foreign oil was too tempting to resist.

Sometimes you just need an object lesson in the price of vigilance.

And that’s how it was sold to policymakers. And woe betide anyone who questioned the industry’s wisdom. And it was sold – hard.

In 2011, for instance, I reported that driller Range Resources hosted a Super Bowl party for state lawmakers and other power-brokers at a ranch near Fort Worth, Texas as the the Pittsburgh Steelers faced the Green Bay Packers in nearby Dallas. Pittsburgh ended up losing 31-25.

The industry threw its money around, too. According to The Post-Gazette, Republicans reaped four times the campaign fund-raising windfall from the the industry than did Democrats.

During his 2014 campaign, energy interests poured more than $1 million into former Republican Gov. Tom Corbett’s campaign coffers, compared to $192,985 for DemocratTom Wolf, who ended up winning, StateImpact Pennsylvania reported.

But as new pick-ups popped up in driveways from Towanda to Connellsville, and once-vacant restaurants and hotels began filling with rig-workers, any suggestion that shale was anything less than an economic miracle worker was tough to refute.

And tax them? Forget it.

They’d fold up their rigs and kite off to Ohio or West Virginia or Texas or some other state where it was cheaper to do business, we warned. That has happened – but that’s because industry trends have pulled them that way, not because of a severance tax.

But the dire warnings coming from the industry would have you believe otherwise. “No other industry is being singled out like this one has been,” David Spigelmyer, the president of the hugely influential Marcellus Shale Coalition, told the PennLiveeditorial board this week. “When you’re writing $30 million checks for the impact fee and you’re being told you’re not paying your fair share, it’s pretty offensive.”

The rhetoric, combined with really low natural gas prices, worked. To this day, Pennsylvania doesn’t have a severance tax, though it does collect an impact fee, to the tune of about $200 million a year, to offset the public infrastructure costs of drilling. And, of course, it was perfectly safe.

Drillers, we were told, were responsible stewards of the environment. And while some of them certainly are, it’s easy to be skeptical of such claims. And they were backed up by the horror stories about drilling accidents and the massive fines levied in their wake.

But you need to go deeper than that, into the pages of history. There, you’ll find stories about Pennsylvania’s long and tortured relationship with natural resource exploration and exploitation. Drive north up Interstate 81 through Luzerne and Lackawanna counties and look out your driver’s side window. You can still see the remnants of the coal dust piles from the last energy boom.

In southwestern Pennsylvania, for decades, you didn’t have to look far to find the orange-colored streams that are the tell-tale indicator of a phenomenon known as acid mine drainage.

And in northwestern Pennsylvania, home to the first oil boom in the mid- to late-1800s, it’s still possible to stumble across what are referred to “orphaned” wells. In fact, the state Department of Environmental Protection has a whole program devoted to them.

So when McKelvey and Woodall, who spent six months working on this series, write that their investigation revealed “systemic” failures on the “the part of state regulators to enforce environmental, health and safety standards for the multibillion-dollar industry,” it is extraordinarily hard not to nod in recognition and think, “Well, here we go again.”

It’s a perception that the industry has fought equally hard to defeat. But it lingers nonetheless. “It’s easy to pick on companies that are considered Big Oil” Spigelmyer said. “It’s been easy to [vilify] this industry and say it that came from somewhere other than Pennsylvania. Everyone around my board table is from Pennsylvania.”

Look, there is no doubt that natural gas exploration has been a boon to the state’s economy. And there is also no doubt that it revitalized parts of the state that were ravaged by the collapse of Pennsylvania’s manufacturing sector.

Still, just how many jobs the industry is directly or indirectly responsible for, and how many are what’s known as “induced” because of drilling, remains a hot topic of discussion.

And you can lose weeks, as I once did, wading through the hundreds of pages of research on the subject.

But the industry has created jobs. And it is an economic engine. That’s true. But it’s also true that, as McKelvey and Woodall have reported, that it’s largely skated through the halls of power for a decade with no one there to say “No.” And it’s also true that government allowed this to happen, as my two colleagues thoroughly document.

And sometimes you just need an object lesson in the price of vigilance.

<< See also:  www.FrackCheckWV.net  >>