Fracking in Pennsylvania

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Fracking in Pennsylvania
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Regulation
Regulatory agency Department of Environmental Protection; Office of Oil and Gas Management
Estate ownership Split[1]
Resources
Fossil fuels present Oil, natural gas and coal[2]
Fracking
Other state fracking pages
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Fracking in Pennsylvania depends on available energy resources, the location of these resources, applicable laws and regulations, politics, and the power of environmental and industry groups. Decisions by policymakers and citizens, including state and local governments and ballot initiatives, affect if and how fracking occurs in a state.

Fracking background

See also: Fracking

Hydraulic fracturing, or "fracking," is the process of injecting fluid--mostly water and sand, but with additional chemicals--into the ground at a high pressure to fracture shale rocks and release the oil and natural gas inside.

Recent technological advances in oil and gas drilling--horizontal drilling and hydraulic fracturing--have created a wealth of opportunities and challenges for states with fossil fuel reserves that can be accessed through the combination of these two technologies. The increased use of fracking has been an economic boon for many states, not only those with fracking, but also those with supporting industries, such as frac sand mining or associated machinery manufacturing.

Opponents of fracking argue that the potential negative environmental and human health impacts could be significant. Although wells have been fracked for over 65 years in the United States, concerns have been raised about whether federal, state and local regulatory agencies can keep up with the recent rapid increase in fracking activity, and adequately protect the environment and human health. As with any type of energy extraction, either traditional or renewable, there are economic, environmental and political tradeoffs.

History

Pennsylvania is home to the world's first commercial oil well, the Drake Well, which was drilled in 1859 in Venango County. Natural gas production in the state dates to 1881.[3]

Economic impact

The use of fracking, often in combination with horizontal drilling, has made it possible to extract supplies of oil and natural gas that were once economically unfeasible to extract. This has led to significant growth in the domestic oil and gas industry, and in the supply of domestically produced oil and natural gas. The growth in activity has impacted the economy in direct ways, such as increased capital investments (from both the U.S. and other countries), royalty and lease payments, and government revenues in the form of fees and taxes. The increased supply of natural gas and oil has also affected electricity prices, manufacturing, service industries and employment. In many places, fracking has increased employment in the mining (oil and gas) sector and supporting industries, such as the restaurant and housing sectors. Consumers and manufacturers have also benefitted thus far from lower oil and natural gas prices, and increased demand for pipeline, drilling and other ancillary equipment. As demand for natural gas and oil grows, however, prices are expected to rise.[4]

Taxes, fees and revenue

Fracking booms can increase local government revenue through increases in property and sales taxes, which can help compensate for the costs detailed below. The primary revenue streams from fracking--mineral leasing revenues and severance taxes--go to state and federal governments. As of June 2013, Pennsylvania had a Unconventional Gas Well Fee that changes annually based on the price of natural gas. The revenue from this tax is distributed as follows:

  • $7,500,000 to County Conservation Districts
  • $1,000,000 Pennsylvania Fish and Boat Commission
  • $1,000,000 Public Utility Commission
  • $6,000,000 Department of Environmental Protection
  • $750,000 PA Emergency Management Agency
  • $750,000 Office of State Fire Commissioners
  • $1,000,000 Department of Transportation
  • $2,500,000 Marcellus Legacy Fund

Once the earmarked funding has been distributed 60 percent goes to "counties and municipalities through the unconventional gas well fund." The remaining 40 percent is "allocated for statewide initiatives through the Marcellus Legacy Fund."[5]

Royalties and land sales

The United States is one of the few countries where property owners can own the right to use and build on their land, known as surface rights, but they may not own the rights to the minerals located under their property. Depending on the state the mineral rights may have been sold in the past and may now belong to someone other than the surface owner. In fact, those mineral rights may belong to more than one individual, a company, or many individuals, who now have the right to extract those minerals, and in some states this can happen without the permission of the property owner. This can cause tension between the mineral owner, or whoever is leasing the mineral rights, and property owner.[6]

Economic impact studies

Below is a study about the economic impact of the oil and natural gas industry (also categorized as the mining industry in some studies) in Pennsylvania. Both the author and sponsor of the study have been listed.

Study for the American Petroleum Institute

Economic modeling
IMPLAN and REMI are two econometric modeling systems used in both the private and public sectors to predict economic outcomes of policy changes. While these systems are widely used and highly respected, their results are theoretical and may not be universally accepted.

Because the oil and gas industry has grown so rapidly, there is not a wealth of data regarding its economic impacts. Instead, economists use forecasting models, such as IMPLAN and REMI, to predict the impact increased fossil fuel extraction is having on the economy. These studies usually measure both direct impacts, i.e., the jobs and income being added within the oil and gas industry and indirect impacts, i.e., jobs created throughout the supply chain. These studies also include induced impact, i.e., jobs created through increased spending due to growth in the industry.[10]

The following data are taken from a study done by PricewaterhouseCoopers LLP (PwC), a research consulting firm, for the American Petroleum Institute about the economic impact of the oil and natural gas industry in 2011 in Pennsylvania. According to the PwC study, the oil and gas industry added $34.65 billion in total value in 2011, including direct, indirect and induced value. Of this $13.17 billion, or 2.2 percent of the state's total value added was direct, $10.27 billion was indirect and $11.22 billion was induced. In total, this accounted for 5.8 percent of the state's total value in 2011.[10]

Employment

The PwC study attributes 338,986 jobs, or 4.7 percent of employment in Pennsylvania in 2011, to jobs created directly by, indirectly by, or induced from, the oil and natural gas industry. The industry directly employed 100,716 people, or 1.4 percent of state total employment. Indirectly the industry employed 97,219 people and induced 141,051 jobs.

Direct, indirect and induced labor income, according to this study, was $19.55 billion, totaling 5.1 percent of Pennsylvania's labor income in 2011. Direct labor income from the mining sector was $6.52 billion, or 1.7 percent of the state's total. Indirect labor income totaled $6.4 billion and induced labor income was $6.63 billion.[10]

Environmental impact

Because of the sudden and unprecedented growth in fracking across the United States, getting high-quality, unbiased, state-specific information on the environmental impacts of fracking can be difficult. Most studies that would fit those first two qualifications are government studies that focus on the nation as a whole. As such, much of the information that follows in this section may only apply generally to the state. State-specific information has been added where possible.

Air

As with any type of energy extraction, there are several areas of risk when it comes to air quality. In the case of fracking, these risks include air pollutants such as volatile organic compounds (VOCs) and methane. Some environmental groups have raised concerns that methane could be leaked during the extraction process, resulting in unnecessary pollution.[11][12] Most of this pollution occurs during the well completion phase. Fracking operations can also emit known carcinogens, which have been linked with increased rates of cancer.[13]

Emissions

With regard to carbon dioxide, when natural gas is used to generate electricity in power plants, it produces fewer carbon emissions than coal-fired power plants. According to a 2014 study by the National Oceanic and Atmospheric Administration, "as a result of the increased use of natural gas, CO2 emissions from U.S. fossil-fuel power plants were 23% lower in 2012 than they would have been” without the increase in natural gas use.[14] During the extraction process, however, methane is emitted, and methane actually traps 20 times more carbon dioxide than other greenhouse gases. Nevertheless, according to the International Energy Agency (IEA), CO2 emissions in the United States dropped by 3.8 percent in 2012, due in large part to the "increased availability of natural gas, linked to the shale gas revolution."[15][14]

A 2014 report from the U.S. Environmental Protection Agency found a decrease of 3.3 percent in overall greenhouse gas emissions and a 12 percent decrease in methane emissions from 2011 to 2012. Natural gas extraction is the second largest producer of methane, after cattle.[12][16]

Earthquakes

Policypedia
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State energy policy

State fracking policy

Energy policy terms

Fracking in the U.S.

Energy use in the U.S.

Energy policy in the U.S.


See also
Local fracking on the ballot

Statewide fracking on the ballot

The central and eastern United States have been experiencing an increased number of earthquakes over the last few years, according to the U.S. Geological Survey (USGS), the government agency responsible for such data. Studies from the USGS have not found fracking directly responsible for this increase in felt earthquakes; however, the USGS is looking into regulations that would use seismic data to determine thresholds dictating when and where fracking can occur.[17] There is a growing body of evidence suggesting that this growth in the number of earthquakes has been caused by the increased use of injection wells to dispose of fracking wastewater. While fracking has been rarely known to cause earthquakes, there is an established scientific link between earthquakes and the disposal of fluids in deep, underground injection wells. Once a well has been fracked, the water returned to the surface is called wastewater, and contains large amounts of salt and other contaminants.[18] Some of this water can be recycled, but that water which can't be recycled is often stored in injection wells. These injection wells are generally considered the safest and most cost-effective place for wastewater to be stored. Injection wells are located thousands of feet underground and are encased in cement. Multiple drilling wells often rely on one disposal well for wastewater storage. The U.S. Environmental Protection Agency estimates there are 144,000 of these wells across the United States receiving 2 billion gallons of frack fluid per day.[17][19]

Induced seismology, or man-made earthquakes, have been around for decades and can be caused by mining, damming rivers and injecting fluids into underground wells. Earthquakes are caused by injection wells when water pumped into underground wells causes the faults under the earth to slip. Even though scientists at the USGS have been able to cause earthquakes intentionally by carefully injecting liquid into the earth, the link between injection wells and earthquakes is not fully understood. One of the largest concerns for scientists and regulators is that they do not have the tools to predict whether wastewater will cause seismic activity. These concerns are compounded by the lack of knowledge about where faults are located across the central and eastern United States. The USGS is just beginning to map these areas in more detail in order to understand the seismic risks. As of June 2014, these earthquakes have typically been small, two or three in magnitude on the Richter scale, but at least one scientist has raised concerns that earthquakes could grow in intensity if old injection wells continue to be used for storage.[17][18]

Water

When it comes to water protection and fracking there are four main areas of risk: the depletion of fresh water sources, spills and leaks of fracking fluid into water, mismanaged produced water and flowback, and stormwater pollution. Stormwater, flowback, produced water and wastewater can be harmful because they contain total dissolved solids and naturally occurring radioactive materials. Because of the recent rapid growth in fracking, there are still many uncertainties about the effects of fracking on water. There are studies that link fracking to groundwater contamination, but they remain controversial. The U.S. Environmental Protection Agency is releasing a report in spring 2015 on the potential impacts of fracking on drinking water, and is working on effective programs for managing these potential risks.[13][20]

One of the main criticisms of fracking is that the process uses a disproportionately large amount of water. Up to 10 million gallons of fresh water may be required to frack one well. A 2014 study from the Bureau of Economic Geology at the University of Texas found, however, that the amount of water used in a traditional well, versus a hydraulically fractured well, is not appreciably different. According to one of the researchers, Dr. Bridget Scanlon, "The water used to produce oil using hydraulic fracturing is similar to the water used in the U.S. to produce oil using conventional techniques." The only difference between the amount of water used during the two oil or gas production techniques, is when in the process water is used. The study was funded by the Alfred P. Sloan Foundation.[21][22]

A 2014 study analyzed water well samples from both the Marcellus and Barnett Shales, located in Pennsylvania and Texas, respectively. Researchers found that higher than expected levels of hydrocarbon gases, including methane, had not been caused by fracking, or horizontal drilling, but by well integrity problems. Researchers gathered 113 samples from Pennsylvania and found seven instances of fugitive gas contamination, known as elevated hydrocarbon levels. In Texas, 20 wells were sampled and one instance of fugitive gas contamination was found. Of these eight cases, half were identified by the researchers as having likely been caused by poor well cementing. Three cases were associated with faulty casing, and the final well experienced underground well failure. According to one industry representative, well integrity failure is extremely rare, "occurring in a fraction of 1% of wells." This research, published by the Proceedings of the National Academy of Sciences, came on the heels of another peer-reviewed paper by Echelon Consulting; both of these studies concluded that methane found in wells above the Marcellus shale occurred naturally and was not the product of fracking.[23][24]

Health

Because of the recent, rapid growth of fracking, little is known about the potential impacts to human health. Government agencies dealing with human health issues have raised concerns about some chemicals that can be released during the fracking process, including VOCs. The Centers for Disease Control are working with the EPA and federal, state and local agencies to better understand potential impacts.[25][26]

Socioeconomic impact

Fracking can also present challenges to communities. Increased oil and natural gas production happens in boom or bust cycles, and often these cycles disproportionately occur in rural communities. Large scale fracking booms can also lead to increases in crime, such as substance abuse, sex trade and domestic abuse. An influx of oil and gas workers also strains housing and traffic resources. This lack of housing can push oil and gas workers into so-called 'man camps,' which are "clusters of mobile homes, RVs, and trucks," or into hotels. A fracking boom also puts heavy traffic on roads, which can strain infrastructure, increase traffic accidents, and increase the likelihood of oil spills. Local governments respond by hiring more police, social workers, health care workers and emergency response personnel, thereby spending more of their budgets on roads and social programs. Currently, much of the tax revenue generated by the oil and gas industry goes to the federal and state government, not the local governments.[13]

Departments, agencies and organizations

  • The Office of Oil and Gas Management (OOGM), an agency with the Pennsylvania Department of Environmental Protection, is "responsible for the statewide oil and gas conservation and environmental programs to facilitate the safe exploration, development, recovery of Pennsylvania's oil and gas reservoirs in a manner that will protect the commonwealth's natural resources and the environment." OOGM is instrumental in developing and implementing regulatory policy and programs, issuing permits and conducting inspections.[27]
  • The stated mission of the Pennsylvania Department of Environmental Protection (PDEP) is "to protect Pennsylvania's air, land and water from pollution and to provide for the health and safety of its citizens through a cleaner environment." Regulatory programs include:[28][29]
    • Waste, Air, Radiation and Remediation
    • Water Management
    • Active and Abandoned Mine Operations
    • Oil and Gas Management

Major organizations

  • The Pennsylvania Independent Oil and Gas Association (PIOGA) is a non-profit organization and trade group that represents members of the state's oil and gas industry. The group was formed in 2010 by the merger of the Pennsylvania Oil and Gas Association and the Independent Oil and Gas Association of Pennsylvania. PIOGA seeks to "be recognized as the leading Appalachian oil and gas trade association, promoting an environment favorable to the growth of the industry and developing Pennsylvania as an attractive state for oil and gas development." PIOGA is listed as a "cooperating association" by the Independent Petroleum Association of America, which is a national trade group that "advocates its members' views before the U.S. Congress, the Administration and federal agencies."[30][31][32]
  • Pennsylvania Voters Against Fracking is an anti-fracking group associated with the Food and Water Watch Fund. The group is asking 2014 gubernatorial candidates to sign a pledge to "cease issuing new hydraulic fracturing well permits until such time as the practice aligns with the people’s 'right to clean air, pure water, and to the preservation of the natural, scenic, historic and esthetic values of the environment' as stipulated by the Pennsylvania Constitution."[33][34]

Energy consumption

For more information on energy consumption in Pennsylvania, see "Energy policy in Pennsylvania"

Most of the energy consumed in Pennsylvania in 2011 was consumed by the industrial sector. The residential and transportation sectors each made up one-fourth of the total energy consumption. The commercial sector consumed less than 20 percent of the total energy consumed.[2]

Pennsylvania mainly heats its homes with natural gas, over 50 percent of homes are heated in this way. Electricity is used to heat a little over 20 percent of homes in the state, and fuel oil is close behind at 19 percent.[2]

Consumption of energy for heating homes in Pennsylvania
Source Pennsylvania 2011 U.S. average 2011
Natural gas 51% 49.5%
Fuel oil 19.7% 6.5%
Electricity 20.7% 35.4%
Liquid Petroleum Gases (LPG) 3.6% 5%
Other/none 5.1% 3.6%

Pennsylvania produced almost 4,000 trillion BTU of energy in 2011. About 40 percent of the energy produced is coal, and about 35 percent is produced from natural gas. Pennsylvania is the second largest producer of electricity in the nation, only Texas produces more electricity.[2]

Where electricity comes from in Pennsylvania[35]
Type Amount generated (MWh) % of state** % of U.S.**
Petroleum-fired 8 0.05% 0%
Natural gas-fired 3,880 24.76% 0%
Coal-fired 5,271 33.64% 0%
Nuclear 5,875 37.49% 0%
Hydroelectric 146 0.93% 0%
Other renewables 438 2.79% 0%
Total net electricity generation 15,671 100% 0%
**Note: Because the U.S. Energy Information Administration (EIA) does not include all of a state's energy production in these figures, the EIA totals do not equal 100 percent. Instead, we have generated our own percentages.

News items

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See also

External links

References

  1. Pittsburgh Business Times, "Pa. laws on mineral rights complicate land-use issues," July 19, 2013
  2. 2.0 2.1 2.2 2.3 U.S. Energy Information Administration, "Pennsylvania Profile Analysis," updated December 18, 2013
  3. Pennsylvania Independent Oil and Gas Association, "PA Oil and Gas," accessed July 25, 2014
  4. IHS, "US unconventional oil and gas revolution to increase disposable income by more than $2,700 per household and boost US trade position by more than $164 billion in 2020," accessed September 17, 2014
  5. National Conference of State Legislatures, "State Revenues and the Natural Gas Boom: An Assessment of State Oil and Gas Production Taxes," June 2013
  6. Geology.com, “Mineral Rights,” accessed January 29, 2014
  7. IMPLAN, "IMPLAN€'s History of Expert Economic Data," accessed September 17, 2014
  8. REMI, "About Us," accessed September 17, 2014
  9. REMI, "Clients," accessed September 17, 2014
  10. 10.0 10.1 10.2 PricewaterhouseCooper LLP, "Economic Impacts of the Oil and Natural Gas Industry on the US Economy 2011," July 2013
  11. University of Oklahoma, "Hydraulic Fracturing and Water Resources," accessed March 15, 2014
  12. 12.0 12.1 Senate Committee on Energy and Natural Resources, "Written Testimony of Frances Beinecke," accessed March 2, 2014
  13. 13.0 13.1 13.2 Stanford Law School Student Journals, "Local Government Fracking Regulations: A Colorado Case Study," January 2014
  14. 14.0 14.1 Cooperative Institute for Research Environmental Sciences,, "New study: U.S. power plant emissions down," January 9, 2014
  15. International Energy Agency, "Redrawing the Energy-Climate Map," June 10, 2013
  16. The Wall Street Journal, "Talk About Natural Gas: Cow Belches Top Methane List," February 26, 2014
  17. 17.0 17.1 17.2 U.S. Geological Survey, "Man-Made Earthquakes Update," January 17, 2014, accessed March 10, 2014
  18. 18.0 18.1 National Geographic, "Scientists Warn of Quake Risk From Fracking Operations," May 2, 2014
  19. National Public Radio, "How Oil and Gas Disposal Wells Can Cause Earthquakes," accessed June 2, 2014
  20. U.S. Environmental Protection Agency, "Natural Gas Extraction - Hydraulic Fracturing," accessed March 10, 2014
  21. WOAI, "Research: Fracking Uses No More Water Than Traditional Oil Production," October 6, 2014
  22. Bureau of Economic Geology, "US Shale Reserves and Production Bureau Shale Gas Study," October 6, 2014
  23. Proceedings of the National Academy of Sciences of the United States of America, "Noble gases identify the mechanisms of fugitive gas contamination in drinking-water wells overlying the Marcellus and Barnett Shales," September 15, 2014
  24. USA Today, "Study: Faulty gas wells, not fracking, pollute water," September 15, 2014
  25. U.S. Department of Health and Human Services, "Garfield County," March 13, 2008, accessed March 10, 2014
  26. Centers for Disease Control, "Review of Federal Hydraulic Fracturing Research," April 26, 2013, accessed March 10, 2014
  27. Pennsylvania Department of Environmental Protection, "Oil and Gas Programs," accessed July 25, 2014
  28. Pennsylvania Department of Environmental Protection, "Organization Chart," accessed July 25, 2014
  29. Pennsylvania Department of Environmental Protection, "About DEP - Mission Statement," accessed July 25, 2014
  30. Pennsylvania Independent Oil and Gas Association, "Who We Are," accessed July 26, 2014
  31. Independent Petroleum Association of America, "About IPAA," accessed July 16, 2014
  32. Independent Petroleum Association of America, "Cooperating Associations," accessed July 16, 2014
  33. Food and Water Watch Fund, "Pennsylvania Voters Against Fracking," accessed July 25, 2014
  34. EcoWatch, "Anti-Fracking Group Pressures Pennsylvania Governor Candidates For Moratorium Commitments," April 16, 2014
  35. U.S. Energy Information Administration, "Pennsylvania Profile Overview," accessed February 5, 2014