(Un)Conventional Thinking, Part 2

October 7, 2016By: Davitt Woodwell
PEC Blog

As of today, Pennsylvania finally has in place the core of a twenty-first century set of rules for the gas industry. It has taken three governors, four DEP secretaries, two state supreme court decisions, three sessions of the General Assembly, and around seven years, but it’s a start. The Chapter 78a rules – the fact that there is an “a” involved is a hint at the tortured tale that got us here – are not perfect for anyone and miss the point on some critical issues, like the fact that not all high volume fracturing operations are even covered.

Even now, the final fate of the regulations is not clear as we still digest the import of a very recent state supreme court decision (see this quick synopsis). Continued lawsuits are likely.

So the ongoing civics lesson that is oil and gas regulation in Pennsylvania continues. As it does, we all need to keep in mind that today’s “new” regulations do not close the chapter on the Commonwealth’s opportunities to balance the environmental benefits of switching electric generation from coal to natural gas, at least in the short-term, with the equally real impacts from drilling, pipelines, and compressors.

An example is that, in Pennsylvania, we are likely on our way to meeting the goals of the Clean Power Plan because of increased installation of renewable generation sources and a massive switch from coal to natural gas. But the benefits of that new natural gas generation can be negated if we do not comprehensively control for methane leakage between well pad and burner tip. To date, neither the executive nor legislative branch in Harrisburg has introduced the right package to make that control happen, even though industry-backed programs and controls are out there.

Overall, it is not as if companies will suddenly have to change all of their operations today because of Chapter 78a. There will not be a seismic shift in their practices. This is partially because the regulations are not exceedingly groundbreaking and also because there are companies that have committed to go beyond regulation and already employ leading practices in their operations every day. The companies that participate in the CSSD process – Chevron, Consol, EQT, and Shell – have made it clear that it is possible and preferable to push the envelope in avoiding and minimizing the impacts of shale gas production.

For PEC, the example set by those companies means that we are not done with defining what responsible shale development means and that the real import of today’s regulations is that there is a new baseline in place for operators to meet, at least for the moment.

Whether the baseline expectations go higher or lower is the next question for the three branches of Pennsylvania government. We will continue to push for higher. Meanwhile, we look forward to continuing to work with companies that truly commit to continuous improvement in their operations even as we look to strategies for deep decarbonization of electric generation going forward.

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