The Associated Press March 31, 2011, 11:09AM ET

Punishments of Shale drillers now need OK from top

Approval of enforcement actions and punishments aimed at Marcellus Shale drilling operators must now go through top officials in the Pennsylvania Department of Environmental Protection in a change that the agency said Wednesday is aimed at improving its consistency in handling the rapidly growing industry.

Acting Secretary Michael Krancer is changing the procedure after receiving complaints that agency staff in different regions of Pennsylvania were carrying out their responsibilities unevenly, a department spokeswoman said.

The new policy covers a variety of enforcement actions that can require a company to pay a fine or correct a problem, spokeswoman Katy Gresh said. In some cases, those matters reach top officials. But the policy also covers notices of violation -- which Krancer's predecessor, John Hanger, equated to a traffic ticket making its way up to the chief of police and said it represents an encroachment onto the professional independence of the agency's inspectors.

The policy applies strictly to Marcellus Shale-related drilling activity, and not to any other activities that the agency also inspects across six regions, including mining, construction, water and sewer treatment, power generation and medical X-rays.

Gresh said the week-old policy may be only temporary.

"We need to make sure we are consistent and that we make our best effort to be the most effective regulator of this industry, which will benefit all Pennsylvanians," Gresh said.

Gov. Tom Corbett, whose successful campaign last year received sizable donations from members of the natural gas industry, has said he wants to make Pennsylvania the Texas of the natural gas boom. Pennsylvania is the largest natural gas state not to tax the activity, and Corbett is against imposing a new tax on it.

Notice of the change surrounding the hotly pursued natural gas formation wasn't announced publicly. Rather, a March 23 email from a top department official ended up in the hands of reporters.

In the email, the department's regional directors and the director of the bureau of oil and gas management were instructed to seek approval for actions involving Marcellus Shale drilling from two top agency deputies, with final clearance from Krancer.

"Any waiver from this directive will not be acceptable," wrote John Hines, the agency's executive deputy secretary.

On Wednesday, Hanger called the change to longstanding practice "ill-advised."

"I can't think of anything more likely to erode public confidence in the inspection process than this," Hanger said. "I urge them to rethink and reconsider."

Hanger said it oversteps the built-in checks and balances that give every company the ability to contest a notice of violation by responding in writing, asking for a meeting with regional staff to discuss it, appealing a decision to the Environmental Hearing Board and even going to court.

If there are complaints about consistency, the best way to handle those complaints is to carry out a management-level review of consistency and then train staff, if necessary, Hanger said.

"The idea that the secretary himself and the deputy secretary would presumably review, literally hundreds if not thousands of (notices of violation) before they were issued, when they were not on the site, they didn't do the inspection, is incredible," Hanger said. "It's a new full-time job for the secretary, is what's going to happen."


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