States with the heaviest oil and gas development in the shale drilling boom are doing a poor job enforcing rules meant to protect public health and safety, according to a new analysis by Earthworks.
The 124-page analysis — “Breaking all the rules: the crises in oil and gas regulatory enforcement” — was partially paid for with a $25,000 grant from The Heinz Endowments. The foundation has given grants to a number of projects related to the shale boom recently, said Jennifer Krill, executive director of Earthworks.
In preparing the report, Earthworks interviewed enforcement experts and analyzed a year’s worth of data from agencies in Colorado, New Mexico, New York, Ohio, Pennsylvania and Texas. The organization also created state-specific reports for some of them, including Texas.
About 350,000 active oil and gas wells go uninspected each year in those states, according to Bruce Baizel, attorney for Earthworks.
The Texas Railroad Commission enforces most of the environmental rules for the oil and gas industry in Texas. The railroad commission is charged with making the most of the state’s oil and gas resources and, at the same time, with protecting public safety and the environment. Compared to other states, Texas inspectors recorded more violations per inspection. Texas inspectors documented between 70,000 and 90,000 violations per year between 2006 and 2010, or about 0.6 violations per inspection, Earthworks found. The group also found that Texas’ enforcement process doesn’t deter repeat violators and may be to blame for the large number of violations.
Unlike many states, however, Texas inspectors have severance powers — the authority to shut in a well.
As a result, “the commission finds that most operators will bring their operations into compliance,” said spokeswoman Ramona Nye in an e-mail. “For those operators who did not bring their leases into compliance with commission rules, the commission assessed $1,965,019 million in enforcement penalties in FY 2012.”
Earthworks found that in the first three quarters of this fiscal year, Texas violators, on average, paid just more than $1,000 per violation.
Overall, state agencies showed evidence of being unprepared for the boom, Baizel said. The shortfalls in inspection and enforcement undermine public trust in the ability of state agencies to enforce the law.
Dan Boggs, an affected landowner in Gardendale, and the former mayor of Dish, Calvin Tillman, were included in a media call about the reports. Both said the reports echoed the first-hand experiences they had with poor enforcement in their communities.
“Those of us who reached out to state agencies for help, this confirmed what we experienced,” Tillman said, adding that enforcement programs are often “the first to get cut in a budget crisis.”
Much of Earthworks’ report on Texas echoed problems detailed by the state’s Sunset Advisory Commission last year when it recommended major reforms for the Texas Railroad Commission. The Texas Legislature was not able to address those reforms in 2011. The matter was pushed to the next session in 2013.
The railroad commission is again under review, Nye said, but the new report is not yet complete.
Since the 2011 report, the railroad commission has hired 13 new inspectors, for a total of 153, Nye said.
To lower the number of violations in Texas and other states, Earthworks made many recommendations based on interviews with stakeholders and experts in enforcement. Some of those recommendations include measures to increase citizen empowerment by giving residents the ability to document violations, the ability to complain without fear of intimidation or reprisal, the ability to track violations and the ability to sue.
The Colorado Oil and Gas Commission agreed through a memorandum of understanding to share its authority with local inspectors in Gunnison County — an enforcement trend Baizel said could help other heavily impacted areas in other states.
The Texas Railroad Commission is working with the Texas Department of Public Safety to make sure waste haulers are in compliance, protecting roads statewide and in heavily impacted areas, such as the Eagle Ford Shale and Permian Basin, from pollution, Nye said.
Earthworks’ report is the second report for Texas by an environmental group this month examining the impact of the drilling boom on communities.
Environment Texas released a report last week on economic impacts. Luke Metzger said his group was using the report first as part of public comment to the railroad commission on new rules for water use, which could include some requirements for recycling.
Environment Texas found that state water planners have called for $400 million in new water projects to supply mining, 40 percent of which would be used for hydraulic fracturing.
The report will become part of his group’s push to shore up not only rules for water usage but also for financial responsibility in plugging old wells in the next legislative session, Metzger said.
One recommendation from the 2011 sunset report — self-funding the Texas Railroad Commission — remains a priority in an upcoming session for Rep. Myra Crownover, R-Corinth.
“The oil and gas industry in Texas is booming and it is vital that we have an effective, efficient and adequately funded Railroad Commission,” Crownover wrote in an e-mail.
PEGGY HEINKEL-WOLFE can be reached at 940-566-6881. Her e-mail address is pheinkel-wolfe@dentonrc.com .
