When Pennsylvania Department of Environmental Protection Secretary Michael Krancer stepped to the mic at a shale oil and gas conference earlier this month, he offered one of his most candid descriptions to date of how he sees his mission as a regulator. His job, he said, is to protect the state not from the potential misdeeds of drillers but from those of the EPA.
“EPA has completely lost its concept of the rule of law,” Mr. Krancer charged, adding that he would remain watchful against any effort by the federal government to usurp state authority over hydraulic fracturing.
It was a small window into the mind of the top environmental regulator in a state now famous as ground zero of the current drilling boom, where the shale industry has enjoyed a virtually unprecedented bonanza.
Mr. Krancer described how foolhardy he thought it was to assume that the industry needed policing.
“We’ve been doing this safely in the United States for years and years and years,” he said with regards to hydraulic fracturing (fracking).
Along these lines, he dared his listeners to walk up to any American rigworker and to look that worker in the eye and tell say to his or her face that they shouldn’t be trusted to do their job safely.
“Actually, I don’t recommend that you do take that challenge,” he added, to knowing chuckles from the audience of shale gas industry representatives.
Mr. Krancer has come under heavy fire lately for the way his department has handled water testing when groundwater contamination from drilling and fracking was suspected.
During a question-and-answer session following his speech, Mr. Krancer was pressed repeatedly to explain why many test results were never released to homeowners.
Describing it as a “manufactured issue” he went on the offensive against a state representative who had called for a criminal investigation into the DEP’s conduct.
“Frankly, that Representative doesn’t have the faintest idea what he’s talking about,” Mr. Krancer charged.
Mr. Krancer became increasingly combative as members of the press continued to question him about water testing results.
“Do your homework, and then come ask me an intelligent question,” Mr. Krancer shot back when award-winning Pittsburgh Post Gazette reporter Don Hopey asked about way his department chooses what to test for when contamination from drilling or fracking is suspected. (To his credit, Mr. Hopey did in fact seem to have done his homework, having in hand a thick stack of hard-copy documents covered in notes – including what appeared to be the very documents Mr. Krancer alleged the journalist had ignored.)
Krancer’s responses became vaguely threatening as the questions continued.
“I don’t comment on requests to investigate – I could make a couple of requests to investigate myself but I probably shouldn’t or won’t do that,” Mr. Krancer said when a third reporter asked about the potential criminal investigations into the DEP’s handling of water test results.
Although his hostility to the press was palpable at times, he was far warmer when speaking to the energy industry.
“What I see is the making of an American energy super-power, right here in Pennsylvania,” he enthused, praising the industry for producing domestic energy that he said meant energy security for the United States and a major boon for the economy.
This closeness began long before this month’s conference. When Krancer joined Governor Tom Corbett’s administration, one of his first acts was to issue a policy requiring his personal approval for all Marcellus shale-related enforcement actions. After the memo describing the policy was leaked, governance watchdogs cried foul over the potential for political interference in law enforcement decisions and Krancer backed down. But the message to field agents had been sent.
Indeed, enforcement has fallen by the wayside under Krancer's watch.
“More than 9 out of every 10 violations by Marcellus Shale gas drilling companies resulted in no fines from DEP,” a report by the environmental group Clean Water Action concluded, based on a review of enforcement statistics from 2011.
“In fact, a larger percent of violations are going unpunished now than in any of the past 10 years,” another report, by Earthworks' Oil and Gas Accountability Project, found after reviewing enforcement actions by the DEP up to April 2012. That report also found that even though drilling had slowed slightly in the state as natural gas prices plunged, the number of environmental violations by drillers has remained high.
As he spoke to drillers at the conference, Mr. Krancer was enthused about what he termed a “juggernaut of jobs” that could come from drilling in Pennsylvania. But in his enthusiasm, he seemed prone to an exaggerated take on the industry’s potential.
In areas where the industry itself has scaled back on some of its overblown rhetoric, Mr. Krancer has gone in the opposite direction.
A few years ago, some in the oil and gas industry projected that one hundred years worth of natural gas could be produced from the Marcellus shale alone. But these early hopes have not been borne out. Last year, the USGS downgraded its estimates for the Marcellus region, and the EIA followed, slashing its projections for the Marcellus by eighty percent in January.
These revisions cast claims of a century-long supply into grave doubt. Undeterred, Michael Krancer went even a step further at the DUG East conference, telling those assembled that the region could supply “hundreds of years” of gas – far higher than the industry has ever claimed.
Krancer also predicted that drilling could create 20 million jobs – a stunning claim to make about an industry which the Bureau of Labor Statistics estimates currently employs less than 200,000 workers.
In fact, Krancer’s 20-million-jobs estimate reflects 18.4 million more jobs than the (often-debunked) claim by America’s Natural Gas Alliance that shale drilling could create 1.6 million jobs nationwide – by 2035.
There was another, perhaps even more telling, statistic that came from Krancer’s speech at DUG East.
It was a full 8 minutes into his speech before Mr. Krancer first mentioned the environment. When he did so, it was to assure the assembled drillers that he was aware of their commitment to safety and their “environmental sensitivity.”
But many in the state are not convinced that the industry’s track record in the state justifies this degree of confidence.
“There are currently 12 environmental violations per day on average, at Marcellus Shale gas drilling well pads and associated infrastructure in Pennsylvania,” Iris Marie Bloom, director of the Pennsylvania-based environmental group Protecting Our Waters, told NPR earlier this year.
As questions about Krancer’s handling of environmental issues kept mounting during the question-and-answer session at the conference, it became clear that the secretary was among friends that day.
“Oh god, here we go,” Talisman Energy’s Dave Mitchell said quietly to a colleague when reporter Don Hopey, documents in hand, pushed Krancer for answers about the water contamination tests. “I’m gonna ask the next question.”
Mitchell took the mic and tossed Krancer a soft-ball question about gas prices, directing attention away from environmental problems and away from Krancer’s own record.
It was a gesture that spoke volumes.
As much as Secretary Krancer looks out for the shale drilling industry, it seems that, in some ways the industry looks out for him too.