The year comes to a close today with the Pennsylvania Supreme Court having yet to rule on the constitutionality of Act 13’s provisions concerning the ability of municipalities to control Marcellus Shale development through local zoning rules (those provisions were overturned by the Commonwealth Court in a closely divided decision in July 2012). Despite the legal uncertainties that remain, 2012 saw significant growth of the unconventional gas industry in Pennsylvania:
- Pennsylvania is now reportedly second only to Texas in number of workers employed in the unconventional oil and gas industry, although that number likely includes some non-permanent residents who moved to PA for work in the industry.
- Marcellus Shale wells in Pennsylvania and West Virginia now account for about 25 percent of all U.S. shale gas production, nearly double the production reported for the Marcellus play in 2011.
Last week saw the release of the U.S. Environmental Protection Agency’s progress report on its research studies into water use in hydraulic fracturing operations. EPA – relying in part on data from Pennsylvania drilling sites and waterways – is looking specifically at the following research questions:
1. What are the possible impacts of large volume water withdrawals from ground and surface waters on drinking water resources?
2. What are the possible impacts of surface spills on or near well pads of hydraulic fracturing fluids on drinking water resources?
3. What are the possible impacts of the well injection and fracturing process on drinking water resources?
4. What are the possible impacts of surface spills on or near well pads of flowback and produced water on drinking water resources?
5. What are the possible impacts of inadequate treatment of hydraulic fracturing wastewaters on drinking water resources?
EPA is expected to release its conclusions in a final report in 2014.
Last week also brought the expected news that current EPA Administrator Lisa P. Jackson will step down once President Obama’s second term begins. As speculation builds about the President’s nominee for the EPA’s top spot, I anticipate that – even though most regulation of unconventional gas operations occurs at the state level – the agency’s direction on the regulation of hydraulic fracturing and other aspects of unconventional oil and gas development will be a significant issue when the U.S. Senate holds confirmation hearings for the new Administrator in early 2013.
This raises an intriguing question: would a nominee from outside the EPA’s current management structure, particularly one experienced with Marcellus Shale development, find an easier path to confirmation in the newly seated Senate than someone from within the agency? That may depend on how difficult a confirmation battle the Obama Administration is prepared to support, in a second-term environment in which even rumored nominees for the top spots at the Departments of State and Defense have found themselves the subject of strong opposition.