U.S. Auditor General criticises DEP’s monitoring of shale industry

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The U.S. Department of Environmental Protection (DEP) was unprepared to protect the environment from shale-related risks and to ensure that laws and regulations which govern potential impacts to water quality are enforced – a review published by the Auditor General has found.

According to the review, the DEP was unable to meet these challenges because the rapid expansion of shale gas development has strained it, and the agency has failed to keep up with the workload demands placed upon it.

Although the DEP has tried to make organizational changes to meet the demands and has raised permit fees to generate the money to meet its mission, the report found that these efforts fell short in ensuring the DEP was adequately prepared to monitor shale gas development’s boom. As a result, these shortcomings have eroded the public’s trust that the DEP will respond to citizen complaints and will consistently hold operators accountable for any impacts resulting from shale gas development and do so in a transparent manner.

The audit identified eight findings which address the shortcomings it found in how the DEP monitored shale gas development, and in particular, how the DEP responded to complaints about adverse impacts to water quality.

  1. The DEP did not routinely and consistently issue orders requiring oil and gas operators to restore/replace adversely impacted water supplies as required by law.
    • Recommendation: The DEP needs to be a stronger regulator and use its enforcement powers consistently. The DEP should always issue a violation and an administrative order to an operator who has adversely impacted a water supply—even if the operator and the complainant have reached a private agreement.
  2. The DEP’s communications to complainants regarding potential adverse impacts to their water supplies were neither clear nor timely.
    • Recommendation: The DEP should ensure that clear and understandable “determination letters” are always issued to complainants in water supply investigations and in a manner that does not allow for misinterpretation. The DEP should make every effort to ensure that complaints are investigated and resolved timely. For cases involving stray gas migration, the General Assembly should evaluate if the 45 day requirement is realistic.
  3. The DEP utilizes an inefficient and ineffective complaint tracking system that does not provide management with timely and accurate complaint information related to oil and gas activity.
    • Recommendation: The DEP should develop better controls over how complaints are received, tracked, investigated, and resolved. The DEP must invest resources into replacing, or significantly upgrading, its complaint management system and procedures to ensure it is well equipped to provide the best level of service to the citizens.
  4. The DEP could not provide reliable assurance that all active shale gas wells were inspected in a timely manner.
    • Recommendation: The DEP needs to find the financial resources to hire additional inspectors to meet the demands placed upon the agency. The DEP should also implement an inspection policy that outlines explicitly the requirements for timely and frequent inspections.
  5. The DEP does not use a manifest system to track shale gas waste, but relies upon a disjointed process of utilizing three different reports and self-reporting by operators with no assurances that waste is disposed of properly
    • Recommendation: The DEP should implement a true manifest system so it can track the waste. The DEP needs to be a leader and set the example for other states to follow. In the meantime, the DEP needs to be more proactive in ensuring that the waste data it collects is verified and reliable.
  6. The DEP’s website lacks transparency and accountability to the public.
    • Recommendation: The DEP needs to reconfigure its website and provide complete and pertinent information in a clear and easily understandable manner. If the DEP will not post information on credible cases of contamination to public and private water supplies on its website, the General Assembly should take action to amend the law to require the DEP to do so.
  7. The DEP failed to post online inspection information that is accurate and meets statutory requirements.
    • Recommendation: The DEP needs to invest in information technology resources for its inspectors. An all-electronic inspection process should be developed so that inspection information is accurate and timely. Data collection and reporting must improve.
  8. Data collected in eFACTS did not provide the DEP with adequate information needed to monitor a growing shale gas industry.
    • Recommendation: The DEP needs to more effectively use information technology resources and capture critical data. Then, the DEP can develop an IT structure that will ensure its oil and gas program has a strong foundation for the ongoing demands placed upon it.

The report contains scathing criticism of the DEP noting for example that after reviewing a selection of 15 positive determination complaint files, the DEP actually issued just one order to an operator to restore/replace the adversely impacted water supply. The review also found that the DEP’s inspection policy is outdated and ineffective and that although auditors were given “unprecedented access” to DEP files, they found he  “DEP’s documentation was, and continues to be, egregiously poor.”

In the DEP’s reply to the findings – included in the review – the Department did not concur with any of the eight findings, although it agreed with some of the report’s 29 recommendations.

Also, In the DEP’s response to the audit included in the report, Secretary E. Christopher Abruzzo wrote that “to a great extent, the audit report reflects how the Oil and Gas Program formerly operated, not how the program currently functions.”

Many of the audit’s recommendations have already been implemented or are being considered, he added, but other of the audit’s findings misinterpret the law or DEP’s systems.

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