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Study Analyzes PA O&G Industry Environmental Compliance

Researchers from Hong Kong Baptist University and the Chinese University of Hong Kong have published their study analyzing environmental compliance in Pennsylvania. The study, published in the academic journal Resources, Conservation & Recycling, uses statistical testing to empirically examine trends in non-compliance in the natural gas extraction industry.

The study examined the number of well inspections conducted by the Department of Environmental Protection, the fines levied for non-compliance and the number of violations before and after inspections was conducted and fines ordered. They had also taken into consideration the size of the firm that owns and operates each well and their geographic location.

In sum, the results indicated several trends:

  • First, conventional and nonconventional wells in the northeastern region of the state were found out of compliance at higher rates than wells in southwestern Pennsylvania.

  • Second, a single well in the state was inspected 0.24 times per quarter from 2011 to 2017, indicating that wells were inspected “far less than once a quarter”.

  • Third, non-compliance increases in the quarter after a well is inspected, indicating that knowledge of a low probability of inspection allows for regulations to be ignored.

  • Lastly, when a fine or written warning is levied against a well operator, compliance increases in the following quarter.

The authors summarized their findings stating that “previous inspection activities and punishments done by the Pennsylvania DEP were significant factors affecting the environmental compliance performance of shale gas well operators” adding that “fine penalties and [written warnings]…had significant effects in reducing the non-compliance of wells”. In their discussion of the findings, they recommend “progressive directions” for the DEP in coming years to decrease non-compliance.

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