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Shale gas operator violations in the Marcellus and what they tell us about water resource risks

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  • Rahm, Brian G.
  • Vedachalam, Sridhar
  • Bertoia, Lara R.
  • Mehta, Dhaval
  • Vanka, Veeravenkata Sandeep
  • Riha, Susan J.

Abstract

Development of shale gas entails environmental risk, particularly with respect to water resources, and stakeholders are keen to assess such risks before making development decisions. We focus on Pennsylvania, USA and the Marcellus Shale, the most productive shale play in the country. We examine compliance data recorded by the state regulatory agency in order to assess environmental risks and their trends and drivers over time. Overall, we track 3267 shale gas violations, noting that environmental violation rates increase from 2007 to 2009, remain high through 2010, and then drop in 2011 and thereafter. Violations related to spills and erosion were most commonly issued. A single change in policy resulted in a 45% decrease in environmental violation rates. Furthermore, for every 1% increase in wells drilled per inspections conducted, there was a 0.56% decrease in environmental violation rates. Similar effects were not found for administrative violations. Operator identity, price of gas, and other major policies were not significantly correlated with violation rates. In comparing conventional and shale gas extraction compliance we found that shale gas development entails more risk related to spills and solid waste management, while conventional development entails more risk associated with cementing and casing issues, and site restoration.

Suggested Citation

  • Rahm, Brian G. & Vedachalam, Sridhar & Bertoia, Lara R. & Mehta, Dhaval & Vanka, Veeravenkata Sandeep & Riha, Susan J., 2015. "Shale gas operator violations in the Marcellus and what they tell us about water resource risks," Energy Policy, Elsevier, vol. 82(C), pages 1-11.
    • Handle: RePEc:eee:enepol:v:82:y:2015:i:c:p:1-11
    DOI: 10.1016/j.enpol.2015.02.033
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    References listed on IDEAS

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    1. Abbott, Malcolm & Cohen, Bruce, 2009. "Productivity and efficiency in the water industry," Utilities Policy, Elsevier, vol. 17(3-4), pages 233-244, September.
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    1. Cong Dong & Xiucheng Dong & Joel Gehman & Lianne Lefsrud, 2017. "Using BP Neural Networks to Prioritize Risk Management Approaches for China’s Unconventional Shale Gas Industry," Sustainability, MDPI, vol. 9(6), pages 1-18, June.
    2. Max Harleman & Pramod Manohar & Elaine L. Hill, 2022. "Negotiations of Oil and Gas Auxiliary Lease Clauses: Evidence from Pennsylvania’s Marcellus Shale," NBER Working Papers 30806, National Bureau of Economic Research, Inc.
    3. Abualfaraj, Noura & Olson, Mira S. & Gurian, Patrick L. & De Roos, Anneclaire & Gross-Davis, Carol Ann, 2016. "Statistical analysis of compliance violations for natural gas wells in Pennsylvania," Energy Policy, Elsevier, vol. 97(C), pages 421-428.
    4. Noura Abualfaraj & Patrick L. Gurian & Mira S. Olson, 2018. "Assessing Residential Exposure Risk from Spills of Flowback Water from Marcellus Shale Hydraulic Fracturing Activity," IJERPH, MDPI, vol. 15(4), pages 1-25, April.
    5. Noura Abualfaraj & Patrick L. Gurian & Mira S. Olson, 2018. "Frequency Analysis of Failure Scenarios from Shale Gas Development," IJERPH, MDPI, vol. 15(5), pages 1-13, April.
    6. Kuwayama, Yusuke & Roeshot, Skyler & Krupnick, Alan & Richardson, Nathan & Mares, Jan, 2017. "Risks and mitigation options for on-site storage of wastewater from shale gas and tight oil development," Energy Policy, Elsevier, vol. 101(C), pages 582-593.
    7. Cronshaw, Ian & Grafton, R. Quentin, 2016. "Economic benefits, external costs and the regulation of unconventional gas in the United States," Energy Policy, Elsevier, vol. 98(C), pages 180-186.

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