Study Reports 'Hidden Costs' in Gas Drilling

Pittsburgh Post-Gazette
22 September 2012
By Don Hopey

A PennEnvironment Research & Policy Center report has identified more than a dozen categories of hidden costs -- including aquifer contamination, human health problems and damage to roadways, home values and natural resources -- linked to Marcellus Shale gas development in Pennsylvania.

The report, released Thursday in Pittsburgh as Gov. Tom Corbett was welcoming the industry at the Marcellus Shale Coalition's second annual conference in Philadelphia, also stated that bonding amounts required by the state will be inadequate to cover long-term future costs of plugging abandoned wells.

"There are a staggering array of threats to the environment posed by Marcellus Shale gas development and myriad costs," said Erika Staaf of PennEnvironment, a statewide advocacy organization. "We're advocating a moratorium on drilling until additional safeguards and appropriate bonding is put in place."

PennEnvironment is one of a half-dozen organizations advocating a halt to drilling at a demonstration, scheduled for 11 a.m. to 1 p.m., today, on Flagstaff Hill in Schenley Park, Oakland.

Travis Windle, a Marcellus Shale Coalition spokesman, said the report was an attempt by PennEnvironment to stoke anti-drilling publicity.

"In truth, tightly regulated natural gas development is done responsibly, while helping to create tens of thousands of jobs and much-needed energy savings for consumers," Mr. Windle said. "The air quality benefits tied to expanded natural gas use are also undeniable."

According to the report, drilling activities, including hydraulic fracturing or "fracking," have damaged drinking water supplies, roads and bridges, increased the need for police, education and social services, fragmented state forests, impacted human health and released methane gas that contributes to global warming.

The state announced last week that Pennsylvania drillers paid $197.6 million in the first round of Marcellus Shale impact fees, exceeding legislative estimates, but the report said those fees fall far short of covering all costs.

"There are economic benefits from shale drilling but not when the external costs are factored in," said Bridget Coyne, an attorney from Ligonier. "Those economic impacts are being felt by people like my neighbors who were sickened by toxic fumes from a nearby drilling operation that seeped into their basement. They're bearing the true cost of drilling."

The report also says that the state's well bonding program is inadequate to cover long-term costs of plugging shale gas wells once they stop producing. It cites a report that Cabot Oil & Gas spent $730,000 to cap three shale gas wells in Susquehanna County.

The state requires drillers to post a $10,000 bond per well and recently increased the "blanket bond" amount, covering all wells a company drills in the state, to $625,000 from $25,000.

Patrick Henderson, the Corbett administration's energy executive, said the state bond amounts are "among the highest in the nation for on-shore drilling" and, under the state mining law, Act 13, well operators are required to pay all costs associated with properly plugging a well, including those above the bond amount.

"While [the Department of Environmental Protection] has never had to require the forfeiture of an unconventional well bond, should the occasion arise, it is important to understand that any and all assets of an operator may also be forfeited -- in addition to the bond -- to ensure that the well is plugged, the environment is protected, and taxpayers do not foot the bill," he said.

For more on Marcellus Shale, visit

Don Hopey: or 412-263-1983.