Pa. DEP and PUC heads keynote gas industry events
By Rob Galbraith  •  Jan 08, 2014 at 09:50 EST

This fall, Blank Rome LLP, a Pennsylvania-based law and lobbying firm, held two events titled “Environmental Issues Affecting Midstream & Downstream Oil & Gas Development.” The events, one in Philadelphia and one in Harrisburg, were co-hosted by Hull & Associates, a shale oil and gas project management and consulting firm, and featured a slew of presenters from variety of industry affiliates, including Blank Rome energy chair (and former Pennsylvania DEP Secretary) Michael Krancer; Stephanie Catarino-Wissman, the executive director of the American Petroleum Institute‘s Pennsylvania office; and Chris Tucker, the leader of Energy in Depth, the Independent Petroleum Association of America’s public relations campaign.

Also among the presenters were E Christopher Abruzzo, Krancer’s replacement as DEP Secretary, and Robert F Powelson, the chairman of Pennsylvania’s Public Utility Commission (PUC).

While it is important for industries to be kept abreast of the issues regulators are looking at, the Blank Rome program, which included presentations on how midstream and downstream companies can mitigate public relations fallout from an environmental crisis, is another illustration of the cozy relationship in Pennsylvania between the oil and gas industry and the governmental bodies tasked with overseeing it.

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Pennsylvania DEP Secretary Krancer exits through revolving door
By Rob Galbraith  •  Mar 28, 2013 at 11:49 EST

Pennsylvania Secretary of Environmental Protection Michael Krancer announced last week that he was leaving the agency to lead the energy, petrochemical, and natural resources practice at Philadelphia-based law firm Blank Rome LLP, where he was a partner from 1992 to 1999.

Krancer’s administration of the Department of Environmental Protection during the fracking boom was mired with controversy, characterized as overly friendly to the natural gas industry and hostile to regulation and enforcement. His return to Blank Rome, which lobbies for natural gas clients and was a member of the Marcellus Shale Coalition until 2013, makes him the fifth DEP secretary since the agency was created to take a job connected to the oil and gas industry.

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New DEP water contamination policies (again) raise the specter of political interference
By Rob Galbraith  •  Nov 16, 2012 at 11:53 EST

This past March, the Pennsylvania Department of Environmental Protection faced controversy when an e-mail leaked to the Pittsburgh Post-Gazette revealed a new agency policy requiring any Marcellus Shale permitting or enforcement action to be approved by DEP executives and cleared by Secretary of Environmental Protection Michael Krancer. Under the new policy even notices of violation, previously issued by field inspectors or regional DEP offices, were required to be cleared by agency brass in Harrisburg. The policy, decried by environmental groups statewide, raised the specter of political interference in Pennsylvania’s regulation of fracking. Former DEP Secretary John Hanger called the new policy “exceptionally unwise” and said that it could “do nothing but crater public confidence in inspections and oversight of the industry.”

For Krancer, an appointee of Governor Tom Corbett, a decrease in the number of violations found by his department would help vindicate his vigorous stance against the federal government regulating fracking, which he feels should be left to state agencies. Indeed, in a Congressional hearing Krancer quoted a report from the University at Buffalo’s Shale Resources and Society Institute that (incorrectly) concluded that the incidence of major environmental incidents was decreasing based on the number of notices of violation issued by the DEP.

After a spate of bad press and at the insistence of 42 environmental and conservation, faith-based organizations, and businesses, the DEP rescinded the pre-approval policy a little more than a month after the directive issued.

Last month, another e-mail obtained by the Pittsburgh Post-Gazette exposed another new DEP policy requiring reviews of notifications by top agency officials, this time for determinations that water has been contaminated by fracking in the Marcellus Shale. Previously, based on the results of laboratory testing of samples collected by water specialists, DEP district offices would send determination letters to residents and property owners whose water was affected. Under the new policy, contamination determinations must first be sent to the DEP headquarters in Harrisburg for review by Deputy Secretary for Oil and Gas Management Scott Perry and Michael Krancer.

Much like the rescinded policy from this spring, this directive requiring the approval of DEP Secretary Krancer over notifications of water contamination introduces the possibility of administrative interference in what should be a matter of test results and the plain language of the law. An e-mail from Deputy Secretary for Oil and Gas Management Perry indicates that only positive determinations of contamination from drilling operations are to be reviewed at the top level, though he asks to be apprised of negative determinations that “may generate media interest.”

The new notification policy came on the heels of meetings between DEP officials and Range Resources to contest water contamination letters sent to property owners whose supplies were contaminated by methane, likely due to gas drilling. According to Marcellus Money, a project of Common Cause PA and Conservation Voters of Pennsylvania, Range Resources executives and its political action committee have contributed $46,754.77 to Gov. Tom Corbett, who appointed Krancer, since 2009.

On top of the policy requiring top-level approval of contamination notifications, the DEP is facing scrutiny over the content of notification letters. Pennsylvania State Representative Jesse White has called for state and federal agencies to investigate the DEP for “alleged fraud and misconduct” after a DEP employee revealed in a deposition that the Office of Oil and Gas Management directed the Bureau of Laboratories to omit a number of heavy metals, some known carcinogens, and volatile organic compounds associated with fracking from water test reports. At the direction of the Office of Oil and Gas Management, the results of DEP’s laboratory tests for lithium, cobalt, chromium, boron and titanium as well as volatile organic compounds are witheld from reports to the oil and gas division and property owners.

These policies cast a shadow on the Department of Environmental Protection’s mission to “protect Pennsylvania’s air, land and water from pollution and to provide for the health and safety of its citizens through a cleaner environment.” They seem to show a calculated manipulation of information, at the risk of Pennsylvania residents, in order to make fracking in the Marcellus Shale seem safer and its regulation by the DEP more effective. The Office of Oil and Gas Management can reduce the apparent number of contamination instances by limiting the number of hazardous chemicals reported on water tests by the Bureau of Laboratories and by requiring all letters confirming water contamination to be approved by Secretary of Oil and Gas Management Scott Perry and Secretary of Environmental Protection Michael Krancer.

Neither Perry nor Krancer are chemists with the scientific experience one would expect necessary to determine whether fracking has contaminated a water supply. Rather, both are attorneys. Prior to heading the DEP, Krancer was general counsel for the energy company Exelon and previous to that he was a litigator for Blank Rome LLP, a law firm and lobbying group that represents a number of natural gas clients. Perry was the attorney for the DEP’s oil and gas division before being selected to head it.

Considering the serious health consequences possible from exposure to contaminated water, the apparent interference of top DEP administrators in public notifications about water contamination is cause for alarm. Michael Krancer is a staunch defender of his agency’s ability to effectively regulate the gas industry and Scott Perry has gone on record saying: “There has never been any evidence of fracking ever causing direct contamination of fresh groundwater in Pennsylvania or anywhere else.” But as long as Perry and Krancer are playing politics with water contamination notifications, the Pennsylvania Department of Environmental Protection has effectively ceded its authority to make such determinations.