Gov Wolf: Despite its claims, oil and gas industry can afford to cut pollution

This blog was co-written by Leann Leiter and Nadia Steinzor.

The oil and gas industry is wreaking havoc in Pennsylvania. Oil and gas companies have created a 1 million+ ton methane and air pollution problem that worsens climate and threatens the health of more than 1.5 million Pennsylvanians.

To protect Pennsylvanians’ present and future, we must end the expansion of oil and gas extraction.

Meanwhile, we must rein in pollution from the state’s more than 100,000 existing oil and gas sources. Gov. Tom Wolf has proposed a rule that claims to do just that. But his proposal does not yet go far enough because it excludes tens of thousands of oil and gas wells and facilities–and the pollution that comes with them.  

That has to change.

This exemption for so many pollution sources is a gift for industry lobbyists in Harrisburg who spin a tale that low-producing oil and gas wells are (1) not as large a source of pollution as higher-producing wells and (2) owned by family-run small businesses that simply can’t afford to cut pollution. 

This story is fiction.

Fact v. Fiction

First, the same study that tracked Pennsylvania’s 1 million+ ton methane problem also found that over half of methane emissions came from malfunctioning low-producing wells–the majority of which were shallow, conventional wells.

Second, Earthworks has reviewed data showing that most of the oil and gas produced in Pennsylvania is extracted by just a few top operators–all of which make enough money and own enough assets to afford to cut health and climate harming pollution.

In Pennsylvania in 2019, the top 10 operators of low-producing wells earned more than $5 million in revenue each and generated nearly 60% of total state production from low-producing wells. That same year, the top 20 operators all earned more than $2.2 million in revenue and generated more than 70% of all production from low-producing wells in Pennsylvania.  

In other words, industry lobbyists are intentionally misleading policymakers. If major companies can afford to drill, and they continue to profit from low-producing wells, they can afford to cut the pollution they create–pollution that harms the climate and public health.

Yet, the Wolf administration risks falling prey to an industry fiction and embarrassingly short of achieving a lasting legacy on climate and public health in Pennsylvania.

Limited loophole logic

Two major loopholes have been written into Gov. Wolf’s draft rule. The first exempts wells defined as “low-producing” from any requirements to conduct inspections for pollution leaks from malfunctioning equipment, and subsequently repair them. The second allows companies that self-report a low number of leaks to do fewer inspections over time.

Neither loophole makes sense for air quality or for climate. The first ignores the recent findings (mentioned above) that low-producing wells account for more than half of Pennsylvania’s oil and gas methane emissions. Since so many of the low-producing wells in the state are shallow, conventional wells, you could measure the effectiveness of this rule by its impact on those operations.

In its current form, this much-needed rule would only apply to 300 out of 71,000 conventional wells in the state–less than .5%!

The second loophole is equally illogical. Equipment is more likely to malfunction as it ages, and this loophole would incentivize operators to underreport leaks and not inspect their operations. 

The data on “low-producers”

Basic research is sufficient to refute the claim that the low-producing wells in Pennsylvania are run by family-owned, “mom & pop” operators. 

Data from the Commonwealth’s own Department of Environmental Protection (DEP) and production/revenue information from industry analyst Enverus show low-producing drilling in Pennsylvania is often big business.

The large majority of Pennsylvania’s low-producing wells and the bulk of their production are controlled by wealthy operators who can easily afford to enact common-sense measures to reduce pollution, protect public health, and stabilize our climate. 

According to the DEP, compliance would likely result in “little, if any cost” to most affected operators.

The fact that operators with higher producing wells often also run lower producing operations is important since the former type will be required under the new rules to find and fix polluting leaks. In other words, companies that would already be conducting frequent inspections for leaks at many of their wells would nonetheless be allowed to simply look the other way when pollution occurs at others from which they’re also making money.

The bad actors

Normally invisible air emissions, made visible by Earthworks’ optical gas imaging camera. This leak is from a facility owned and operated by Snyder Brothers, Inc.–the company ranking sixth for income from conventional wells alone. They made over $11.5 million in 2019. That figure jumps to over $32 million when also accounting for their unconventional or fracking production.

Earthworks’ field investigations of dozens of oil and gas sites in Pennsylvania–including those operated by several of these wealthy companies–routinely demonstrate just how urgently we need pollution control rules for the industry. In some cases, fixes can be ridiculously easy–like at the low-producing and conventional well shown above, which only required a whack of the inspector’s sledgehammer to tighten a leaking valve. 

Yet, because no one was checking on the site regularly, the leak may have persisted for months or more–and DEP records indicated that five years had passed since the last official site inspection.

Earthworks has documented evidence of climate and health-harming pollution at sites owned by some of the most profitable producers. The following four companies are among those making extraordinary amounts of money from both higher and lower producing operations and can and should pay to reduce their pollution. Some of them have shown disregard for communities, the environment, and even the rule of law.  

  • Diversified Oil and Gas has a business model of snatching up and profiting from low-producing, conventional wells. The company holds over 22,000 wells–more than any other operator–and has already settled a legal battle with the PA DEP over neglecting to properly plug older, non-producing ones–one of which (shown here) Earthworks documented leaking even after the settlement. Diversified made nearly $48 million on low-producing wells in 2019. 
  • Range Resources, one of the first companies to drive the Marcellus Shale boom, owns many wells that are both lower and higher producing. The PA Attorney General recently levied criminal charges against Range for negligence that resulted in damage to land and water supplies. Range generated over $1.8 billion in 2019, with $15.6 million coming from low-producing wells. 
  • Snyder Brothers Inc. is the number 5 top low-producing operator in Pennsylvania. It made over $11 million on low-producing wells in 2019.
  • Finally, CNX, among the largest companies profiting on oil and gas, made $4 million on low-producing operations last year.  Its CEO has attacked every reasonable and necessary environmental rule in op-eds in both the Washington Post and PennLive. The company has been forced to pay for numerous violations, including a fine issued by DEP for uncontrolled methane leaks in Westmoreland County just this month.

The records of these four companies, along with public data, demonstrate that big business operators don’t need or deserve an exemption from pollution control rules. Oil and gas is an inherently polluting industry, so controlling its pollution should be seen as the cost of doing business, not something to avoid despite the harm to climate and health. 

Still time to change course

There’s still time to change course, though. Governor Wolf’s existing source rule can still be strengthened to close loopholes and put the state on a path toward meaningful climate action. The Governor has performed admirably in striking the right balance when it comes to COVID-19, prioritizing public health over corporate greed. He can do it again on health and climate when it comes to harms from the oil and gas industry. With the Trump administration rolling back national standards to reduce oil and gas pollution, the need for state leadership has never been greater. 

It’s time for facts, not industry’s tall tales, to drive policy decisions.