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PennEnvironment Research and Policy Center
90.5 WESA
Michael Lynch

The fracking debate continues.

study released Tuesday by an environmental activist group shows Pennsylvania’s bonding practices are inadequate to cover the cost and range of damage from drilling and fracking activities. 

The report from the PennEnvironment Research and Policy Center examined Pennsylvania’s financial assurance requirements for oil and gas drilling operations and found that the state’s requirements are lacking.

Erika Staaf, a clean water advocate with PennEnvironment, said fracking companies need to make greater monetary promises to the public before and after drilling occurs in order to cover potential losses.

“By holding these operators fully accountable,” Staaf said, “strong financial assurance requirements deter some of the riskiest practices … and insure that it’s the industry rather than the public, several years from now or decades from now, that it’s the industry that’s bearing the brunt of the costs.”

According to the report, drilling operators are required to secure between $4,000 and $10,000 per well in bonds before drilling. The bonds cover site restoration and well plugging, but do not offer compensation for victims for damage to property or health or full restoration of damage to public infrastructure.

Some fracking wells can cost as much as $700,000 to plug, according to Staaf.

The state releases drillers from assurance one year after a well is plugged and reclaimed, which can leave the residents, communities and taxpayers financially responsible for long-term damages.

The report offers several recommendations:

  • The state should require broad accountability for fracking related costs such as public reimbursement for property damage and health problems brought on by improper fracking.
  • Drillers should be required to post at least $250,000 per well in financial assurance
  • The state should eliminate loopholes, exceptions and discounts.
  • Pennsylvania should require financial assurance as long as the possibility of damage persists.

With an uncertain future, Staaf said drilling companies should offer financial guaranties for the public 30 years after a well is plugged and reclaimed.

“We don’t know what’s going to happen down the line,” Staaf said. “We don’t know what problems might emerge as a result of fracking in Pennsylvania or nationwide so we want to see assurances over time.”

Staaf said the state needs to keep its long history with pollution and natural resources in mind.

“We’ve seen every boom of extraction leaving a legacy of pollution for future generations left to grapple with,” Staaf said. “And here in Pennsylvania, we’ve certainly seen the trend over and over again — that boom and bust cycle. And Pennsylvania’s bonding requirements are another reason why fracking is taking us down the same disastrous path.”