Committee Hearing, September 28, 2010

Belmont being in the Fourth District. COMMISSIONER BRUNWASSER: Yes, Fourth District. Those two plants split the other 40 percent of the production and distribution of drinking water. Now, Marcellus Shale, about 11 percent of the Schuylkill drinking water 12 that we get is under the Marcellus Shale 13 or in that area, and I believe about 50 14 percent or so of the Delaware sources are 15 under Marcellus Shale.

So if you combine the two, what percentage of our drinking water potentially or does come under Marcellus Shale? COMMISSIONER BRUNWASSER: I guess it would be between 40 to 50 percent.

So that's significant. COMMISSIONER BRUNWASSER: Sure. 124 9/28/10 - TRANS./ENVIRONMENT - RES. 100515

In your Early Warning Systems, could you describe for us how they, A, connect to other counties and how far does that go to the actual site of drilling of Marcellus Shale. COMMISSIONER BRUNWASSER: I may turn this over to one of my experts, but I can tell you that about 280 miles of river are monitored by the Marcellus Shale, and over 7,000 miles of stream are monitored as well. Our watershed I think is approximately 13,000 square miles all together, the Delaware watershed, and about -- and more than half of that is covered by our EWS system.

Clarification: You said 50 percent of that is covered by the Early Warning System? COMMISSIONER BRUNWASSER: About 7,000 square miles.

So what 125 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 percentage is not covered by the Early Warning System leading up to that Marcellus Shale? COMMISSIONER BRUNWASSER: Well, I'll be hazarding a guess, but I stand to be corrected by my staff. I suppose it's about 40 percent is not covered, 45 percent is not covered. And, again, this was -- this is under the Philadelphia Water Department's authority. We would love to see -- and one of the points that I think I made in my testimony, what we would love to see is for any potential driller, extractor of this natural gas to be forced to join us, forced to join this EWS, which would continue it all the way up through the Marcellus Shale area and make that part of the -- and they should also contribute to bolstering this system so we could have realtime monitoring in more places, more often and so forth. This is one of the things that Philadelphia would like to see as an outcome of the expansion of this 126 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 industry, that we all, all along the Delaware River, have the ability to see if anything is awry very quickly and so that we can take action, and we're happy here in Philadelphia to run that system.

Any comment from the industry on that recommendation?

Yes. In fact, one of our members, East Resources, last year did embark on a project contributing, I think it was, close to a million dollars to put in the Susquehanna River an in-place monitoring network. And so that is certainly within our recent history and something look forward to pursuing with you.

Okay. So that's a good thing. In that monitoring system, did you see the chart offered by Dr. Boufadel about how they monitor? Is our warning system similar or complementary to what he was illustrating? COMMISSIONER BRUNWASSER: I 127 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 think I'll let Dr. Crockett answer that one.

We have a lot of doctors over there.

Thank you, Councilman. Thank you, Councilwoman. My name is Dr. Christopher Crockett. I'm Director of Planning and Research. I'm also the inventor of the Early Warning System for the Delaware Valley. The Delaware Valley Early Warning System was developed prior to 9/11, the concept, and we finally received funding to develop it after 9/11. And it's a secure system that is one of the most advanced in the world that provides instant telephone, web-based and water quality monitoring information for emergency responders, regulatory agencies, et cetera, to communicate about water quality events on the Delaware and Schuylkill Rivers. Currently, the coverage of that system includes realtime monitoring as 128 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 far up as Easton on the Delaware River and pretty much the whole length of the Schuylkill River. The watershed coverage for event notification for Philadelphia where someone would call, such as a regulator at DEP if they found out about a spill or accident or Pennsylvania emergency response, would reach up to the state boundaries of the upper boundary of Pennsylvania and New Jersey. There's only a short distance between that upper boundary and where New York City's water supply starts. And so there's a gap, but in terms of the gaps in coverage, we would definitely like to see this system enhanced so that we can expand the monitoring and make sure that anybody that's doing anything upstream is involved and aware and can utilize that system to warn us.

One of the things that I learned quickly being the Councilman from the Fourth District was 129 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 the area of my district which is Manayunk which gets flooded from time to time. There was a warning system put in place so that upstream if they had what is called a rain event, it foretold possible flooding in our area, because the rainwater runoff and all of that compiles at the end of the day in my district. So that type of system has helped prepare merchants and residents to know when to evacuate or when something bad was coming downstream. To the degree that that gap exists in the warning system, what does that mean by way of realtime to react to different potential threats?

Well, for example, I'll give you an example. Back in 2005 on the Delaware River, we actually had a large P&L lake --

For us laypersons --

A lagoon or a lake. PP&L is Pennsylvania Power and 130 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 Light.

There you go.

They had a power facility that stored fly ash waste in a lagoon/lake along the river. The stop logs failed and a large amount of fly ash, laden with arsenic, went into the Delaware River over 100 miles upstream Philadelphia in the middle of the night. We were notified immediately when the state knew about that. We were able to get equipment and people upstream and monitor the rivers. The City of Easton actually had to shut down their intake for a period of time, and there was about a mile of river on the Delaware that was gray. Though it did not make the news here, our people were out there protecting, getting data, getting feedback and making sure that nothing was coming to Philadelphia to its water supply immediately upon that call, and this was over 100 miles upstream. 131 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 These kinds of things are what we prepare for at the Early Warning System, and we would like to make sure that, one, that people are aware of it that are doing the drilling and have that phone number to call if there's an accident and they know how to utilize it; two, that in the gap above Easton, that there would be some more monitoring equipment, as mentioned by the other speaker, so that we could have data to see if the water quality is changing rapidly or not. So if there is an event, sometimes you may not know an event happened until the water quality monitoring data tells you, because nobody knew it happened.

Again, one of the outcomes of this hearing is to take recommendations like that and present it to the appropriate authorities, both at the state, the monitoring levels, and the industry to try to, to the degree that we can, put 132 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 safeguards in place. So that's important. What I'd like to do is give you a list of chemicals. No, don't go anywhere. You're doing real well. And I want you to look at this list of chemicals that are used in the process of fracking and to tell me, do we currently test for any of these chemicals.

Okay. You're giving me a long list, but I'll tell you that the Water Department, if you check your consumer confidence reports that we have online for the City of Philadelphia, we basically put up on that website in our consumer confidence report, which we also mail out to all the customers, a list of all the chemicals that we test for and the concentrations found in drinking water, as well as we discuss what's in our rivers and streams. We can take this list back and compare that and we can get back to you, but a number of these compounds, though 133 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 some of them are very specific, they do roll up into general other compounds that we would pick up in our monitoring. Not necessarily realtime. Some of these pieces of equipment that's used for some of these highly organic chemicals that would be in manufacturing, we would be testing on more of a weekly or daily basis, not on a realtime basis, because that equipment is not necessarily ready for prime time out there.

So one of the recommendations you will make to this panel after reviewing this list is to see if, A, currently do we test for these things.

Yes. And we've actually taken a similar list like this and sent it to the Delaware River Basin Commission, and as Chair of the Toxics Advisory Committee, I've charged the Delaware River Basin Commission and our partners at EPA and different states to look at this list as well in our Toxics 134 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 Standard Committee meeting in October to go over if there are any gaps in the current standards for surface water and drinking water related to what's reported in the discharges.

The second part of this is, the Water Department, meaning you, did an excellent hearing to discuss what -- after, I believe it was, a newspaper article that talked about the percentage of particles and chemicals and compounds that were found still in our water after treatment. And what we discovered was some of that arguably wasn't as -- and you did percentage by one-billionth particle of this or that, but I want that compared to what is ingest possibly by humans that could be harmful based on this list of chemicals specifically. Okay?

And we are looking at that list. I'm not only a Water Department employee, I'm a customer, and I have two small children 135 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 that drink this water, my wife. And the thousands of employees that work for the Water Department who do this view themselves as vanguards of public health to make sure that their drinking water is safe, and we're taking a very serious look at these.

That inspires confidence, because I'm on the Schuylkill side, so I drink that water. So I'm very, very concerned. Let me -- any questions?

Yes. Can I do a follow-up on that?

Yes. Councilwoman Brown.

I would like to do a follow-up to the question around the list of testing of chemicals, and it goes to a question I raised before about protocols and SOP, standard operating procedures. Is it reasonable to think then as we look down the road of this very 136 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 vigorous planning we expect to do on the subject at hand that this type of protocol could be one that is incorporated in the process? Any one of the Philadelphia Water Department officials. COMMISSIONER BRUNWASSER: Well, I do remember addressing this body on the potential of pharmaceuticals in drinking water, and I guess part of that is what you are referring to now. The issue with Philadelphia was in parts per billion, we did not find these chemicals, but since we are a leader in the field and we took part with some of the researchers in the water industry and started measuring, not ourselves but sending to special laboratories, samples of our drinking water that were measured in parts per trillion, which is one thousand times stronger than parts per billion, and we did find 17 chemicals in our drinking water and -- but in such minute 137 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 quantities that you would -- you couldn't physically drink enough water for as many years as you needed to to even come up with a single dose of some of these pharmaceutical drugs. So there's no immediate concern, but it's good that the nation is looking at this ability now scientifically to measure it, such unbelievable measurement, that better to start to think about these things and start to bring procedures in that will help us as a nation to avoid these types of -- any types of problems from pharmaceuticals or any of these other types of chemicals that we find that we know could be harmful to us.

Thank you very much.

I'd like to go to the industry. You heard a lot of the comments and criticisms and concerns, and a couple of them I'd like you to specifically address. One of them was 138 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 that there was no standardization. How many members do you have currently?

About 43 are midstream or producer members and the remaining are associate members.

Would you describe them as small businesses?

Some of our associate members are small businesses.

And what concerns me is that the actual composition of chemicals. There is not a standard knowledge of what levels of concentration of each of those chemicals is in each individual brew, if you would, that goes into the earth and ferrets out the gas. Why is that?

Well, over time those products have been developed by different companies, serving the same purpose, but just like one law firm may market itself as an expert in this area because of a particular expertise, one 139 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 company might market itself to a drilling company saying that their biocide works even better. So over time, those certainly would have nuances, but the basic underlying purpose of having any chemicals in that hydraulic fracturing fluid is to serve a very targeted, specific purpose. There's economic reasons to keep anything to a minimum that's not the water and the sand, the two least expensive parts of the fluid. We've certainly seen both economic and environmental benefits of recycling that water, and when that occurs, there is extensive testing that's done. And the protocol you mentioned is the same in any other industry that is regulated by safety and health organizations. I mean, we have to have on site the products that are being used and in their purest form, which is much more concentrated on those material safety data sheets than you would ever see in the fluid either being 140 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 injected or withdrawn.

Well, I'm looking at this list. Have you seen this list of chemicals that --

Not this particular one, but certainly the source of this data was the industry.

There's at least 50 varying types of chemicals that go from acids to some, just as a layperson, pretty scary stuff, and one is more dangerous than the other, and to know the amounts and concentrations seems to me the kind of information that if I was living next door to drilling I'd want to know. And so is there a reason why we cannot through the EPA monitor how much each driller puts in of this?

Well, there is no 21 reason, and in my testimony I mentioned the changes to Chapter 78 that were put forth by the Department of Environmental Protection, and the industry certainly sees benefits to that, meaning that each 141 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 individual well, the well report that is submitted per well -- not overall, not a whole stack of MSDS's delivered to the agency -- that that will be part of the regular well report. That information is available online at DEP's eFACTS system. It's a very transparent web portal for all sorts of information, not just on the natural gas industry, but for every single permitted source, from dry cleaners to electric utility plants and everything in between.

So if I understood what you said correctly, every well will list for the neighbor downstream the amount and blend of chemicals that were used to do fracking?

First of all, when you say "neighbor downstream," I think it's important to recognize that as the previous panel discussed, these compounds are being contained either through this recycling that I discussed and/or treatment at permitted facilities that 142 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 have the kind of monitoring like we heard from Philadelphia's water authority. So the design and the day-to-day operations of this industry doesn't result in any downstream of -- downstream neighbor of this, because it's a self-contained process. But to your point -- (People yelling.)

In other words, when you're doing 100 percent recycle, of which many of our companies have been achieved and it's been a major innovation that is being noted by regulators and others around the country as to how far this recycling has happened in Pennsylvania, when that happens, it is a closed-loop system. Do we know what's being put into these wells? Absolutely, and that will be available in even more venues than it already is.

I'm glad you don't live in my district, because you sound a little bit political to me. I'm 143 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 going to ask the question again. I got the fact that you take every precaution through your casings to attempt to contain this, but as we saw in the Gulf, things break, things happen. And what my question to you specifically is, will we be able to, in a transparent manner, know what's in the soup?

Absolutely. And when you go on to any website, first responders know this. You know how to go right to the folder, electronic and hard copy, of that data that's on site. And that is readily available today and it has been for years, and it should be even more transparent going forward.

So specifically this is something that the industry supports doing?

Absolutely.

And that will be another one of the recommendations that this body insists upon. 144 9/28/10 - TRANS./ENVIRONMENT - RES. 100515

And I want to point you to several of our members who are already on their websites putting even more information out. We've got several members also who are working nationally and internationally at finding the best next generation of these chemicals. And I think it's both because of the interest of the public that is very valid and other advances that are moving this industry forward all the time.

I want to take a moment. We invited the United States Environmental Protection Agency Region III to participate today and we'd like to take this moment to read into the record a letter of response from them. I think it will be of interest to people at this hearing.

"Dear Councilman Jones: Thank you for your invitation to testify about the impacts of hydraulic fracturing of Marcellus Shale before 145 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 Philadelphia City Council's Joint Committees on Transportation and Public Utilities and the Environment. "Unfortunately, I am unable to attend your hearing. However, I would like to take this opportunity to update you on the action the U.S. Environmental Protection Agency (EPA) is taking with regard to hydraulic fracturing. "Natural gas plays a key role in our nation's clean energy future and hydraulic fracturing is one way of accessing that vital resource. Over the past few years, the use of hydraulic fracturing for gas extraction has increased and has expanded over a wider diversity of geographic regions and geologic formations, including Marcellus Shale. Given this expansion and the increasing concern about potential impacts on drinking water resources, public health, and environmental impacts, EPA believes further study is necessary." (Applause.) 146 9/28/10 - TRANS./ENVIRONMENT - RES. 100515

"In order to address those concerns and strengthen our clean energy future, EPA announced in March 2010 that it will study the potential adverse impact that hydraulic fracturing may have on drinking water and water resources. EPA understands that citizens and their representatives want to be assured that hydraulic fracturing is safe, and we believe this is a fair question that deserves serious study. "EPA is committed to using the best available science in this process and we have engaged independent experts and the public on how to best conduct this study. The study will be conducted through a transparent, peer-reviewed process, with significant stakeholder input. In July, August and September 2010, EPA held highly attended public meetings across the country to discuss the design and scope of the study. "As part of the study's information gathering process, EPA has 147 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 issued voluntary information requests to nine leading national and regional hydraulic fracturing service providers. This data is integral to understanding any potential relationships between hydraulic fracturing and drinking water. Through this information request, EPA is seeking information on the chemical composition of fluids used in the hydraulic fracturing process and data on the impacts of the chemicals on human health and the environment. We are also seeking information on the standard operating procedures at hydraulic fracturing sites and the locations of sites where fracturing has been conducted. "With input from our recently completed public meetings, EPA plans to complete the draft study by October 2010. EPA expects to initiate the study in early 2011 and to have the initial study results available by late 2012. More information about the study can be found 148 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 at" -- it's their website. "Finally, I would like to point out that the EPA will not pre-judge the outcome of this study, but if concerns are raised about specific threats to human health and the environment while the study is ongoing, EPA will not hesitate to investigate and take action using its existing authorities. "Once again, thank you for your invitation. If you have any questions, please do not hesitate to contact me or have your staff contact Mrs. Megan Mackey, EPA's Pennsylvania Liaison. "Sincerely, Shawn M. Garvin, Regional Administrator." (Applause.)

We just got this faxed to us and I thought it was appropriate to read into the record. My only reaction is that ordinary people working together can do extraordinary things, and I'm pleased with the EPA's stance. 149 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 We're going to continue the hearings, and Councilwoman Blondell Reynolds Brown has a few questions.

I do. Thank you very much. Ms. Klaber, you open your remarks by saying that your organization expects to move, and I quote, "safely and responsibly" as we look at this issue. Share with us what the 43 small businesses have done already that support that statement.

Actually, the 43 businesses are the midstream and the drilling companies. The remaining of the 130 or so members have some small businesses in there. So, if I may, I'll respond to your question. Those 43 companies who are doing the drilling, who are responsible for the safety and the environmental protection are involved in quite a few ways. In my testimony I referred to the gas management work that 150 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 we did with the DEP in an area that is really critical to the safety and the protection of groundwater, and that's how you drill a well, how you do it. Not just how it's done in other places, but how we make sure that we're understanding the geology of Pennsylvania. It's not a homogenous geology. We've had some of the nation's foremost experts from among the industry come to Pennsylvania to advise, to help develop not only the best practices, but the regulations that were reflected in the Chapter 78 regulations. So I think that's a very critical issue. Second I would put the safety work. We have a safety committee that has representation from across both the drilling companies, the midstream pipeline companies, as well as the associate members, those who are also on site and need to be partners in safety. We have worked to develop a first responder program that was put in place originally last spring, and that has gone 151 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 through a "train the trainer" process and is now being rolled out among municipal officials to make sure that the training that they've already received for decades, that they also understand what issues may be involved at a well site, to recognize what they may encounter in a first response. And it's very important that we be partners with those folks who have the first responder responsibilities in our community. So that training has been a very big part of what the safety committee has done.

Do you believe there was a lack of that in the Gulf debacle?

I really am not -- I mean, I know a lot of what's going on in detail in Pennsylvania, and technically I'm not qualified to comment on all the technical issues in the Gulf.

Given that then, what would you say, given your rich experience on the other side of the 152 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 ledger, what are one or two lessons learned?

Well, I think accountability is very important. That's been a discussion in the Marcellus Shale Coalition, that the responsibility for that site is with the operator, and that's why it's so important that our safety practices and environmental practices are spread throughout that supply chain. But it's ultimately the responsibility of the operator of that site. I think that's a lessen learned in terms of accountability. The size and shape and conditions of a well in the Gulf of Mexico versus on the surface in Pennsylvania are very different landscapes, but I think the other lesson learned has to be around well casing. And that's why that's been such a big focus, making sure you're building those wells correctly, that they protect the environment and that they have an 153 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 integrity for not just environmental protection, but obviously the safety of anybody on the site or proximate to the site.

So then with that said, is there uniformity then in just the building of the well? Because I have yet to hear affirmatively that -- uniformity helps take the mystery out of a lot of this and it also opens up the transparency piece of this. So with X number of members that make up the Coalition, where might there be some uniform practices?

Good question. Certainly uniformity in the well casing reports, how do you log what you're finding, what are the steps that you're going through, all that needs to be reported, submitted to the Department's Bureau of Oil and Gas. There's also consistency in the water management plans, what are the elements that need to be there, from the time of any withdrawal 154 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 through how that water is handled to its ultimate either reuse or disposal. That water management plan, through the efforts of the Department in the past few years, have become more streamlined. We have six different regions of DEP. Five of them have a Marcellus well, at least one, in them. It's important to be consistent across those regions so that the industry knows what's acceptable and so that the agency can be consistent as well. So there's been a lot of hard work, rolling up the sleeves in rooms to define what the requirements are for these wells. It may be different from the shallow wells that have been drilled for over 100 years in Pennsylvania.

So with those three that you've mentioned, who then is responsible for the audit? Accountability is one thing, but who has the hammer once there has been a violation of what those standards are? 155 9/28/10 - TRANS./ENVIRONMENT - RES. 100515

The enforcement, the inspectors from the Department of Environmental Protection have that authority. Those are both done at the regional office level and obviously coordinated out of Harrisburg.

Is there any self-imposed enforcement procedures amongst the group where you hold your peers accountable?

Right. There's a tremendous amount of that. In our organization, I would say that's the single value add. It could be otherwise just a lot of individual companies being regulated by DEP, EPA, basin commissions and otherwise. But it's really -- I think the value out of my organization to be able to bring those people together, whether it's with regulatory agencies or not, we do it both ways depending on the issue, share what we're finding in different places around the play, get folks up to speed very quickly who are 156 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 coming to Pennsylvania. We've been thrilled when a new company decides to enter the Marcellus. One of the first places that they call is the Marcellus Shale Coalition, because they know they can go from zero to 60 to understand what the requirements are, what the best practices are, and I think that's what makes the organization a value to our members.

And, lastly, what is the temperature with regards to the relationship that your organization shares with its neighbors?

In the community?

Yes.

Well, most of my members at this point do have individuals who are responsible for, I guess we call it, the advance work, really understanding what the requirements are in individual municipalities, because those vary across municipalities in Pennsylvania, making sure to meet up 157 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 front the local emergency response officials, the fire department, the police, the local PennDOT office. We're doing a lot of work with PennDOT to make sure that before we come into a community, we know what the road use agreement is, know what the bonding requirements are. So I would say that that advance work is probably the most valuable aspect of working with our local communities, and then obviously being responsive and communicate, and that's what spending -- what we need to invest even more in going forward.

The communication piece, because there are citizens who do not fit in any of those categories you just mentioned, but yet are deserving of that reality coming in their backyard.

Absolutely. And I think that landowners who have leased their land with a gas company probably do 158 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 have a lot more information than those who have not or those who that's not -- they don't own the land and haven't had that opportunity. So I agree with you. Communication is key. That is something that I think we're focused on doing even more of, but, as you know, it's a very big Commonwealth. I know Philadelphia is at the center, but there are 66 other counties and we're spending a lot of time in each of those communities.

Okay. Well, I thank you all for your important testimony. Any final closing comments or remarks you care to make, any one of you? (No response.)

Then thank you very, very much for your testimony. If we could please invite members of Panel No. 3, which include Denise Dennis, historic farmland owner; Iris Marie Bloom, Director of Protecting Our Waters; and Dr. Frederic Murphy, Temple University, Department of 159 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 Economics. And if we could please invite to the table Congressman Joe Sestak's representative to read your statement to the record, fully recognizing that time is not your own, like the rest of us. Please have a seat. (Witnesses approached witness table.)

Okay. We will start with the representative for Congressman Joe Sestak. If you would state your name for the record and proceed with your testimony.

Thank you very much, Councilwoman.

You're welcome.

My name is Bill 20 Walsh. I'm the Congressman's District Director. I work at his district office in Media, Pennsylvania. I've known the Congressman since our plebe year at the United States Naval Academy many years ago. I've had the honor to work for him 160 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 for the past four years, and he asked me to pass to you and to President Verna the sincere appreciation for the opportunity to testify today. I've left copies of his press release over there describing his position on the Marcellus Shale, for those who want them, and if there others who need them, they can contact our office and we'd be happy to provide them. With that, I'll provide the Congressman's statement. President Verna and Councilmembers, my thanks to you for bringing together such a wide range of experts today to testify on the environmental impacts that hydraulic fracturing in the Marcellus Shale will have on Philadelphia and the surrounding region. Accountability and accessibility are the two crucial elements of good government and should be applied to all activities in our watersheds, including the stewardship of the Marcellus Shale. 161 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 That is why I co-sponsored the Fracturing Responsibility and Awareness of Chemicals Act, or FRAC Act. This bill would take the important step of closing the Halliburton loophole, which exempted hydraulic fracturing from regulation under the Safe Drinking Water Act in the 2005 Bush Energy Act. Its passage -- (Applause.)

Its passage would allow the EPA to assist the Pennsylvania Department of Environmental Protection in the regulation of hydraulic fracturing and provide for enhanced protections. Unfortunately, I am one of only two Pennsylvania members of the House of Representatives currently co-sponsoring this bill. (Applause.)

I also supported an effort to include language in last year's Appropriations bill to allocate funding for the U.S. Environmental Protection Agency to study the impacts of hydraulic 162 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 fracturing in unconventional shale plays such as the Marcellus Shale formation here in Philadelphia. It is, therefore, critical that this study be detailed and completed in a transparent manner. As such, I submitted a public comment to the EPA which recommended a thorough and scientifically based study. I also encouraged the EPA to complete this effort in as expeditious a manner as feasible given the strong economic pressures and rapid development already taking place in our nation shale plays. There is extraordinary economic potential associated with the development of Marcellus Shale resources. However, as the oil spill in the Gulf reminded us, there is also great risk when industry is allowed to police itself when our quality of life, present or future, is at stake. (Applause.)

Our nation should be committed to taking steps needed to transition us away from fossil fuel, but 163 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 this will take time. Through that process, there needs to be a responsible utilization of our domestic energy resources, including natural gas. Natural gas can boost our economy and cut our dependence on foreign oil. It produces half the carbon emissions of coal, allowing us to reduce our impact on climate change in the near term. In addition, the responsible development of the Marcellus Shale formation can create needed jobs in our state during these difficult economic times. However, in order to ensure that jobs in Pennsylvania are filled by Pennsylvanians, not out-of-state workers, I recently introduced House Bill 6141, the Marcellus Shale On-the-Job Training Act of 2010, to provide a national grant program for on-site training in this field. Unfortunately, this legislation is not yet law. The scale of natural gas -- the natural gas boom in the Marcellus Shale 164 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 region is unprecedented, and we cannot compromise the right of Pennsylvanians and the generations that follow to have a clean and safe environment, including clean drinking water. (Applause.)

That is why I've called for a halt to new drilling until greater environmental, health and safety regulations and legislation can be finalized and until we have had time to train Pennsylvanians for the jobs now going, in the vast majority, to out-of-state workers. The coal industry left our state with a legacy of 2,500 miles of deteriorated streams, 250,000 acres of contaminated land and a $15 billion clean-up bill. Let us not make mistakes like that again. Lack of governmental and regulatory foresight should not lead Pennsylvanians to needlessly bear the burden of the increased cost to our infrastructure, risks to our health and 165 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 safety, and environmental degradation once more. In closing, let me thank President Verna, Councilman Jones and the Philadelphia City Council for your desire to see this and other environmental issues reviewed in a thorough and thoughtful way. I have no doubt that if the best science, public policy and leadership are applied to this extraordinary opportunity, protections will result that will simultaneously benefit our environment and our economy in a way that will make the Commonwealth of Pennsylvania the global standard for responsible stewardship of natural resources. We should settle for nothing less. Thank you. (Applause.)

Sometimes it is very difficult to remember that I'm up here to chair this. I caught myself clapping about the jobs part. I had to 166 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 restrain myself.

Thank you, sir. You're very kind. Thank you all. (Applause.)

Will the next person to testify please approach the mike and read your name. And remember, once again, feel free to summarize. All of this will go into the record. All written testimony will be memorialized in the record. Thank you.

Hi.

Hello.

Councilman Jones and Councilwoman Reynolds Brown, thank you for inviting me to speak today and for having the discernment and, might I say, courage to convene these hearings. Before I start, I want to hold up a book that was written by a Pennsylvanian, Rachel Carson. Fifty years ago she warned the nation about the effects of chemicals, non-biodegradable 167 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 chemicals, on our environment, and she's considered the mother of the environmental movement, and I am evoking the spirit of Rachel Carson here today, and our Department of Environmental Protection is named after her, and I hope they live up to the woman whom they are named for. So now I will begin my remarks. Believe it or not, I am not --

Again, repeat your name.

I am Denise Dennis. I am not a professional environmentalist. I am not an activist. I am here today as a private citizen with knowledge to share. I speak for the landowners in the Marcellus Shale region. I am all for progress, but I am for progress that is at least reasonably safe. To ensure the safety of the people of the Greater Philadelphia area, we need cumulative impact studies and results of 168 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 EPA studies before allowing gas companies to drill in the Delaware River Basin. I have lived in Philadelphia for 30 years, but I grew up in Northeastern Pennsylvania in what people think of as the coal region, although I've never seen a coal miner. I am also the steward of a property on the Marcellus Shale that was settled by my ancestors, free African Americans who came here from Connecticut 200 years ago. My four generations of my family are buried in the cemetery on our family property. We have been working to preserve the property, which the National Trust for Historic Preservation has identified as one of the rarest African American historic sites in the United States and one of the kind. There is no 21 other African American family that has been able to retain ownership of its property for 200 years. (Applause.)

And, again, that 169 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 property is on the Marcellus Shale. As I speak today, please remember how the tobacco industry tried to deny the impact of smoking on our health. (Applause.)

And how they attempted to intimidate and to silence anyone who tried to simply tell the truth. I began to research gas drilling when after receiving offers from various gas companies for leases to drill on our farm. I decided to find out for myself what this drilling entailed. I approached it with an open mind. I must say, though, I had reservations, thinking about all the African Americans who had their land swindled away from them, taken from them, when they had no rights in the courts and also stolen from them, because, again, courts would not defend them. So when I was offered gobs and gobs and gobs of money, I didn't think 170 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 this is good. I thought anything this good is too good to be true, probably is too good to be true. (Applause.)

Because, as I've said to my -- that is a predominantly white area. I said, This is what it feels like to be black, as the gas companies have told false truths to get people to sign leases up there. I approached it nonetheless with an open mind, because if this proved to be safe, it would have been great for us, because it would have given us money to go on with our preservation projects. So if it proved to be safe, I would have been all for it. Unfortunately, though, the more I learned, the more I learned and studied the drilling process, the more concerned to horrified I became. (Applause.)

The farm is about ten miles down the road from a place called Dimock, and if you go to the 1850 171 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 census, you will see the names of James Dennis and Henry Dennis, my great-great-great grandfather and my great-great grandfather. And the only reason they're not in Dimock now is, Henry married Angeline and moved down to the farm, right ten miles down the road, her family's property. On New Year's Day 2009, a gas well exploded because the cement well casement -- those cement, steel, cement we heard about today, guess what? It cracked. Designed by Halliburton. The same designer of the well in Dimock designed the well in the Gulf in the BP spill. Right now 32 residents of Dimock -- and it's a small place. Thirty-two is like half the population -- have to have their water delivered to them for all their needs - for bathing, cooking, drinking and household chores, because their water is contaminated. Imagine what would happen, 172 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 whether it's in the near future or the distant future, if the population of the Greater Philadelphia area had to have their water delivered to them. Imagine the pecking order. Imagine the pecking order about who would get the clear water and who would not. Imagine all the lawsuits when the gas companies deny culpability, as they have done in Dimock. They say the methane was already there. You heard Ms. Klaber. The methane was in the -- well, if you know the methane is there, don't drill. If this sounds improbable that American citizens who pay their property taxes and who are living their lives not having to worry about contamination are now having to have their water brought to them, talk to the residents of Dimock. (Applause.)

You might see television commercials now extolling natural gas as clean energy. This is not 173 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 true. (Applause.)

I promised myself I was going to be calm. The process for extracting natural gas from shale is as dirty as coal mining, and, as I said, I'm from the coal region. When natural gas escapes into the atmosphere as unburned methane, it is times more powerful than carbon 12 dioxide at trapping heat. 13 (Applause.) 14

You know, when 15 your ancestors are buried somewhere, you 16 do your homework. 17 The industry claims that 18 fracking doesn't cause methane 19 contamination, but what the industry 20 doesn't tell you is that drilling the gas wells releases the methane that then migrates to the wells and aquifers. I've heard them speak before. The industry says that hydraulic fracturing -- you heard it here 174 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 today -- has been around for 50 to 60 years, but what they don't tell you is that horizontal hydraulic fracturing, the kind that you use to go into shale as deep as the Marcellus, is new, and it was developed by Halliburton, and it is untested, and Pennsylvania is the lab and Pennsylvanians are the lab rats. (Applause.)

Lord help me. (Audience member yelled "Lord help us all.")

Yes, especially the people upstate, my neighbors. The industry claims that this will bring jobs to Pennsylvania. Well, I'm a journalist and I interviewed Secretary Hanger for an article, and I said, Secretary Hanger, who is Secretary of the DEP, from my data I've learned that most of these jobs are going to people from out of state who are now riding around in their trucks up there with confederate flags, who have years of 175 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 experience in this industry. And Secretary Hanger said -- and I've read it so many times from my notes that I know it by heart -- It is true, most of the jobs are going to people from out of state, but the Governor and I believe they should go to Pennsylvanians. The industry claims that only one percent of the solution, the fluid, that goes into the ground is made of chemicals. What the industry does not tell you is that it takes from two to five million gallons of fresh water to frack a well, and one percent of two to five million gallons is 200,000 gallons to 500,000 gallons of toxic chemicals. And there was a big discussion today about what comes out and what doesn't come out. This is from a scientist, Sandra Steingraber. This is what comes back in addition to the chemicals, in addition to the brine, benzene brine and radioactivity, because it is that level that shale has radioactive qualities to 176 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 it. So what also comes up in this water, benzene brine, radioactivity and heavy metals, that for the past 400 million years have been safely tucked a mile below the surface, and now because of drilling, these things come to the surface. And they are not biodegradable. You can't clean them up. I was listening to Ms. Klaber. What was her word? You can -- something that implied clean them up. No can do. The science is there. I'm an ordinary person. I could find this science. And I heard what the industry said and I looked at what the industry told me and I looked at what the scientists, multiple scientists, told me, and I said someone is not telling the truth here, and it wasn't the scientists. You can spin anything. They're spinning, you know, like a jowly with plates. They're spinning. They're spinning people. We got to make sure the plates crack. Okay. There is a PR campaign 177 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 now on television and the radio describing natural gas, and they're spending millions of dollars on these campaigns claiming that natural gas is home-grown American energy for Americans. The truth is that all of the companies investing in the Marcellus Shale are multi-national corporations. For example -- and I've had letters from all of them -- EnCana is Canadian based in Calgary, Alberta, Canada; Chesapeake, 32 percent of Chesapeake is owned by Statoil, a Norwegian company, and they will not allow hydraulic fracturing in Norway. Schulemberger, a French company, is a major shareholder in Cabot. An Indian company has invested $6 billion in the Marcellus Shale, in land owned by Pennsylvanians. And a Japanese company has invested 1.6 billion. The largest American-only gas company, Devon, has not invested in the Marcellus Shale because they believe it is too risky. Already a 178 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 Pennsylvania-to-Canada pipeline is planned. This gas is not going to stay in Pennsylvania and lower your gas bills. It's not even going to stay in the United States. Rather, this gas will go into the global marketplace, where it will make international shareholders wealthier than they already are. Just as -- (Applause.)

Just as corporations received tax breaks based on the rationale that they would create jobs for Americans, only to then take those jobs overseas where labor is cheap in order to make their shareholders' profits higher, the gas companies will take natural gas from Pennsylvania, pay a few people chump change and reap stratospheric profit, leaving us to clean up the mess they leave behind. (Applause.)

Including healthcare for those stricken by the effects of contamination. And I've got 179 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 the information on asthma, cancer, infertility, brain lesions. These are the health issues we can look at, and we'll have to take care of them. And the effects of living in a ravaged, a ravaged Commonwealth. The gas industry has the financial resources to go back to the drawing board and develop a way to extract gas from shale safely. If we stand up to them, perhaps they will. We have the shale. We've got it. We've got the resource. It has been here for 400 million years and it isn't going anywhere. The industry has threatened Harrisburg that they will leave if Harrisburg doesn't comply with their demands. But, my friends, as long as there is gas in Marcellus Shale, the industry will remain interested in it. We've got the bargaining chips that we're rolling over. We can afford to wait for the EPA and for cumulative impact studies. We've got the cards in our 180 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 hands. We just got to stand up. (Standing ovation.)

Someone needs to be the adult in this situation. Someone needs to stand up and say, Stop, wait and listen. (Applause.)

We need to understand the overall risk and the impact on our community, our state and our nation. Our nation is at stake. We're going to poison ourselves into oblivion. We're not going to have to just import oil; we're going to have to start importing water. Isn't that going to be fun? Eight blocks east and one block south from here, a few men stood up in 1776 and said, Enough is enough. Now, they were not perfect men. A lot of them had slaves. But they did stand up to the most powerful empire of their time, the British. What better place, what better place than Philadelphia for -- 181 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 (Applause.)

-- for someone, the DRBC maybe, to say, Enough is enough. We're going to wait, we are going to wait and see the results of the EPA and cumulative impact studies, and until then, the Delaware River Basin is off limits. (Applause.)

Well...

You invited me.

I sure did, and I'm glad I did.

Don't mess with a woman.

I have no 18 questions on that. I'm going to let the other panelists speak, but that was powerful, and thank you. (Standing ovation.)

Well, I feel sorry for the next panelist. I really do. But please begin your testimony.

Thank you. Denise 182 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 Dennis is a wonderful researcher, wonderful speaker, wonderful writer, and I'm proud to be sitting next to her. My name is Iris Marie Bloom and I'd like to thank you, Councilman Jones and Councilwoman Blondell Reynolds Brown, for your leadership prior to today and your leadership today. We really, really appreciate it. This is the most important public health issue in our region in our time. And, of course, it is an environmental issue, but I think it's very important for us to understand this is a public health issue. I speak on behalf of Protecting Our Waters, a Philadelphia-based, all volunteer, grassroots group of about 1,600 people on our list, 160 organizations in our network, sometimes tens of thousands who read what we write and a dozen people who do all the work. Thank you, Protecting Our Water volunteers, who are absolutely amazing. I am tremendously grateful for everyone 183 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 in Protecting Our Waters and everyone here today who cares enough about clean water and air, public health, climate and environmental justice to be heard. I also speak on behalf of myself. I am a people person. I live in West Philly and have worked for a healthier Philadelphia for over years 10 as an educator, businesswoman, as founder 11 and director of the non-profit Women's 12 Anti-Violence Education, as a writer and 13 editor. I am an activist, and I am most 14 amazed that Homeland Security never 15 tracked me until I began advocating for 16 clean water and clean air. 17 (Applause.) 18

There is more I'd 19 love to tell you about how much I love 20 our rivers and why, not just the tap water that I do love to drink but the rivers themselves, how well I know the Schuylkill and Delaware and how rivers bring people together across all the dividing lines known to human kind, urban 184 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 and rural, upstream and downstream, all the divisions of class, race, age, culture and personal histories, but I have about points to make in four 6 minutes, so I will talk fast. 7 This is a public health issue, 8 and, City Council, we are asking you to 9 stand up for our drinking water, our 10 rivers and streams, economic justice and 11 our future loud and clear. 12 Gas drilling upriver threatens 13 Philadelphia. Toxic chemicals can in 14 fact cause serious harm, illness and 15 premature death even in trace amounts. 16 PCBs in the Hudson River were proven to 17 travel 200 miles. So fracking upstream can impact our drinking water. This June, the national non-profit American Rivers named the Upper Delaware River the number one most endangered river in the United States, a dubious distinction, due to the threat of up to 20,000 unconventional gas wells being drilled upstream. Two weeks ago 185 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 the environmental group Riverkeeper released a report summarizing more than 100 cases of water contamination related to gas drilling around the country, and the independent reporters at ProPublica have documented over 1,000 instances of water contamination due to gas drilling nationwide. We cannot afford to treat contaminated water, we cannot afford to replace contaminated water, and we cannot afford to drink contaminated water. (Applause.)

I'm going to step aside from my prepared comments just to address some things that haven't been stated yet in other comments. Denise referred to the radioactivity of the Marcellus Shale. This is a very important -- this is one of the most important features that has not been adequately addressed yet. The Marcellus Shale has high levels of radium-226, which is a leading cause of 186 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 lung cancer and bone cancer. Radium-226 comes up -- the samples have come up 4 as high as 16,000 picocuries per liter. 5 That is 3,200 times the safe level for 6 drinking water, which is five. So five 7 picocuries per liter is what's safe for 8 drinking water. Sixteen thousand 9 picocuries per liter is what comes up. 10 What comes up is also 267 times 11 the safe level for exposure to the 12 environment. But when it comes up, it is 13 exposed to the environment, workers are exposed to it, and I have not heard any adequate description for treatment of this radioactive waste. So we should be clear that the waste, the flow-back, is not just toxic, but it is radioactive. So when it's called brine and we're envisioning like simple salt water, that's not it. (Applause.)

A couple of other points. There was a reference to New York City being more proactive. On this 187 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 issue, New York City, City Council and Mayor have been proactive. They insisted that a study be done. They hired a firm, Hazen and Sawyer, to do an engineering study of the New York City watershed. That cost, I believe, a million dollars. It took months, and it's done. When 9 it came back, the conclusion was there 10 should be no fracking, no horizontal 11 drilling in the Marcellus Shale within seven miles of New York City's watershed. (Applause.)

We need a comparable study for Philadelphia's watershed. That study -- the million dollars for that study is in the federal pipeline right now. Congressman Sestak and two other Congressmen have fought for that. We need to make sure that that study happens. And in terms of Pennsylvania having the most stringent regulations -- that was also stated -- in fact New York state has the most stringent regulations, 188 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 because they have a moratorium. The New York State Senate passed a moratorium on gas drilling. And that's what we need. That's what stringent regulations would mean. Until we have adequate regulations, we need a moratorium. I'm going to -- (Applause.)

So to be very clear what we're asking for, City Council, we insist that you do everything in your power -- you've already done a lot; we need you to do more -- everything in your power to demand a cumulative impact study be undertaken and completed specifically for the Delaware River Basin before any rules are issued for drilling in this watershed, before any more exploratory wells, water withdrawals or drilling permits for vertical or horizontal wells are approved. /ENVIRONMENT - RES. 100515 testimony, specifies the DRBC must review the cumulative impacts of exploratory wells, which can and do cause as much harm -- as much or more damage than producing wells. So we insist that a cumulative impact comes first. If it takes three years to perform that cumulative impact study, that moratorium will provide protection to families and children, land and water for three more years. This month, 13 more families in Susquehanna County filed suit against gas drillers for water contamination by poisonous fracking fluid, sickening a young child in one of those families. On Thursday, this Thursday, the day after tomorrow, September 30th, DEP Secretary John Hanger is expected to announce publicly that it will cost $10 million to pipe in replacement water for the families in Dimock because the nine square mile aquifer is permanently contaminated. It cannot be cleaned up. /ENVIRONMENT - RES. 100515 So they're talking about creating a whole new municipal water system, piping in water from elsewhere. The bill is going to be paid for by the State of Pennsylvania. That's us. We can't afford gas drilling. Under these circumstances, the environment and public health cost is too expensive. Please support a statewide moratorium on all new fracking permits. We're asking that as a specific demand, because there are two bills in the House -- in the State Legislature right now calling for a moratorium. The best bill is being introduced by Tony Payton from Philadelphia calling for a three-year moratorium, but any statewide moratorium we're asking you to give your full support. /ENVIRONMENT - RES. 100515 deforestation and soil compaction. Remediation for the soil and for the water quality is not an expense we can afford. We haven't talked about the salt line yet. The salt line in the Delaware River is now at Chester, five miles north where it usually is this time of year. The salt line would march north if drilling proceeds because of draining potentially billions of gallons of fresh water permanently from the ecosystem, permanently, and injecting most of that underground in a contaminated form. Furthermore, global warming and sea level rise will cause the salt line to move north and dumping of high, tedious, salty wastewater from the Marcellus Shale, and she will cause more salt. So we have a salt problem. That's a cumulative impact. It has not been studied yet. /ENVIRONMENT - RES. 100515 warming. Unconventional gas drilling contributes to global warming by pouring hydrocarbons, over a thousand truckloads per frack, plus 800 gallons of diesel per day for a typical generator into the air, along with massive routine methane emissions. Methane, as Denise pointed out, is a potent greenhouse gas, trapping, according to which scientists you're listening to, to 72 times more 12 heat than CO2. So we're talking about 13 increased global warming, but no one, not 14 DEP, not EPA and not DRBC, has any plans 15 to regulate these massive routine methane 16 emissions. Philadelphia cannot afford 17 more global warming, which threatens to 18 inundate the wetlands and eventually the 19 City itself. /ENVIRONMENT - RES. 100515 than diesel, in global warming impact when extraction costs are taken into account. This is not an alternative energy fuel. This is a fossil fuel, which dangerously increases global warming.

Further, gas drilling explosions, fires, blowouts, pipeline problems create potentially catastrophic risks for the region, which have yet to be evaluated, let alone prevented. Due to its structure, in that DEP is directed by the bus, Ed Rendell, to fast-track drilling permits that's a structural problem, they're fast-tracking drilling permits and the same entity is charged with regulating the processes that result from those same drilling permits that are being handed out like candy. So because of that structure, because of its lack of funding, its inability to catch up to the pace and destructiveness of this industry, DEP is unable to appropriately regulate this industry. /ENVIRONMENT - RES. 100515 Secretary John Hanger said that the June 3rd Clearfield blowout would have been catastrophic had a single spark been present. As it was, it was merely a disaster. As everyone knows, toxic fluids and flammable gas spewed 75 feet into the air for hours in that 9 incident. It was potentially 10 catastrophic. That happened in a 11 beautiful state forest. In this more 12 densely populated region, that spark more 13 likely would have been present, turning 14 disaster into catastrophe. 15 We need a moratorium for safety 16 and emergency planning that has not happened yet. /ENVIRONMENT - RES. 100515 safety planning, and that is the case throughout the State of Pennsylvania. We need facts, not fabricated figures. The industry's only argument about how they're going to benefit the public, the general public, is jobs. No 8 jobs will be created in Philadelphia due to gas drilling, unless we get a whole new crop of environmental lawyers, which we sorely need, and civil rights lawyers, which we also need. Furthermore, the industry's prediction of 90,000 jobs created this year by drilling was fabricated by a computer program called IMPACT, which can produce whatever numbers are desired using fabricated multipliers. This discredited study was paid for by the industry. Pennsylvania Labor and Industry figures show an increase of only 2,500 in-state jobs in the mining sector since 2007 and 5,000 jobs in the hospitality sector, according to Responsible Drilling Alliance. /ENVIRONMENT - RES. 100515 are the state figures. No 90,000 jobs. That is a fabrication. We need facts. I'm just going to say this, because my mother died of lung cancer after smoking for 60 years, and my brother has worked in the -- has worked against tobacco for many years as a lawyer, and every time I tell him what the PR strategy is of this industry, he is stunned how identical it is to big tobacco. This is not just rhetoric. This is what they're doing. Big gas behaves like big tobacco, which actively suppressed scientific evidence linking cigarettes to lung cancer for decades, while arguing that our economy needed all these jobs. Same PR strategy, same de-valuing of life and health. Why is the industry trying to rush and fast-track everything? Common Cause has shown the industry spent $5 million lobbying in Pennsylvania. /ENVIRONMENT - RES. 100515 grease the rails of speedy drilling. Why? They want to drill fast before the EPA study or any cumulative impact study can be done, before lawsuits have time to even come to court or let alone be resolved, and before the general public can fully comprehend the massive harm. )

Unions are being shut out from gas drilling jobs, but only unions can make drilling safer, because workers who speak up about health, safety or environmental violations can be fired without whistleblower protections, whatever state they're from, wherever they're from. They have no protection if they're not in a union. And many people have spoken to workers on site, and that's what they say. They say, We are paid a lot of money to do a job and look the other way and not speak the truth. A diverse economy is a healthy economy. Eco-tourism, organic farming, trout fishing, healthy agriculture, 198 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 hiking, every other form of commerce that requires clean water, clean air and healthy, beautiful landscape are all at risk. Trout fishing one species alone of trout puts $4.7 billion into the Pennsylvania economy every year. And if you look at a map of the best trout fishing streams -- I didn't know this until I started studying Marcellus Shale, where the trout fishing streams are. They overlay -- these are all the trout fishing streams. They overlay exactly on top of the Marcellus Shale extraction areas. We've been warned. People have come all the way from Texas to warn us that the air pollution is worse than the water contamination. There's a problem with fragmentation here, fracturing and fragmentation. The agencies are fragmented. So it's my understanding the DRBC does not control or study or worry about air pollution. Their job is water 199 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 quality. DEP is being directed to fast-track permits. EPA is kind of shut out from the whole thing because of the Halliburton loophole. So who is looking at air pollution? Studies have confirmed that in Fort Worth gas drilling poured as much CO2 into the air as all the cars in Fort Worth annually. You can replace water, but you can't replace air. Just a little bit more. And I know people have a lot to say, so I really hope we can hear from the public, but we need to know that Pennsylvania DEP has logged over 1,614 gas drilling violations since 2008, of which 1,056 are identified as most likely to harm the environment. We can't afford this kind of damage for the sake of a boom-and-bust cycle. Marcellus wells are depleted 75 percent within the first year, according to industry records. When the wells are done, the destruction of habitat, wetlands, streams, water quality, air 200 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 quality, climate and public health remains behind. Not just for a few months, but for many years, for decades, and as Dr. Boufadel pointed out, for 10,000 years in terms of all of the toxic materials that are injected underground. The only reason -- I'm sorry. Just a little bit here. Councilmembers, we have to stand up, slow down, say halt, say study first, say moratorium until science, not cash, can guide policy. We have to protect our neighbors by insisting on no 15 forced pooling. If forced --

Thank you.

If forced pooling were to go through, then this precious land with this amazing legacy on the Dennis farm would be forced against their will to have gas drilling underneath their property, as well as all around their property. We must insist that PGW not buy Marcellus gas for as long as it takes for 201 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 the EPA study to be done, for our own cumulative impact study to be done and for the public to be in discourse to run its course. We need a societal consensus about whether or not this is good. So, PGW, don't buy Marcellus gas until then. Meanwhile, we must reduce our carbon footprint as if there were no gas. There are 250 cities Philadelphia's size in China which heat 100 percent of their hot water using solar systems. We can do that. (Applause.)

There's a lot more I would love to say about people, because rural people from Tioga County, Bedford County, Bradford County, Sullivan County, Susquehanna County are calling me day and night because I've got Protecting Our Waters on my Gmail and on my website and they think that I can help protect them. And that's why I'm coming to you. That's one of the reasons I'm coming to you, because rural people -- we are healing 202 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 the urban rural divide and we are caring about our rural neighbors as well as our urban population. We know your first job is to protect the urban population here, but we do need to protect our neighbors as well. The only reason for the Marcellus rush is that fossil fuel extraction is the most profitable activity known to man. Check out marcellusmoney.org to see whose pockets Marcellus money is filling. But their money isn't going to stop us from protecting our health, our waters, our flowers, our fields, our air, our climate, our economy, our people, our future. (Standing ovation.)

I hope you're all clapping for your yourselves, because your dedication really matters. And before I turn the mike over to our esteemed economist, I just want to mention www.protectingourwaters.com as a 203 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 way to find out more information and look at our allies' links. Thank you.

I want to thank everyone for their patience. We are running behind time. I told you five minutes. It seems as though everyone's watch is broken. So is mine, because the information is important to get out there. But what we want to do is get everybody in so it's a matter of public record. So, remember, we are listening. All written testimony will be memorialized. If you want to summarize, feel free. Thank you and begin your testimony.

Okay. I'm Frederic Murphy, a Professor at the Fox School of Business at Temple University. S. /ENVIRONMENT - RES. S. energy markets, and I was involved in the major policy analyses that went through for all the major energy legislation that affected the nation when the first energy crises hit in the 1970's. I've also been involved in economic impact assessments. I took the Army Corps of Engineers' economic assessment of the deepening of the channel, and I was the one who found the major flaws in that first analysis that caused them major headaches and having to redo that study. I've also looked at the economic impact of casinos, and I found the major flaws in those studies as well. And so I do have a background of digging deeply into these things. /ENVIRONMENT - RES. 100515 only had a few hours to look at this, so these are preliminary views. But let me first start out with the basic principles that I use to look at an economic impact statement. First, number one, it's a sell document. These documents are produced by interested parties who want to sell a position, sell a project, and they all point out the positives and never the negatives. And next, a consultant who writes one of these documents has to be as positive as possible, because otherwise they wouldn't have any future customers. So you always have to put on your green eyeshade when looking at these things. /ENVIRONMENT - RES. 100515 talking about projects like doing each other's dry cleaning, which clearly does not add jobs to the economy. And then -- and this involves being very careful about understanding the net job additions that come from the project as opposed to the gross job additions. So that, for example, in the casino economic impact reports, they talked about all the jobs they added in the casinos, but they did not address the question of what were the job losses elsewhere, because people have constant recreation budgets they don't violate and if they spend their money in the casinos, they don't spend their money at local restaurants and local entertainment venues. And so that means the casinos were a net job loser for the City. This applies to stadiums, it applies to concerts and arts. It applies to the Convention Center and even medical research labs. /ENVIRONMENT - RES. 100515 local recreation dollars. That means other recreation businesses are impacted in the region. Convention centers bring in outside dollars, but they cost a lot of money and don't make any money on themselves. So it's a question of whether that's a good investment. Medical research labs I put on here because that's 100 percent outside money from national institutes of health and other research funders that generate huge jobs without a lot of cost to the City. Now, the other question I ask, Are the numbers consistent with other economic impact statements. So that, for example, SugarHouse claimed that they would provide jobs that average $40,000 each. Foxwoods said $18,000. You look at Foxwoods' report, Foxwoods told the truth. And you look at the casino reports. /ENVIRONMENT - RES. 100515 showed that they were job killers, too. So now this brings me to the gas report. And, again, this is preliminary, because I haven't spent hours digging through the numbers, but clearly, the industry puts its better foot forward in this report. It talks about all the positives. And probably the job numbers are inflated, but I haven't had a chance to check the multipliers in this model that they used. They're checkable at some point. The authors were paid by the industry and have worked in the industry for years. Considine is a known researcher, by the way, so he does have a respected career, but he's producing a product for the industry. Now, in favor of the gas industry report, this is a pure export industry. I mean, all that gas that they produce either substitutes for gas we would have imported or it's sold. So it's an export industry. /ENVIRONMENT - RES.

100515 Now, I would have said that there's little job loss, except in the impacted farmlands, but as was pointed out to me, I'm not an expert in recreation industries and to what extent does this do damage to the fishing industry, and I don't know, and it could be significant jobs. Now, I can't judge whether these numbers are consistent with other impact statements, but a couple points are clear. The authors try to claim that the Marcellus Shale is in competition with the Barnett Shale and other shale deposits in the country, and so they try to create this horse race sense and we got to take care of them. But, in fact, there's a national natural gas price with regional differences, and you see that PGW buys from the Gulf from standard gas supplies. And this is a national market. We're not competing against the Barnett Shale. /ENVIRONMENT - RES. 100515 Now, one of the reasons for this report is to address the issue of taxes or to fight back the taxing of the gas. However, the report says nothing about the job impact of taxes. How would one do that? One would compare the number of jobs before and after the taxes with a tax model that incorporates the geology, the cost of the industry and the gas prices. There's nothing in the report on that. So the only conclusion I can come is if they're willing to pay that much in upfront money, they could afford to eat the cost of the taxes and they could afford to eat higher costs of production to make it more environmentally safe to produce the gas. /ENVIRONMENT - RES. 50 mostly, whereas a few years ago the gas price was $10 a thousand cubic feet. Now, eventually, once the shales are depleted, the gas price is going to get back up there, and so no 9 matter what the taxes are, no matter what the environmental restrictions are, it will at some point become economic and there will be jobs in that industry, but they'll be jobs that are safer and better protect the environment. The other thing is that one of the things about Pennsylvania is that this has been a boom-bust state as far as natural resources. We were the major oil producer, and now there's some, but not a lot. And we've seen the destruction from the timber industry. Thank God that it was renewable and grew back. /ENVIRONMENT - RES. 100515 the state. It's better to have a thousand jobs for ten years than 10,000 jobs for ten years.

Say that again.

It's better to have a thousand jobs for a hundred years -- did I misspeak -- than 10,000 jobs for ten years. So we don't necessarily want an extreme boom that will create an extreme bust as far as the health of the state economy. Now, the other thing is, the economics literature on taxes and on how the federal government ought to take lease bonuses and royalty payments -- there's a big literature on that -- it is important to look at, and there's -- and the thing you look at when you do this kind of tax analysis is not who writes the check to the government, but who ultimately pays. And in terms of, say, a tax on natural resource, it would just 213 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 mean lower lease bonus payments for the holder of the natural resource, and it would not mean necessarily higher cost for citizens of Pennsylvania in general. And so in conclusion, I would say that one would have to take the economic impact statement with a jaundiced eye. One would have to put on one's green eyeshade and recognize that this is a sell document. And the industry is so highly profitable, otherwise it wouldn't be paying so much in upfront royalties, that there is the opportunity to regulate and still have the gas produced or the jobs there. And there's no rush. The resource has been there for hundreds of millions of years. It will still be there. Thank you. (Applause.)

I want to thank this panel both for your passion and your knowledge about this important research we're doing. One economic 214 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 question, because this is more environmental in this nature and hearing, but I can't resist the question of, is it -- I know and I've traveled abroad where there are oil-producing nations. It is not uncommon for the residents of that nation to receive a subsidy on the gas that is produced in Middle East countries, that they get a benefit from the origin of the natural resources, meaning that people in Amman, Jordan don't pay a lot for gas because they're neighbors to Saudi Arabia and they subsidize their actual petroleum use. In the case of Pennsylvania, are there any measures that you know of or things that in other states have been done to give a hometown discount, if you would, for the resource that is produced here? We heard very little jobs being created for Pennsylvanians and a great deal of risk assumed by Pennsylvanians environmentally. Have we looked at that at all? 215 9/28/10 - TRANS./ENVIRONMENT - RES. 100515

Well, first off, one should look at the kind of cars that are driven in Saudi Arabia, and they're the biggest gas guzzlers around, because gas is so cheap. So essentially if we lower the price, we would have much higher consumption, and that has consequences for the environment and has consequences for when the resources go out and we build this infrastructure around cheap resources and we don't prepare for when the resources are going to be very expensive. So, in fact, that actually is not a good idea. If you're going to take it, take it as tax revenue and lower the cost for taxpayers in other ways.

The purpose for this hearing is to vet ideas. Even when they're bad, we need to know it.

Okay.

Councilwoman Brown.

Let me 216 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 echo, the testimony was powerful, deeply compelling and an affirmation that we need to be having this discussion. My question is, what are the elected officials doing or saying in the rural areas around this issue? Have they been energized, galvanized, talked to, sat down with, whatever?

Well, I'll just mention a couple of things, and also if Brady Russell is still here, he has more expertise on that and the big picture from Clean Water Action perspective. But Senator Ferlo is from the Pittsburgh area, not a rural area but a heavy, heavy gas drilling area, and he is the first person in Legislature to introduce the one-year moratorium. So it's very significant that somebody from one of the areas that's been drilled the most heavily for the longest is actually in the forefront of pushing for a statewide moratorium.

His full 217 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 name is what?

That's co-sponsored by Vince Hughes in Philadelphia. So that's SB 1447. SB 1447, I believe, and then HB 2609 that was introduced by Phyllis Mundy. Just a couple of other bills. I can tell you more about the bills than the specific legislators, but there's an HB 2213, which would require disclosure of chemicals. That's in the House. And then I've heard -- I haven't read the bill, but our own Senator Williams has introduced a bill requiring full disclosure of chemicals, because as we heard, the industry says they're disclosing it, but they're not. We didn't know that hydrochloric acid was being used in the fracking process until there was a hydrochloric acid spill. That's what's happening. So there needs to be that full disclosure. And you wanted to...

Well, you just mentioned it. I was going to -- Phyllis 218 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 Mundy of Luzerne County, which is where I grew up, she's calling for -- well, she's also working on the forced pooling. One of the things that's happening right now that a lot of the local legislators are involved with is the forced pooling bill. They've changed it. They're calling it conservation pooling. But basically what they've attached to the severance -- they're trying to get a severance tax in Harrisburg. What the Senate attached to the legislation for the severance tax are two things. One would be exempting the gas companies from local zoning rules, so that the local zoning rules that might prevent them from drilling, they would be -- the gas companies would now be exempt. The other thing is this thing called forced pooling, which they've changed to conservation pooling. That would enable the gas companies to go on unleased land, like mine, extract the gas from the subsurface, and they say that 219 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 they're going to go under the surface, but to get those pipes underneath, we asked, they do disturb the surface of it to do it. Then they would extract the gas from properties like mine and force me to pay whatever royalty they feel like paying. They have attached those two clauses. Just like the Halliburton loophole was attached to the energy bill, the Senate has attached those two clauses. We were in Harrisburg. We talked to the House leadership or his representative. They said the House is against us. I said, Well, if the Senate sends the bill back with those two clauses, can you promise us that since the House is against it, you will not pass it, and they didn't. So look at that severance tax very carefully. That's right now where most of the attention of the local legislators. They're all over the place. 220 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 Chris Carney, who is up in -- he lives in Dimock, and yet Chris Carney is not standing up. And I know Chris Carney. I am really disappointed in Chris Carney. He is going along with gas drilling. The problem that I found -- and I've stopped being angry with legislators -- everybody is handing a lot of stuff, and unless it's your property and you're taking the time or you're activists and you're taking the time to look through all of this, it is -- the truth is easy to find. You just have to take the time to do it. And when people are -- you've got a state economy that's depleted, because corporations are controlling the Legislature and the Congress in Washington, so states have no 20 money, everybody sees a cash cow and they stop thinking. That's where I said somebody has to be an adult. You know, money can't buy you love and money can't buy you depleted forests. I tried to address 221 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 Philadelphia's concerns. There's so many different facets to this issue. There's so many ways in which it is dangerous, I can't begin to go into them here. And I'm certain you agree with me. So the individual legislators, remember, these are small-town people. They are dazzled by dollar bills, too.

Thank you again both very, very much for your testimony. That is an additional instruction for us. Thank you. (Applause.)

Our stenographer here, who has been taking notes for four hours straight, needs a five-minute break. So we will take a short recess, five minutes, to allow that break. Thank you. (Short recess.)

We are going to reconvene. Is the Clerk back from break? There she is. Would you announce the next panel. 222 9/28/10 - TRANS./ENVIRONMENT - RES. 100515

Carol Collier, Executive Director of the Delaware River Basin Commission; Deputy Secretary Scott Roberts from the Pennsylvania Department of Environmental Protection. And is Matthew Klayman still here from the Energy Coordinating Agency? (Witnesses approached witness table.)

I want to first thank you so much for your patience and ask you to read your testimony.

I have submitted written testimony, and there's some maps attached to that that you might want to look at. I'm Carol Collier, Executive Director of the Delaware River Basin Commission, and I really appreciate this opportunity. DRBC is an interstate federal commission, the mission of which is to manage water resources without regard to political boundaries. /ENVIRONMENT - RES. 100515 do. The members are the governors of the four basin states - Pennsylvania, New York, New Jersey and Delaware - and the Commander of the North Atlantic Division Corps of Engineers, who represents both the President and all federal agencies. Philadelphia serves as an advisor to the Commonwealth of Pennsylvania, and staff members of the Water Department serve on many of our advisory committees. PWD has been a really strong partner as we manage the waters of the basin. Today I will discuss how DRBC currently provides protection of Philadelphia's drinking water, our proposed regulations for natural gas production in the basin and concerns for the future. The Delaware River is a treasure. The Delaware River drains the portions of the four states and provides drinking water to over 15 million people, including New York City and Philadelphia. /ENVIRONMENT - RES. 100515 area of the Delaware is relatively small, but it serves a big need. 7 billion gallons of water withdrawn from the basin daily. Forty-two percent of all Pennsylvanians live in the Delaware River Basin. I always think that's an impressive number when I'm in Harrisburg talking to representatives. As you know, the Delaware is the longest un-dammed river east of the Mississippi, and three-quarters of the non-tidal river is designated in the Federal Wild and Scenic River program. While there are 200 miles upstream of non-tidal, there are 130 miles of tidal river. While the tidal river is this busy working river so important to Philadelphia and the urban area, the upper river is pristine, has very high water quality and provides outstanding recreational opportunities. /ENVIRONMENT - RES. 100515 the water users along the river, including the City of Philadelphia. As you know, water does not respect political boundaries, and that is why the Delaware River Basin Commission was formed in 1961, signed into law by President Kennedy, ratified by Congress and by each of the four states. We do have regulatory authority, and we will be regulating Marcellus Shale, but we also serve as a coordinator of holistic watershed management and provide a forum to adapt policies and management strategies as issues change. We develop action plans using our multi-sector advisory committees and are able to implement the strategies through regulations, operating plans such as the lower basin drought watch that we just announced last Friday. It appears that if you make a drought watch, that makes it rain. So it's good. And imposing management approaches of equitable allocation. /ENVIRONMENT - RES. 100515 states, but provides a forum for states and federal government to come together to manage critical resources. DRBC has a number of programs for protection of Philadelphia water supply currently, and I want to mention two of the most important, because this relates to Marcellus Shale regulation. One is maintaining what we call the Trenton Flow Target. If there is not sufficient fresh water flowing down the Delaware River, salty water from the bay can work its way up into Philadelphia intakes at Torresdale, threatening the operations of the water treatment facility and the health of Philadelphia citizens. This almost came to pass in the droughts of the '60s. /ENVIRONMENT - RES. 100515 Engineers. The releases from the latter reservoir, Beltzville, also help flows for the water supply in the Schuylkill, your personal water supply. As of yesterday, the Commission had directed the release of almost 8 billion gallons to keep the salt away 9 from Philadelphia during these dry times.

10 I'd like to say, though, that it's 11 working now, but in the future, I am 12 concerned about climate change and how 13 that will raise the level of sea level, bringing the salt further up, also making for more intense storms but also summer droughts, something we need to talk about in the future. We also have the issue that salts, total dissolved solids, are being seen increasing in fresh water, so the water coming down to Philadelphia, due to a number of causes, but including mining and drilling.

Could you repeat that. 228 9/28/10 - TRANS./ENVIRONMENT - RES. 100515

If you look at the chemical composition of fresh water, while it's not above standards, we don't have the same problems as, say, in the Monongahela River, but gradually we are seeing an increase in salts in fresh water, and this is from wastewater plants, road salt, but it is also from mining and drilling. The second area that we have in place now, which is especially important and to Philadelphia, is what we call Keeping the Clean Water Clean. We have done years of monitoring and found that the waters of the non-tidal river from Hancock, New York all the way down to Trenton are better than water quality standards. Three-quarters of this non-tidal water are designated Federal Wild and Scenic, as I mentioned, and that is managed by the National Park Service, but DRBC has a role in protecting the water quality of the system. And I am proud to say that DRBC has designated the 229 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 whole non-tidal river as what we call Special Protection Waters. So we are maintaining existing conditions, and it is the longest stretch of anti-degradation waters in the nation. So this SBW, as we call it, regulatory program provides an extra level of protection for the waters of Philadelphia. Let's jump to Marcellus gas well drilling. Approximately 34 percent of the Delaware River Basin -- when I say "the basin," I also include the area below Philadelphia -- is underlain by the Marcellus Shale, and, of course, it is also located in river headwaters, and this is the most vulnerable part of a river system. And there's some graphics there to look at. The shale also underlies the Special Protection Waters of the basin that I just mentioned. So protecting the existing water quality during Marcellus Shale drilling is really paramount. 230 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 Potential water-related impacts we have heard about, which include consumptive use of water for high-volume fracking, treatment and disposal of the drilling wastewater, the flow-back and production waters, potential spills and non-point source runoff, potential contamination of groundwater, and changes to the landscape of the upper basin. I have found it very interesting that even though the Delaware River headwaters are more than 150 miles upstream from here, the Water Department stated in their source water protection analysis that impacts to the headwaters of the Delaware could potentially impact the City's drinking water system. And my understanding is that analysis was primarily looking at loss of forest, forest fragmentation, which of course could be due to gas flow drilling or development, but the overall changes. The headwaters of the Delaware are over 85 percent forested, and it is 231 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 these forests that protect the quality and quantity of our water systems, and forest fragmentation is really a major concern of ours. DRBC does regulate gas well drilling. In May 2009 -- so over a year ago -- I issued an Executive Director Determination stating that all gas well activity would be regulated by DRBC regardless of the wastewater or water withdrawal thresholds because of its cumulative impact, potential cumulative impact, and significant impact to the waters. At that time, we exempted exploratory wells. So they were allowed to go forward, because we put them in the same category as water wells, vertical wells that do not take the high volume of water and was more standard.

For the record and again for laypersons, exploratory well is to discover if in fact you're on a trajectory, is that right, to a gas deposit? 232 9/28/10 - TRANS./ENVIRONMENT - RES. 100515

Right. It's a well that the industry would drill down to the Marcellus, or whatever layer they're interested in, to see if it really can produce the gas, if it's worthwhile going forward.

And at some point, it becomes a producer.

That was not our original understanding, but, yes, sometimes they want to turn these exploratory wells into production wells. Not all of them. This past May 2010, my commissioners - New York, New Jersey, Pennsylvania, Delaware - and the federal government directed staff to develop regulations specific to gas well drilling because of the overall impact, and that we were not to review any well pad operation applications, prepare or review for their action, until regulations are in place. We should continue to review applications for water withdrawals, 233 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 because that's something DRBC has done for years. So there has been one water withdrawal approved to date. There are no production wells in the Delaware River Basin because of DRBC action. (Applause.)

Since May, we have supplemented the Executive Director Determination stating that exploratory wells will also be regulated and, therefore, will not be reviewed until new DRBC regulations are adopted. And if I can, the reason we did that is because, one, there is different operations when you're drilling down over a mile. So there is more site infraction. And as you mentioned, the exploratory wells can become production wells. We are concerned about the siting of wells, so if we don't regulate exploratory wells, we might have lost that whole portion of it. We did provide exemptions for 234 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 up to ten wells because they were already in the process and had already gone through the Pennsylvania state review approval process. So there's seven new exploratory wells that have occurred from the summer up till this time, but we don't see any others coming on board until we have regulations.

So if I understand what you just said, we have somewhat of a moratorium?

My commissioners don't like to use that word, but we are not reviewing or taking any action on well permits until we have regulations in place.

Okay. (Applause.)

We really do appreciate the good work of Congressman Sestak, Hinchey and Holt for providing dollars or starting the path to dollars for a U.S. geological survey cumulative impact study. It needs to be done, but 235 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 we also feel that we need to get regulations in place, and that's what the commissioners directed staff to do, and we feel that if we get draft regulations out there for public review, people will see what DRBC is interested in. We'll have a level playing field, and we'll also -- I mean, the commissioners have stated that it would be an iterative process, so that if new information comes up through the EPA study, USGS study, TMC, the Nature Conservancy study, whatever, we can reopen those regulations, if needed, but we need to get started. So DRBC staff are currently working with our states and federal agencies to finalize draft regulations, with our hope of having them out for public review by mid October. It's not very far away. Regulations will address what we are calling the three-legged stool - water withdrawal, well pad siting and operations, and wastewater disposal. 236 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 We are also evaluating bonding requirements, ground and surface water monitoring requirements, pass-by flow requirements for water withdrawals, well pad siting prohibitions, such as keeping them out of floodplains, and also incentives to avoid forested areas and steep slopes, which development there can obviously affect water quality. We are also developing a water tracking program in order to account for the source of water from each well, how much is used at the well and what's the final treatment and disposal of that wastewater. Over 15 million people depend on the waters of the Delaware. It is important that we find the right level of regulation so that DRBC does not duplicate the regulatory requirements already set by the states, Pennsylvania and New York, but that we do fill regulatory gaps and protect those Special Protection Waters and the people 237 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 downstream. And I hope that you as City Council and others all in Philadelphia will really be active in our public review process of our gas well regulations. Thank you for the time. (Applause.)

It was interesting when we did the resolution 11 and started this hearing process, a semi-friend from the Harrisburg area asked me, Well, why would a City Councilman from West Philly be concerned about this, and what do you think at the end of the day you're going to be able to do about this? If nothing else, we have raised awareness, and I am really happy you're here to hear, but what I need to know and I'm going to ask each of you. What I've learned as a freshman Councilman here is that when you don't want a law to work or you really don't want to enforce a regulation, you limit the number of 238 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 inspectors and you limit the number of resources applied to that regulatory process. Simply put, do you have enough people to monitor this?

That is a very good question, and let me start off with saying that right now I do not have a full complement of employees, because we are dependent on state and federal funding, and since 1996, we've received one year of federal funding. So we do not have the dollars that we're supposed to have. But in the proposed regulations, we have a section on fees specifically for the natural gas well drilling, and it would also include monitoring fees. So with that -- we're talking to the states now, because the question is should DRBC have inspectors or should the states have more inspectors or how do we work that best. But we do need more people out there, no doubt about it.

That's 239 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 important. Okay. I'm going to go to my next panelist.

Thank you, Councilman Jones. My name is Scott Roberts. I am Deputy Secretary at Pennsylvania's Department of Environmental Protection for Mineral Resource Management, and I am here at the request of yourself in your request to Secretary Hanger, who couldn't be here personally. So I'm speaking for him today. DEP is charged with enforcing state laws as they relate to oil and gas activities in the Commonwealth of Pennsylvania, and as I will try to lay out to you, we have been doing our best to keep up and change with a lot of the issues you've been hearing about today. Very early on with talk about the Marcellus Shale, Governor Rendell recognized that there was an economic opportunity being presented to the 240 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 Commonwealth of Pennsylvania. However, he charged his Administration, including at DEP, with doing two things. One is maximizing benefits to Pennsylvanians and minimizing impacts, and it is that second part, minimizing impacts, that DEP's role falls. Pennsylvania has plenty of other agencies that can deal with economic opportunities. Our job is to enforce those laws and to do our best to protect the environment and the safety of the public. Oil and gas activities are not new to Pennsylvania. In fact, the industry itself was born in Titusville, Pennsylvania 151 years ago. Within Pennsylvania today, we have about 120,000 wells that are on Pennsylvania's inspectable units list that my inspectors go out and look at.

Can you repeat that figure?

One hundred and 241 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 twenty thousand oil and gas wells. Sixty-six thousand of those wells are gas wells. The rest are either oil wells or fall into a legal definition of being inactive. In addition, there are over 50 large underground gas storage fields. These are facilities that were developed in already exhausted natural gas reserves, one of which being something called the Oriskany sandstone, that instead of gas coming out of, now during the low demand months in the marketplaces in the Northeast, gas is pumped back down into that reservoir rock and then at high demand periods the gas is pumped back out. It is a large program in Pennsylvania. We have had this year already 4,958 applications for oil and gas wells in the state. It breaks down to 2,539 wells for conventional gas reserves or for oil, and 2,419 Marcellus gas well applications. We see -- and this is a 242 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 long-term number -- roughly two well applications per well drilled. The industry will get applications, get permits, and then for one reason or another, never drill the well. To date --

What are some of those reasons?

They may end up not reaching agreement with somebody as far as property issues. They may run into financing issues. I'm not familiar with all the reasons. To date in 2010, we've had 2,036 wells drilled. One thousand and seventy-two of those were conventional oil and gas wells, 964 are Marcellus wells. There are 90 rigs in Pennsylvania capable of drilling Marcellus wells that are active. It takes them roughly a month per well to drill, to give you some idea of sort of how that plays out. And from 2005, which is an important date, because that's when the first Marcellus 243 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 well itself was drilled, to present, we've had 2,102 Marcellus wells drilled in this state and 18,740 conventional oil and gas wells. Also to date -- and I actually agree wholeheartedly with your position that if you want to judge whether or not people are truly interested in enforcing the law, are they actually walking the walk. We've done 10,340 inspections, 6,325 wells, 3,072 of those inspections, and 1,320 of those wells were Marcellus operations.

Hold it. Does this -- so if I were to go pre-Marcellus Shale, how much of an increase in activity on wells inspections does this represent for your department, roughly?

Well, in 2010, it's about half of the applications we're now getting, but a little less than half of the number of wells that are being drilled, but most of the inspections -- 244 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 we have been targeting -- we've done 3,072 inspections out of 10,000. So about 30 percent of the inspections are done on Marcellus wells, and we have inspected all of the Marcellus wells.

So is that a 30 percent increase in activity from 2007 to now?

Well, that's an interesting question, because we actually hit our highest number of well permit applications before the Marcellus came on us, with 8,000 applications. So this isn't a high point for us. But the industry is obviously changing as you look at those numbers. Pennsylvania's oil and gas industry has traditionally been one where we deal with relatively small operators, and, as a matter of fact, some of those wells I just talked about are wells drilled by private individuals to supply gas just to their home. In Erie County, that's something people do. So we go from that spectrum 245 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 up in the conventional industry to relatively sizable companies, but certainly nothing of the size we're seeing now with the Marcellus, the type of companies that are coming in for that. So our industry has traditionally been smaller. They've drilled a lot more wells, because they were all vertical wells. So to drain the gas from whatever rock they were trying to get it from, they had to go out and drill wells in close centers to be able to get the gas to drain to it. But they were lower production, shallower wells, for the most part, that don't cost as much to put into production as one of these Marcellus wells. The exception to that was back in the 1930's the drilling end of that Oriskany sandstone that I mentioned, which is physically below the Marcellus, and it was from that point in time that people realized there was gas in the Marcellus, but it wasn't until the marriage, if you will, of horizontal 246 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 drilling with hydraulic fracturing that that gas was produceable. So while the Marcellus has been known about and people have drilled through it for a long time, it's only been since 2005 that people have specifically targeted to drill it, and there was only one well in 2005.

If we were to segment your more commercial wells from your independently owned household wells, property wells, how often in the lifetime of a well or over a period of a year should a well be inspected?

Again, the life of a well starts out with, you first go out and you construct the drill pad that we've heard people talking about, and for Marcellus wells, it's about five acres of earth disturbance that's leveled off to create a place where the drilling is going to occur. Then you bring a drill rig on that drills part of the well. And, again, talking Marcellus, they drill the vertical portion, do all the 247 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 construction and that type of thing of that portion of the hole, move that rig off, move a second rig on that drills the horizontal portion of the well, move that off and then bring in yet a third well that perforates the steel pipe in the Marcellus. That moves away and then there is -- a crew comes in to actually do the hydraulic fracturing. Once that fracturing is done, then a rig comes in to clean out the well to put it into production. All of those steps -- the construction of the well pads can be done independent of the drilling, but the rest of those steps, the companies appear to be trying to make them go sort of bang, bang, bang, and it's probably six weeks to eight weeks per well to do all of that activity. At that point in time, the well is ready to be connected to a pipeline, and from that for the rest of its life expectancy, which for the Marcellus people are opining could be 30 to 50 248 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 years, it's a steel pipe sticking out of the ground. And while we try to go out and inspect those wells that are in production, really that's not where the problems occur. The problems would occur during those drilling operations. So we try to target having our inspectors going out at points of the process that are most likely to have problems.

So in that phase, how many times is a good number of inspections?

It depends again on the nature of the operation and the operator, but four, five, six times.

Okay.

There's also multiple wells now with the Marcellus and the pads, because they did drill horizontally. Instead of being like the conventional wells that had to go out and drill on a grid pattern, they can put multiple wells on one pad. So we're already seeing up to ten wells being 249 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 drilled from one pad, which limits the earth disturbance, which makes those concerns perhaps lesser, but increases some materials handling issues both with drill cuttings as well as with fluids on that site.

I don't know if you can answer this, but what is the frequency of a well being closed?

Being?

You said an average lifespan could be ten years. How often and is there a process by which you monitor a well being shut down?

Yes. There are specific legal requirements in the State of Pennsylvania for what's called well plugging, and when that well reaches the end of its commercial life, the owner or operator of that has an affirmative obligation to plug that well. It has to be done in a particular manner to make sure that the gas from a depth isn't leaking up the well bore and it's safe. 250 9/28/10 - TRANS./ENVIRONMENT - RES. 100515

So is it equally as a vulnerable time as the initial drilling? Is that also --

Oh, absolutely. And obviously with the Marcellus wells being as young as they are, we don't have any that have reached that point in their life expectancy. We do have inspectors, though, that deal with the older conventional wells and how they're plugged.

And would that plugging also include restoring the earth?

Yes. Yes. And as a matter of fact, once the well is drilled and ready to be put into production, there'll be some restoration of that well pad back down to a minimal area for the production well.

So from the five acres down to?

Down to an acre or so. So it sort of shrinks once the 251 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 drilling is done. Within DEP --

I see people's hands up. It's not that kind of process.

Within DEP, we've been doing a number of different things, though, to also deal with issues being raised by the Marcellus, and I provided you with some of those in written form. Secretary Hanger has clearly instructed us that he expects us to have tough regulations with great enforcement. He expects us to be on the field, boots on the ground, doing our jobs on it. The things that we are looking at and the types of things are water withdrawals, and that has been something that's been talked about, where is the source of the water from. We are working with the Delaware River Basin Commission on what regulatory form that will look like in the Delaware River Basin, but in the other river basins of Pennsylvania, the 252 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 approach we've taken is one of pass-by flow. They have to ensure that a certain volume of water passes by their withdrawal point, and that volume of water is calculated upon what's necessary for other users downstream, as well as the aquatic life in the stream. So they can't take out more than a given amount.

So as more wells -- I'm going to wait. I'm going to hold my questions that I can. Finish your testimony and I'll allow you --

However you'd like to do it.

But you guys are just opening up so many different aspects of questioning that it's just hard for me to resist, but go ahead.

That's why I was happy to come. We have -- as you said, one of the measures is whether you're serious about this staffing-wise. We have greatly expanded the size of our oil and 253 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 gas staffing. In 2008 and early 2009, we went to Pennsylvania's Environmental Quality Board to convince them that it was appropriate to drastically increase the fee that we charge for permit applications. That went from $250 in the case of a Marcellus well to probably somewhere between 2,500 and 5,000 per well, depending upon the length of the bore hole. We have used those funds to both deploy staff in parts of the state that hadn't seen historic oil and gas activities. We opened an office in Scranton. When we put oil and gas staff in our office in Williamsport, those parts of the state had not seen these activities previously. And we increased the number of our staff. We added 37 additional enforcement staff members in 2009, 68 more in 2010. And to put that into context, while we were doing that under the 2009 state budget, we were forced to furlough from other parts of the department. So we recognize that 254 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 this is an area that we do need to devote staff to. By having that fee in place, we have the funding mechanism to pay those staff people, and we are putting them out there. Now, I would remiss to not point out perhaps at this point that the severance tax debate is raging in Harrisburg. The Governor and the Administration and DEP, even though we have a separate funding source, firmly believe that an appropriate severance tax is necessary and appropriate. What's more, we also agree that some of that money should be going back to the municipalities where the drilling is taking place to help them manage impacts. Other portions of the money -- and one of the things I'm pleased to hear about being discussed -- is having it go into environmental protection and restoration projects sort of a la Growing Greener.

I'm sorry. If we were BP, would there be anything 255 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 that would closely resemble a contingency fund for just in case?

No. 5

Is that being proposed?

No, not that. What we do have is, we require people to post bonds for the operation and restoration of their well and well site, and that's been in the law since it was first enacted in the 1980's. It is a problem, however, in that the values that are assigned per well are low, and in a way that is incredulous to me actually, you can post a $25,000 bond for as many wells as you can possibly drill. And rather than having a contingency fund that somehow or another the taxpayers have put together, I would prefer to see real honest-to-goodness and appropriate bonding for these sites.

So to more closely adjust the per well worth and/or risk assessment to each well as opposed 256 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 to a blanket?

Right.

I got it.

Exactly. Some of the other things we've done is, we absolutely agree with the public and everybody else that the industry needs to be transparent with what they are using in these wells. And it is more difficult than perhaps was explained earlier in trying to get the industry to do that, but as was mentioned, we are changing our regulations and modifying them. One of those changes does require the owner of the well to submit as part of the completion report, which is required to be filed within six months after the well is finished, a complete accounting down to percentages of what was used in drilling and completing that well.

Do you take samples of what is being used?

We do. We have 257 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 not seen -- there's been some talk about whether or not that hydraulic fracturing fluid, when it gets down to depth and is breaking up the Marcellus, whether or not that's creating problems with groundwater. We have no instances of that that we've seen, but we do have documented cases where inappropriate handling of those chemicals on the surface, either as they are being delivered to the site, they're spilled; as they're being mixed, they're spilled. During the hydraulic fracturing, it's a high-pressure operation. A hose will burst, the materials will be sprayed out and spilled, or after the water flows back from the well, there's materials handling problems. And those are unacceptable. They're illegal under state law, and we should not accept that, period. So that's where I come from on it. TDS was the other issue that has been talked an awful lot about and 258 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 what to do with the water that comes back up from these wells. Right now the statewide average, we're seeing about 5 percent of the water that is pumped 6 underground comes back up during what's 7 called the flow-back stage of the well. 8 There's some water that will continue to 9 come back from those wells in much 10 reduced amounts probably over the life of 11 it, but that flow-back period is only 12 about 13 percent. That's the water that 13 Ms. Klaber talked about as being recycled, which is an excellent thing, something we encourage. Industry's first steps out of the box with that was to build lagoons to hold it. I think they're starting to realize there are issues with that. And so what we're seeing is more of a movement towards container storage of those flow-back materials until they're either recycled or taken for appropriate disposal. We have put in place a 150-foot 259 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 buffer around high-quality and exceptional-value waterways in Pennsylvania for oil and gas well drilling and construction, and as I mentioned, we have an entire package of regulatory changes dealing with both the construction of water wells, the dealing with emergencies on well sites --

That's been proposed?

They are being voted on as final by the Environmental Quality Board on October 12th. So they've been both proposed, gone through the comment period and now we're up for final. The EOG well accident in Clearfield County was talked about. That was the case of people on the site just being stupid, but it was -- it points out that in a lot of human activities, being stupid is not acceptable. And in the handout I gave you, you can read a number of the different steps we are taking to 260 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 make sure that those types of accidents don't occur again. And we've also been partnering with the State Police to do something we called Frack Net, which are unannounced vehicle pullovers, pulling over trucks hauling water and wastewater and other waste from these drill sites, checking them for appropriate documentation of what they're hauling, who is it from, where it's going, as well as is the truck physically appropriate to be on the highway, are the brakes working, those types of things. So we are out there working hard on dealing with these issues. We don't have a mandate that we have to issue permits. Nobody has ever said you have to get permits out tomorrow or anything like that. However, the Oil and Gas Act of Pennsylvania does provide that within -- if actions aren't taken within 45 days, then that permit can be deemed approved. So we have a statutory issue we have to deal with. So that, I think, 261 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 can be misinterpreted by some. We have none of those that occur. We get to them all, but part of that is having staff in place to do it. One of the previous speakers invoked the name of Rachel Carson, and I work in a Rachel Carson state office building, and I agree with her sentiment. In this particular issue, I think back to one other famous Pennsylvanian, one of our former governors, Governor Gifford Pinchot, who years before he became 14 Governor of Pennsylvania came up with the 15 entire idea of conservation, which is one 16 of the three elements of modern 17 environmentalism. So I think in this 18 particular case, he's the one I try to 19 invoke, and we're trying our best at DEP 20 to implement the state laws that are out there in a way that conserves and protects Pennsylvania's environment, and I look forward to answering your questions after the next speaker.

Thank you. 262 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 We have one more panel after this. We're almost there.

Good afternoon. Thank you, Councilman Jones, ladies and gentlemen. Thank you for allowing me to testify before City Council about the serious issues surrounding fracking and gas extraction from Marcellus Shale. Today I'm speaking on behalf of two organizations - the Energy Coordinating Agency, ECA, and the Keystone Energy Efficiency Alliance, or KEEA. ECA is a non-profit corporation whose mission is to help people conserve energy and to work toward a sustainable and equitable energy future for all in the Philadelphia area. ECA administers almost all the low-income energy services in the City and has been a leader in green jobs training and in increasing the energy efficiency and sustainability of housing statewide. KEEA is a non-profit corporation dedicated to 263 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 energy-efficiency market transformation in Pennsylvania through advocacy, education and training. KEEA monitors and supports energy-efficiency policies at the local, state and federal level for both residential and commercial sectors to reduce carbon emissions and help Pennsylvania transition to a cleaner energy economy. ECA and KEEA support a realistic approach to the energy and environmental impacts that the fracking of Marcellus Shale will have on Philadelphia and the surrounding region. The natural gas trapped in the Marcellus Shale is a tremendous potential energy resource, but it is not without significant risks. Chief among them is widespread environmental damage to local water and land. While so many in Pennsylvania have caught fracking fever, the dangers of watershed contamination are very real and must be thoroughly understood and addressed if disasters are 264 9/28/10 - TRANS./ENVIRONMENT - RES. 100515 to be avoided. (Applause.)