An Analysis of Unconventional Gas Well Reporting under Pennsylvania's Act 13 of 2012

Abstract

In response to growing concerns about the impact of shale gas development, Pennsylvania’s Act 13 of 2012 established an unconventional gas well fee and required the state’s Department of Environmental Protection (DEP) to report on the number of such wells. In this article, we analyze the extent to which the DEP complied with its reporting requirements under Act 13. Using publicly available data, we find that the DEP likely omitted between 15,300 and 25,100 unconventional gas wells from its Act 13 report. Left uncorrected, we estimate that Pennsylvania’s state, county, and municipal governments could forfeit fees of $205–$303 million in 2012 and up to $0.75–$1.85 billion cumulatively over the expected life of these wells. Rather than an isolated incident, evidence suggests that information management is a systemic and recurring problem within the DEP and its predecessor agencies. We propose the implementation of a relational database and geographic information system as a way for the DEP to fulfill its Act 13 obligations.

Keywords: hydraulic fracturing, Pennsylvania Department of Environmental Protection, unconventional natural gas drilling, governmental reporting

JEL Classification: D82, D71, L71, O13, H11, H23, H71, N50, O38, Q33, Q38, K32, Q28