EARTHWORKS

New York Oil & Gas Enforcement - Enforcement Actions

Limited data show few enforcement actions taken

The DEC’s Division of Mineral Resources’ Oil, Gas and Mineral Resources Annual Reports contain some information about penalties and other enforcement actions taken against oil and gas operators. Annual reports for 2010 or 2011 have not yet been published by DEC.

Oil and gas enforcement actions and penalties in New York
Estimated number of active wells that were not inspected in 2010
Click chart for larger, footnoted version

As seen in the table, civil penalties for violations of DEC’s oil and gas regulations have not amounted to much. In most years administrative penalties assessed by DEC totaled less than $20,000. DMR annual reports show that in 2006 and 2007 the penalties were collected as a result of a mere 12 and 10 administrative enforcement cases, respectively. (Data on enforcement cases were not provided for other years.) So, on average, less than $2,000 was collected per enforcement case.

Penalties provisions - weak

The purpose of penalties is two-fold: to deter violators, and in some cases to provide compensation for harm, such as pollution. It is unlikely that a $2,000 penalty is going to have much of a deterrent effect on operators, especially given the fact that so few penalties are issued in New York every year.

Compared to Pennsylvania, which is in the midst of a shale gas drilling boom, the maximum penalty for violating rules related to New York's Mineral Resources (e.g., oil and gas) is low – it cannot exceed $8,000 plus an additional penalty of $2,000 for each day that the violation continues. The Pennsylvania Department of Environmental Protection (DEP) has the ability to issue penalties of up to $25,000 plus $1,000 per day of continuing violation for conventional oil and gas wells, and the Pennsylvania DEP can assess penalties of $75,000 plus $5,000 a day for violations at unconventional wells.[1] In Texas, the Railroad Commission can fine oil and gas operators up to $10,000/day if they break rules pertaining to safety or pollution prevention.

There are stronger penalty provisions in some environmental statutes in New York. For example, the Environmental Conservation Law enables penalties up to $37,500 per day, per violation of various sections of the Water Pollution Control Law. These penalties can be applied to oil and gas operators if they violate the statutes. It is not clear, however, how often these provisions are used against oil and gas operators.

One example was found where DEC assessed penalties against and oil and gas operator for violating New York's Water Pollution Control Law.[2] In January 2012 DEC filed a complaint assessing a civil penalty of $187,500 against oil and gas operator U.S. Energy for polluting a stream in New York’s Allegany State Park.

Penalties and enforcement actions - data lacking

It’s difficult to do an in-depth analysis of DEC’s oil and gas enforcement program because DEC does a poor job of posting information on oil and gas enforcement actions. As seen in the table above, in most years there has been no information on the number of administrative enforcement actions that led to penalties (or number of actions taken by the Attorney General). Also, little information was found on the names of the operators receiving penalties, or other particulars of the enforcement cases (e.g., which rules were violated, and which types of violations resulted in enforcement actions and penalties).[3]

Other states do a much better job of providing information on enforcement actions. For example, the Pennsylvania DEP has an online, searchable database that allows users to search for enforcement actions by operator, county, municipality, with a particular time period, and provides information on penalties and whether or not violations have been resolved. Colorado’s Oil and Gas Conservation Commission web site allows interested parties to view enforcement hearing documents and find out the amount of penalties assessed to operators.

The tracking of violations and enforcement actions is not only of interest to the public, it is also a very important tool to enhance DEC’s understanding of where to focus its enforcement efforts.

In 2011, the Texas Sunset Commission berated the Texas Railroad Commission for its poor tracking of serious oil and gas violations and repeated violations by the same operator, and commented that without this type of information, “the Commission cannot determine or ensure effective and consistent enforcement across the state.”[4]

DEC needs to make enforcement data easier to access so that employees can better understand where to focus their enforcement efforts. Also, data on violations, date of resolution, repeat violators, enforcement actions taken in response to violations, penalties resulting from enforcement actions should be tracked and published in on-line, publicly accessible databases that enable users to download information into spreadsheets.


For more information:

Endnotes

1 PA ACT 13 of 2012. Title 58. Part III. Chapter 32. Subchapter E. Enforcement and Remedies. §3256. Civil penalties.

2 The DEC’s complaint against U.S. Energy cites Article 17 (Water Pollution Control) of the Environmental Conservation Law (ECL), §17-0101, §17-0501, and §71-1929 and 6 NYCRR (Division of Water regulations) Parts 700.1(a)(47), 701.1, 701.7 and 703.2.

3 A search was made of the Office of Hearing and Mediation Services (OHMS) Hearings and Decisions system. Searched for “Article 23”, “oil”, “gas”, “energy”, “oil and gas” and other terms related to oil and gas. The OHMS Docket Management System was also searched. Filtered results by year, by Case Type: enforcement and by Program Type: Book O: Mining/Mineral/Oil and Natural Gas). Very few enforcement cases relating to violations of oil and gas rules were found. No other databases of enforcement actions were found on the DEC web site or on the environmental protection page of the NY Attorney General’s web site

4 Sunset Advisory Commission. July 2011. Final Report - Railroad Commission of Texas. p. 34.

Tagged with: sanctions, regulations, penalties, oil and gas, new york department of environmental conservation, new york, fracking, fines, enforcement, drilling

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