* Pennsylvania increases number of gas well regulators
* Neighbors say they are ignored in favor of industry
By Jon Hurdle
PHILADELPHIA, Dec 30 As U.S. energy companies
scramble to mine natural gas from shale deposits, state
regulators are struggling to keep pace amid criticism that they
lack the resources to enforce environmental laws.
Shale gas trapped deep underground is considered one of the
most promising sources of U.S. energy and one that is
generating jobs, royalties for landowners and tax revenue for
cash-strapped state governments.
But environmentalists and small-town neighbors of drilling
operations say officials have been slow to respond to their
complaints of air and water pollution resulting from drilling,
production or gas processing.
Neighbors of drilling sites complain their claims are often
dismissed as insignificant or outside state control, though
they received a morale boost last week when New York City asked
New York state to ban shale gas drilling in the city's
Energy companies say they work hard to prevent spills and
note that science has yet to link the chemicals used in the
controversial technique to break through layers of rock to
Agencies such as Pennsylvania's Department of Environmental
Protection, which is monitoring the rapid development of the
massive Marcellus Shale, argue that they keep a close watch on
gas companies and don't hesitate to penalize rule-breakers.
"We are not turning a blind eye to the problem," DEP
Secretary John Hanger told Reuters. "Our role is to maximize
the benefits and minimize the costs."
Shale gas is being tapped by advances in horizontal
drilling, and by hydraulic fracturing, or "fracking," a
technique that critics say contaminates drinking water with
chemicals that can cause cancer and a range of illnesses.
Hanger rejected claims the agency is facilitating Marcellus
development with minimal regulation. He said the number of
drilling inspectors has risen to 120 from 75 in February 2009.
They regulate more than 800 Marcellus wells that have been
drilled since 2005.
In September, the DEP fined Cabot Oil & Gas Corp. (COG.N)
$56,500 for three spills of a drilling lubricant and banned it
from hydraulic fracturing until it bolstered safeguards.
The increased oversight is being paid for by higher fees
levied on energy companies, the secretary said.
WYOMING, NEW YORK
In Wyoming, whose economy is heavily dependent on oil and
gas, some in the farming community of Pavillion say the state's
Department of Environmental Quality has shown little interest
in complaints about trucks spilling drilling fluids on roads or
requests to test water.
"There's a lot of pressure from the government to allow
industry to proceed," said John Fenton, a Pavillion farmer
whose water well is contaminated. "They are not hindering the
industry in any way."
In New York state, 17 inspectors and other officials
monitor about 15 traditional vertical wells in the Marcellus
Shale, and the state is considering opening the formation to
the type of horizontal drilling that critics fear.
Stephanie Hallowich, from the southwest Pennsylvania town
of Hickory, said the DEP has downplayed or ignored her
complaints about air and water contamination from a complex of
gas installations near her home.
In October, a compressor station experienced what she said
was a sudden, violent release of gas that shook her house and
filled the air around it with foul-smelling gas. "It sounded
like a jet engine," Hallowich said.
State inspectors found the incident to be a routine albeit
loud depressurization of compressor station equipment.
"The company is now being required to alert area residents
when they are doing scheduled blow downs," said Teresa Candori,
a spokeswoman for the DEP.
Hallowich rejected the DEP's statements that it is
adequately regulating the Marcellus boom.
"They have not been responsive," she said. "There have been
no violations, and they have not been keeping up with
(Reporting by Jon Hurdle; Editing by Daniel Trotta and Cynthia