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New Report Indicates Lax Oversight of Drilling on Federal Lands

Little or No Fines for Over 2,000 Safety and Drilling Violations by Oil & Gas Outfits In Past Decade

Just two weeks after President Obama called for increased drilling during his State of the Union speech, an important but largely unnoticed report was released from Congress that reveals the federal government has done little to crack down on drilling violations already occurring on federal lands.

Photo by Roy LuckA natural gas drilling operation in Leon County, Texas. Only six percent of violations by oil and gas
companies actually led to a monetary fine.

The report, which was released by Representative Edward Markey and Representative Rush Holt, indicates that for the past decade, oversight of drilling on federal land has been lax, accidents and violations have been frequent, and fines have been rare and small.

The most striking part of the report is in the details.

The report found that between 1998 and 2011 there were 2,025 safety and drilling violations by oil and gas companies on federal lands. How much were these companies fined for these violations? A cumulative total of $273,875. That’s for all companies, across the entire time span — or an average of $135 per violation. The vast majority of violations led to no fines at all.

These violations include some fairly serious environmental incidents. One oil and gas company, for example, dumped drilling waste directly into Oklahoma’s Washita river. The company was fined $2,500, less than hunters in the state are sometimes fined for killing deer without a permit. As the report points out, that’s less than what some of the largest oil and gas companies typically earn in a minute.

Companies were cited nearly 300 times for broken or missing blow-out preventers, which are those devices that are supposed to seal off a well when there is an explosion or other major problem. The blowout preventer is what failed in the Deepwater Horizon disaster in the Gulf of Mexico.

Problems with blowout preventers or other devices responsible for controlling wells during accidents made up 20 percent of the 2,025 total violations reported. The report highlighted a well in North Dakota that experienced a blowout in 2008 that the driller never reported to the Bureau of Land Management.

The Congressional report is especially timely because drilling promises to become a major campaign issue in the upcoming presidential race. Already, the oil and gas industry has been running ad campaigns, including these ones from the American Petroleum Institute. The ads read: “I am an energy voter” across the top and feature photos of people who say they support drilling for domestic oil and gas.

The White House has said it will open enormous new swaths of federal land for oil and gas drilling, but hasn’t specified exactly how much. The Congressional report offers a glimpse of how large this expansion will be.
“Of these 42 million acres, about 12.2 million acres are currently in production with an estimate of an additional one million acres that will come into production during the next ten years,” the report says.

The report also offers some blunt warnings about the types of dangers that can be created by this new drilling.

“Oil and gas drilling activities on public lands may endanger drinking water,” the report says, adding that roughly one-third of a random sample of wells were hydraulically fractured (or “fracked”) in, near or below an underground source of drinking water.
In one 2008 case, a casual conversation between BLM officials and a driller revealed that the company was using benezene-laden diesel fuel to frack a well in Wyoming, without a permit and in potential violation of the Safe Drinking Water Act, which bars the use of diesel during fracking.

Even though the report found that roughly a third of violations were issued because of major safety and environmental violations, only six percent of violations led to a monetary fine. Sixty-four out of the 335 drilling companies found to be violating the law faced a monetary fine. In eight states — Alaska, Arkansas, Louisiana, North Dakota, Nevada, Ohio, South Dakota, and West Virginia — no fines were issued at all during the 12 years covered by the report.

“It would be an overstatement to even call these fines a slap on the wrist,” said Representative Markey. “For oil and gas companies making billions from drilling on America’s public lands, this kind of inadequate oversight and enforcement is little more than a pin prick.”

Federal lands are by no means the only place where drilling violations have become pervasive.  The New York Times offered a close analysis of similar data last year from Pennsylvania which found that it was cheaper for drillers to pay fines for illegally dumping their waste than it is for them to dispose of them legally.

A report by PennEnvironment released the same day as Congressional report focused on drillers in Pennsylvania which is experiencing some of the most intensive new drilling.
The Pennsylvania report said that companies accumulated more than 3,300 violations of environmental laws while drilling roughly 4,600 Marcellus Shale wells in the state between 2008 and 2011. More than 70 percent of those violations likely posed a direct threat to the environment, the report found.

“Between 2008 and 2011, on average, Pennsylvania saw more than two violations per day uncovered by PADEP,” the report said.

Erica Staaf, a researcher with the organization that produced the report, added: “Our analysis shows that Marcellus Shale gas drilling companies are either unable or unwilling to comply with basic environmental laws.”


Sharon Kelly is a Philadelphia-based lawyer and freelance writer. Her work has appeared in the New York Times, the National Wildlife Federation, and the Legal Intelligencer.

Sharon Kelly
Sharon Kelly is a Philadelphia-based lawyer and freelance writer. Her work has appeared in the New York Times, the National Wildlife Federation, and the Legal Intelligencer.

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