The Pennsylvania Department of Environmental Protection's statistics on Marcellus Shale natural gas activity contain serious flaws and inconsistencies, and do not accurately report the volume of wastewater being reused in the industry's much-touted recycling efforts.
The DEP's most recent statewide statistics on wastewater production overstate by nearly two times the amount of wastewater produced during the last six months of 2010 largely because one the 39 operators who filed reports last month inadvertently entered the wrong data in its forms.
Seneca Resources Corp. says it mistakenly reported the number of gallons of wastewater it generated as barrels. A barrel contains 42 gallons, so Seneca's numbers were hugely inflated. And so was the amount of water that it reportedly recycled.
As a result, the 5.3 million barrels of waste that Seneca misstated in the reports accounted for half the entire state's volume of 10.6 million barrels, though Seneca produced only about 3 percent of the Marcellus Shale natural gas extracted during that six-month period.
"It was in fact stated as barrels when it was actually gallons," said Nancy J. Taylor, a spokeswoman for the company, a subsidiary of National Fuel Gas Co. of Houston. She said the employee who misstated the number was "mortified" to learn of the error.
Seneca's actual wastewater numbers amounted to about 125,000 barrels. The statewide total has been revised down to about 5.5 million barrels of wastewater.
The miscue couldn't have come at a worse time for the industry and the Pennsylvania DEP. On Monday, the federal Environmental Protection Agency put Harrisburg on notice that the EPA would increase its scrutiny of how Pennsylvania managed shale-drilling wastewater after news media reported that inadequately treated Marcellus wastewater may be polluting the state's rivers.
"Obviously we're under the microscope whatever we do now," said Kathryn Z. Klaber, the president of the Marcellus Shale Coalition, an industry trade group.
The episode also raises questions about DEP's ability to process the data generated by the fast-growing industry, since Seneca's reporting errors should have been obvious to any knowledgeable analyst who waded through a 5,000-line spreadsheet that the agency posted on its website two weeks ago.
DEP officials did not respond Wednesday to questions about how the agency failed to notice the bad numbers. Seneca reported one of its wells produced more than 500,000 barrels of wastewater - 22 million gallons - an amount that would typically be generated by dozens of Marcellus wells.
"It is too early to draw any definitive conclusions or interpretations about the data being filed," said Kevin Sunday, an agency spokesman. "We are still in the process of receiving and reviewing production data."
John Hanger, who stepped down as DEP secretary in January when Gov. Corbett took office, said the agency was overwhelmed with data in November when he authorized DEP to hire six new administrative employees to help address weaknesses in the agency.
"There's just an enormous amount of data being submitted, and it would be fair to say that DEP data processing is not where it should be," he said.
Industry officials said the problem is compounded because the detailed production and waste reports were mandated by a new law that went into effect last year, and both the regulators and the industry are struggling to adapt.
There seem to be many inconsistencies in how operators report the wastewater - some is listed as brine, some as drilling fluid and some as "frac fluid," the liquids that flow back after hydraulic fracturing, the controversial process for extracting gas from tight rock layers like shale.
The reports have been closely reviewed by the public and the media partly to gauge how the massive volumes of toxic wastewater generated by Marcellus drilling is being managed.
Marcellus wastewater contains corrosive salts and some radioactive isotopes and metals that naturally occur in the deep formation where the gas resides. It also contains some chemicals used during the fracturing process.
While the industry initially sent much of the fluid to public sewage treatment plants that are not designed to treat drilling wastes, the state has responded by restricting discharges. The industry has ramped up efforts to recycle the wastewater, reducing the need for treatment and discharge.
Before the Seneca error was discovered, the industry reported recycling about 6 million of 10.6 million barrels of wastewater during the last half of 2010 - about 57 percent of the total.
But Seneca's inflated numbers represented about 5.2 million barrels of the recycled water. So when its numbers are revised downward, the total volume of wastewater reported recycled falls to 17 percent.
The DEP and the industry still maintain that at least 70 percent of all wastewater is being recycled by blending it into new hydraulic fracturing operations.
They say the waste reports are not comprehensive accounts of recycling, but of waste disposal. But there are inconsistencies - some operators report waste that is reused, others say their recycling efforts are not counted in the reports.
"The system was intended to track wastewater and not recycled water," said Matt Pitzarella, a spokesman for Range Resources Corp., one of the largest Marcellus producers, which says it recycles nearly 90 percent of its wastewater, though those numbers are not reflected in the reports.
Considering the scrutiny the industry faces, Pitzarella said Wednesday that Range is calling for a new reporting system that accounts for recycled wastewater.
"The current system was developed at a time prior to wide spread recycling and reuse," he said. He said the company is calling on DEP and the Marcellus Shale Coalition to "develop a transparent and accessible system that tracks water that is recycled and reused."