NOT IN THE INTEREST OF THE COMMONWEALTH:

NOT IN THE INTEREST OF THE COMMONWEALTH: Anadarko s Record of Environmental Violations in Pennsylvania and its Implications for the Loyalsock State Forest February 6, 2014 The Environmental Integrity Project (EIP) provides the following report on behalf of the Save the Loyalsock Coalition, a group of organizations working to protect the Loyalsock State Forest. These organizations include the Appalachian Mountain Club, Audubon Pennsylvania, Keystone Trails Association, the League of Women Voters of Pennsylvania, the Loyalsock Creek Watershed Association, PennEnvironment, PennFuture, the Pennsylvania Forest Coalition, the Responsible Drilling Alliance, the Rivertown Coalition for Clean Air and Water, Shale Justice, and the Sierra Club Pennsylvania Chapter. Anadarko Petroleum Corporation (Anadarko) has proposed large-scale plans for natural gas development in the Loyalsock State Forest. In considering whether to grant Anadarko access to the Loyalsock, it is the duty of the Pennsylvania Department of Conservation and Natural Resources (DCNR) to analyze the environmental impacts of Anadarko s proposed development. Anadarko s history of compliance as an operator of oil and gas exploration, production, and midstream sites in Pennsylvania is of utmost relevance to this analysis. Anadarko s compliance history is uniquely deficient and out of step with most oil and gas operators in Pennsylvania. Over the past five years, the Pennsylvania Department of Environmental Protection (PA DEP) has cited Anadarko s production and midstream sites for hundreds of violations the sixteenth-most violations statewide. Even more concerning are Anadarko s disproportionately high number of violations related to discharges to waters of the Commonwealth during that same time period. These discharge-related violations represented more than one out of every three of Anadarko s violations, ranking Anadarko seventh statewide. This history of violations is a serious threat to the pristine waters and sensitive landscapes of the Loyalsock, in which Anadarko s development plans are centered, and demands further consideration by DCNR. We hope this report will provide useful information to DCNR, interested parties, and the public as DCNR makes important decisions for the future of the Loyalsock State Forest.

I. BACKGROUND: THE LOYALSOCK STATE FOREST AND ANADARKO S PROPOSED NATURAL GAS DEVELOPMENT The Loyalsock State Forest is a wide and varied landscape of over 100,000 acres in northcentral Pennsylvania, spanning Lycoming, Sullivan, and Bradford Counties. 1 The forest is popular among Pennsylvanians for its hiking, fishing, and scenic beauty, including trails such as the Old Logger s Path and streams such as the pristine Rock Run. 2 The forest is also home to an array of wildlife, including endangered species and migratory birds, the latter of which use the forest as a nursery. 3 The forest has recently been the focus of public attention due to Anadarko s proposal to develop the natural gas of its subsurface mineral holdings within the forest. 4 Although the forest has previously seen natural resources development in the form of historic logging and recent natural gas development, Anadarko s plans are unprecedented in scale, potentially impacting a quarter of the forest s 114,000 acres. 5 Specifically, Anadarko owns subsurface oil and gas rights to 25,621 acres of the Loyalsock State Forest, known as the Clarence Moore Lands for the previous owner. 6 On these lands, Anadarko plans to construct twenty-five or twenty-six well pads with up to six wells each, wastewater impoundments, compressor stations, midstream 1 DCNR, Loyalsock State Forest Clarence Moore Lands Fact Sheet 1 [hereafter DCNR Fact Sheet], available at http://www.dcnr.state.pa.us/cs/groups/public/documents/document/dcnr_20026829.pdf. 2 Id.; Susan Phillips, Lovers of Pa. s Loyalsock Forest Fight to Limit Drilling There, StateImpact Pennsylvania, May 20, 2013, http://stateimpact.npr.org/pennsylvania/2013/05/20/lovers-of-pa-sloyalsock-forest-fight-to-limit-drilling-there/ (last visited Feb. 3, 2014). 3 Susan Phillips, Lovers of Pa. s Loyalsock Forest Fight to Limit Drilling There, supra. 4 See DCNR Fact Sheet, supra, at 1. 5 Id. 6 See id. Anadarko owns the subsurface rights of the Clarence Moore Lands as tenants in common with another private party: the International Development Corporation. This arrangement gives Anadarko fifty-percent ownership of the subsurface rights of all 25,621 acres, rather than a geographically divided share. FracTracker, Controversy in the Loyalsock (May 29, 2013), http://www.fractracker.org/2013/05/clarence-moore/ (last visited Feb. 3, 2014); DCNR Fact Sheet, supra, at 1. The International Development Corporation has since leased its interest in the subsurface rights to Southwestern Energy Production Company (Southwestern). See FracTracker, Controversy in the Loyalsock, supra; Letter from Ralph Kisberg et al. to Richard J. Allan, DCNR, at 2 (Sep. 7, 2012) [hereafter Coalition Letter]. As of late October 2013, Southwestern has not yet submitted a plan to develop the Clarence Moore Lands. Coincidentally, Southwestern s lack of a development plan appears to have at least temporarily stopped DCNR s consideration of Anadarko s proposal. See Morgan Myers, Anadarko plan faulted, Williamsport Sun-Gazette, Oct. 27, 2013, available at http://www.sungazette.com/page/content.detail/id/598641/anadarko-planfaulted.html?nav=5011. 2

facilities such as glycol dehydrators and gathering lines, and temporary and permanent access roads with widths between thirty-five and forty feet. 7 On its own, the exceptional size of Anadarko s proposed development provides enough reason for DCNR to give the project special scrutiny. But what makes the development of particular concern to forest advocates and Pennsylvanians at large is the unique character of the Clarence Moore Lands. As a whole, the Clarence Moore lands are one of only a few large public land areas in north-central [Pennsylvania] that have not been opened to gas development, and still contain relatively unfragmented forests, 8 as well as some of the most treasured parts of the Loyalsock. 9 In particular, the Clarence Moore Lands contain most of the watershed of the pristine Rock Run, which is designated as an Exceptional Value stream and widely hailed as the most beautiful stream in Pennsylvania. 10 The Clarence Moore Lands also contain important wildlife habitat, including habitat for threatened and endangered species, as well as the twenty-seven-mile Old Logger s Path hiking trail. 11 In DCNR s words, the Old Logger s Path offers stunning vistas and clear, cold cascading streams, and is enjoyed by hikers of all skill levels. 12 Also according to DCNR, the Old Logger s Path will be taking the brunt of development. 13 Beyond the lands and resources involved, what also makes Anadarko s proposed development unique is DCNR s oversight role, due to the mixed nature of Anadarko s subsurface rights in the Clarence Moore Lands. On the 6,841-acre blue tract named based on a map in an important legal case 14 Anadarko possesses the common law right to enter, which limits DCNR s control over Anadarko s access. 15 On the 18,870-acre yellow tract, Anadarko s right to enter has expired, which means that DCNR fully controls Anadarko s access to the tract. 16 Specifically, Anadarko must seek a right-of-way for access to the yellow tract. Given that Anadarko wishes to access all its subsurface holdings in the Clarence Moore Lands, and because the blue tract contains certain sensitive and important areas, DCNR and Anadarko are now negotiating to reach a Surface Development Management Agreement that would apply to all Anadarko s Clarence Moore Lands holdings. 17 7 See Susan Phillips, Lovers of Pa. s Loyalsock Forest Fight to Limit Drilling There, supra; Anadarko Petroleum Corp., Loyalsock State Forest Development: Plan of Development Narrative 7-8, 15 (2012); FracTracker, Controversy in the Loyalsock, supra. 8 FracTracker, Controversy in the Loyalsock, supra. 9 Susan Phillips, Lovers of Pa. s Loyalsock Forest Fight to Limit Drilling There, supra. 10 FracTracker, Controversy in the Loyalsock, supra. 11 Id. 12 DCNR Fact Sheet, supra, at 1. 13 FracTracker, Controversy in the Loyalsock, supra (quoting DCNR documents). 14 See Coalition Letter, supra, at 2. 15 See DCNR Fact Sheet, supra, at 1; Susan Phillips, Lovers of Pa. s Loyalsock Forest Fight to Limit Drilling There, supra. 16 Id. 17 See DCNR Fact Sheet, supra, at 1; see also Coalition Letter, supra, at 2-3. 3

Figure 1: Map of Anadarko s Subsurface Holdings and Proposed Development 18 The central point is that DCNR has exclusive power in granting Anadarko access to the yellow tract and important duties and responsibilities to fulfill in making this determination. 19 Advocates for the Loyalsock believe that DCNR can use this gatekeeper role over the yellow tract as leverage to protect all the Clarence Moore Lands. 20 DCNR may only grant a right-ofway to the yellow tract if it ensures certain protections for the lands and benefits of the development.21 Specifically, DCNR must perform environmental impact studies to make findings that the interest of the Commonwealth or its citizens will be promoted by such grant [of a right-of-way] and that the grant of the right-of-way will not so adversely affect the land as to interfere with its usual and orderly administration. 22 Advocates argue that DCNR could 18 Image courtesy of FracTracker. See FracTracker, Proposed Development in Loyalsock SF s Clarence Moore Tracts, http://maps.fractracker.org/latest/?webmap=c0be65953b674c39a742814f933aeb2e (last visited Feb. 3, 2014). 19 See FracTracker, Controversy in the Loyalsock, supra. 20 See id. 21 See Coalition Letter, supra, at 3-4. 22 Id. at 4 (quoting 71 P.S. 1340.302(b)(3)). 4

leverage this power over the larger yellow tract to protect the blue tract lands, which require no right-of-way. 23 For example, even if Anadarko were not to develop natural gas on any part of the yellow tract, it still may require access over yellow tract lands to develop natural gas in the blue tract. 24 In either case, it is important that DCNR analyze the environmental impacts of Anadarko s proposed development, and Anadarko s history of compliance as an oil and gas operator in Pennsylvania is of great relevance to this analysis. As we have found in our review of Anadarko s compliance records, there is a pattern of incidents that raises concern for the sensitive landscapes and waters of the Loyalsock and demands further consideration by DCNR. II. METHODOLOGY FOR ANALYZING ANADARKO S HISTORY OF COMPLIANCE AS AN OIL AND GAS OPERATOR IN PENNSYLVANIA In conducting our review of Anadarko s history as an oil and gas operator in Pennsylvania, we relied on the primary public source of compliance data in Pennsylvania: the Pennsylvania Department of Environmental Protection s (PA DEP) Oil and Gas Compliance Report. 25 The Oil and Gas Compliance Report provides data from inspections performed by PA DEP oil and gas inspectors. 26 Though not always consistent in its level of detail and completeness, this data includes the facility inspected, the cause of the inspection, any violations identified or outstanding, and inspectors comments. 27 For the purposes of this review, we examined all PA DEP compliance data between January 1, 2009, and December 19, 2013, a roughly five-year period. In examining Anadarko s compliance status, we looked both at reports for Anadarko E&P Onshore, LLC i.e., Anadarko s subsidiary that drills wells and operates production sites and Anadarko Marcellus Midstream, LLC i.e., Anadarko s subsidiary that runs the gathering lines from its production sites to larger transportation and processing facilities. 28 As noted above, Anadarko s plans for the Loyalsock include both well sites and midstream facilities. And as discussed below, the 23 See FracTracker, Controversy in the Loyalsock, supra. 24 See Coalition Letter, supra, at 3 n.1. 25 See PA DEP, Oil and Gas Compliance Report Viewer, http://www.depreportingservices.state.pa.us/reportserver/pages/reportviewer.aspx?/oil_gas/o G_Compliance (last visited Feb. 3, 2014). 26 See PA DEP, Report Instructions for the Oil and Gas Compliance Report, http://files.dep.state.pa.us/oilgas/bogm/bogmportalfiles/oilgasreports/helpdocs/og_com pliance_help.pdf (last visited Feb. 3, 2014). 27 Id. For example, as discussed below, the Compliance Report provides permit numbers and geographical identifiers for wells, but not for midstream facilities. For this reason, we know how many inspections and violations occurred at Anadarko Midstream facilities, but not how many facilities were involved. 28 See Anadarko, Marcellus Shale, http://www.anadarko.com/operations/pages/marcellusshale.aspx (last visited Feb. 3, 2014); Anadarko, Midstream: Marcellus, http://www.anadarko.com/midstream/pages/marcellus.aspx#overview (last visited Feb. 3, 2014). 5

Compliance Report returned results for Anadarko facilities in the three Pennsylvania counties in which it operates: Lycoming, Clinton, and Centre. Almost all of the Clarence Moore Lands are in Lycoming County, with a small portion extending into Sullivan County, and it appears that all of Anadarko s proposed development will occur in Lycoming County. 29 To provide perspective on how Anadarko compares to other operators, we compared the resulting compliance data to Pennsylvania s largest operators, using the same five-year timespan. III. ANALYSIS OF ANADARKO S HISTORY OF COMPLIANCE, 2009-2013 A. Anadarko s Record Stands Out for the Number of Major Violations According to the Oil and Gas Compliance Report, PA DEP conducted 2,928 inspections of 488 wells operated by Anadarko E&P Onshore, LLC (Anadarko E&P) between 2009 and 2013. 30 In that same five-year span, PA DEP conducted 72 inspections of facilities operated by Anadarko Marcellus Midstream, LLC (Anadarko Midstream). 31 From these inspections, PA DEP identified 246 violations: 207 at Anadarko E&P sites and 39 at Anadarko Midstream sites. 32 By county, the highest number of violations occurred in Lycoming County, with 112 violations, followed by Clinton County with 70 violations, Centre County with 16 violations, and 48 violations with the county not indicated. 33 Table 1: Anadarko Violations, by County (2009-2013) County Violations Lycoming 112 Clinton 70 Centre 16 Not indicated 48 Total 246 29 See FracTracker, Loyalsock from the Sky, http://www.fractracker.org/2013/10/loyalsockfrom-the-sky/ (last visited Feb. 3, 2014). 30 See Anadarko E&P Compliance Data (2009-2013) (on file with EIP). Prior to January 1, 2013, Anadarko E&P Onshore, LLC operated as a limited partnership under the name Anadarko E&P Company, LP. See Letter from Michael D. Klein, Cozen O Connor, to Appeals Officer Benjamin Lorah, Commonwealth of Pennsylvania, at 2 (April 2, 2013) (on file with EIP). Based on the fact that Anadarko E&P Company, LP is no longer listed as an operator in the Oil and Gas Compliance Report, it appears that PA DEP has transferred all data under the previous name to Anadarko E&P Onshore, LLC s compliance data. 31 See Anadarko Midstream Compliance Data (2009-2013) (on file with EIP). 32 Id.; Anadarko E&P Compliance Data, supra. As discussed below, the summaries for the compliance reports provide an alternative count for violations that is not easily reconcilable with the data in the spreadsheets. In this case, the alternative count for violations is 200 for Anadarko E&P and 29 for Anadarko Midstream. See also Table 5, supra. 33 Id. 6

By township, the majority of violations occurred in four townships: Cummings and McHenry Townships in Lycoming County, and Grugan and Noyes Townships in Clinton County. Table 2: Anadarko Violations, by Township (2009-2013) Township (County) Violations Cummings Twp (Lycoming) 43 McHenry Twp (Lycoming) 37 Grugan Twp (Clinton) 35 Noyes Twp (Clinton) 21 Cogan House Twp (Lycoming) 14 Snow Shoe Twp (Centre) 13 Beech Creek Twp (Clinton) 10 Gamble Twp (Lycoming) 10 Cascade Twp (Lycoming) 4 Chapman Twp (Clinton) 4 Pine Twp (Lycoming) 4 Curtin Twp (Centre) 2 Burnside Twp (Centre) 1 Not indicated 48 Total 246 Examining Anadarko s violations by the type of violation provides a more detailed picture of on-the-ground impacts. While there are dozens of violation codes covering a wide range of violations, from more clerical infractions such as failure to post authorization numbers or retain records on site to actual spills of pollutants to waters of the Commonwealth, we were able to categorize the types of violations into eight main categories. Table 3: Anadarko Citations by Violation Category (2009-2013) Violation Type Citations Discharge of pollutants to waters of Commonwealth & discharge-related violations 87 Failure to properly store or manage wastes or pollutants 77 Failure to minimize erosion or stabilize/restore site 21 Failure to post permit/authorization 27 Well casing violations 17 Miscellaneous noncompliance 9 Failure to submit or maintain records on site 5 Failure to notify DEP of pollution incident 3 Total 246 The most obvious takeaway from this table is that the vast majority of Anadarko s violations were in the categories of major, substantive violations: discharges of pollutants, waste storage, and erosion and site stabilization. 7

As discussed below, each of these top-three categories raises considerable concern, given that they relate to discharge, storage, and control of pollutants, and Anadarko has proposed a significant portion of its development in and around the pristine Rock Run. 34 Of particular relevance is the fact that Anadarko s top-ranking category, comprising more than a third of Anadarko s overall violations, is for actual discharges to waters of the Commonwealth and related violations, such as potential for polluting substance(s) reaching Waters of the Commonwealth. 35 B. In Comparison to Other Operators, Anadarko is a Top Violator, Especially for Discharge-Related Violations On its own, Anadarko s history of violations should give DCNR plenty of reason for concern and further analysis. But comparing Anadarko s compliance record with other oil and gas operators in Pennsylvania provides an even better sense of how Anadarko ranks as a responsible operator. Examining first the data of overall violations, no matter the prevalence or category, Anadarko E&P ranks eighteenth statewide, with Anadarko Midstream much lower. In terms of percentage of Pennsylvania s overall violations, Anadarko E&P represented a little over one percent, and Anadarko Midstream represented one fifth of one percent. Combining their violations, they rank sixteenth statewide out of the 588 operators that Pennsylvania counted between 2009 and 2013. 36 This easily places Anadarko within the top three percent of operators. Table 4: Overall Violations by Oil and Gas Operator (2009-2013) Operator Violations Percent of Total US ENERGY DEV CORP 729 3.76% CHESAPEAKE APPALACHIA LLC 681 3.51% CABOT OIL & GAS CORP 549 2.83% TITUSVILLE OIL & GAS ASSOC INC 518 2.67% SENECA RESOURCES CORP 456 2.35% TALISMAN ENERGY USA INC 387 2.00% EAST RESOURCES INC 381 1.97% CHIEF OIL & GAS LLC 379 1.96% DANNIC ENERGY CORP 363 1.87% RANGE RESOURCES APPALACHIA LLC 340 1.75% CATALYST ENERGY INC 336 1.73% HOMELAND ENERGY VENTURES LLC 308 1.59% NORTH AMER OIL & GAS DRILLING CO INC 279 1.44% XTO ENERGY INC 276 1.42% REPASKY JEFFREY A 252 1.30% ANADARKO E&P & MIDSTREAM COMBINED [246] [1.27%] 34 See FracTracker, Controversy in the Loyalsock, supra. 35 See Anadarko E&P Compliance Data, supra; Anadarko Midstream Compliance Data, supra. 36 See Oil and Gas Compliance Data (2009-2013) (on file with EIP). 8

PA GEN ENERGY CO LLC 227 1.17% SWEPI LP 226 1.17% ANADARKO E&P ONSHORE LLC 207 1.07% ANADARKO MARCELLUS MIDSTREAM LLC 39 0.20% Other Operators 12448 64.23% Total Violations 19381 100% To break the numbers down further, we examined the violations of each of the top ten violators, along with Anadarko E&P and Anadarko Midstream, against the number of the operators wells that PA DEP inspected. This analysis allows more comparison between operators of different sizes by providing an estimate of violations per well inspected, and thereby giving a better estimate of an operator s actual compliance. 37 Table 5: Violations by Operator and by Wells Inspected (2009-2013) Violations per Operator Violations Alt. Count Wells Inspected Wells Inspected US ENERGY DEV CORP 729 456 612 0.75 CHESAPEAKE APPALACHIA LLC 681 588 1354 0.43 CABOT OIL & GAS CORP 549 488 425 1.15 TITUSVILLE OIL & GAS ASSOC INC 518 500 444 1.13 SENECA RESOURCES CORP 456 389 926 0.42 TALISMAN ENERGY USA INC 387 358 774 0.46 EAST RESOURCES INC 381 277 268 1.03 CHIEF OIL & GAS LLC 379 359 299 1.20 DANNIC ENERGY CORP 363 313 204 1.53 RANGE RESOURCES APPALACHIA LLC 340 280 1978 0.14 ANADARKO E&P ONSHORE LLC 207 200 488 0.41 ANADARKO MARCELLUS MIDSTREAM LLC 39 29 N/A N/A The above table provides total violation figures based on the raw compliance data downloaded from the PA DEP s Oil and Gas Compliance Report, as well as an alternative count of violations. This alternative count comes from the summary the Report provides for each operator, which is generated when the Report is searched by operator. 38 We were not able to reconcile this number against the data in the compliance spreadsheet, so we have provided both counts here. 39 Since we also drew the figures for wells inspected from each operator s summary, we opted to use the alternative count of violations to generate the figure of violations per wells inspected. 40 37 Id. 38 See, e.g., PA DEP, Compliance Report: Anadarko E&P Onshore, LLC (2013) (on file with EIP) 39 See note 32, supra. 40 Although PA DEP inspected Anadarko Midstream s facilities at least nineteen times between 2009 and 2013, the summary only provided a count of wells inspected. and not facilities inspected. See PA DEP, Compliance Report: Anadarko Marcellus Midstream, LLC (2013) (on 9

As can be seen from the table, Anadarko E&P is on par with some of the largest operators, with 0.41 violations for every well inspected. There are operators with many more violations per wells inspected, such as Cabot (1.15), Chief (1.20), and Dannic (1.53), but there are also several with roughly the same number as or lower than Anadarko E&P, such as Chesapeake (0.43), Seneca (0.42), and Range (0.14). 41 In this analysis, Anadarko s position is not particularly striking. Finally, as discussed above, it makes sense to examine how Anadarko compares in terms of discharge-related violations, since this is an issue of particular importance for Anadarko s planned development around Rock Run and other waterbodies. As shown above, Anadarko E&P and Anadarko Midstream had a combined 87 discharge-related violations between 2009 and 2013, and this easily places Anadarko in the top ten statewide. Table 6: Discharges and Discharge-Related Violations, by Operator (2009-2013) Discharge- Related Violations Discharge Violations per Overall Violations Overall Rank Operator Violations 1 CHESAPEAKE APPALACHIA LLC 171 681 0.25 2 CABOT OIL & GAS CORP 127 549 0.23 3 TITUSVILLE OIL & GAS ASSOC INC 124 518 0.24 4 US ENERGY DEV CORP 122 729 0.17 5 RANGE RESOURCES APPALACHIA LLC 117 340 0.34 6 CHIEF OIL & GAS LLC 91 379 0.24 [7] ANADARKO E&P & MIDSTREAM COMBINED [87] [246] [0.35] 7 PA GEN ENERGY CO LLC 84 227 0.37 8 SENECA RESOURCES CORP 76 456 0.17 9 XTO ENERGY INC 76 276 0.28 10 TALISMAN ENERGY USA INC 70 387 0.18 11 CATALYST ENERGY INC 66 336 0.20 12 EAST RESOURCES INC 64 381 0.17 13 CNX GAS CO LLC 59 127 0.46 14 ANADARKO E&P ONSHORE LLC 58 207 0.28 15 SWEPI LP 54 226 0.24 16 ATLAS RESOURCES LLC 44 186 0.24 17 PVR MARCELLUS GAS GATHERING LLC 42 128 0.33 18 CARRIZO (MARCELLUS) LLC 41 117 0.35 19 EQT PRODUCTION CO 39 174 0.22 20 EXCO RESOURCES PA LLC 38 150 0.25 28 ANADARKO MARCELLUS MIDSTREAM LLC 29 39 0.74 N/A Other Operators 1753 12448 0.14 Total 3307 19381 0.17 file with EIP). For this reason, we are not able to provide figures for Wells Inspected or Violations per Wells Inspected for Anadarko Midstream in Table 5. 41 Id.; Anadarko E&P Compliance Data, supra; Anadarko Midstream Compliance Data, supra. 10

Specifically, Anadarko E&P and Anadarko Midstream combined rank seventh statewide, with Anadarko E&P ranking fourteenth on its own, and Anadarko Midstream ranking twenty-eighth. 42 Looking just at discharge-related violations clearly moves Anadarko higher up in the rankings than overall violations. In fact, Anadarko s combined discharge violations represent 2.6 percent of the statewide total, roughly double its percentage of overall statewide violations. 43 The results are more striking when looking at each of the top-twenty operators discharge-related violations as a proportion of their overall violations. Under that analysis, Anadarko Midstream has the highest proportion, with nearly three out of every four or seventyfour percent of its violations as discharge-related violations. Anadarko E&P and Anadarko Midstream combined rank fourth, with discharge-related violations representing thirty-five percent of their overall violations, and Anadarko E&P on its own ranks eighth, with dischargerelated violations as twenty-eight percent of its overall violations. Looking at the total statewide violations for all oil and gas operators, discharge-related violations represent only seventeen percent of violations far smaller than any of Anadarko s proportions. Whichever way one looks at Anadarko s record for discharge-related violations as separate numbers for Anadarko E&P and Anadarko Midstream or combined, compared to the biggest violators or compared to the statewide numbers for all operators Anadarko E&P and Anadarko Midstream have a share of discharge-related violations that is disproportionately high and out of step with statewide trends. Anadarko s compliance record, and especially its violations related to discharges to waters of the Commonwealth, raises significant concerns regarding its proposed development in the Loyalsock. Discharge-related violations represent real, on-the-ground impacts to waters of the Commonwealth. And Rock Run, which stands at the center of Anadarko s plans of development, is not just an average water of the Commonwealth. It is designated as an Exceptional Value water and beloved by Pennsylvanians as one of the most scenic and pristine streams in the Commonwealth. In fact, PA DEP has previously raised this very issue: What concerns me most about Anadarko s lax attitude toward environmental compliance is the fact that all of their proposed Marcellus Well activities are taking place in Special Protection Watersheds. They are not only operating in HQ watersheds, but some of the roads they will be using cross through EV watersheds. 44 42 Id. 43 Id. 44 See PA DEP, Memorandum re: Phone Call with Chad Guidry, Anadarko E&P Company (undated) (on file with EIP). The memorandum also discusses Anadarko s contentions that it is up to their discretion to determine when a release threatens the waters of the Commonwealth, that the word discharge only applies to a planned release of a substance, and that the company need not report spills under 100 barrels. Id. 11

To allow large-scale natural gas development on pristine and sensitive lands and waters by an operator with one of the worst records for discharge violations would be simply incompatible with DCNR s duties to the public trust of the Commonwealth and its citizens. 45 IV. CONCLUSION As demonstrated by the compliance data analyzed in this report, Anadarko s history of violations should give DCNR reason to carefully scrutinize Anadarko s plans for natural gas development in the Clarence Moore Lands of the Loyalsock. While Anadarko is not the Commonwealth s worst oil and gas operator in terms of violations cited, its top-twenty ranking out of nearly 600 operators places it within the top three percent of violators statewide. Anadarko also has a history of discharge-related violations out of proportion to its overall violations. More than one out of every three of Anadarko s violations between 2009 and 2013 was due to a discharge to waters of the Commonwealth or a related offense. Given that the Clarence Moore Lands contain most of the watershed of Rock Run a pristine, scenic, and Exceptional Value water of the Commonwealth it is hard to reconcile Anadarko s history of discharges with DCNR s duty to ensure that the interest of the Commonwealth be protected and promoted. As the holder of exclusive control of the surface of the yellow tract s nearly 19,000 acres, DCNR is under no obligation to grant Anadarko a right-of-way to develop the yellow tract or to use the yellow tract for access to the blue tract. In fact, DCNR is affirmatively obligated to ensure that that a right-of-way will not adversely affect the yellow tract lands and will actually promote the interests of the Commonwealth and its citizens. Anadarko s history of violations raises serious doubts that either of these thresholds could be met. 45 See Coalition Letter, supra, at 4. 12