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Our opinion: DEP’s fuzzy math

August 22, 2012
The Times Observer

Pennsylvania's Department of Environmental Protection is starting to look like the gang who couldn't shoot straight.

Blistered by inaccurate and misleading statements about gas and oil production in recent years, the latest faux pas is a doozy.

Recently the DEP released an accounting of Marcellus Shale gas production in the state. The data is used by environmental planners and policy makers as well as market analysts who issue their own reports that end up affecting the well-head price of gas.

Here's the thing: The DEP, in its exhaustive accounting of Marcellus gas production, left out any data from Chesapeake Energy, arguably the most prolific driller and producer of Marcellus gas in the state. That's like leaving General Motors out of the annual count of automobiles produced in the United States.

Shoddy work? You bet; but that would be the most benign explanation.

Like all commodities, natural gas prices are largely controlled by the law of supply and demand. As supply falls short of demand, the price goes up. As supply exceeds demand, the price goes down. The conspiracy theorists among us might harbor the conclusion that the DEP's inaccuracy could drive up the price of natural gas, which has been falling since the flood of gas from the Marcellus has hissed into the market.

Remember when Eddie Murphy and Dan Ackroyd played games with the price of frozen concentrated orange juice in "Trading Places?" The key to the plot was obtaining and then manipulating the government's estimate of the orange crop that year. They made a killing and wrought vengance on their greedy bosses.

No one is implying - and neither are we - that someone is trying to manipulate markets for personal gain, but faulty numbers could artificially inflate or depress market prices for natural gas. Those price changes could be felt in both residential and commercial gas bills.

OK, so maybe it was an honest mistake afterall.

But, that begs another question: If the DEP can issue a report with a mistake this huge, coupled with other shaky reporting in the recent past, how can we trust anything the agency reports? Pennsylvania, and this administration in particular, has climbed on the Marcellus bandwagon and whipped the horses into a gallop. One would think that in the process of making produced gas virtually tax-free and heaping millions of dollars on multinationals willing to build gas-related industry in the state, there would have been some attention given to improving the agency charged with overseeing the industry.

Also disturbing is the DEP's response to the criticisms of its reporting. "Any analysis is incumbent upon the user to make his own interpretations," DEP spokesman Kevin Sunday said in a statement Monday, adding that "what appears is what we have." Translation: "That's the report; you figure it out. It may be useless, even misleading, but, oh well."

 
 

 

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