Shale Daily / NGI All News Access

New Pennsylvania DEP Team, First Energy Executive Tapped

Three experienced state energy officials were selected by Pennsylvania Gov.-elect Tom Corbett on Tuesday to helm the Department of Environmental Protection (DEP) and another was tapped as the state's first Energy Executive.

The DEP, currently led by hard-charging DEP Secretary John Hanger, is one of the most active energy regulators in the country, presiding over the state's massive Marcellus Shale operations.

Michael Krancer, 53, a judge on the state's Environmental Hearing Board (EHB), was named to succeed hard-charging DEP Secretary John Hanger. Krancer, an ally of both Republicans and Democrats, is serving his second term on the EHB, which is a statewide trial and appeals court for environmental cases.

Krancer previously served as an EHB judge from 1999 to 2007 under Gov. Tom Ridge, a Republican, and Democratic Gov. Ed Rendell, who leaves office next week. Corbett is to be sworn in on Tuesday (Jan. 18).

Krancer "has shown to have just the kind of experience we need right now in Pennsylvania, said Corbett. He "has a reputation of being fair, practical, speedy and intellectual." The new DEP chief needs a majority of state Senate members to confirm the nomination.

In 2007 Krancer made an unsuccessful run for a state Supreme Court seat, and following that he served as assistant general counsel for Exelon Corp. from June 2008 through October 2009. He returned to the EHB after being nominated for a second time by Rendell.

John Hines, currently deputy secretary of DEP Water Management, was named to the No. 2 post as executive deputy secretary of DEP programs. Jeff Logan, who previously served the Ridge administration, was selected to become executive deputy secretary of administration.

In addition, Patrick Henderson, a state Senate aide, was tapped as the state's first Energy Executive. Henderson now directs the Senate Environmental Resources and Energy Committee. As Energy Executive, Henderson would act as a senior adviser to the governor and would be charged with coordinating state energy policy. Corbett had promised to create the executive-level position during his gubernatorial campaign.

When it comes to oversight of natural gas production in the Marcellus Shale, Krancer and the newly tapped officials have inherited a large job. According to NGI's Shale Daily Unconventional Rig Count, rigs operating in the play, which also spills over into New York, Ohio and West Virginia, reached a peak of 164 last fall and currently sits at 140.

Marcellus Shale Coalition President Kathryn Klaber said the announcements were a positive for the energy industry.

"As Gov.-elect Corbett has said, the Marcellus Shale provides 'us with another tremendous opportunity for jobs and revenue, but we must proceed in a way that protects the environment,'" Klaber told NGI's Shale Daily. "We couldn't agree more, and our industry looks forward to working alongside Gov.-elect Corbett's capable incoming DEP designees to ensure that we get this historic opportunity right for the commonwealth.

"Putting Pennsylvanians back to work, and ensuring that our kids and grandkids have a clean and healthy environment is a top priority, and Mike Krancer, John Hines and Patrick Henderson have proven track records of helping to achieve these common goals."

Dick Gmerek, a legislative representative for the Pennsylvania Independent Oil & Gas Association (PIOGA), told NGI's Shale Daily that producers were "optimistic in part because the new secretary is a bright guy who has been over at the Environmental Hearing Board for a number of years and understands DEP law and regulations and also understands what we do, which is helpful to us.

"Hines is another guy who has been with DEP a while. There have been all of these articles recently about Pennsylvania being the only state in the country that lets you dump frack water directly into the river, and yet Hines is the guy who is making sure that doesn't happen. He came up with the program that monitors [water] to make sure that we're not doing that. So, we've got a guy there who can speak out and say, 'That's not true, that's not happening.'"

Henderson, said Gmerek, "worked for the state Senate on environmental issues, and quite frankly, for the last year has been working on how to responsibly tax the industry -- if the state decides to. As PIOGA we are not necessarily in favor of a tax. However, we've said if there is some kind of way that there could be a local impact fee that the legislature could approve and the governor would sign -- being that he signed the no tax pledge -- we'd be interested.

"Henderson was working to see if there could be any kind of tax of any nature and whether it would be a responsible tax. He was also looking at what other things need to be done in statute to regulate drilling while also promoting it as a huge employer in the state. All of those things give us a lot of optimism."

Citizens for Pennsylvania's Future (PennFuture), a statewide environmental group, also offered praise for Krancer and Hines.

"Judge Krancer brings an unparalleled knowledge of environment laws and regulations, and can be the 'cop on the beat' that Pennsylvania citizens need, and Tom Corbett promised, in the job of environmental protection and enforcement," said PennFuture CEO Jan Jarrett.

"Hines led the way for cleaner water through Pennsylvania's participation in cleaning up the Chesapeake Bay and the streams that lead to it," said Jarrett. "And without John Hines, we would not have the new strong rules requiring drillers to clean up their wastewater to drinking water standards if they want to return their water to our rivers and streams. Hines has already made a big difference for all Pennsylvanians, and we know we can expect more good work from him in the future."

Jarrett called the Energy Executive position "intriguing...Done the right way, this office can build on our track record of creating great 'green' jobs throughout the commonwealth, by helping grow the 21st century energy industry. We have already created thousands of green jobs, thanks to our alternative energy portfolio standard. But with an increase, we could create a minimum of 129,000 job-years and save consumers billions in energy costs.

"We can also reduce pollution and heat trapping gases through responsible gas drilling and use, replacing coal and petroleum fuels. And we could make Pennsylvania a leader in the use of electric and natural gas powered vehicles. We are certain that, together, Pennsylvania can build a new energy economy with great jobs and new businesses, all the while protecting our environment and communities."

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