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PA DEP Chief Krancer Quits; Interim Replacement Criticized

Pennsylvania Gov. Tom Corbett announced Friday that Michael Krancer, secretary of the state Department of Environmental Protection (DEP), will step down on April 15 and return to practice law in Philadelphia. But the decision to replace him on an interim basis with the governor's deputy chief of staff is being derided by Krancer's predecessor, John Hanger.

"Secretary Krancer has been an invaluable member of our team, and I am grateful for his service," Corbett said. "His impressive efforts at DEP have taken the agency back to basics, protecting the environment and making the permitting process more efficient.

"His guidance on a variety of issues related to the environment has been vital. DEP has been in good hands under his leadership."

E. Christopher Abruzzo will serve as acting DEP secretary until the governor names a successor to Krancer. The governor's office said Abruzzo will hold both positions until a replacement is named. Meanwhile, Krancer will rejoin Blank Rome LLP as a partner and will chair the firm's energy, petrochemical and natural resources practice.

Hanger blasted Abruzzo's appointment, calling Corbett's decision "bizarre and irresponsible."

"The DEP is in crisis, crippled by incredibly low morale and de-funding," Hanger told NGI's Shale Daily on Friday. "The choice of a deputy chief of staff -- a career prosecutor with no background in environment, no understanding of the DEP -- to serve as an interim secretary underlines that the agency is in crisis. There was apparently nobody within the agency -- no 'No. 2' -- who could step in.

"Mr. Abruzzo is unqualified to serve even for day as the secretary of the DEP. It's one of the most important jobs in state government. A lot can go wrong within one day at DEP, given its tremendous responsibilities for protecting the environment and ensuring public safety. It's shocking to me that this agency is going to be led, even for a day, by somebody unqualified for the position. Frankly, it's irresponsible."

It was unclear if the news of Krancer stepping down was related to a StateImpact report on March 13 that said Corbett, during his tenure as state attorney general, and his wife accepted $15,447 in gifts from Blank Rome since 2007. Other media reports said the Corbetts have accepted thousands of dollars in gifts from business executives and lobbyists.

Hanger said that in 1980, Gov. Dick Thornburgh enacted the Governor's Code of Conduct to stop the use of gifts to curry favor from governors and the executive branch. "Until Gov. Corbett took office, gift giving in the executive branch just wasn't done," he said. "It's truly extraordinary to see that the governor himself has taken, at this point, probably more than $20,000 worth of gifts from people who have business in front of him.

"I don't personally believe that Mr. Krancer is the main problem, I believe the governor himself is the problem. He's lost the confidence of huge numbers of Pennsylvanians that the DEP will strongly regulate the gas industry. And that loss of public confidence is a disaster."

Industry groups made no mention of Abruzzo's appointment or the allegations of impropriety surrounding Corbett. Instead, they praised Krancer and said he was an objective leader of the DEP.

"We wish the secretary well as he moves on back to private practice," Lou D'Amico, president of the Pennsylvania Independent Oil and Gas Association (PIOGA), told NGI's Shale Daily on Friday. "I think he did an effective job of managing the department."

Marcellus Shale Coalition CEO Kathryn Klaber concurred. "Secretary Krancer's constructiveness and pragmatism have served our Commonwealth well," she said. "Under his leadership, Pennsylvania has implemented world-class regulatory requirements for the industry, and responsible natural gas production has soared, resulting in more local jobs, cleaner air and strengthened American energy security."

Krancer said he appreciated the opportunity to lead the DEP.

"Serving Gov. Corbett and DEP has been the greatest honor of my career," Krancer said. "Pennsylvania is well on its way to becoming the focal point of an American energy revolution, and I am grateful to the governor for giving me this role in assuring that natural gas and energy development happen in an environmentally sound and responsible manner.

"I owe a tremendous amount of thanks and appreciation to all of the talented, dedicated, hard-working professionals at DEP with whom I have been privileged to work as their secretary."

With Krancer at the helm, the DEP enacted several regulatory changes that affected the oil and natural gas industry as the Marcellus Shale emerged as a production juggernaut (see Shale Daily, March 6).

During Krancer's tenure, the Bureau of Oil & Gas Management was elevated to become the Office of Oil & Gas Management with its own deputy secretary reporting directly to DEP administrators in Harrisburg (see Shale Daily, Sept. 21, 2011). The DEP also created two new bureaus: Environmental Cleanup and Brownfields under the Office of Waste, Air, Radiation and Remediation; and the Bureau of Conservation and Restoration under the Office of Water Management. DEP created two new offices as well: Pollution Prevention and Energy Assistance, and Program Integration.

In 2011, under orders from Corbett, Krancer told operators to stop delivering wastewater from natural gas extraction to treatment facilities, citing revised total dissolved solids regulations. He then targeted "slackers" that didn't comply with the order (see Shale Daily, May 26, 2011; April 20, 2011).

The next year, Pennsylvania's omnibus Marcellus Shale law, Act 13, came into effect, as did the DEP's new Permit Review Process and Decision Guarantee and Permit Coordination policies, which were designed to expedite the drilling permit application process (see Shale Daily, Nov. 7, 2012; Feb. 15, 2012).

But Krancer will also be remembered for not shying away from confrontation, especially with the U.S. Environmental Protection Agency. He blasted the federal agency for its interest in regulating hydraulic fracturing, offering testimony several times that the practice was best regulated by the states (see Shale Daily, June 1, 2012; Nov 18, 2011; June 9, 2011).

As Mitt Romney's energy adviser during the 2012 presidential campaign, he leveled criticism against President Obama for his position on energy issues (see Shale Daily, Sept. 24, 2012).

Krancer also went toe-to-toe with two state lawmakers over allegations that the DEP mishandled water samples in a contamination case and for a plan to enact a two-year moratorium on wastewater injection wells (see Shale Daily, Nov. 19, 2012; Aug. 9, 2012). He also clashed with the Natural Resources Defense Council (see Shale Daily, June 27, 2012), Duke University researchers and the New York Times (see Shale Daily, June 8, 2011; March 3, 2011).

Corbett tapped Krancer to lead the DEP shortly after his election as governor in 2010 (see Shale Daily, Jan. 13, 2011). Krancer had served as a judge on the state's Environmental Hearing Board under former Govs. Tom Ridge and Ed Rendell. He made an unsuccessful run for a state Supreme Court seat in 2007.

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