Courtesy of Lwanga Yonke comes this great story about how the choice of unit of measure for reporting, particularly for regulatory reporting or Corporate Social Responsibility reports can be very important.

The natural gas industry’s claim that it is making great strides in reducing the polluted wastewater it discharges to rivers is proving difficult to assess because of inconsistent reporting and a big data entry error in the system for tracking contaminated fluids.

The issue:

Back in February the Natural Gas industry in the US released statistics which appeared to show that they had managed to recycle at least 65% of the toxic waste brine that is a by-product of natural gas production. Unfortunately they had their data input a little bit askew, thanks to one company who had reported data back to the State of Pennsylvania using the wrong unit of measure – confusing barrels with gallons.

For those of us who aren’t into the minutiae of natural gas extraction, the Wall Street Journal helpfully points out that there are 42 gallons in a barrel. So, by reporting 5.2 million barrels of wastewater recycled instead of the 5.2 million gallons that were actually recycled, the helpful data entry error overstated the recycling success by a factor of 42.

Which is, co-incidentally, the answer to Life the Universe and Everything.

According to the Wall Street Journal, it may be impossible to accurately identify the rate of waste water recycling in the natural gas industry in the US.

Not counting Seneca’s bad numbers — and assuming that the rest of the state’s data is accurate — drillers reported that they generated about 5.4 million barrels of wastewater in the second half of 2010. Of that, DEP lists about 2.8 million barrels going to treatment plants that discharge into rivers and streams, about 460,000 barrels being sent to underground disposal wells, and about 2 million barrels being recycled or treated at plants with no river discharge.

That would suggest a recycling rate of around 38 percent, a number that stands in stark contrast to the 90 percent recycling rate claimed by some industry representatives. But Kathryn Klaber, president of the Marcellus Shale Coalition, an industry group, stood by the 90 percent figure this week after it was questioned by The Associated Press, The New York Times and other news organizations.

The WSJ article goes on to point out that there is a lack of clarity about what should actually be reported as recycled waste water and issues with the tracking of and reporting of discharges of waste water from gas extraction.

At least one company, Range Resources of Fort Worth, Texas, said it hadn’t been reporting much of its recycled wastewater at all, because it believed the DEP’s tracking system only covered water that the company sent out for treatment or disposal, not fluids it reused on the spot.

Another company that had boasted of a near 100 percent recycling rate, Cabot Oil & Gas, also Houston-based, told The AP that the figure only included fluids that gush from a well once it is opened for production by a process known as hydraulic fracturing. Company spokesman George Stark said it didn’t include different types of wastewater unrelated to fracturing, like groundwater or rainwater contaminated during the drilling process by chemically tainted drilling muds.

So, a finger flub on data entry, combined with lack of agreement on meaning and usage of data in the industry, and gaps in regulation and enforcement of standards means that there is, as of now, no definitive right answer to the question “how much waste water is recycled from gas production in Pennsylvania?”.

What does your gut tell you?