American Oil and Gas Reporter - February 2016 - 99

Pennsylvania Rule Nearing Adoption
WEXFORD, PA.-Brushing aside industry objections, the Pennsylvania Department of Environmental Protection has
formally advanced an extensive revamp of
regulations governing oil and gas surface
operations. The Chapter 78/78a, Subchapter C final rule making was transmitted Jan.
6 to the Environmental Quality Board, the
entity that formally promulgates DEP rule
makings, the Pennsylvania Independent Oil
& Gas Association reports.
According to PIOGA, the rule-making
package runs more than 2,800 pages, including the proposed rules, a regulatory analysis form itemizing the various provisions'
estimated costs, and a document that responds to each of the 28,000 public comments in a process that began in 2011. In response to a 2015 legislative directive, the department split the proposal into separate regulations for conventional (Chapter 78) and
unconventional (Chapter 78a) operations.
PIOGA indicates it and other industry
groups have criticized the separation as little more than a word-processing cut and
paste.
"These regulatory changes are balanced, incremental and appropriate, protecting public health while enabling responsible drilling," maintains a statement
by DEP Secretary John Quigley. "These
rules are a long time coming-more than
four years-and were written with an unprecedented amount of public participation
and transparency. We have worked hard to
ensure that the health and safety of our citizens are protected, and the needs of industry are being met."
PIOGA President and Executive Director Louis D'Amico differs sharply. "The
development of these regulations over
the past four years has been flawed to the
point of being fraudulent," he assesses.
"The modernization of environmental
controls was required by Act 13 for the unconventional industry and yet, despite
working on these regulations since 2011,
DEP still not not explained or shown the
need to make them applicable to the conventional industry."
Specific Changes
A handful of key provisions in the revised regulations that DEP highlights are:
* Potential impacts to public resources;
* Areas of review;
* Containment practices; and
* Water resources protection.
On the first matter, DEP indicates well
permit applicants will be required to identify a potentially impacted public re-

source and notify the appropriate resource agency if the well site is within specific distances of, among other things, a
park, publically owned forest, historic or
archaeological site, school playground, water supply point or location of species of
special concern. PIOGA reports it is challenging the public resource provisions in
state court because they rely on a portion
of Act 13 that the Pennsylvania Supreme
Court's Robinson Township decision invalidated and enjoined from enforcement.
Regarding areas of review, DEP has
said operators must identify abandoned,
orphan, active and inactive wells within
1,000 feet of a vertical and horizontal wellbore (or 500 feet of the wellbore in the case
of a vertical oil well) before a well may be
hydraulically fractured. Part of the identification process includes submitting a
questionnaire to landowners whose property is within the prescribed area of review.
PIOGA says industry representatives have
questioned several aspects of the identification and notification procedures.
According to DEP, new containment
practice requirements hold that oil and condensate tanks with a combined capacity of
at least 1,320 gallons must be protected by
secondary containment. Permanent aboveground or underground tanks must use corrosion-control measures and be inspected
regularly. Large centralized impoundments used by unconventional operators
must comply with the more stringent requirements of DEP's waste program or
close within three years.
The rule making's provisions that seek
to protect water resources ban temporary
waste storage pits at unconventional well
sites, but allow their continued use for conventional wells, DEP details. However, any
pits that cover more than 3,000 square feet
and have a capacity greater than 125,000
gallons will require DEP's site-specific approval. The department goes on to say that
pit liners must be at least 30 mils thick unless the manufacturer demonstrates a
thinner liner is equally protective. Operators will be required to use a soil scientist or other qualified professional to document that a temporary pit is at least 20
inches above the seasonal high groundwater table, the department adds.
Lowball Estimates
Additionally, PIOGA notes, the rules
outline how an operator must respond to
and remediate spills or releases, and require
pipeline constructors to develop a Preparedness, Prevention and Contingency
Plan when drilling horizontally under a wa-

terway. Within nine months after they are
done drilling a well, operators will be required to restore a well site, which includes
filling pits and removing drilling supplies
and equipment.
The rule package's regulatory analysis
estimates the annual cost to unconventional operators at $6 million-$31 million a
year. However, PIOGA notes, the Marcellus Shale Coalition released an estimate in
January that estimated the new regulations
would cost the industry about $2 billion annually. Conventional operators will see an
additional $28.6 million a year in new
costs, DEP predicts, but PIOGA says industry advocates have criticized that number as far too low.
If EQB approves the rule making, it will
go before the Independent Regulatory
Review Commission and the environmental resources committees in the House
of Representatives and Senate, along with
the state attorney general. The department
has expressed hopes for the rules' final approval and implementation by summer.
D'Amico says PIOGA intends to use
every opportunity to block the regulations'
implementation or force DEP to make further changes. With regard to the rule
making for conventional wells, the association says it continues to work with legislators in an effort to mandate a fresh start
for the regulatory process.
"Repeated references by this administration to whatever it proposes as 'commonsense' cannot magically transform
any of them, especially these rule makings," D'Amico stated. "We look forward to pressing on with our fight against
this abuse of process and extreme regulatory overreach these rule makings represent."
❒

Coming In March
The industry is applying the technological skillsets developed in tight
oil and shale gas plays to discover
new possibilities in even the most
mature producing basins. Part III of
the Unconventional Resource Science series presents an inside look at
how one small independent is combining petrophysics, geophysics,
reservoir engineering, and best-inclass drilling and completion technology to exploit multiple stacked
plays in East Texas. Reports also
showcase the latest advancements in
frac/refrac tools and techniques.
FEBRUARY 2016 99
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