American Oil and Gas Reporter - May 2015 - 146

Oil And Gas Regs

PIOGA Vexed With DEP Final Draft Rule
WEXFORD, PA.-There is a lot not to
like in the Pennsylvania Department of Environmental Protection's draft final regulations for oil and gas surface operations,
according to the Pennsylvania Independent Oil & Gas Association.
After months of sifting through more
than 24,000 public comments on proposed
changes to its Chapter 78 regulations, the
DEP released a set of draft final rules on
April 4 for public comment (AOGR,
April 2015, pg. 18). PIOGA reports it
found much to disagree with in the initial
draft and is no happier with the revisions,
which it says would impose even more unnecessary and inappropriate regulatory
burdens on both conventional and unconventional operations.
The association does note one bright
spot-if only from the perspective of facilitating review of the proposed rules-is that
the regulations are divided into separate
sets of rules applying to conventional and
unconventional operations. It says many
industry interests had complained that
DEP's initial draft of its Subchapter C regulations subjected conventional producers
to many stringent new requirements that
should be applied, if at all, only to unconventional operations.
The Pennsylvania General Assembly
responded to industry's concerns by requiring, as part of budget legislation last
year, the DEP to create separate rules for
conventional and unconventional operations. However, PIOGA and others say
they believe the department's simple
"word processing" separation falls short
of withdrawing the proposed rules and initiating a rule making, as required by that
legislation.
PIOGA says little of the massive rule
making, which runs to nearly 300 pages,
is required as a result of Act 13 of 2012.
The association explains that in response
to Pennsylvania's burgeoning shale gas development, Act 13 imposed an impact fee
on shale gas wells, and would have required uniformity in local zoning affecting oil and gas operations, if that chapter
had not largely been invalidated by the
Pennsylvania Supreme Court in December 2013.
Most of Act 13's revisions to the environmental protections in the Oil and Gas
Act of 1984, which became Chapter 32 in
the new act, are self-executing and require
no regulatory changes, PIOGA points
out. It contends only about 2 percent of the
revisions could be said to be "required" by
Act 13.

Significant Changes
In its advanced notice of final rule making published April 4, DEP listed several new sections that it considered to be
"significant changes" from the draft that
was issued in December 2013. PIOGA
says changes that would apply to all operators include:
* A requirement to restore impacted
drinking water supplies to Safe Drinking
Water Act standards, or to the quality
found in testing prior to drilling, whichever is higher;
* Banning the use of pits to store production fluids at well sites;
* A new proposal to authorize centralized tank storage;
* Expanding predrilling assessments
to include identifying nearby active and inactive wells;
* Revising the obligation to identify
nearby abandoned and orphan wells;
* New obligations for site restoration
that go beyond what is required under the
erosion control requirements of Chapter
102; and
* A new requirement to remediate
spills or releases at well sites in accordance
with the Act 2 program, but under a time
frame unique to oil and gas operations.
Changes specific to unconventional operators include an entirely new noise
mitigation provision, prohibiting the use
of temporary waste storage pits, and an option to obtain approval for disposing of
waste at unconventional well sites, PIOGA reports.
Jean Mosites of Babst Calland, who is
helping direct a PIOGA work group assessing the proposal and developing formal comments on behalf of the association, highlights one particular concern in
the April issue of the association's
newsletter: a new definition of "other critical communities" dealing with well permit conditions necessary to protect against
probable harmful impacts to specified
public resources while ensuring the optimal development of oil and gas resources
and respecting property rights of oil and
gas owners.
The definition includes plant and animal species not listed as threatened or endangered, areas where threatened or endangered species exist, and "significant nonspecies resources" such as unique geological or natural features, or significant
natural communities.
The term "critical communities" is
not defined in Act 13, and Mosites writes

146 THE AMERICAN OIL & GAS REPORTER

that DEP's definition and the lack of an exact corresponding term in other laws and
programs that apply to species of concern
likely will cause problems for permit applicants.
"DEP's definition of critical communities would elevate all nonlisted species,
as well as various nonspecies resources,
to levels of protection comparable to
those for threatened or endangered species
without any public input or science to justify such protection," she reasons.
Further, Mosites says, contrary to the
explicit directive in Act 13, the revised
rules do not set criteria for DEP to use in
creating permit conditions to protect
against probable harmful impacts to public resources, which "further compounds
the uncertainties created by the proposed
definition of critical communities."
Industry Concerns
In formal comments submitted on the
December 2013 draft rules, PIOGA asserted that DEP's Oil and Gas Technical Advisory Board had not been given the opportunity to complete work requested by
the department on several aspects of the
proposal.
In particular, PIOGA was worried
about:
* Provisions that addressed protecting
public resources and "special concern"
species, which implicated the Pennsylvania Supreme Court's decision in Robinson
Township to invalidate Act 13 provisions
relied on by the department;
* The imposition of well permit application requirements related to public resources that it believed created unauthorized, unnecessary and inappropriate burdens on applicants; and
* DEP significantly underestimating
the economic impact of the proposed
rules on the oil and gas industry, and especially on conventional operators.
The association contends DEP left
many of those concerns unaddressed in the
April draft final regulations. "We are
disappointed and upset on a number of levels," declares PIOGA General Counsel
Kevin Moody. "The department ignored
the input of the people who are most
knowledgeable about how the industry operates. It continues to push a set of rules
that are incomplete, poorly conceived, and
inadequately supported. And DEP is exceeding its statutory authority or going
against legal decisions in some aspects of
the proposal."
DEP has stated that the April draft is
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