American Oil and Gas Reporter - March 2020 - 84

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lion in annual severance tax revenues.
The commonwealth's impact tax has
been in place since 2012, and continues
to tax unconventional gas wells, with the
revenues distributed to local governments
to mitigate the impacts of drilling, Weaver
describes.
"Governor Wolf has seen little success
with his calls for severance taxes, but he
continues to believe that Pennsylvanians
are not getting their fair share of taxes
from gas production," Slagel says, "and
says, incorrectly, that Pennsylvanians are
paying other states' severance taxes."
The Restore Pennsylvania program
would run for four years, while the administration's figures suggest paying the
expected $4.5 billion bill would take 30
years of tax collection. Weaver points
out that under Wolf's proposal, the commonwealth will spend $8.0 billion over
the next three decades, with a large portion
of the Restore Pennsylvania's funding
going to projects in the commonwealth's
southeast counties, where there is no gas
drilling or production.
"It appears the governor is not reading
the news about how low natural gas and
even low natural gas liquids prices are adversely affecting producers of unconventional gas, with Chevron exiting the Appalachian Basin completely," Weaver says.
New Regulations
Conventional well operators still are
waiting for Pennsylvania to unveil oil
and gas regulations written expressly for
their wells, Weaver says. After Act 13
authorized the Pennsylvania Department
of Environmental Protection to rewrite
surface regulations in 2015, he recalls,
industry groups pointed out the language
in Chapter 78a for conventional well activities differed little from the unconventional well operations regulated in Chapter
78 (AOGR, February 2016, pg. 99).
According to Slagel, the Conventional
Oil and Gas Well Act would eliminate
some of the more cumbersome requirements
imposed by Act 13 that were meant to
apply to the unconventional industry, but
which inadvertently and unnecessarily put
additional burdens on conventional wells.
"Those conventional operations are not
multiwell sites, and they don't have large
well pads. You just don't have the same
type of surface and environmental impacts
as unconventional wells," he describes.
The statute written expressly for con-

Coming In April
Official Convention Coverage for
OOGA's annual meeting, March 4-6
in Columbus, Oh.
84 THE AMERICAN OIL & GAS REPORTER

ventional operators passed the Senate
and in mid-February was awaiting House
action, Weaver says.
"I think the bill will pass, but the governor has said he will veto it," he reports.
"The governor and the bill's opponents
think some of the water quality standards
aren't where they need to be. There have
been multiple meetings between the Department of Environmental Protection
and stakeholders. The stakeholders have
said these are the numbers they want, but
DEP has not accepted them. DEP says it
will roll forward with regulations on conventional wells this year, so if this bill
does not pass, Chapter 78A is coming
back out."
In addition, both conventional and unconventional operators are dealing with
dwindling numbers of produced water
facilities. Weaver points out the number
of water treatment plants in western Pennsylvania has dropped to one in Franklin,
Pa. DEP has informed the facility owner
it will be shut down by the end of 2020 if
the facility doesn't undertake multimillion-dollar upgrades.
"The shutdowns are not because of

alleged seismic activity, as in other states,"
he notes. "These are water treatment facilities that discharge into rivers. DEP is
saying the Franklin facility has been discharging water with total dissolved solids
above the standard, but the standards
keep changing."
Pennsylvania keeps rewriting those
water quality standards, until, according
to several water treatment experts, DEP
has set the levels to unobtainable limits,
Weaver says. "All of our unconventional
operators are encountering difficulties.
Their drilling programs are being disrupted because of water disposal requirements. The only choice for is many
of our unconventional operators is to
ship their wastewater to Ohio's injection
wells," he reports.
Weaver notes there are more than
100,000 operating conventional wells in
Pennsylvania, versus 15,000 unconventional wells. "There are parts of the
commonwealth where there is no unconventional drilling, and all the utilities
and pipelines there are supplied by conventional wells that been around for
decades."
❒

Big Data Solutions Now Offer
Answers To Oil, Gas Industry
NEW YORK-As oil and natural gas
assets increasingly become fitted with a
multitude of Internet of Things sensors,
the resulting exponential growth in data
increases the need for adopting data management solutions to improve operational
visibility. GlobalData says this approach
also helps identify bottlenecks in operations, and uncover patters and relationships
across diverse entities.
In its report, "Big Data in Oil & Gas,"
GlobalData examines how the growing
dependence on data from oil and gas operations is compelling the industry to
adopt big data solutions.
"The oil and gas industry has always
generated huge volumes of data daily
across the value chain," assesses Ravindra
Puranik, oil and gas analyst at GlobalData.
"However, despite being awash with money it has been poor at data management.
It is only when profits drop that the industry starts to investigate how to use
data to improve operational efficiency."
That laissez-faire attitude now is less
common, Puranik says, as many players
across the value chain are taking an enterprisewide view to data, and applying
analytics to improve existing business
processes and developing new revenue

streams.
Data management is a very complex
process, GlobalData points out, particularly
given that much of an oil company's upstream data is created on remote assets,
and often stored in disparate, disconnected
infrastructure.
"Big data in the oil and gas industry
will experience incremental growth once
it overcomes these barriers," Puranik predicts. "The growth will be further accelerated by concerns such as falling profit
and future uncertainty from renewables."
The paper-based data collection used
by companies for maintaining records
from daily operations largely has been
digitalized now, he says, but effective
data management is essential for this approach to succeed so that companies can
make better use of their data.
"The industry generates large volumes
of data that require considerable time
and substantial computing power to store
and analyze," Puranik says. "This can be
done either by investing in data storage
facilities of their own or shifting to cloudbased solutions. Companies are adopting
a combination of both these approaches
to manage their data requirements while
also balancing the financial aspects." ❒

American Oil and Gas Reporter - March 2020

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