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Bill to Protect Legacy Oil, Natural Gas Producers Passes Pennsylvania House

A Republican-sponsored bill introduced in the Pennsylvania House earlier this year to update the state’s Oil and Gas Act of 1984 to clarify language and address the current challenges facing conventional producers has passed and now moves to the Senate for consideration.

State Rep. Martin Causer introduced House Bill (HB) 2154 to ensure “fair regulation” for the legacy producers, and it passed the House this week 111-84. A companion bill introduced by state Sen. Scott Hutchinson is still in committee. Hutchinson has been pushing for such legislation since last year.

HB 2154 comes about two years after the Republican-controlled General Assembly passed a bill Hutchinson sponsored that scrapped what would have been new regulations for the conventional industry and required the state Department of Environmental Protection (DEP) to rewrite the package.

Those rules were written at the same time as those for unconventional producers. Opponents of the conventional rules successfully argued that they were too burdensome and similar to those drafted for better-financed shale producers. While shale gas production has continued to increase in the state, the glut has kept prices down and hit the conventional industry hard.

Causer said his bill removes “the threat of unreasonable and unnecessary regulations from the backs of our conventional producers in favor of rules that are relevant and appropriate to these shallow well operations.”

The legislation was primarily developed by the Penn Grade Crude Advisory Council, which was created in 2016 to advise and assist the DEP in crafting regulations for the state’s 160-year old conventional industry. The council is also working on a plan to help increase the production of Pennsylvania grade crude oil in a way that could better supply regional refineries and help ensure the long-term viability of legacy producers.

Causer said the legislation to redraft the Oil and Gas Act includes several regulatory updates and clarification that would serve as the legislative framework for any future changes to rules that impact the conventional industry. The bill would also aid in the plugging of orphaned wells and give DEP the authority to issue permits allowing municipalities to use brine from wells for dust control and de-icing on roads.   

Hutchinson and Causer both represent districts that include parts of northwest Pennsylvania, which has long been home to the state’s legacy producers and much of their operations.

 

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