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Work to Update Pennsylvania Oil, Gas Regulations Continues Slowly

The Pennsylvania Department of Environmental Protection (DEP) continues to move forward slowly with a set of proposed regulatory updates for the state's oil and gas drillers with a series of public hearings scheduled throughout this month.

Work on the rules has been ongoing since April 2012, said DEP spokeswoman Lisa Kasianowitz, after Gov. Tom Corbett signed Act 13 -- a comprehensive piece of oil and gas legislation -- into law that year (see Shale Daily, Feb. 15, 2012). It requires regulators to consider the impacts of the industry on the state's environment. The proposed regulatory changes would update Chapter 78 of the state code, which sets out environmental protection standards at oil and gas well sites.

Public hearings on the rule changes got under way on Dec. 14, and they will conclude with a final meeting in Indiana County on Jan. 23. The Pennsylvania Environmental Quality Board first approved the proposals in August (see Shale Daily, Aug. 29, 2013), which deal with reducing impacts on public resources, preventing spills, waste management and the final restoration of well sites after drilling, among other things.

This month's hearings, though, are drawing considerable interest given a ruling last month in the Pennsylvania Supreme Court that struck down key provisions of Act 13 and remanded other parts of the law back to a lower court for further consideration (see Shale Daily, Dec. 20, 2013). How the ruling will affect the DEP's charge to update certain regulations is unclear.

One key part of the ruling was the court's decision to strike down a requirement that allowed the DEP to grant a waiver on setbacks for drilling activities near water bodies. That provision was so closely intertwined with other setback and environmental regulations included in Act 13 that the court was forced to throw out those as well, rendering the DEP's ability to enforce zoning restrictions in hundreds of rural cities and towns without such regulations useless. The DEP's ability to protect public resources is in question as a result.

An update to Chapter 78 would call for an operator to notify the agency if a well site is within 200 feet of a publicly owned park or wildlife area and whether the site could disrupt "critical communities" or wildlife that are of "special concern." With the Act 13 ruling, it remains unclear if the change could be enforced if it's implemented.

“The bulk of the proposed rulemaking is not affected by the court’s ruling, so the hearings will go on as scheduled” Kasianowitz said. “We anticipate having more clarity from the court before this proposed rulemaking is presented as a final rulemaking, and in consultation with our attorneys, will make any necessary changes to the final rule to ensure that it conforms with the court’s decision.”

Kasianowitz said the DEP continues to review the high court's ruling to determine its effect on the agency's regulatory scope. When asked, Kasianowitz couldn't offer a further explanation of what a "review" consisted of, or when the agency might offer something definitive on how the court’s decision will affect its operations. The new rules are not expected to be implemented for more than a year, she added.

The proposed regulations will also require operators to identify and plug any abandoned wells within 1,000 feet of new pads. The DEP estimates that as many as 250,000 old wells in the state have not been adequately plugged and pose a danger to the public and horizontal drilling. Significant requirements for secondary containment units, such as liners, dikes, berms and double-walled storage tanks have been suggested as well.

Temporary storage, long-term storage and impoundments also face stricter regulations under the proposal, with specifications that exposed storage pits can't hold produced water for prolonged periods, and a strict requirement that impoundments must be restored after drilling.

In testimony provided on Jan. 7 in Wyoming County, and provided toNGI's Shale Daily, Marcellus Shale Coalition Community Outreach Manager John Augustine said a strong regulatory framework is essential to steady development in the Marcellus Shale, but he said current regulations were already strong enough. Any additional requirements, Augustine said, would jeopardize the industry's benefits to the state and create further uncertainty for operators in the wake of the Act 13 ruling.

Establishing "special concern species," Augustine said, "raises questions about how any such list is generated, what criteria are used to determine whether there is an impact to these species, and how DEP proposes to mitigate impacts to such species." Treatment of abandoned wells, the MSC believes, would lead to open-ended obligations for identifying those wells, while a standard included in the proposal to upgrade public water supplies would be a costly burden.

In a recent blog post, environmental advocacy group PennFuture wrote that the regulations don't go far enough. The group provided a series of 15 talking points on its website, asking the public to voice concern over the short-sightedness of some of the proposals and urged attendees to press for more environmental restrictions and more responsibilities for operators to protect natural resources during drilling.

Public hearings on the rule changes correspond with a public comment period online that will end on Feb. 12. Kasianowitz said when the public comment period concludes the DEP must respond to all questions and concerns.

Updates to Pennsylvania oil and gas regulations come at the same time as regulators in Ohio are working to strengthen oil and gas rules and create new ones there (see Shale Daily, Dec. 24, 2013). In West Virginia, scrutiny of the industry's environmental impact is rising, with a few public and private studies ongoing to examine air quality and waste management, among other things (see Shale Daily, Dec. 13, 2013; Jan. 13).

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