Deep divisions and a litany of concerns were laid bare at a hearing in rural Washington County, PA, on Wednesday, where roughly 200 people attended to hear about the state Department of Environmental Protection’s (DEP) latest revisions to a proposed package of oil and gas regulations.
The agency has been at work on the rulemaking proposal for about four years. Tens of thousands of public comments, legislation passed in recent years and a new administration with Democratic Gov. Tom Wolf taking office in January have all delayed the process. The DEP said last year that it would rework and delay its proposals after receiving more than 24,000 public comments (see Shale Daily, May 13).
But under the leadership of DEP Secretary John Quigley, whom Wolf appointed, the industry is facing more red tape under a series of new proposals aimed at tightening the regulations further, which has prompted an outcry from trade organizations, operators and industry supporters that claim DEP has gone too far with its latest revisions. On Wednesday, some residents and environmental groups joined the industry in chastising DEP representatives, albeit with a set of different concerns that the agency is essentially not doing enough to protect the environment with its proposals.
"Certainly the new administration is behind efforts to do this, to update the regulations further," DEP spokesman John Poister said when asked about the delay in the rulemaking process. "A lot of this is also in response to hearings we had last year. They pointed to some things that needed to be looked at harder, and I think the agency did start work on that. When the new administration came in they were supportive of those efforts, though."
The state's omnibus oil and gas law, Act 13 of 2012, required the DEP to update Chapter 78 of the state code, which sets out environmental protection standards (see Shale Daily, Feb. 15, 2012). The rule changes deal with reducing impacts on public resources, preventing spills, waste management and restoring well sites after drilling, among other things.
At Wednesday's hearing, the state's conventional oil and gas industry appeared to be caught in the middle. Representatives pleaded with DEP representatives not to confuse their small, family-run businesses with larger unconventional operators working to develop the Marcellus and Utica shales.
"The spirit of the bifurcation of Chapter 78 was meant to regulate the conventional and unconventional oil and gas industries separately, the conventional via Act 223, and the unconventional via Act 13. Instead, the DEP has executed a work-crossing exercise and given us two identical sets of regulations," said Joseph Thompson, operations manager at Devonian Resources Inc., a small family-owned business that's been working in the state for decades. "They laughed in the face of our state legislators who saw the need for bifurcation.
"The DEP scoffs at our industry as uneducated, rural roughnecks and works to implement unattainable regulation as a sort of retribution for our audacity in trying to save our jobs and maintain our rich heritage here in Pennsylvania," he added. Other conventional operators who delivered testimony said their industry is "under water" with low commodity prices and said additional regulations would cost billions.
Last year, state lawmakers passed a bill that required the DEP to adopt separate regulations for the conventional and unconventional industries (see Shale Daily, June 27, 2014). It was aimed at shielding legacy producers from the financial burdens of the Chapter 78 update, which has primarily been crafted in response to shale drillers operating in the state. Conventional producers charged Wednesday that the agency has simply layered ambiguous regulations into the rulemaking package for both industries.
"We are concerned that the Commonwealth is shifting its focus from upholding our high standards to creating a regulatory environment that is punitive and borders on government overreach," said Joy Ruff, director of planning at Dawood Engineering, which does work for both conventional and unconventional operators in the state. Ruff said the DEP is required to do a full regulatory analysis of any new recommendations, including a cost-benefit analysis.
"You have not yet done so for all proposals," she told DEP representatives. "What is the cost to small business? What would the economic impacts be for Dawood Engineering?"
Both opponents and supporters of the industry shared concerns about how hastily those revisions were rolled out. In March, Quigley announced the changes and opened them up for public comment. The comment period ends May 19, and two more public hearings are scheduled before then.
The state is proposing to eliminate the use of temporary waste storage pits, phase out wastewater impoundments within three years of the rules' implementation or require them to be re-permitted (see Shale Daily, March 9). Among several other proposals, DEP has also put forth noise mitigation measures, tighter standards for drilling near public resources such as schools, heightened regulations for drilling near waterways and locating abandoned wells.
Executive Director of the Associated Petroleum Industries of Pennsylvania Stephanie Catarino Wissman said the industry and the public should have more time to provide comment on the proposals. She noted that last year's public comment period was 90 days and included nine public hearings, instead of just 45 days and three public hearings under the latest revisions.
She said some of the proposals were too vague or not flexible enough, and said they were written in a way that is "not user-friendly and does not facilitate regulatory understanding or compliance." WPX Energy Inc. spokeswoman Susan Oliver went further and said there was no need at all to change the state's unconventional regulations because they've worked for years.
But others in attendance, including one resident who called the DEP a “proxy for the oil and gas industry,” said the agency is failing to protect the public and the environment.
"I would characterize the proposed changes as modest beginnings, with the need for far bolder improvements," said Ron Slabe, a member of Citizens Against Marcellus Pollution. He implored the DEP to ban wastewater impoundments, increase setbacks for schools and require closed-loop waste disposal systems. An organic farmer said the DEP was withholding data about the industry, and another resident blamed her daughter's health problems on horizontal hydraulic fracturing.
"We really don't comment on this. We're still in the public hearing stage," Poister said. "We have two more hearings. This is the purpose of these public hearings, for everybody to make comments so that we can seriously analyze them and respond to them in whatever final action is taken on these regulations."
In all, 68 people signed up to provide testimony on the rule changes at Wednesday's hearing. Others also submitted written comments. The DEP will review testimony and include it in a comment response document before the proposals are finalized next year.