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In Latest Twist, Pennsylvania Lawmakers Vote to Scrap New Rules for Conventional Oil/Gas Wells

A sweeping overhaul of environmental regulations for Pennsylvania's oil and natural gas industry hit another roadblock on Wednesday, when the state House Environmental and Energy Resources Committee approved legislation to scrap parts of the package that would apply to conventional wells.

The committee's vote was the latest twist for a package of new rules that took more than four years to draft. Earlier this year, the Pennsylvania Department of Environmental Protection (DEP) began the regulatory review process before their implementation, setting off a renewed round of controversy (see Shale Daily,Jan. 6). The rules include separate standards for the conventional and unconventional industries and are designed to, among other things, reduce impacts on public resources, such as schools and parks, help prevent spills, strengthen waste management and require stronger well site restoration standards.

But since Democratic Gov. Tom Wolf's administration pledged to tighten the regulations in 2015, the rulemaking has met opposition at nearly every step of the way (see Shale DailyMarch 9, 2015). Legacy producers, trade organizations and state lawmakers on both sides of the aisle have accused the DEP of writing ambiguous and similar regulations for two very different industries. They have also claimed that the DEP ignored Act 126 of 2014, which required the agency to adopt separate regulations for legacy and shale producers.

DEP, meanwhile, has insisted that the process was a balanced and transparent one that consisted of several public hearings and attracted tens of thousands of public comments. Complicating matters, former DEP Secretary John Quigley, who spearheaded the tighter regulations and was appointed by Wolf last year, abruptly resigned last month after he sent a questionable email to environmental advocacy groups chastising them for not doing enough to help get the drilling regulations through the state legislature (see Shale DailyMay 23).

A process that the Wolf administration and Quigley said would be extraordinarily transparent has been wrested behind closed doors. Last month, the House Energy committee approved a resolution to kill the entire package and prevent it from being implemented even though the Environmental Quality Board and the Independent Regulatory Review Commission approved it (see Shale DailyMay 5).

Since then, the governor's administration has been negotiating with lawmakers to reach an agreement on the package, Wolf spokesperson Jeffrey Sheridan said. The DEP did not respond to an inquiry about the ongoing negotiations.

After the energy committee passed its resolution, the full House had until next Monday (June 13) to vote on it. With no action, the package would have moved to the Attorney General's office for review and implementation. But Monday's scheduled committee vote to approve SB 279 would prohibit the DEP from implementing new regulations on conventional oil and gas operations and could buy more time for negotiations.

"We're working with the administration to get language that we can all agree on," said Stephen Miskin, spokesman for Republican House Majority Leader Dave Reed. "These are two very different industries and lumping regulations all together is a disservice to everybody. After what happened a couple weeks ago, the governor may not have been fully on board with what his secretary was doing."

The administration provided no explanation for Quigley's resignation, saying only that DEP Policy Director Patrick McDonnell would serve as acting secretary. Miskin didn't rule out that removing conventional operations from the package could give the Wolf administration leverage to push new rules through for unconventional wells. He added that the primary complaint with the rulemaking process has been how conventional regulations were drafted.

"My first priority throughout this process has been to put a stop to regulations threatening the future of the 150-year-old conventional oil and gas industry," said Republican Rep. Martin Causer, who represents parts of Northwest Pennsylvania where legacy producers have long conducted their operations and who also serves on the energy committee. "But it is also important that we ensure the integrity of the state's regulatory processes. Elected representatives, not bureaucrats, are the ones who should be setting policy in this commonwealth."

SB 279 was originally introduced as SB 1310 during the 2013-2014 legislative session by Republican Sen. Scott Hutchinson, who represents a five-county region in Northwest Pennsylvania, including Venango County, where more than 150 years ago one of the nation's first oil wells was drilled. The bill was originally introduced to create the Pennsylvania Grade Crude Development Advisory Council to advise and assist the DEP in crafting appropriate regulations for the conventional industry that reflect the differences in their operations compared to those of shale drillers.

It was reintroduced in January and later passed the Senate, but has been sitting in the House energy committee since February. The bill was amended on Wednesday by the committee to prohibit the new conventional regulations and sent to the full House for consideration.

While there are separate regulations in the package, both conventional and unconventional producers would be required to adhere to some of the same rules, such as closer regulatory scrutiny for wells near public resource protection zones. All operators would be required to conduct reviews of abandon and active wells near their pads prior to drilling, among other things.

Miskin couldn't say Wednesday when an agreement on the package might be reached. "This is something they should be working on as we speak," he said.

  

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