Unconventional well permitting in Pennsylvania declined in 2018 by about 8% year/year as natural gas prices remained depressed and operators drilled longer laterals instead of developing more wells, according to the annual oil and gas report by the state Department of Environmental Protection (DEP).
DEP said it issued 1,868 unconventional well permits last year, compared with about 2,028 in 2017. Permitting had bounced back in 2017 from an eight-year low of 1,321 in 2016, when exploration and production companies were still recovering from the 2014 commodities downturn.
Operators still drilled about the same number of wells in 2017 and 2018. DEP’s report showed that 917 were drilled last year, compared with 913 in 2017. Unconventional production reached record levels last year at 6.1 Tcf, or about 14.2% more than in the prior year. The volumes followed a boom in pipeline capacity -- a buildout that has since slowed -- as production is expected to increase only modestly across the Appalachian Basin in the coming years on suppressed prices and more capital discipline from operators.
DEP’s report is published in electronic format and includes interactive data on permit activity, inspections, operator compliance and enforcement for both the conventional and unconventional industries. The agency has been working for years to implement technologies to make the regulatory process more efficient and transparent.
The surface activities inspection process moved to tablet computers, while the agency also launched an updated erosion and sediment control general permit in electronic format last year. DEP also simplified its internal oil and gas permit review structure statewide. The changes helped lower review times and cut into the agency’s backlog. The effort came after the industry stepped up complaints about how long it was taking to receive permits.
DEP said its permit backlog has been reduced from more than 8,700 in early 2016 to only 635 last month. Inspection efficiency has also improved by 20% through the use of tablets and other technology.
“DEP attained new levels of efficiency in the permit application and review process as well as site inspections in 2018, and we continue to seek new avenues to improve customer service and environmental protection,” Secretary Patrick McDonnell said.
Agency personnel completed 36,873 compliance inspections at conventional and unconventional well sites last year, or about 585 more than in 2017. Violations dropped at conventional sites to 3,017 in 2018 from 3,272 in the prior year, likely as a result of fewer inspections.
The report showed that unconventional well site inspections increased to 18,830 last year from 16,296 in 2017. As a result, there were 1,043 violations at unconventional sites, compared with 821 in the prior year.
Marcellus Shale Coalition President David Spigelmyer said, however, that the industry made gains in 2018.
“Unconventional natural gas producers are more efficient in the use of resources, reusing and recycling 90% of the water we use, while driving record production levels in Pennsylvania,” he said. “And we are doing so with an inspection compliance rate that exceeds 98%, reflecting our collective commitment to safety, operational excellence and public health.”