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Regulators to Enforce Stricter Rules for Producers in Marcellus

September 1, 2008
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The Susquehanna River Basin Commission (SRBC), an independent interstate compact agency, has notified natural gas producers of its intent to enforce stricter regulations with respect to the use of water to develop wells in the Marcellus, Utica and other shale formations in the Susquehanna watershed in Pennsylvania and New York. The Pennsylvania Department of Environmental Protection (DEP) also has gotten tougher, requiring producers to submit water management plans as part of their applications for drilling permits.

Effective Oct. 15, the Harrisburg, PA-based commission will require natural gas producers to seek prior approval from the SRBC, no matter the amount of water consumed in the exploration and production of shale gas in the region. Current regulations require prior approval only for those gas producers who use 20,000 gallons per day or more of water from any source, including public water supplies, or that withdraw 100,000 gallons per day or more of groundwater, surface water or both.

The agency sent out certified letters in mid-August to more than 50 producers informing them of the new prior approval requirement, said SRBC spokeswoman Susan Obleski.

"While this regulatory provision is certainly not new, it is the first time in the commission's 37-year history we are imposing it on a class of projects," said SRBC Executive Director Paul Swartz. "I decided it would be prudent to impose the more stringent provision on the natural gas industry to give us the ability to review and regulate the industry's individual and cumulative impacts on water resources."

In taking this action, Swartz said he determined that the natural gas industry's water-use activities could have a cumulative adverse or interstate effect on the water resources of the Susquehanna River Basin.

"We do recognize the significance of [these] actions not only on the natural gas industry, but on the commission itself in terms of the additional number of projects it will have to review. For this reason, we intend to propose [a] new rulemaking that will help us meet the purposes of the determination without impacting the legitimate development of the basin's water resources for economic development," he said.

The proposed rulemaking would seek to provide a more streamlined administrative process for reviewing consumptive water uses by the natural gas industry, according to SRBC. The commission said it plans to consider the proposed rule at its next meeting on Sept. 11 at Bucknell University in Lewisburg, PA. It noted that it expects to issue a final rule in early December.

The Marcellus and other shale formations underlie more than 72% of the Susquehanna watershed, covering portions of New York, Pennsylvania and Maryland, the SRBC said. Advancements in technology for capturing natural gas in those shale formations require operators to inject large amounts of water several thousand feet underground to break up the rocks.

In related action, the Pennsylvania DEP has revised its permit guidelines to require producers seeking to drill in the Marcellus Shale region to submit water management plans as part of their applications. Under the new application process, natural gas well operators will be required to file the following information:

All drilling permit applicants must submit water management plans starting in October, said J. Scott Roberts, the DEP's deputy secretary for Minerals Resource Management. Companies that have already completed drilling permit applications or received permits may submit the new information to the department for review in a narrative form, he noted.

In May and June, routine DEP inspections uncovered violations at Marcellus Shale drilling operations, including poorly constructed water impoundments, inadequate erosion and sediment controls, improper waste and fluid disposal and unregistered and unapproved water withdrawals from streams. The agency noted that the violations threaten Pennsylvania's water resources.

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