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Executives: Make Regulations Predictable, Not Easy

As the natural gas industry pushes for a standardized drilling ordinance in Pennsylvania, it doesn't expect the regulations to be easy, just predictable, a pair of executives told an audience in Pittsburgh.

"It's not to necessarily take control away from anybody. It's just trying to make things more uniform," Ray Walker, senior vice president of environment, safety and regulatory compliance for Range Resources Corp., said at Hart Energy's 2011 DUG (Developing Unconventional Gas) East conference last week. "What our industry craves is consistency and predictability. We've never once, that I know of, asked for it to be easy."

Pennsylvania famously (or infamously, from the industry perspective) is composed of more than 2,000 local governments, from counties to townships to boroughs to cities, and Walker compared the process of operating in more than one as as being similar to needing a different driver's license for each municipality.

"It causes a lot of grief in the inner workings of an oil and gas company," he said.

The natural gas industry isn't shy about this discontent (see Shale Daily, Oct. 7), Walker said. As it fights several high-profile battles locally, the industry wants a statewide standard, and could succeed under various impact fee bills working through the Pennsylvania General Assembly (see Shale Daily, Nov. 16; Oct. 28; Oct. 24).

Walker noted that in neighboring Ohio, "they basically put in place total preemption." While that might be ideal for the industry, Walker acknowledged that it "may not be the best answer" in Pennsylvania.

Although exploration and production companies are leading the charge for a statewide standard in Pennsylvania, most operators only operate in a one- or two-county region of the Marcellus, and each well is, of course, located in a single municipality. Pipeline companies, on the other hand, are trying to build permanent installations that can run across multiple counties and through numerous municipalities, noted Ted Wurfel, vice president of environmental, safety and regulatory affairs for Chief Gathering LLC.

"We're not asking that it be made easy, but uniformity does help us plan," he said.

The industry got its wish in October when the Pennsylvania Department of Environmental Protection (DEP) outlined a new approach to aggregating sources of air emissions. That came after years of meetings between the DEP and the industry and carries the support of industry, according to Wurfel (see Shale Daily, Oct. 14).

"We like to be able to know that if 100 wells are coming online in this particular township in the next two years... that we're going to be able to build a compressor station to deliver that gas to the transmission line. That predictability is of tantamount concern," Wurfel said, adding that he hopes the guidance "stands."

The main point of the guidance generally defines "contiguous or adjacent" facilities, one of the guides for aggregation, as being located within a quarter-mile of each other, rather than being merely "interdependent." While that definition does make the process more predictable for industry, it also makes it easier.

Pennsylvania could do even more to improve predictability, Walker said, by creating a statewide plan to increase the use natural gas over dirtier fossil fuels such as coal and oil, thereby lowering the total amount of air emission in Pennsylvania, rather than focusing on the emissions of any single compressor station.

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