Regulators with the West Virginia Department of Environmental Protection (DEP) said permit applications for oil and natural gas drilling in the Marcellus Shale are taking about four months to process -- about three months longer than they should take compared with past permitting.
West Virginia Oil and Natural Gas Association Executive Director Corky DeMarco told NGI's Shale Daily that DEP Secretary Randy Huffman spoke at the organization's spring meeting on May 10 and listed several reasons for the delay, including a backlog of permit applications and constraints from the new Natural Gas Horizontal Wells Control Act, which became law in December (see Shale Daily, Dec. 27, 2011).
"It's taking three months longer than it previously had taken," DeMarco said Tuesday. "I think the three additional months may be conservative; it may actually be taking a little bit longer than that, maybe closer to 150 days."
DEP spokeswoman Kathy Cosco said the agency currently had 253 permit applications pending. She also said the new law was responsible for causing part of the backlog.
"The Horizontal Well Act added a 30-day comment period into the permit review process," Cosco told NGI's Shale Daily on Tuesday. "So automatically right there things are going to take an extra month, even without the backlog being part of the formula."
DeMarco said Huffman also cited difficulty in hiring additional staff to keep pace with the permit applications, and a continuing legislative performance audit of the DEP's Office of Oil and Gas.
"I think another complicating factor is, in the period of time between the last legislative session and when the rules were passed in December there was a period in there where we were operating some emergency rules," DeMarco said (see Shale Daily, Aug. 24, 2011; July 14, 2011). "So you have multiple sets of rules that apply in different time frames, depending upon when you got your permit in."
Asked if the oil and gas industry was upset over the permitting delay or was taking it in stride, DeMarco said, "It depends a lot upon whether you've got a rig waiting or not to drill a well.
"If you've got some time in between when you're going to be ready and when the permit is going to be issued, then [the delay] is probably OK. But if you've got a rig that you're paying for, it's sitting idle and you can't put it on pipe because you don't have a permit, then it's very frustrating and very expensive. That's not something we've experienced in this state with getting permits out the door."
DeMarco confirmed that Huffman said the agency was having trouble attracting potential new hires because the starting annual salary of $35,000 was low compared to other jobs in the industry. Despite this, 20 DEP inspectors have filed a grievance with the state, alleging that the agency was unfairly hiring new workers at a higher salary and with fewer prerequisites (see Shale Daily, May 17).
Cosco said the DEP has so far hired 30 employees to full-time positions, including some inspectors. She said the agency was still in the process of hiring another 17 full-time employees.
"I think Randy [Huffman]'s goal is to have this backlog caught up, and to be more timely in getting permits out the door, by the end of 2012," DeMarco said. "I think that's his goal. I would certainly like to see it happen sooner than that, but short of contracting out some services, I don't know how they could get it done with the number of personnel they have."