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Delaware Commission Moves to Allow Marcellus Gas Development

The Delaware River Basin Commission (DRBC) on Thursday proposed rules that would allow natural gas development projects -- with conditions -- in affected areas of the Marcellus Shale.

In a nutshell, the proposed rulemaking would allow water within the basin to be used for gas development if the water is "within the physical boundaries" of a DRBC-approved natural gas development plan, or NGDP. Developers also would be allowed to reuse flowback and production waters, treated wastewater and mine drainage waters for natural gas development "under specified conditions."

The proposed rulemaking also would streamline the process to obtain permits for gas development projects "that demonstrate that they satisfy certain criteria." Existing procedures now take six to nine months; the streamlined permit proposal could allow projects to get under way within 30 days.

The proposed rulemaking, which would add Article 7 Part III to basin regulations, would supersede DRBC's executive director determinations issued this year and in 2009 that temporarily banned gas development (see Daily GPI, June 16; May 12; June 1, 2009).

Three public hearings will be scheduled over the next three months to allow oral testimony on the proposed rulemaking. The dates had not been set on Thursday.

Divided into three sections, the 83-page proposed rulemaking addresses water sources for natural gas development, well pad siting and wastewater disposal. The commission said it "primarily" relied on the oil and gas programs and the "experienced agency staff of the state in which the natural gas well is located to manage well construction and operation."

The DRBC has federal regulatory authority to protect the watershed of the basin, which affects portions of Delaware, Pennsylvania, New Jersey and New York.

A program already is in place to regulate water withdrawals to serve multiple water resources, the DRBC noted. The objectives of the current program are to preserve river flows to protect in-stream living resources and downstream withdrawers, and to ensure there is "adequate assimilative capacity" for approved discharges. Other regulations also establish thresholds for project review based on the 30-day average volume of water withdrawals.

However, "water withdrawals for natural gas development including high volume hydraulic fracturing [fracking] may have substantial water quality impacts due to their high intermittent daily withdrawal volume. Consequently, this Article requires that water used for natural gas development projects must come from water sources that have been approved by the commission for use for natural gas development.

"The requirements for approval are designed to protect minimum stream flows, provide a record of water transfers and otherwise ensure that water resources are not adversely affected," the DRBC stated. "A streamlined approval process is provided that encourages the use of existing commission-approved water sources to minimize the need to construct and operate new water sources."

The "severity of the risks to water resources from well pad construction and operation depends in large part on where the well pads are placed," said the DRBC. The proposed Article 7 would minimize gas development impacts to water resources by requiring NGDPs, as well as well pad siting and planning requirements that would include:

In addition to complying with the affected states' well construction and operation procedures, the DRBC proposed that all "nondomestic wastewater" be transferred to temporary storage tanks on the well pad site or to a centralized wastewater storage facility. Fluids and drill cuttings from horizontal wellbores in the target formation would be "beneficially" reused or disposed of at an appropriate waste facility.

Because wastewater at gas well sites contains salts and other chemicals that present water treatment challenges, the rulemaking would allow "any wastewater treatment facility within the basin" to accept nondomestic wastewater from a gas development project with prior approval from the commission. The rules include a comprehensive tracking system designed to promote proper wastewater disposal from gas development projects.

Financial protections in the rules would require developers to pay $125,000 per gas well would be required for plugging, abandonment and restoration of gas wells and pollution remediation.

Once the well installation and fracking are completed, the DRBC's executive director could approve a reduction in the amount of the financial assurance "for individual wells if there is no evidence of harm to the water resources of the basin and the project sponsor obtains a separate 'excess' insurance policy or other financial assurance instrument.

ISSN © 2577-9877 | ISSN © 2158-8023
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